In a story on NewsChannel 9 in Chattanooga, CRER director Howard Wall gave his perspective on a proposal in the Tennessee legislature to change the method for calculating the maximum mortgage rate that can be charged in the state. The bill would peg the maximum mortgage interest rate at four percentage points above the average prime offer rate on a 30-year fixed rate loan. Under current law, the maximum mortgage rate would be set at 4 percentage points above the rate for 30-year Treasury Bills.
Wall explained that the bill should result in a higher maximum rate. He also said that the only people who would be affected by the change are those who would not be able to get a mortgage otherwise, and that it would probably only affect second mortgages. This jibes with the claim from the bill’s sponsor that the change will create greater opportunities for borrowers.