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Vol. 8 No. 10
June 27, 2016
www.csrej.com
PMIERS: The new regulation the Feds got right
71 Percent believe student debt delays homeownership percent) and those with $70,000 to $100,000 in total debt. Regardless of the outright amount of student debt, more than half of non-homeowners in each generation report that it's postponing their ability to buy. The survey, which only polled student debt holders current in their repayment, yielded responses from borrowers with varying amounts of debt from mostly a four-year public or private college. Forty-three percent of those polled had between $10,001 and $40,000 in student debt, while 38 percent had $50,000 or more. The most common debt amount was $20,000 to $30,000. Lawrence Yun, NAR chief economist, says the survey findings bring to light the magnitude student debt is having on the housing market and the budget of even those financially able to make on-time payments. While obtaining a college degree increases the likelihood of stable employment and earning enough to buy a home, many graduating with this
debt are putting homeownership on the backburner in part because of the multiple years it takes to pay off their student loans at an interest rate that's oftentimes nearly double current mortgage rates.
“student debt is hurting their ability to save for a down payment” "A majority of non-homeowners in the survey earning over $50,000 a year – which is above the median U.S. qualifying income needed to buy a single-family home – reported that student debt is hurting their ability to save for a down payment," he said. "Along with rent, a car payment and other large monthly expenses that can squeeze a household's budget, paying a few hundred dollars every month on a student loan equates to thousands of dollars over several years that could See Student Debt | 5
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Seventy-one percent of nonhomeowners repaying their student loans on time believe their debt is stymieing their ability to purchase a home, and slightly over half of all borrowers say they expect to be delayed from buying by more than five years. This is according to a new joint survey on student loan debt and housing released today by the National Association of Realtors® and SALT®, a consumer literacy program provided by nonprofit American Student Assistance®. The results also revealed that student debt postponed four in 10 borrowers from moving out of a family member's household after graduating college. Nearly three-quarters of nonhomeowners polled in the survey believe their student loan debt is delaying them from buying a home. Broken down by each generation and debt amount, the percent share is the highest among older millennials approximately aged 26 to 35 (79
While there has been considerable grumbling within our industry as we’ve struggled By Jon Paukovich Ent to interpret and imple- — ment a plethora of new regulations, most would agree that the Federal Housing Finance Agency (FHFA) got one new rule very right: the Private Mortgage Insurer Eligibility Requirements (PMIERS). Like other recent regulation changes, PMIERS was created in response to the housing industry meltdown. During the financial crisis, two mortgage insurers went out of business due to insufficient funding. These insurers were unable to completely cover all the claims they had written policies on. Consequently, lenders holding the inadequately-insured defaulted mortgage loans and investors whose portfolios included impacted mortgagebacked securities suffered substantial losses. And they were not alone: Fannie Mae and Freddie Mac also lost millions of dollars on defaulted loans due to mortgage insurer underfunding. To cover their losses, Fannie and Freddie sought payment from the lenders, particularly those who hadn’t followed their private mortgage insurance company guidelines to the letter. This had two consequences. First, some lenders that couldn’t pay the costs their mortgage insurer defaulted on typically went out of business.
Edward Duncan
Will Michaloski
Marianne Elep Turner
Loan Officer
Loan Officer
Loan Officer
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(719) 331-2750 chad.denny@academy.cc
(719) 380-1778 debbie.havens@academy.cc
(719) 491-2500 sharon.ballinger@academy.cc
(719) 264-1968 edward.duncan@academy.cc
(719) 232-7553 will.michaloski@academy.cc
(719) 264-1952 marianne.elepturner@academy.cc
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