Proposed Bill in Congress Could Crush Housing Industry
Are there always two sides to a story? Yes, the impact to the real estate industry could be sharp. But shouldn't the focus on whether this is a good deal for the distressed homeowner and the mortgage investors? Is this another example of Government shoving legislation down our throats rather than to let the free market decide...
From Matthew Ferrara & Company's Blog today:
If you’re looking for how the housing market double-dip will be created, here’s the answer. Never mind the endless taxpayer-backed money-pits of FHA, Fannie and Freddie: Here comes a proposal to grant defaulting homeowners the “right” to rent their homes for five years.
It’s called H.R. 5028 and it’s no joke. The “Right to Rent” bill drafted before Congress meets with the approval of the Center of Economic Policy and Research, a think-tank that believes home “ownership may not be the smartest option.” Not that such thinking in Washington should come as news to our readers, since we’ve reported that none other than FHA’s Director Donovan has made similar statements in recent months.
But now we’re talking potential legislation.
According to HousingWire, the bill would grant the right to homeowners entering foreclosure to occupy their homes for up to five years, making fair-market rent payments, determined by an independent appraiser, to the lender. The CEPR says this would give homeowners important “security” since they would not be “thrown out on the streets.” CEPR cites the cost savings to “homeowners” who would be able to rent their homes rather than face evictions and have to rent on the open market.
REALTORS should be horrified.
Read the rest of this blog entry at our site...
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