Federal Reserve Releases Housing White Paper
January 16, 2012: On January 4, 2012, The Federal Reserve released a white paper, entitled “The U.S. Housing Market: Current Conditions and Policy Considerations.” In the paper, the Fed said that continued weakness in the housing market poses barriers to a more vigorous economic recovery. The paper supports many principles established by NAR to help revitalize the housing industry and economy including, increasing lending to creditworthy home buyers, aggressively pursuing appropriate policies to keep borrowers in their homes, and providing greater incentives to pursue foreclosure alternatives like loan modifications, refinancing, short sales, or deeds-in-lieu of foreclosures. NAR believes these efforts will reduce the rising inventory of foreclosed homes and help stabilize and revitalize the housing industry. The Fed paper also addresses converting foreclosed properties into affordable rentals. In a statement released on January 5, NAR expressed concerns about proposed bulk sales of distressed properties and suggested that every effort should be made to increase liquidity for consumers and small investors since bulk sales will likely result in greater losses for taxpayers and have a more negative impact on housing values.