National Association of Realtors continues to oppose FHA reform

Article Highlights

  • The NAR supports the FHA's decades-long insurance nightmare resulting in an estimated 3.2 million dashed homeowner dreams since 1975.

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  • The NAR proposes to subject even more first-time home buyers and working class families to the FHA's abusive lending practices.

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  • Now is the time to end the nightmare at FHA.

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Today, the National Association of Realtors (NAR) will be running its third ad presenting what it calls “FHA Facts“. The NAR apparently supports the FHA’s decades-long loan insurance nightmare that has resulted in an estimated 3.2 million dashed homeowner dreams since 1975. This represents a failure rate over 37 years of 1 in 7 families who have gotten an FHA loan. This is nothing short of scandalous.

Notwithstanding this long history of financing failure, the NAR says that the FHA can responsibly serve the needs of homeowners with lower credit scores.

Indeed, the NAR proposes to subject even more first-time home buyers and working class families, many of whom are minorities, to the FHA’s abusive lending practices. The NAR would have these families experience foreclosure rates of 10, 15, and even 25%. History tells us that many working class neighborhoods will suffer even higher rates of failure.

NAR says its members “oppose any changes to FHA that will cause a disruption to the housing sector…” and now is not the time for reform. They are wrong. Now is the time to end the nightmare at FHA.

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About the Author

 

Edward J.
Pinto
  • American Enterprise Institute (AEI) resident fellow Edward J. Pinto is the codirector of AEI’s International Center on Housing Risk. He is currently researching policy options for rebuilding the US housing finance sector and specializes in the effect of government housing policies on mortgages, foreclosures, and on the availability of affordable housing for working-class families. Pinto writes AEI’s monthly Housing Risk Watch, which has replaced AEI’s FHA Watch. Along with AEI resident scholar Stephen Oliner, Pinto is the creator and developer of the AEI Pinto-Oliner Mortgage Risk, Collateral Risk, and Capital Adequacy Indexes.


    An executive vice president and chief credit officer for Fannie Mae until the late 1980s, Pinto has done groundbreaking research on the role of federal housing policy in the 2008 mortgage and financial crisis. Pinto’s work on the Government Mortgage Complex includes seminal research papers submitted to the Financial Crisis Inquiry Commission: “Government Housing Policies in the Lead-up to the Financial Crisis” and “Triggers of the Financial Crisis.” In December 2012, he completed a study of 2.4 million Federal Housing Administration (FHA)–insured loans and found that FHA policies have resulted in a high proportion of working-class families losing their homes.

    Pinto has a J.D. from Indiana University Maurer School of Law and a B.A. from the University of Illinois at Urbana-Champaign.

  • Phone: 240-423-2848
    Email: edward.pinto@aei.org
  • Assistant Info

    Name: Emily Rapp
    Phone: 202-419-5212
    Email: emily.rapp@aei.org

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