The Official Online Weekly Newspaper of NAHB
NAHB on Sept. 20 urged the Administration and Congress to take a balanced approach in disposing of the large inventory of real estate owned (REO) properties held by Fannie Mae, Freddie Mac and the Federal Housing Administration to avoid further disruptions to housing prices and markets and to limit further losses to the two government sponsored enterprises and the FHA.
Testifying before the Senate Subcommittee on Housing, Transportation and Community Development on new ideas to address the current glut of foreclosed properties, NAHB Chairman Bob Nielsen said that Fannie, Freddie and the FHA should avoid bulk sales to large investors that have no stake in the neighborhoods in which these properties are located.
"Local and small businesses that have a stake in the future of the affected communities should be the driving force behind the disposition of the REO inventory. This will result in the creation of jobs and the stabilization of neighborhoods," said Nielsen.
In addition, NAHB urged the regulators to allow modifications to a number of existing federal housing programs, particularly altering rules that restrict or prohibit for-profit investors, in order to effectively reduce foreclosures.
"With the scale of the problem so large, it is necessary to deploy all resources in both the for-profit and nonprofit sectors," he said.
To further help reduce excess inventory, NAHB also offered suggestions for a new investment fund and lease-purchase program.
"We support the goals to maximize value for taxpayers and increase private investment in the housing market," said Nielsen. "Stabilizing home values will improve the balance sheets of financial institutions and will reassure home owners that their biggest asset will retain its value."
To view NAHB's testimony before the Senate subcommittee, go to http://nahb.bz/rbNZJ6.
For more information, email Scott Meyer at NAHB, or call him at 800-368-5242 x8144.