Home buying is complex

Robert Steel, undersecretary for domestic finance: Mortgage Providers Must Be Clear

Excerpt:

At the town hall forum in Minneapolis sponsored by Sen. Norm Coleman, R-Minn., Steel said home buying is complex.

"Mortgage providers must offer clear, transparent and understandable information on the mortgage products they sell," Steel said. "And home buyers have a responsibility to use that information and understand their mortgages."

In the prepared remarks, Steel said housing and mortgage markets adjustments are occurring "against a backdrop of healthy U.S. fundamentals and strong global economy."

He said a "significant number" of homeowners will be affected by challenges in the housing market and many could face foreclosure.

About 2 million subprime mortgages will reset in the next 18 months, but not all of those will end in foreclosure, Steel said. Some homeowners will be able to afford their new payments; many others will qualify for a refinanced, fixed-rate mortgage, he said.

Some homeowners went beyond their means or made bets on the housing market, purchasing multiple houses expecting to make a profit, Steel said. "For many of these borrowers, foreclosure is inevitable," he said. "And let me be clear _ we have no interest in bailing out speculators. Our concern is for the Americans who are struggling to make payments on their primary residence."


Comment: Home buying is complex, the process should not be dumbed down to avoid the details!