WASHINGTON – Jan. 14, 2009 – According to National Association of Realtors® (NAR) President Charles McMillan’s testimony yesterday before the U.S. House Financial Services Committee, Congress and the next administration must place significant emphasis on restoring confidence in the housing market.
“The housing sector is at the core of the current economic crisis,” McMillan said. “A renewed, revitalized and robust housing market is essential to generating commerce and helping families build wealth.”
McMillan congratulated Chairman Barney Frank, D-Mass., on H.R. 384, the TARP Reform and Accountability Act, which was introduced last week. Many points in this bill reinforce NAR’s proposed recovery plan to stimulate housing investment, mitigate foreclosures, help current homeowners, and provide needed liquidity to commercial mortgage markets to ensure that financing is available. The principle focus of NAR’s plan is to ensure that the TARP (Troubled Asset Relief Program) does what it was originally intended to do – end the credit crisis and jumpstart mortgage lending.
“It is imperative to get TARP back on track by targeting funds for mortgage relief, which will help lower mortgage rates and reduce foreclosures,” said McMillan. “In addition, eliminating the repayment feature of the first-time home buyer tax credit and expanding it to all home buyers; reinstating the higher mortgage loan limits for FHA, Fannie Mae and Freddie Mac; and lowering mortgage interest rates through a buy-down program will meaningfully impact the housing industry. We are pleased that Congress is moving forward on these important issues. Together these actions will build a solid foundation for a housing recovery.”
NAR’s plan also includes keeping mortgage interest rates low, boosting home buyer confidence, and reducing the current foreclosure rate. NAR has also asked that regulators be encouraged to help financial institutions resolve problems in the short-sale process, make it easier for servicers to modify existing loans, remove unreasonable underwriting guidelines and insist that credit reporting agencies correct errors promptly.
“Low interest rates are only effective if people can get a loan. We hear every day from our members that even home buyers with good credit are having trouble getting mortgage loans. We must all work together to unclog the housing and financial system,” said McMillan.
NAR called on Congress to use current TARP dollars to not only reduce interest rates, but also fix operational issues that prevent consumers from getting or modifying home loans. “These are critical steps that must be undertaken quickly if we are to right our nation’s housing and financial markets,” McMillan said.
NAR hailed the House of Representatives’ actions and called on the Senate to move quickly in adopting its proposal. NAR also expressed hope that the new administration will focus on a housing recovery as it moves forward with a larger stimulus package.
The National Association of Realtors(R), “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.