MoCoRealEstate

NAR’s plan to improve the housing market misses the mark

December 23rd, 2008 Categories: In General

Everyone has an opinion on how the U.S. government should address the economy and the housing market.  The professional body that represents real estate agents is NAR – the National Association of Realtors.  NAR promotes many positions that I agree with — like providing better health care options for Realtors and protecting property owner’s rights.  NAR’s “four-point plan” to stabilize the real estate market, however, is off target.

#1. Change the $7,500 tax credit currently available to new home buyers:  make it available to all buyers, and don’t require repayment. To me, this was bad legislation from Day One. Right now, a new home buyer can take a $7,500 credit on their federal tax return and then pay it back over future years.  This was never a credit, but an interest-free loan available from the government.  If a buyer can’t afford a home purchase without another loan, then they shouldn’t be making a home purchase.

Now NAR wants to make this a true credit available to all home buyers.  If the U.S. government is going to give money back, why single-out home buyers?  If a home buyer can’t afford a home without this credit, then they shouldn’t be buying.  This is a give-away that won’t make a dent in the housing market. NAR’s position on this point would make a bad idea even worse.

#2. Make the 2008 FHA, Fannie Mae and Freddie Mac loan limits permanent.  The government’s single most effective action in 2008 was to raise the FHA limits from $417,000 to $729,750.  This was a big deal for our local market.  Without it, the number of 2008 sales would have definitely been lower.  This increase was only good for a year and now the limit is $625,500.  I agree with NAR on this one.  With stringent underwriting requirements, I see no reason why lenders can’t make responsible loans at the higher limit.

#3. Target bank rescue funds on mortgage relief and foreclosure modification. Amen, brother.  Many responsible homeowners are getting pulled down with the undertow of foreclosures and distress sales.  In many cases banks should be forced to modify loans allowing families to stay in their homes.  Everyone looses when people are forced out of their homes — the homeowner, the banks, the neighborhood and ultimately the economy.  How would this work?  That’s the big challenge.  Addressing this issue is raft with pitfalls.  The government is going to do something here in 2009 – I hope they don’t screw it up.

#4. Permanently bar banks from engaging in real estate brokerage. Why is NAR even talking about this right now? Trust me, the last thing a bank wants to buy right now is a brokerage firm.  They can argue the merits of this legislation later. By adding this to their ‘four point plan’, NAR demonstrates that it’s just another big, special-interest lobby that puts its own priorities over the greater good.  Very disappointing.

My recommendation to NAR: Focus your considerable energy on helping homeowners stay in their homes and nothing else.  Participate in the dialog and help ensure that Congress implements effective, fair legislation.

Do you have an opinion?  Make a comment.

Posted by Bruce Lemieux

This entry was posted on Tuesday, December 23rd, 2008 at 7:00 am and is filed under In General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

1. Aaron Catt | Boise Real Estate Soup said at January 28th, 2009 at 1:03 pm

   And I thought I was the only Realtor who thought the NAR was ‘one-sided’. Evidently not.

   I’m surprised that they aren’t jumping on the bandwagon of telling agents to be “Shortsale Specialists”!

2. Bruce Lemieux said at January 28th, 2009 at 1:25 pm

   I think that most of us are looking for the U.S. to use all of our money smartly to help get the economy on track. Given the importance of fixing housing, it would be a great time to see real leadership from our professional organization. I think they’ve missed a great opportunity to do some good.

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