The NATIONAL ASSOCIATION OF REALTORS® on Monday gave its support to the ongoing bipartisan efforts to finalize a financial bailout plan.
The proposed plan would allow the Treasury to buy questionable mortgage loans from U.S. and foreign-owned banks. At a potential cost of as much a $700 billion, the bailout package aims to repair U.S. financial markets and keep mortgages flowing to consumers.
After a busy weekend, Congress will continue to negotiate the plan this week.
"Obviously, there will be differences over some details, and we will have to work through them," President George W. Bush said Monday in a Washington Post article. "The whole world is watching to see if we can act quickly to shore up our markets and prevent damage to our capital markets, businesses, our housing sector, and retirement accounts."
Bush warned that failure to pass the bill quickly, which he said is possible if too many provisions are added, would have broad consequences far beyond Wall Street. "It would threaten small business owners and homeowners on Main Street," Bush said in the Washington Post report.
NAR said it believes government intervention is imperative to restore market liquidity.
"Many securities are being valued at pennies on the dollar due to the very high leverage ratio and illiquidity of certain mortgage-backed securities," NAR President Dick Gaylord said. "Unrealistically low valuations are paralyzing the balance sheets of financial institutions and have hindered liquidity flow."
Gaylord said NAR supports efforts to stabilize financial markets to allow rational valuation of assets, expedite refinancing and relief efforts for home owners, and other measures to reestablish a level of confidence in the housing credit markets.
"NAR will work diligently with Congress and the administration to achieve these goals as well as the broader goal of reforming the housing finance system," he said.
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