WASHINGTON — A panel of financial regulators and housing finance executives expressed strong confidence the 30-year, fixed-rate mortgage will remain a key element of the U.S. housing finance market.
The panel addressed bank and credit union executives attending the Mortgage Bankers Association meeting on Monday at the Washington Convention Center.
The panel comprised Carol Galante, federal housing commissioner at the Department of Housing and Urban Development; Michael Heid, president of Wells Fargo Home Mortgage; William McCue, president and owner of McCue Mortgage, a housing finance company in New Britain, Conn.; and Thomas Wind, executive vice president at Everbank in Jacksonville, Fla.
Panel members based their opinions on the observations that long-term, fixed-rate loans were the vehicle that not only remain the most popular with the majority of consumers, but are among the only loans which will meet new housing finance regulations.
“I can't even imagine the 30-year, fixed-rate loan going away,” Heid said. “It plays that central a role and there is nothing on hand to replace it.”
McCue added the prediction that, eventually, the 30-year loan will become the only housing finance loan which is readily available.
“We also cannot underestimate the value of certainty for consumers,” McCue added. “Even if no one really plans to remain in their homes for 30 years, consumers like having a fixed mortgage payment they can plan around and budget around.”
Galante acknowledged that housing finance regulations favor the longer-term loans, noting that they provide the degrees of affordability that the U.S. has long tried to make sure remained included in its housing market.