Bank of America CEO says nation must change housing mindset

When hopeful homeowners begin to scope the housing market for the ideal piece of property, it's crucial that they keep their finances a priority. Falling behind on monthly payments will not only push them toward foreclosure, it could make any future purchases or investments more difficult.

This can be avoided by working with a lender that uses mortgage loan software, which will help them create a schedule that caters to the borrower's needs. Additionally, an amortization schedule for loans will keep monthly payments in amounts that won't put undue pressure on homeowners.

Bank of America CEO Brian Moynihan said during a speech at the Brookings Institute in Washington on Friday that the U.S. government, lenders and borrowers need to reset their expectation that everyone can own a home. According to him, the government should have a modified role with the housing market.

Furthermore, Fannie Mae and Freddie Mac's role needs to have an "orderly transition" in returning their focus to helping low- and middle-income borrowers.

"[The Federal Housing Agency] has been instrumental in sustaining the market the past few years, but they have come a long way from their original mission," he said during the speech.

Last month the FHA said it would raise premiums and sell off delinquent loans after disclosing that it might need U.S. Treasury aid to balance its books for the first time in its 78-year history.

When it came to lenders, Moynihan explained that they need to carefully underwrite loans and ensure that borrowers have an incentive to maintain their payments. It's important to find the right balance between prudent underwriting, responsible down payments and access to homeownership, he said.