I am paraphrasing an article by Lew Sichelman, who has covered all areas of rel estate for 50 years and he has contributed to several publications.
How to boost home inventory: To boost inventory, temporarily halve the capital gains tax on the sale of investment properties. This could release millions of houses held by small-time investors. According to Bank Rate, investors own more than 20 million single family properties.
Lenders Cut Loan Prices: Lenders lose money on the mortgages they write until the loans are on the books for at least six months. Many buyers refinance as soon as the rates fall, even just a little. Therefore, lenders price their loans higher to compensate for the possible loss of revenue. A suggestion would be to add a prepayment recapture which would fine the borrower for paying off their loan within 12 months after closing. This could result in lower rates for everyone.
Cut Price Adjustment Fees: Loan-level price adjustments are required by lenders to include these fees in their loans to account for risk. This proves to be cash cows for Fannie Mae and Freddie Mac. If the charge was removed, the borrower's overall mortgage rate would drop by 0.875%.
These suggestions would have an immediate impact on affordability in a positive way.
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