OBAMA VS. ROMNEY - Topic: Underwriting Mandates

OBAMA VS. ROMNEY - Topic:  Underwriting Mandates

Federal banking regulators have drafted rules that would go beyond lenders’ restrictive lending policies by setting a minimum down payment amount for home mortgage loans to be considered safe and therefore available at more affordable rates. Where do you stand on the federal government mandating minimum down payment amounts and credit requirements for lenders to apply in their          underwriting standards?

Obama:  We’re committed to the goals of Wall Street reform, which includes ending an era of reckless lending by banks without adequate skin in the game. At the same time, we’re committed to maintaining widespread access to mortgage credit for responsible American families, which is the key to providing the middle class with access to home ownership and the key to returning to a robust, but sustainable, housing market recovery.

Romney:  A big part of the problem is that the government, and not the  private sector, is the dominant force in mortgage finance today. With tax payers still on the hook for trillions in mortgage loans, of course the government will continue to play a role in setting some basic minimum lending standards. However, we need to encourage private markets to provide mortgage loans at reasonable interest rates across all market conditions, with simple and understandable contracts for homebuyers.

Freedman, R. (2012, September/October). Two visions come into focus.
    REALTOR, 11.