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Will QRM Steal the Latino Market's Opportunity to Take Advantage of Purchase Boom?
Jun 16, 2011

The National Association of Hispanic Real Estate Professionals (NAHREP) has published a report “The State of Hispanic Homeownership” that offers an overview of compelling data on the Hispanic homebuyer market and why it is poised, due to its population size, high desire and buying clout, to drive first-time homebuyer purchases and accelerate the nation’s economic recovery. According to the report, minorities and immigrants will drive growth in housing demand due to their population size, age and greater propensity to be married with children. In particular, within the next 15 years, they are expected to drive demand for condominiums, smaller starter homes and first trade-up homes. They are also expected to represent a rapidly growing segment of the middle and middle-upper markets for housing.  “The Latin boom has been forecasted for years, but we are now seeing the front edge of it and it has the potential to help the nation’s housing system get back on track if we can create a safe credit environment for new buyers to get into the market,” said Carmen Mercado, president of the National Association of Hispanic Real Estate Professionals (NAHREP). “Our report quotes data from a number of sources that highlight the fact that enthusiasm for homeownership in the Hispanic community remains as strong as ever.” In the report, NAHREP lays out what it calls "The Five-Point Plan: Restoring the Future of Minority Homeownership," a list of five actions that NAHREP feels must be taken in order to improve the market for the first-time homebuyer. Nahrep feels that providing a balanced regulatory approach to qualified residential mortgage (QRM) exemption definition in order to support and encourage sustainable homeownership for qualified and responsible homebuyers. NAHREP further feels that establishing a QRM that is significantly tighter and more restrictive than current market standards will unfairly result in categorizing countless creditworthy buyers as high-risk borrowers and would potentially lead minority and underserved borrowers to obtaining higher-cost mortgages, thus once again adversely impacting their prospects of homeownership and economic progress. “The State of Hispanic Homeownership,” which was penned by former Housing Fellow, Researcher, Author & Watchdog Alejandro Becerra. Past national housing surveys have revealed that Hispanics strongly aspire to become homeowners and are more motivated than the general population to buy a home for both emotional and financial reasons. Strong family values, larger family sizes compel this group by a wide margin to yearn for a place to call home. Fifty-seven percent of Hispanics consider owning a home a symbol of success, compared to only 33 percent of all Americans. While Hispanics have been severely impacted by foreclosure, the larger population of potential homebuyers were unaffected by the crisis and demonstrate an eagerness to become homeowners. The association’s report maintains that tight credit, higher fees, stricter underwriting requirements continue to remain barriers and that down payment assistance and savings programs are crucial to enabling buyers to afford homes even at present historic low prices. “In the climate of crisis, we must resist over reaching with regulations that make homeownership more expensive for millions of responsible consumers who have the buying power to revitalize our fragile housing market," said Mercado. "Homeownership remains a cornerstone of family stability and long-term wealth creation."
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