Housing and Urban Development secretary Julian Castro wants to make it easier for more Americans to buy a home.
“The truth is that the dream of homeownership is out of reach for too many Americans,” said Castro in his first major address as HUD secretary, addressing a crowd at the Bipartisan Policy Center’s housing summit. “This has to change. Some believe it was too easy to get a home loan. Today it’s too hard. The pendulum has swung too far in the other direction.”
The former San Antonio mayor became secretary of HUD in July. He said easing credit and nudging up home ownership rates is some of Castro’s top goals.
How tight has credit gotten?
Last week, former Federal Reserve chairman Ben Bernanke said he recently had been turned down when trying to refinance his Washington, D.C. mortgage.
“I recently tried to refinance my mortgage and I was unsuccessful in doing so,” said Bernanke. “I’m not making this up.”
Nationwide, lenders made $267 billion in home loans in the second quarter of this year, according to the Mortgage Bankers Association. That’s a 17-year low.
“I think it’s entirely possible,” Bernanke added, that lenders “may have gone a little bit too far on mortgage credit conditions.”
“We need to attract private capital back to the market,” said Castro last month. “I want to send a simple message to lenders: let’s work together.”
Castro said that government enforcement has been too “draconian” and lenders — who’ve been fined $3 billion for faulty loans since the crash — are justifiably frustrated and gun-shy.
To ease the crunch, Castro said that HUD is revamping its rules to ease concerns about penalties for minor oversights on new loans.
“We’ve got to work together to give folks who are ready and responsible the chance to buy a home,” he said.