Congress and Obama Administration Must Act to Stimulate Housing Recovery
WASHINGTON (October 25, 2011) - America needs strong housing policies that ensure a robust recovery and do not further weaken the nation’s housing market. That was one of several recommendations resulting from the bipartisan New Solutions for America’s Housing Crisis forum on October 4 and endorsed by the National Association of Realtors®.
The forum was hosted by the Progressive Policy Institute and Economic Policies for the 21st Century and brought together policy leaders, industry representatives, members of Congress, thought leaders and the media. In a letter sent today to Congress and President Obama, NAR outlined and urged support for the recommendations in a new five-point housing solutions plan to help reenergize housing markets and spur the economic recovery.
“As the nation’s leading advocate for homeownership and housing issues, NAR knows that the key to the nation’s economic strength is a robust housing industry,” said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “The nation is in need of immediate policy solutions to address the myriad challenges. Swift action from Congress and the administration is needed to stimulate housing and economic recovery.”
The five-point plan urges legislators and regulators to oppose proposals that could put the nation’s housing market recovery at risk. This includes revising the unnecessarily high down payment requirements of the proposed Qualified Residential Mortgage exemption; restoring higher mortgage loan limits supported by the Federal Housing Administration and the government-sponsored enterprises (GSEs); and preserving home ownership tax benefits, including the mortgage interest deduction.
“Consumers continue to find it increasingly difficult to find affordable mortgage options. Proposing higher down payments and lowering conventional loan limits only strips home buyers of their savings and reduces the number of borrowers who are able to purchase a home,” said Phipps. “Now is also not the time to change the tax benefits that apply to homeownership, which would further undermine consumer confidence and depress home values.”
The plan recommends that lenders and the government take more aggressive steps to modify loans and approve short sales to help reduce high foreclosure inventory levels and restore vitality to communities and neighborhoods. Realtors® are hopeful that reduced fees and improvements to refinancing programs will help more struggling homeowners reduce their monthly mortgage payments and avoid losing their home to foreclosure.
The plan also calls for changes to rehabilitation and investor financing programs, which will help private capital return to the mortgage markets and foster new demand among responsible homebuyers. This would also help reduce the high inventory of foreclosed homes and stabilize home prices.
In addition, the plan recommends that the federal government continue to play a role in the secondary mortgage market to support the use of long-term, fixed-rate mortgage products and ensure a continual flow of mortgage capital in all markets under all economic conditions. Phipps said that recent proposals calling for the full privatization of GSEs Fannie Mae and Freddie Mac should be rejected, because private firms will focus on generating revenue rather than on the best interests of consumers or the nation’s housing market, making homeownership unaffordable for many Americans.
Finally, the plan urges the White House to move housing to the front of the nation’s domestic agenda. Phipps said that a broad discussion among stakeholders could provide valuable recommendations and solutions to put housing and the economy on a path to recovery.
“A housing recovery is key to the country’s future economic strength. That is why Realtors® are proud to endorse these recommendations, which we believe will help housing return to a balanced, healthy state,” said Phipps.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.
Information about NAR is available at www.nar.realtor. This and other news releases are posted in the News Media section.