Too many chiefs?
With the housing crisis still heated and stabilization seemingly wishful thinking, 2010 will continue to be the year of finger pointing and as proof, everyone seems to have an idea that they feel will fix the housing sector. All ideas seem to be aimed directly in Fannie Mae and Freddie Mac’s direction.
FHFA has set new goals to overhaul Fannie Mae & Freddie Mac, Barney Frank has called to abolish Fannie Mae and Freddie Mac altogether, the National Association of Realtors recommends that Fannie & Freddie be converted into “government-chartered, non-profit secondary mortgage market authorities,” Credit Suisse is calling for them to be privatized while Former Treasury Secretary Henry Paulson suggests they should be set up as public utilities.
Pipe down, everyone
The Obama administration confirmed this week that it will not entertain any legislation regarding Fannie Mae or Freddie Mac until next year which we suspected would be the case, given that housing has not been a priority of the administration (as shown in his State of the Union speech which devoted 3 lines in the entire 70 minutes to the housing crisis).
Congress has no idea or consensus on what could actually help the housing industry and the White House seems to be following that same sentiment. Abolish? Overhaul? Privatize? Since The Hill doesn’t intend on doing anything, we unfortunately have ample time to debate this- what do you think would make the most impact in fixing the housing crisis?
Real Estate Feeds
February 26, 2010 at 5:11 am
Congress & Obama Clueless About How to Fix the Housing Crisis: Too many chiefs?
With the housing crisis still heat… https://bit.ly/9LoCaB
Real Estate Ninja
February 26, 2010 at 5:13 am
Congress & Obama Clueless About How to Fix the Housing Crisis https://bit.ly/9vtUcc
realdiggity
February 26, 2010 at 5:23 am
Congress & Obama Clueless About How to Fix the Housing Crisis: comments https://bit.ly/dlMGyB
RealEstate Babble
February 26, 2010 at 5:24 am
AgentGenius: Congress & Obama Clueless About How to Fix the Housing Crisis https://bit.ly/cMW5dq Full https://bit.ly/caTN4b
Eric Hempler
February 26, 2010 at 6:40 am
I think they need to let housing work itself out. I really don’t understand why they thought a tax credit would get people to buy. How can people buy if there are no jobs? Then there’s a credit if you sell then buy another home. Why would ANYONE sell their home and buy another just to get a tax credit? Aren’t you actually losing money with the closing costs and down payment? How is that a beneficial thing to do? The reason housing is having this major correct is because of the Community Reinvestment Act changes, so why would we want the government to mess things up more?
Matt Stigliano
February 26, 2010 at 7:33 am
Lani – I think we need to let pricing work itself out more than anything. Will that destroy some people’s hopes and dreams on their home if they’re underwater? Of course. Unfortunately, not everyone’s home price can be resolved with a snap of the fingers.
The tax credit needs to go – artificial demand and confusion/anticipation have ruled this part of the housing market corrections. Stop telling people it’s the last one and then sending out press releases that encourage it to be extended (I’m talking to you NAR). Encouraging the continuation of the tax credit will only further deepen the psychological long-term impact of the crisis.
Let’s stop paying lip service to homeowners. Want to keep them in their houses – then do it. Want to make the short sale/foreclosure process easier – then do it. Want to get banks to stop this “we’ll get to it when we get to it” attitude – then do it. I’ve listened to so much talk about these things, yet the banks seem to have the government fooled into thinking they’re doing the best they can. I don’t buy it.
My favorite example is short sales…”we just don’t have enough people to process all the short sale paperwork.” Hmmm, you’ve just brought in a nice profit, you borrowed money from the U.S. to get you on your feet, we have high unemployment, you claim to care about customer service, and your department is understaffed. *Scratches head* Hmmm, I know there’s a solution in there somewhere…I just can’t figure it out.
