Government Involvement in Secondary Mortgage Market Will Ensure Flow of Capital, Says NAR

By Anuradha Kher, Online News EditorWashington, D.C.–To insure that there is sufficient capital to support mortgage lending to qualified borrowers, the National Association of Realtors (NAR) is recommending continued government involvement in the secondary mortgage market.”As the leading advocate for housing issues, NAR developed these principles for consideration by the 111th Congress and the new presidential administration in light of disruptions in the credit markets and the conservatorship of Fannie Mae and Freddie Mac,” says NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage. “NAR believes that the federal government must continue to play a role in the mortgage markets to ensure the continued flow of capital.”NAR’s Presidential Advisory Group on Government Sponsored Enterprises developed the new principles to encourage a strong, robust financing environment for homeownership. The principles call on the government to ensure an active secondary mortgage market; support affordable mortgage rates for qualified borrowers; establish reasonable affordable housing goals; require that institutions pass on the advantages of lower borrowing costs by making lower rates on mortgages available for qualified borrowers; require sound underwriting standards, along with transparency and soundness with respect to disclosure and structuring of mortgage-related securities; and establish rigorous oversight.”Safe and affordable mortgages must be available throughout the nation,” says McMillan. “This requires that the higher loan limits passed in the economic stimulus bill earlier this year be made permanent. The federal government must also insure that there is sufficient capital to support mortgage lending in all types of markets.”