11-10 BOD & stimulus plan
In my
ongoing effort to bring you more from the business side of the 2008 NAR
Conference & Expo,
today was the Board of Directors Meeting. It was an epic
event
spanning more than four hours in spite of the fact that there were no
items of controversy on the agenda. I'll write another post on the
meeting in general as there were some interesting announcement but the
item that generated the most discussion today was NAR's Four
Point Housing Stimulus Plan.
In
an effort to be more inclusive of commercial Realtors, there were
proposed amendments to the plan, which were defeated. In an effort to
provide more responsiveness to people who currently have a mortgage in
trouble, there were amendments which were defeated. What emerged was a simple, straightforward
proposal designed to stimulate the 'BUY' side of the housing equation right
now. What follows is the verbiage of the plan as approved by
the Board this morning:
As
REALTORS, we know that at its core, the current economic crisis is the
result of problems in our nation's housing and mortgage markets. With
Congress considering a return to Washington this month for another
economic stimulus effort, NAR has put forth a Four-Point Plan that mus
be included in any stimulus effort in order to boost the economy and
calm jittery real estate markets.
Housing
has always lifted our economy out of past economic downturns. Immediate
action is imperative to foster a housing recovery that historically
leads any overall economic recovery.
NAR's
plan would
- Make
the $7500 first time homebuyer tax credit available to all buyers and
eliminate repayment requirements. The credit's limited availability and
re-payment requirement severely limit the credit's use and
effectiveness.
- Make
the 2008 FHA, Fannie Mae & Freddie Mac loan limits permanent.
New
rules for 2009 will reduce them. Now is not the time to limit mortgage
affordability.
- Get
the Treasury relief program back on track and target more funds to
mortgage relief. Create a federal mortgage interest buy-down program to
lower rates to 4.5% or lower and stabilize home pries. The proposal
calls for a short-term government buy-down of mortgage rates to at
least 4.5% or lower, for a 30 year fixed rate mortgage (down from
current rates of approximately 6.04%). This homebuyer incentive would
apply to the purchase of all new and/or existing homes sold up to $1
million in price. There are a number of ways in which the government
ultimately could decide to structure and fund this program, which could
be addressed as part of the stimulus package currently being discussed
in Washington.
- Permanently
bar banks from engaging in real estate brokerage and management. The
banks have proven they have enough to do to simply manage the loan
process. We do not want them to manage home sales and purchases.
As
you might imagine, item 3 generated the most interest. Our lobbyists
will actually be proposing an interest rate buy-down to as low as
2.99% for 1 year followed by a second year at 3.99%.
Understand, these are 30 year
fixed loans at 2.99%
- or whatever the final amount is determined to be. Based on it's
research, NAR believes that the current interest rate is artificially
inflated by as much as 200 basis points, therefore it would take a real
rate of @ 4% to encourage buyers to get in the game NOW. They would
prefer a rate of 2.99% as a real stimulus incentive (do
you have buyers who would get off the fence if they could get a 30 year
fixed mortgage at 2.99% on todays housing prices? You bet!)
Followed by a second year with the buy-down to 3.9%. After two years,
the inventory would be largely eaten up and housing would revert to
it's free market interest float - although by that time the housing
recovery would have precipitated a more generalized economic recovery
and interest rates should be naturally lower anyway.
In addition to approval by the Board, some 20,000
Realtor attendees at the Expo signed a large cardboard
house that will be presented to legislators on our behalf. You will
also shortly be asked to respond to a 'Call for
Action' to notify your legislator of your support for this
stimulus package. Estimated cost of the buy-down - around
$100 Billion.
But they just approved $700 Billion of which nothing has yet gone
to
the people we were told it would help. Now Nancy Pelosi
just signed a
letter with automakers asking for $100 Billion of that bail-out money.
This would apparently enable people to move out of their foreclosed
home in a new car. Thanks Nancy. Why do you people in Northern
California keep re-electing this... person?
Our Buyers
need that money and they need it NOW. Realtors, this will be a time to
make OUR voices heard.
Gene
Wunderlich - Selling Southwest California Homes including
Temecula, Murrieta & The Southern California Wine Country
Remember, Don't wait to buy real
estate - Buy real estate and wait.
' NAR Four Point Housing
Stimulus Plan'
THE
OPINIONS IN THIS
COMMENTARY ARE STRICTLY GENE WUNDERLICH's PERSONAL OPINION. WHILE ANY
REASONABLE &/or RATIONAL PERSON SHOULD AGREE, THESE VIEWS MAY
NOT
REFLECT THOSE OF ACTIVERAIN, COLDWELL BANKER RESIDENTIAL BROKERAGE OR
ANY LOCAL, STATE OR NATIONAL ASSOCIATIONS.
;)
;)
;)
Interesting. These are the first sensible proposals I've seen. Let's hope we (NAR) still have some Dems that will let us in the door.
Shucks, I could even refinance myself. What appears to be missing is the matter of value. Can these proposals work for folks with negative value????
Flagged. This needs to be featured.
Love it Gene. Good work.