Survey: Americans Blame Low, No Money Down Mortgages for Housing Meltdown

Experts contend that the appeal of government-insured home loans and a resurgence in the ""Federal Housing Administration’s market share"":http://dsnews.comindex.php/home/news_story/3230 can be attributed to the fact that these mortgages require smaller downpayments than conventional loans. But ""ING DIRECT"":http://www.ingdirect.com says a recent survey it conducted shows consumers have learned a powerful lesson from the mortgage meltdown - save for a downpayment.
According to the Wilmington, Delaware-based direct lender, more than four in 10 Americans - 42 percent to be exact - think homes purchased with a bigger down payment in recent years could have reduced the proliferation of foreclosures and prevented the sharp economic downturn. ING DIRECT argues that in recent years, too many no-money-down mortgages were offered to homebuyers who could not afford to keep paying their mortgages after their homes lost significant value and the economy slowed.
Arkadi Kuhlmann, president of ING DIRECT USA, said, ""Owning a home is an opportunity, not an entitlement. Sadly, that message has been lost in translation over the past several years.""
Kuhlmann says consumers who want to own a home, should save for it. And, he says, his company’s recent survey shows that Americans agree.
The survey also reveals that more than 40 percent of homeowners may refinance this year because of historic-low mortgage rates. Homeowners surveyed indicated that they are seeking new options from the 30-year mortgage product. Nearly four in 10, or 37 percent, said they are likely to consider a mortgage that allows them to make bi-weekly payments to pay off their mortgage faster, without pre-payment penalties.
Kuhlmann said, ""Americans want home loans that eliminate years of payments and give them the freedom to own their homes sooner.""
The national housing survey was conducted by the research firm ""Harris Interactive"":http://www.harrisinteractive.com, on behalf of ""ING DIRECT"":http://www.ingdirect.com, during May 2009.