The Iowa Association of Realtors (IAR) is participating in a bus tour with the national association to highlight issues they say could have a serious impact on home ownership. State association C.E.O., Dave Bert, says one of the issues is talk of removing the mortgage interest deduction.
He says the deduction has been a part of the tax code for 100 years and “it’s ridiculous” to say now that it is part of the deficit problem. Bert points out that it’s something that’s just a proposal at this point. Another proposal is to require home buyers to put 20-percent down to get a loan.
Bert says borrowers with less than 20-percent down would have to choose between higher fees or pay an interest rate that’s three percentage points higher. “If they decided to wait, it would take them up to 14 years to save the necessary funds to come up with a 20-percent down payment,” Bert says. The housing problems were in part caused by loose lending rules that allowed people to borrow more than they needed, or buy more expensive homes than they could afford. Bert admits realtors had a role in the housing troubles.
“We reaped some of the benefits and we’re not proud of it, but it did go way the other direction,” Bert says “were we part of inventing those ideas, no we weren’t part of that, we did take advantage of them to try and put people into home ownership.” He says they’re asking legislators to take a step back as we now need some good policies out there.
Bert says the realtors have talked to some of the biggest banks and told them about lending problems. He says the banks have set standards and then what happens is the branches set even higher standards for fear that the corporate office will retaliate against them.
Bert says that’s ended up with loan standards that’re “tighter than they need to be.” Bert says the national association is taking its bus tour across the country to educate people about their concerns. You can see more about the tour at: www.houselogic.com/bus