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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: nextrade! who wrote (16915)	2/7/2004 7:35:32 PM
From: nextrade!	Read Replies (2) \| Respond to of 306849

U.S. bill aims to offer no-down-payment mortgages forbes.com NEW YORK, Feb 5 (Reuters) - A congressional bill was introduced this week with aiming to create federally insured no-down-payment mortgages for first-time homebuyers. Congressman Patrick Tiberi, an Ohio Republican and member of the House Financial Services Committee, sponsored a proposal that would allow the Federal Housing Administration (FHA) to offer a zero-down-payment product for first-time homebuyers. Lenders normally require a borrower to put a down-payment for a mortgage as a financial cushion in case the borrower defaults. The Tiberi-led bill, "The Zero Down-Payment Act of 2004" (H.R. 3755), was introduced on Tuesday, the same day the Census Bureau said the U.S. home ownership rate hit a record high of 68.6 percent in the last quarter of 2003, equivalent to 72.6 million households which own their own homes. FHA does not make loans directly to consumers. The agency insures mortgages that fit its standards so these home loans can be sold into the secondary market. Normally, FHA requires a down-payment of at least 3 percent of the loan amount. According to the U.S. Department of Housing and Urban Development, 150,000 people who otherwise would not meet current FHA standards would qualify for this type of zero-down payment mortgage. "A lot of consumers have the income to make mortgage payments and have a good credit record, but can't overcome the hurdle of a down-payment," Kurt Pfotenhauser, senior vice president of government affairs at the Mortgage Bankers Association, said in a statement. Under the proposal, families that qualify for no-down-payment mortgages insured by FHA would be charged a modestly higher insurance premium on their loans. For example, on a $100,000 mortgage, a zero-down-payment family would pay about $50 a month more than a regular FHA borrower. Copyright 2004, Reuters News Service