Hispanic markets are large enough to drive a full economic recovery, but legislation needs to provide a stabile secondary market, NAHREP tells U.S. Senate Committee
SAN DIEGO, CA (May 19, 2014) -- The nation needs housing reform and a national policy that changes the status quo as it affects the country’s fastest-growing market segment, says the National Association of Hispanic Real Estate Professionals (NAHREP). NAHREP is the leading trade association among Hispanics and is comprised of 21,000 members in 40 chapters around the United States.
In a letter to the Senate Committee on Banking, Housing & Urban Affairs, NAHREP President Jason Madiedo, a mortgage banker with over 19 years of experience making home loans, said that while the current proposed legislation may be on the right track, it does not go far enough to meet the needs of an increasingly diverse home buying market.
Referring to the Housing Finance Reform and Taxpayer Protection Act of 2014 proposed by Committee Chairman Tim Johnson and Ranking Member Mike Crapo, Madiedo’s letter said, “The status quo of the GSEs in conservatorship, a system dominated by government support, and increasing constriction of credit simply cannot be sustained. NAHREP believes we need legislative reform, and we support S. 1217 with some important caveats. To sustain a liquid secondary market, we’re pleased to see the Bill provides a Government “backstop,” but clearly intends to put private capital in front of taxpayer risk. It is estimated that 40% of all new homebuyers will be Hispanic in the coming years. We support the modest 3.5% down payment opportunity for first time homebuyers, clearly a high priority for constituents of NAHREP.”
Madiedo’s letter went on to point out areas that NAHREP feels strongly about:
“Two major issues must be addressed as this legislation progresses through the US Congress.
· First, we are concerned the added 10% capital cost on conventional mortgages could be prohibitive for many Americans, especially first time and low to moderate income homebuyers.
· Second, it is projected that nearly 74% of households formed in the period 2010-2025 will be minority. Hispanics were disproportionately affected by the housing crises, losing 65% of their median household wealth between 2007 and 2012. Homeownership has always been a gateway to the middle class in America. Whether through affordable housing goals, objectives or incentives, this legislation must adequately meet the needs of a growing, diverse homeowner population.”
The proposed Johnson/Crapo legislation has been controversial, and while debate on its merits continues, the needs of the evolving market in the United States require reform sooner than later, says Gary Acosta, NAHREP co-founder and CEO. “Success in addressing the requirements of the minority market is essential for a sustainable economic recovery, job creation and long-term stability,” Acosta notes. Citing NAHREP’s 2013 State of Hispanic Homeownership Report released last month, Acosta says, “Since 2010, Hispanics have accounted for a net increase of 559,000 owner households, representing 56 percent of the total net growth of owner households in the U.S. Their purchasing power is estimated to grow to $1.5 trillion by 2015, a $500 billion increase from 2010,” he says. “The Hispanic market alone is large enough to drive the housing recovery, and we need the legislation affecting homeownership to include these motivated, creditworthy buyers and other minorities.”
Madiedo adds that mortgage companies currently catering to the Hispanic markets are reaping the benefits, including his own firm, Las Vegas-based Venta Financial Group. “Our company and others that have invested the time and energy to understand the needs of this growing market are experiencing high loan volume while the rest of the industry is struggling,” he says. “Latinos are ready to buy homes now and the faster we provide the inventory to accommodate them, bolstered by a secondary market that keeps sustainable and affordable financing available, the sooner America will achieve a full economic recovery.”
About NAHREP
The National Association of Hispanic Real Estate Professionals, a non-profit 501c6 trade association, is dedicated to increasing the homeownership rate among Latinos by educating and empowering the real estate professionals that serve them. Based in San Diego, NAHREP is the nation’s largest trade organization for Hispanics with more than 21,000 members in 48 states and 40 affiliate chapters. For more information, visit www.NAHREP.org.
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