So, we all have an opinion about what can be done to fix the market. Several opinions, actually. I think of random ideas at various times, and lucky you, you get to hear the one that just popped into my head!
Some entity should make it easier for investors to purchase single family residences. I really like Fannie Mae's HomePath loan for investors that allows for as little as 10% down. It has no mortgage insurance (but it does have a higher rate). But it's only good for Fannie Mae homes approved for HomePath financing.
Freddie Mac should come out with the same thing. Fannie and Freddie are the two goliaths of the foreclosure world. All their properties should have special financing, but Freddie has none. Zero, zippo, nada.
The other guideline that should be eased would be the limitations on how many investment properties an investor can have. If they can afford it, and if they are good at it, why limit the investor?
Keep the current debt-to-income ratios. Keep the rental income guidelines. Make sure the investor has cash reserve to cover emergencies. We don't want these ending up as foreclosures again. Just let them own a few more and make it a bit easier to get in!
This worked in the 1980's, it would work now. We need the investors to sop up inventory. Many families have short sales or foreclosures so they will be renters for a few years. Rental demand is increasing. It would help the economy more to have investors buy these houses and rent them to tenants rather than having the houses languish on the market.
My next cure for the market will come as soon as I think of it!
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