Sustainable homeownership as the “gateway to the middle class” was the topic of First American Financial Corporation’s recent “Achieving the American Dream” housing forum.
Panelists said housing is the primary source of wealth creation for many Americans, and that increasing the U.S. rate of owner-occupiers is key to a healthy economy. And lenders don’t need to lower the bar to qualify for mortgages – they only need to open the credit window.
“What that essentially means is we’re not trying to qualify people who probably shouldn’t qualify for a mortgage – but we want to widen the criteria that we use and the metrics that we use to identify successful homeowners of the future,” said National Association of Hispanic Real Estate Agents co-founder and CEO Gary Acosta.
A credit score sometimes bans people for homeownership that should qualify, according to the experts. They suggest lenders solve that problem by uncovering new and inventive ways to gauge creditworthiness, notably a way to lend mortgage money to qualified people who otherwise lack a credit history.
“We need to find ways to credit score these types of individuals by using things like rental payment histories, utility history and cell phone payment histories,” said First American chief economist Mark Fleming. “If they’ve established a creditworthiness through making monthly rental payment and timely payments on their cell phone bills, then you know there’s a good chance that they’ll also be capable of making a mortgage payment on time.”
Other panelists stressed the importance of people who file their taxes, as well as putting money in the bank that can be tracked so they can develop a relationship with an institution.
Source: DSNews (10/28/2015) Honea, Brian
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