Session addressing glut of foreclosed properties
Today, real estate industry experts and economists testified in an open session before the United State Senate Committee on Banking, Housing, and Urban Affairs. The session entitled “New Ideas to Address the Glut of Foreclosed Properties” was made up of a panel of five industry experts who officially put forth their ideas.
Mr. Allan “Dutch” Dechert, President, New Jersey Association of Realtors (NJAR); Mr. Bob Nielsen, Chairman of the Board, National Association of Home Builders (NAHB); Mr. Chris Krehmeyer, President and CEO, Beyond Housing; Ms. Laurie Goodman, Senior Managing Director, Amherst Securities; and Dr. Stan Humphries, Chief Economist, Zillow all testified before the committee.
Dr. Humphries of Zillow encouraged members to advocate for policy that does not disrupt the natural process of economic recovery and does not harm housing. “Forces in the housing market are at play that will lead to long-term stabilization,” Humphries said in his written testimony. “But it’s a delicate balance that should be well-understood before the government steps in to help it along.”
NAHB Chairman Bob Nielsen asserted that government sponsored entities should “avoid bulk sales to large investors that have no stake in the neighborhoods in which these properties are located.” Additionally he noted that the FHFA should “allow a more decisive approach to mortgage modifications, which would help reduce the number of foreclosures.” Nielsen points to the Dodd-Frank bill and the Qualified Residential Mortgage (QRM) proposal to both be overly restrictive and harmful to the overall housing sector.
NJAR President Dutch Dechert echoed NAHB’s sentiment that bulk selling REOs to investors would force taxpayers to take larger losses than necessary and that the “unintended consequences of bulk sales at the proposed scale could devastate communities across the country.” Additionally, Dechert urged the committee to focus on providing mortgage financing to qualified buyers to increase the absorption rate of the bloated REO inventories and expand pre-foreclosure resources such as loan modifications and short sales.
The full testimony of each witness can be read here in full.