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| Fannie and Freddie Will be Important in Economic Recovery, Lockhart Tells Realtors(R) |
Posted: 2008-11-10 19:37:54 |
WASHINGTON, DE -- At the 2008 REALTORS(R) Conference & Expo today, Federal Housing Finance Agency Director James B. Lockhart III assured Realtors(R) that government-sponsored enterprises Fannie Mae and Freddie Mac and the Federal Home Loan Banks will continue to play a critical role in the country's economic recovery.
(Logo: http://www.newscom.com/cgi-bin/prnh/20080923/NARLOGO)
"As Director of FHFA, I am using the authorities established in the Housing and Economic Recovery Act of 2008 (HERA) to ensure that the housing GSEs provide stability and liquidity to the mortgage market, support affordable housing and operate safely and soundly," said Lockhart.
FHFA is a newly created independent federal agency that was granted expanded legal and regulatory authority to take actions that would strengthen Fannie Mae and Freddie Mac and the Federal Home Loan Banks. Lockhart told Realtors(R) that placing Fannie Mae and Freddie Mac into conservatorship was unavoidable and was necessary primarily because of "an inherent conflict and flawed business model embedded in the GSE structure."
"Our members see firsthand the impact that an unstable housing market is having on communities all across the country," said National Association of Realtors(R) President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists, Long Beach, Calif. "Ensuring that the nation has a strong secondary mortgage market and continued affordable financing will certainly help stabilize housing prices."
NAR sent a letter on October 16 to U.S. Treasury Secretary Henry Paulson calling on the Treasury Department and the FHFA to refocus their efforts on restoring strength to the mortgage-backed securities market, which would help lower mortgage rates for all home buyers and for those needing to refinance.
"The administration and Congress need to work together to ensure that the American people -- not Wall Street and large banks -- benefit from the economic recovery plan, and Fannie Mae and Freddie Mac play an important role in this recovery," Gaylord said.
In the interests of stimulating the housing market and the economy, NAR supports making the 2008 GSE loan limits for high-cost areas passed in February as part of the Economic Stimulus Act permanent. In addition, NAR submitted a stimulus plan to Congress and the administration in October calling on Congress to enact a new housing stimulus package that would help boost the economy.
The plan includes consumer-driven provisions that would eliminate repayment of the first-time home buyer tax credit and expand the credit to all home buyers, make the 2008 increased mortgage loan limits permanent, focus the economic stabilization efforts on supporting the housing and mortgage markets instead of providing capital to banks with no strings attached, and permanently ban banks from entering into real estate brokerage or development.
According to an NAR economic analysis presented in October, a reduction, or a buydown, of interest rates by just 1 percentage point could result in up to 840,000 additional home sales and reduce the inventory of homes by as much as 20 percent. Inventories currently at a 9.9-month supply would decrease to approximately a 7.5-month supply.
NAR reported that reducing the interest rate, combined with removing the home buyer tax credit repayment, would reduce inventory by an additional 10 percent, down to a 6.5-month supply, and would produce modest home price gains of 2 to 4 percent. Such price gains would provide up to $760 billion in housing equity for the nation's 75 million homeowners.
"Stabilizing home prices would not only improve the housing market but also would bring clarity to the valuations of mortgage-backed securities, removing uncertainty in the financial markets and positively affecting the overall U.S. economy," Gaylord said.
The National Association of Realtors(R), "The Voice for Real Estate," is America's largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
Information about NAR is available at www.realtor.org. This and other news releases are posted on the Web site's "News media" section in the NAR Media Center.
REALTOR(R) is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS(R) and subscribe to its strict Code of Ethics. Not all real estate agents are REALTORS(R). All REALTORS(R) are members of NAR.
Photo: Logo: http://www.newscom.com/cgi-bin/prnh/20080923/NARLOGO
AP Archive: http://photoarchive.ap.org/
PRN Photo Desk, photodesk@prnewswire.com
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| Notes:
Source: National Association of Realtors
CONTACT: Mary Trupo of the National Association of Realtors(R),
+1-202-383-1007, mtrupo@realtors.org
Web Site: http://www.realtor.org/
About This Release
If you have any questions regarding information in this press release, please contact the organization listed in the press release. Issuers of press releases and not TCI are solely responsible for the accuracy of the content.
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