Is Washington fiddling while the country collapses around the housing crisis sink-hole? One would think so listening to testimony before the House Financial Services Committee this week. Remember when Congress passed the $700 billion bailout bill (aka the “Troubled Asset Relief Program”)? That was October. And, before that, in late July, the Housing and Economic Security Act became law. It appears the devil is in the implementation because the people charged with making the bailout happen cannot quite agree on how to spend all that money.
Treasury Secretary Paulson, who in September insisted that $700 billion was needed to buy mortgage-backed securities or individual mortgages, now opposes that strategy and, having spent $250 billion on something or other, is not sure what to do with the rest of it and wants to save it for the next administration (which doesn’t take office until January 20). Meanwhile, FDIC Chair Sheila Bair wants to use $24.4 billion of the $700 billion to modify loans, which she says will stop 1.5 million foreclosures. Read the full story of this crazy hearing before the House Financial Services Committee at MarketWatch.com. Don’t be surprised to hear that it’s all mixed up in politics. Bair may want to be the Republican in President-Elect Obama’s Cabinet.
Meanwhile, the National Association of Realtors® had its say at the same hearing, proposing a four-point plan, the last of which is very familiar: Keep banks out of the real estate business! In addition, NAR President Charles McMillan said:
"The only way to overcome today’s economic turmoil is to motivate and encourage worried or cautious housing consumers to enter the marketplace. Stabilizing the housing market will lead to a quicker and greater economic recovery. Our goal is to ensure there is a healthy market and sufficient capital to support mortgage lending to qualified borrowers."
The NAR proposal calls for eliminating the repayment of the first-time home buyer tax credit that was passed in the July stimulus bill, and for expanding the tax credit to include all home buyers, not just first-timers. The plan also recommends making the increased FHA and conventional loan limits permanent to stimulate home sales and stabilize prices. In addition, the NAR plan urges that the Troubled Asset Relief Program be put back on track by targeting the funds for mortgage relief through a mortgage interest rate buy-down. Finally, the plan recommends finalizing long-pending legislation to prohibit banks from entering into the business of real estate brokerage and property management. (After their performance in the last few years, that starts to look better and better, doesn’t it!)
Meanwhile, home prices in Flagstaff have not been better for a long-time. If you want to buy a Flagstaff home, contact this Flagstaff broker who knows the market well: Team Heitland at RE/MAX Peak Properties. | 
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