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Proposed Bill in Congress Could Crush Housing Industry

By
Education & Training with -- www.matthewferrara.com

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... 

 

Victor Zuniga
Berkshire Hathaway Home Services California Properties - San Diego, CA

Now I've heard it all. I can sympathize with people losing their homes but I think this bills goes too far. Are there no other rentals available? These days it seems that solutions to problems go from one extreme to another. Then again the country has become so polarized that this fits right into these times. What will they think of next?

Sep 24, 2010 10:30 AM
Matthew Ferrara
-- www.matthewferrara.com - Boston, MA
Matthew Ferrara & Company

@Victor: If they're going to nationalize housing, maybe they can just be honest about it? ......

Sep 24, 2010 10:46 AM
Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

Is 5 short years long enough for people to make an alternate plan?  I mean, we don't want people ejected onto the streets, right?

Sep 24, 2010 04:08 PM
Mike Saunders
Retired - Athens, GA

Matthew - while this would be one of the final nails in the coffin for the housing market, it appears to be DOA. It has languished in committee for over 5 months and similar bills are dead. It certainly will not come to the floor before the house breaks for elections and, after what looks like Nov. will bring, will probably never see the light of day.

Sep 25, 2010 02:52 AM
Larry Lawfer
YourStories Realty Group - Newton, MA
"I listen for a living." It's all about you.

The ideas that float through our legislatures these days make no sense whatsoever. Without any leadership at all the bills that get put up for a vote are an amalgamation of various ideas and no clear thought. This is yet one more. Thanks for bringing it to our attention.

Sep 25, 2010 05:22 AM
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

Oh sure . . . they'll [and by 'they'll . . . "they" referring to the mortgage holders] ride out the 5 years, when values come back?!?   The homeowners who whose mortgages were manipulated get to rent -- their own homes!!  The mortgages are then paid by the rents collected.  GEEZ! 

Sep 25, 2010 09:00 AM
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

The bill looks dead as has been indicated by Mike Saunders.  Even if it passed, what is the likelihood that a homeowner who can't make mortgage payments will not default on rent payments?  Even if this poorly conceived bill became law, it would benefit nobody.

Sep 25, 2010 09:07 AM
Brian Morgenweck
Power Realty Group, LLC Bergen County, NJ - Hackensack, NJ
Broker/Owner, GRI, CRS, ABR, SRS

Everyday, the next revolution gets a little bit closer.

Ween them off private enterprise, a free market system, private property, who needs all that nonsense?! The government will take care of you!

Don't forget to vote for your landlord!

My friends...The lunatics have taken over the asylum.

Sep 26, 2010 01:56 PM
Jark Krysinski *PREC (Personal Real Estate Corporation)
REMAX CREST REALTY WESTSIDE - Vancouver, BC
TeamYVR Team Leader, BA,ABR,IRES,IMSD,LLB

Matthew, this constitutes another form of usury in my opinion.  If i was a homeowner in that position I am not sure if I would accept.  Think of it this way.  If i have no more title to the property and pay rent for the property, (1) it means the banks themselves don't see the value in the property and don't believe that it will sell, it also means that (2) the banking systems are becoming landlords not just mortgagers, which reminds me of the land-title systems before land-title systems, in the old world, where should you become late with payments you were kicked off the land and all your interests in that land were abolished.  I think these bills would enter a dark period in our real estate history...

Sep 27, 2010 04:30 PM
Alan Brown
Coldwell Banker Realty - Davenport, FL
32 Years of Real Estate Experience .

Duly Horrified.  More government do gooders can we shout any louder "Nanny State"

Sep 26, 2011 10:19 AM