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US New regulations could bruise US mortgage market

Property Here - Wednesday, October 24, 2012

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Realtors and mortgage bankers in the US have warned that home buyers will likely have more difficulty qualifying for a home loan in early-2013 due to new rules, Bloomberg reported. 

Regulators are preparing to release the language of two rules which will take effect in January. These will establish standards for non-abusive lending and will require banks to keep a portion of risky mortgages on their books. 

At the same time, US banking overseers must implement new capital standards as mandated in the international Basel III accords in 2013. 

Maurice Veissi, President of the National Association of Realtors, said the new housing rules, which comes almost simultaneously, may overlap or conflict, creating a “perfect storm” of regulations.

“There’s this intersection of policies that are absolutely not being considered by this massive array of institutions, all involved in deciding the future of homeownership and rental opportunity,” said David Stevens, President of the Mortgage Bankers Association (MBA). 

However, consumer organisations feel that the industry’s fears are exaggerated. 

“All of these rules are reactions to the failure to regulate at all over the last decade,” said Alys Cohen, Staff Attorney at the National Consumer Law Center.