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Real Estate Articles"Hug a Realtor" Day in Texas
It is truly amazing that Texas, the state based on boom and bust, somehow managed to escape the housing melt down that decimated the balance of the country. While Texas politicians are all to eager to take credit, the real hero is - lobbyists. Almost impossible to believe, isn't it? By 1997 Texas was the only holdout among the fifty states in barring home equity loans. Pressured by big bank lobbyists to join the 20th century, the legislature in Austin began listening to arguments. The lobbyists had their work cut out as Texas had banned the practice of equity lending as a result of unscrupulous bankers in the 19th century. The ban was legislated in order to keep innocent Texans from losing their homes. The philosophy was, however, a homeowner should be able to take advantage of the unpledged value of their house. Additionally the interest on second mortgages was lower than credit cards and as a double plus, tax deductible. Lobbyists for the state's big banks, nearly all of which were national banks, gladly helped the politicians appreciate the benefits of equity lending. Banks were acutely aware of how much profit they were losing by not being able to make these loans and spent a lot of time and money lobbying to right their financial ship. But on the other side was the powerful Realtor's lobby that had always opposed any bills allowing equity loans. Realtors were concerned that if people borrowed too much against their homes and the economy took a dive, home foreclosures would soar and real estate prices would fall. Subsequently, Realtors would make a lot less money. As the bill moved through the legislature, the Realtor lobby pressed for and got safeguards into the bill. The single most important safeguard was limiting equity borrowing to 80 percent of the appraised value. Many other states allowed borrowing above the appraised value. The banker's bill lost to the bill brought by the Realtor lobby. As a result, Texas did not suffer as much from the disastrous equity-loan frenzy. Texans, hug a realtor today!
You can talk about... "Hug a Realtor" Day in Texas Tags: • foreclosures • real estate • equity lending • credit cards • bank lobbyists • second mortgages • home foreclosures • home equity loans • real estate prices • appraised value • texas • realtor • Related articles:
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