Pursuits
30-Year U.S. Mortgages Spur Too Much Debt, Ex-Housing Chief Says
- Long-term loans 'bad advice' for many, according to DeMarco
- Shorter-term instruments would foster quicker equity buildup
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The idea that U.S. home buyers should be taking out 30-year fixed-rate mortgages is “just bad financial advice for many Americans,” according to Ed DeMarco, the country’s former top housing-finance regulator.
U.S. policy is focused “too much on increasing debt,” and “there is too much defaulting to ‘everyone should get the 30 year mortgage’,” the former acting director of the Federal Housing Finance Agency said Thursday at the ABS East industry conference in Miami. Instead, more should be done to steer borrowers to loan products that they can pay down faster, he said.