The Ohio real estate market has proven to be relatively strong over the last few months. According to the Northern Ohio Regional Multiple Listing Service, the number of single family unit sales increased 4.7% in the beginning of 2015, which was a remarkable turnaround from the sluggish market in the prior year. The stronger housing market has also attracted many predator lenders, which is fueling concerns about another housing crisis.
State lawmakers are collaborating with their colleagues in Congress to address these concerns. They hope that subprime mortgagors and other unscrupulous lenders will be driven out of the state.
Ohio voters recently expressed a strong desire to limit unscrupulous lenders in the state. The Consumer Financial Protection Bureau recently instituted significant reforms to limit payday loans. However, some conventional lenders are still issuing subprime mortgages at usury interest rates.
John Boehner, the Speaker of the House of Representatives, recently praised the introduction of The Preserving Access to Manufactured Housing Act, which would try to curb costs on mobile home purchases. The bill intends to address many of the shady practices that have increased costs on lower income home buyers. Boehner is an Ohio resident and apparently recognizes the financial problems that such lenders have created.
Patrick Crowley, a spokesman of the Ohio Consumer Lenders Association, has praised lawmakers for taking new steps to limit predatory payday lenders. However, Crowley has previously stated that efforts to curb subprime mortgages have been insufficient. He was particularly vocal about the problems before the recession struck. While new reforms have since taken effect, more regulations are needed to ensure consumers receive the protections they need.
How Will Measures Impact the Housing Market?
The new regulations may have temporary ramifications for the Ohio housing market, but should ultimately prove beneficial over the long-term. The market for middle class family units will probably be fairly insignificant, but lower income families may still have difficulty affording new homes unless other mortgage reforms reduce lending costs for lower income buyers. However, this drawback will probably be fairly benign, since subprime lenders are becoming less prevalent in the Buckeye State.
However, the laws should eventually cause overall interest rates to decline as mortgage defaults and foreclosures from subprime lenders decline. As a result, residential properties should ultimately become more affordable for low income homeowners in the coming years.