RealtyTrac discussing government’s role in housing
In the video above, Rick Sharga, Senior Vice President of RealtyTrac speaks to the current status of the government as their role in housing and especially foreclosures is currently in flux.
Sharga says that the first thing the American government should do about housing is, first “do no harm.” How exactly does the government go about doing that, given how ingrained they are in housing?
Sharga says that government can influence banks for principle balance reductions, but that without job stimulation, there are no buyers and no confidence in the safety to buy.
Government, don’t impede in financing
The government can get involved in financing by not impeding, for example not eliminating the mortgage tax credits which would weaken the desire to buy (the last thing housing needs right now), Sharga notes.
Rethinking the Dodd-Frank provisions is a necessary step, Sharga said. As a nation, it would be unwise to unplug the life support tubes, so this reform must be thought through more fully.
Opposition to a national moratorium on foreclosures
Sharga said clearly and succinctly that he does not support a national moratorium on foreclosures. He said that at best, it is a temporary reprieve for a very small number and that most homeowners at that stage will foreclose anyhow.
A national moratorium on foreclosures would be disastrous, essentially eliminate financing and threaten to damage housing prices, says Sharga. It is a popular but impractical sentiment.
The bottom line
If you read between the lines, Sharga is saying that the current role of government and the role they are attempting to put themselves in for the future, is not much more than a political move and doesn’t do much to move the needle. With Sharga saying that a moratorium that sounds healthy on the surface but doesn’t do much more than stall the inevitable while harming housing.