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FDIC Head, Diverse Groups Tackle Housing Affordability
 As Congress and federal financial regulators pursue measures to prevent a recurrence of the problems besetting the secondary mortgage market, steps also need to be taken to ensure that homeownership opportunities remain for subprime borrowers, according to Sheila Bair, chairman of the Federal Deposit Insurance Corporation.
"Homeownership should be a vehicle for accumulating wealth, not stripping it," Bair said in an address before the 2007 Housing Affordability Symposium. Co-hosted by NAHB, the NAACP and the National Education Association, the Oct. 5-6 symposium is taking place on the campus of the George Washington University in Washington, D.C.
"Housing affordability is one of America's greatest social issues," Bair said, and a specific goal of her agency is "keeping people in homes they can afford." Making that job difficult in the current housing downturn are hybrid adjustable-rate loans that are readjusting at significantly higher interest rates after the second or third year of the loan.
Many subprime borrowers did not understand what their mortgages would cost once they were reset, she said, and lending standards were lacking.
Action needs to be taken to ensure that the subrime problem "does not become a drag on the economy," she said. "Kicking the can down the road will only prolong borrower distress and uncertainty. The ultimate solution is a national standard that covers all market participants."
While the predatory lending standards that led to a rapid increase in problem subprime loans needs to be addressed, "responsible subprime lending has an important role," she said, and can increase the benefits of homeownership for families and the communities in which they live.
The bottom line, she said, is that lenders need to ensure that borrowers can repay their loans.
 Bair's address was the first of many designed to provoke further discussion of initiatives on several fronts to find remedies for the housing affordability problems that have been pricing out increasing numbers of families and preventing them from residing in the communities where they work.
Affordability is a critical issue that deserves the attention of all those who care about the stability of America’s families, said NAHB President Brian Catalde.
“This event is about getting people together for a focused conversation on how all of us, collectively, can work together to help more families find a home that meets their needs at a price they can afford,” Catalde said.
“Lots of organizations have conducted seminars and conferences on this issue,” Catalde said. “They have come up with many good ideas that ought to be implemented.
“It is my hope that this symposium is to go one step further, by creating a set of recommendations we can collectively embrace and forward to those institutions — public and private — that are best positioned to act on the ideas advanced during the symposium,” Catalde added.
The goal of the symposium is to develop a broad national coalition that understands and voices support for housing issues at the local level, and to compile a toolbox of techniques and programs to help a local coalition improve housing affordability.
Further coverage of the symposium will appear in the Nov. 12 issue of Nation's Building News.
For more information, e-mail Blake Smith at NAHB, or call him at 800-368-5242 x8583.
Photos by Morris Semiatin
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