NAR Welcomes Tougher Mortgage Guidelines

The NATIONAL ASSOCIATION OF REALTORS® welcomed proposed guidelines Tuesday from five federal financial regulatory agencies on specialty mortgage products that allow consumers to defer repayment of the home mortgage principal and interest.

“The guidelines appear to be consistent with NAR's view that specialty mortgages are not appropriate for everyone. Home buyers should consult a REALTOR® to learn more about different financing options, their implications over time and what types of mortgages might work best for them,” says NAR President Thomas M. Stevens, senior vice president of NRT Inc., from Vienna, Va. “While specialty mortgage products have helped many borrowers finance the American dream of home ownership, NAR wants to help borrowers understand the risks before they take out an interest-only or payment-option adjustable-rate mortgage.”

While the agencies recognize that innovative mortgage products can benefit some consumers, they are concerned that non-traditional mortgages are being offered to sub-prime and other borrowers who may not fully understand the risks that come with these products. The five federal agencies also expressed concerns that these mortgage products present important risks that must be managed.

Do Your Homework First brochure is part of an NAR’s consumer education campaign addressing specialty loans and abusive lending practices.

—NAR