America's bankers are running out of money to lend home buyers and homes could become less affordable as a result, the president of the nation's largest single source of home mortgage money said today.
Mark J. Riedy, president of the Federal National Mortgage Assn., said lenders must raise more money or ask for bigger down payments from home buyers "many of whom--especially first-timers--may not be in a position to meet those demands."
If builders or lenders can't find money, borrowers may have to find their own, perhaps asking their parents to help with a big down payment, he said.
His remarks, released in Washington, were prepared for the Mortgage Bankers Assn.'s secondary mortgage conference in Los Angeles.
High inflation is no longer able to "bail everybody out," he said.
"We all thought inflation was terrible, but it sure helped out the housing industry for a long time," he said in a telephone interview. If a big monthly payment left a buyer temporarily short of cash, the next jump in inflation was likely to give the borrower a raise and increase the value of the house.