Honesty about housing loans critical factor
The long-awaited turnaround in the housing market appears to finally be materializing across the nation, and that is a good sign for the economy.
There was especially good news this week for the state of Arizona as a whole. A report from the Federal Finance Agency said that the average price of a home sold in the state has gone up by more than 20 percent in the past year. That is twice the rate of any other state.
But averages can be deceptive. The news was not as good for our community. Prices have been going up at a slow rate here, compared to the average for the state overall. But it does appear the housing situation has at least stabilized in Yuma County.
Perhaps the Yuma story is not surprising, given that traditionally our area enters recessions later and therefore also comes out of them later.
At any rate, the national housing news is a good sign of recovery.
It is also why a recent action by the federal government to crack down on the honesty of advertising by mortgage brokers and lenders is timely.
The Consumer Financial Protection Bureau and the Federal Trade Commission have been issuing warnings that misleading claims on mortgages will not be tolerated. Formal investigations of 19 alleged violations are already underway.
“Our hope is through this joint effort that we will make the point that mortgage advertisers need to be very careful about the claims that they make,” said a government spokesperson.
One cause of the housing industry collapse that started the spiral into the Great Recession was misleading lending and false promises to those seeking mortgages, especially sub-prime loans.
It is important that every effort be made to make sure that doesn't happen again because a healthy housing industry is critical to the nation's economic well-being.