Shiller Sees Risk in
New Push for First-Time Homebuyers
Ultralow down payment programs sound risky to Nobel Prize-winning economist Robert Shiller. Fannie Mae and Freddie Mac plan to offer new programs that will guarantee loans with down payments of as little as 3 percent, but Shiller says this would be risky for the lender and the mortgage insurer. He doubts that the initiatives would be the best course of action. "Because it's only a 3 percent margin, if somebody defaults and they have to sell the house, they might not get all the money back." Most first-time home buyers have remained on the sidelines of the housing market as banks tightened lending standards. The National Association of Realtors recently reported that first-time home buyers account for just 33 percent of all home purchases, the lowest level in nearly three decades.
From "Shiller Sees Risk in New Push for First-Time Homebuyers"
CNBC.com (12/14/14) Gillies, Trent
Ultralow down payment programs sound risky to Nobel Prize-winning economist Robert Shiller. Fannie Mae and Freddie Mac plan to offer new programs that will guarantee loans with down payments of as little as 3 percent, but Shiller says this would be risky for the lender and the mortgage insurer. He doubts that the initiatives would be the best course of action. "Because it's only a 3 percent margin, if somebody defaults and they have to sell the house, they might not get all the money back." Most first-time home buyers have remained on the sidelines of the housing market as banks tightened lending standards. The National Association of Realtors recently reported that first-time home buyers account for just 33 percent of all home purchases, the lowest level in nearly three decades.
From "Shiller Sees Risk in New Push for First-Time Homebuyers"
CNBC.com (12/14/14) Gillies, Trent
No comments:
Post a Comment