Voices of Real Estate

I have heard from members recently about the careless comments that appeared on the TODAY Show Money segment on July 2nd. I wanted to let you know that NAR has sent a letter to NBC asking them to clarify their misstatements. If your clients saw this piece, they may be asking you what the truth is. I recommend that you turn this into an opportunity to educate them with correct information about the current situation in mortgage lending.

In the piece, Matt Laurer stated, and Money host Jean Chatzky agreed, that zero-down payment mortgages are gone. This is not true. Fannie Mae and Freddie Mac have told NAR that they are still doing zero-down mortgages within special programs and limited to borrowers with high credit scores. The problem with zero-down payment loans is not in their availability – but whether mortgage insurance companies would insure such loans. Another problem with these loans is when they are abused by borrowers who take out this loan and find that it doesn’t meet their financial needs. Zero-down payment loans remain a good product for a specific type of borrower, which may turn out to be one of your clients.

Second, Ms. Chatzky also said that Federal Housing Administration (FHA) down payments in some areas were as high as 10 percent to 15 percent. Again, this statement is wrong. FHA loans are 3 percent down across the board. In response to our letter, on the TODAY Show website , NBC clarified this portion about FHA.

This is a great opportunity to educate your clients about current conditions in the marketplace that will help consumers get off the sidelines and back into the market. And that is why REALTORS remain the most trusted source of real estate information. -- Dick Gaylord, NAR President