The National Association of Hispanic Real Estate Professionals (NAHREP) has issued a letter to the Senate Committee on Banking, Housing & Urban Affairs pushing for housing finance reform that does a better job aiding both disadvantaged and diverse homebuyers.
NAHREP is the leading trade association among Hispanics and is comprised of 21,000 members in 40 chapters around the United States.
In the letter to the Senate Committee, NAHREP President Jason Madiedo, a mortgage banker with over 19 years of experience making home loans, said that while current proposed legislation to reform the housing finance system may be on the right track, it does not go far enough to meet the needs of an increasingly diverse home-buying market.
Referring to the Housing Finance Reform and Taxpayer Protection Act of 2013, S. 1217, proposed by Committee Chairman Tim Johnson, D-S.D., and Ranking Member Mike Crapo, R-Idaho, Madiedo’s letter said, “The status quo of the [government sponsored enterprises (GSEs)] in conservatorship, a system dominated by government support, and increasing constriction of credit simply cannot be sustained. NAHREP believes we need legislative reform, and we support S. 1217 with some important caveats. To sustain a liquid secondary market, we’re pleased to see the bill provides a government ‘backstop,’ but clearly intends to put private capital in front of taxpayer risk. It is estimated that 40 percent of all new homebuyers will be Hispanic in the coming years. We support the modest 3.5 percent downpayment opportunity for first-time homebuyers — clearly a high priority for constituents of NAHREP.”
Madiedo’s letter went on to point out areas that NAHREP feels strongly about:
“Two major issues must be addressed as this legislation progresses through the US Congress: First, we are concerned the added 10 percent capital cost on conventional mortgages could be prohibitive for many Americans, especially first-time and low- to moderate-income homebuyers. Second, it is projected that nearly 74 percent of households formed in the period from 2010 to 2025 will be minority [owned]. Hispanics were disproportionately affected by the housing crisis, losing 65 percent of their median household wealth between 2007 and 2012. Homeownership has always been a gateway to the middle class in America. Whether through affordable housing goals, objectives or incentives, this legislation must adequately meet the needs of a growing, diverse homeowner population.”
The proposed Johnson/Crapo legislation has been controversial, and while debate on its merits continues, the needs of the evolving market in the United States require reform sooner rather than later, said Gary Acosta, NAHREP co-founder and chief executive officer.
“Success in addressing the requirements of the minority market is essential for a sustainable economic recovery, job creation and long-term stability,” Acosta said.
“Since 2010, Hispanics have accounted for a net increase of 559,000 owner households, representing 56 percent of the total net growth of owner households in the U.S. Their purchasing power is estimated to grow to $1.5 trillion by 2015, a $500 billion increase from 2010,” Acosta said. “The Hispanic market alone is large enough to drive the housing recovery, and we need the legislation affecting homeownership to include these motivated, creditworthy buyers and other minorities.”
Madiedo adds that mortgage companies currently catering to the Hispanic markets are reaping the benefits, including his own firm, Las Vegas-based Venta Financial Group.
“Our company and others that have invested the time and energy to understand the needs of this growing market are experiencing high loan volume while the rest of the industry is struggling,” Maciedo said. “Latinos are ready to buy homes now, and the faster we provide the inventory to accommodate them, bolstered by a secondary market that keeps sustainable and affordable financing available, the sooner America will achieve a full economic recovery.”