Posted by: realtormarkpalace | October 27, 2011

Congress and Obama must act to stimulate housing recovery

WASHINGTON – Oct. 26, 2011 – America needs strong housing policies that ensure a robust recovery – ones that do not further weaken the nation’s housing market, according to one recommendation created by the bipartisan New Solutions for America’s Housing Crisis forum on Oct. 4 and endorsed by the National Association of Realtors® (NAR).

In a letter sent yesterday 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. “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 rejection of any proposals that could put the nation’s housing market recovery at risk. At issue are the high downpayment 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 homeownership tax benefits, including the mortgage interest deduction.

“Consumers continue to find it increasingly difficult to find affordable mortgage options. Proposing higher downpayments and lowering conventional loan limits only strips homebuyers 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. Realtors hope that reduced fees and improved refinancing programs will help more struggling homeowners reduce their monthly mortgage payments and avoid losing their home.

The plan also calls for changes to rehabilitation and investor-financing programs, which would help private capital return to the mortgage markets and foster new demand among responsible homebuyers. It would also help reduce the high inventory of foreclosed homes and stabilize 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.

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.

NAR’s five-point plan is also available online.

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