Ralph Bell
February 26, 2010 at 9:45 am
The tax credit is really helping those in the lower price range of home shoppers. The 8K definitely makes a difference to them. They are purchasing Foreclosures and short sales in need of repair or updating and using the 8K to replace carpet, flooring, and paint. Think about all the economics involved with that.
But as far as the middle to upper end home buyers I see that the 8K is not persuading them to purchase now. It is not creating a since of urgency like it is for the lower end home buyers.
I would like to see the Feds allow a permanent tax credit for 1st time home buyers looking to purchase distressed properties and increase the amount to 10K.
Eric Hempler
February 26, 2010 at 10:18 am
If you put a permanent tax credit for first time home buyers you’re making a false market and it would be only a matter of time till these homes are overpriced.
Dennis C Smith
February 27, 2010 at 1:44 pm
They are able to get their tax credit fast enough to do all that work? I am very skeptical any tax credits have been processed that fast. The tax credit is a waste of tax payer money and those who have benefited the most are those who have frauded the system to pick up the check. Get rid of it.
Ralph Bell
February 26, 2010 at 10:46 am
A false market for distressed homes? Now that is funny!
Nashville Grant
February 26, 2010 at 1:27 pm
How about hands off and let the natural market forces determine the housing market!! That is a true free trade democratic capital market.
ShortWoman
February 26, 2010 at 5:28 pm
Well, when the unfortunately accurately named TARP program was unveiled, I thought it would have been a far better idea to for the Feds to simply pay a maximum of $100,000 towards every primary mortgage. This would have the same net effect of giving money to the banks with no strings attached (which is pretty much what happened) while making most homes no longer “underwater,” thus drastically reducing the number of short sales and foreclosures. But no, we can’t leave the impression that the government will bail anybody out who’s worth under a few million dollars.
As for what will help now? We have got to get all these contingent short sales moved before they all become next month’s or next year’s REOs. Almost 2/3 of Vegas’s contingent listings are short sales awaiting approval! That’s over 9800 properties, and we only have 11,000 available listings.The banks are quite stubborn about approving these things, and the new voluntary guidelines are a joke. I hate to think that we might need a federal agency to rubber stamp the majority of them, but I don’t see the banks doing anything close to “the right thing.”
Realty Infusion
February 26, 2010 at 10:47 pm
Lani Rosales nails the best read of the day ==> https://bit.ly/b7XgXA via @AgentGenius
Greg Hollander
February 27, 2010 at 2:34 am
@agentgenius Congress & Obama Clueless About How to Fix the Housing Crisis https://bit.ly/aLOMEM
Jim Gatos
February 27, 2010 at 4:56 pm
I don’t think the tax credit has TRULY motivated the amount of buyers everyone was hoping for and on the next roll around I think it should be put to rest.
Brandie Young
February 28, 2010 at 2:10 pm
Hi Lani
How timely. I just returned from the MBA Servicing conference – what an eye-opener! I participated in meetings with players from the “other side of the fence” if you will, including servicers, sub servicers , loss mitigation folks and GSE’s – very insightful.
The bottom line is, we have a long way to go and will be feeling pain for some time.
@Eric Hempler – spot on! People can’t buy or keep homes when they have no income.
archer214AV
March 1, 2010 at 8:11 pm
There is a proposal that has been reviewed by many experts that is unlike any of the other “fixes”. It doesn’t include banks, it doesn’t require the existing mortgage to be modified, and it use market forces to quickly determine if a defaulted, distressed, or underwater mortgage on a home can be “fixed”. The program description and details are available at internetlawny.com.
What if it works and is never tried?
Burt Goralnick
April 2, 2010 at 6:44 pm
The Fix 1 2 3…
1. Lower Income Taxe Rates = Incentive to invest.
2. End Estate Tax (Or have a $10 million exemption= Save small businesses = Jobs.
3. Regulate Oil Futures. All purchases must take delivery. = Less speculation, lowers prices.
Last: Sell or refinance defaulted homes at market values with fixed fully amortized loans.
(The government (Fannie & Freddi) suckered low income earners to buy homes on terms they could never repay.)