Wednesday, February 25, 2009
Today's news that January home sales declined is further evidence that Congress must provide proven incentives like downpayment assistance (DPA) in order to stabilize the housing market, according to Ann Ashburn, President of AmeriDream, Inc. The National Association of Realtors announced today that existing home sales fell 5.3 percent to an annual rate of 4.49 million last month, from 4.74 million in December. It was the worst showing since July of 1997.
Downpayment assistance programs funded in part by sellers expired under federal law in October 2008, despite helping one million families and individuals achieve homeownership. Eliminating these programs effectively removed 300,000 FHA qualified homebuyers from the housing market annually at a time when the economy can least afford it.
"Big decisions lay ahead for Congress and the Obama Administration," said Ashburn. "Our leaders have an historic opportunity to stabilize our housing market by supporting H.R. 600, bipartisan legislation that will reauthorize DPA for credit-ready homebuyers. H.R. 600 will help prevent the downward spiral in home sales and home values that have devastated many neighborhoods. It will also be a sorely needed incentive for the next generation of American homeowners. We urge Congress to act swiftly on H.R. 600, and we encourage members of the public to learn how they can support H.R. 600 by visiting www.ameridream.org."
H.R. 600, sponsored by Rep. Al Green (TX-09) would encourage sustainable homeownership by making non-profit downpayment assistance an allowable gift source for creditworthy borrowers of Federal Housing Administration loans. A broad coalition of organizations support downpayment assistance, including the National Association of Homebuilders, the U.S. Conference of Mayors, the Congressional Black Caucus, the Congressional Hispanic Caucus, and the Labor Council for Latin American Advancement.
BACKGROUND: AmeriDream, a 501(c)(3) charity, was established in 1999 to provide housing-related programs to low and moderate income individuals and families. AmeriDream provides a wide range of programs, including homebuyer education, loss mitigation counseling, community development, and privately-funded down payment assistance. These programs are provided at no cost to the taxpayer. AmeriDream not only seeks to help families purchase homes, but also provide them with the education and other resources needed to be responsible homeowners.
Website: http://www.ameridream.org/ posted by We buy houses, Stop foreclosure
@ 1:34 AM
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Thursday, February 5, 2009
The following is an Op-Ed by Jeff M. Busch, Chairman, Safe Blood International Foundation and former Investment Banker, and Henry E. Cole, Partner, Positive Outcomes; President, Global Development International; and former President, The Futures Group International:
The Obama Administration must take steps to directly purchase 2 million foreclosed homes and provide rental and repurchase rights for these to the existing or new occupants. This will stabilize the housing market and stop further depreciation of home prices. The current deep recession has been brought about by an unprecedented failure in the housing market and can only be reversed by a stabilization of housing prices. This change must be energized by removing the enormous excess of foreclosed homes and foreclosure pressures weighing on families and threatening the housing and mortgage market. Without this, backlog of foreclosures will continue to put downward pressure on housing prices presenting an almost insurmountable damper on the lives and spending of homeowners and on the lending capacity and willingness of the banking sector to help finance recovery and economic growth.
This investment will inject roughly $300 billion back into the economy exactly at the pressure points where the needs are greatest and the economic stimulus can be strongest. It will also stabilize housing prices, giving confidence to consumer and investor decisions and will stabilize the banks, enabling them to begin lending again. Importantly, the government and taxpayer will not lose money on this program since the houses will be sold as the economy recovers.
This proposed Administration response to purchase foreclosed housing is the most straightforward means to address the imbalance of housing supply and demand. Housing inventory levels have ballooned - from the six month inventory of available housing that normally keeps housing prices in balance to levels of 10 months and above. Purchasing foreclosures will make an important difference in this equation. Housing market inventories have been rising over at least the last three years as housing demand has slackened with overall declines in economic growth. At the end of 2007, excess housing supply was as high as 1.5 million units (including substitute rentals). 2008 saw further drops in sales and dramatically accelerated foreclosures (up 45% from 2005), driving inventory levels even higher, compounding downward pressure on housing prices. Housing prices plummeted last year as a result of oversupply. Over 1.5 million additional foreclosures are forecast, with possibilities of 2.2 million borrowers at serious risk. Removing the languishing inventory from the market will prevent the toxic assets from continuing to contaminate the healthy assets in affected communities. Additionally, direct losses for banks and lending institutions from these foreclosures may be over $160 billion, further exacerbating their reluctance to expand loans.
An Obama American Housing Initiative can have results greater than the government's direct foreclosure purchases:
- Secured housing provides relief to the country's many at-risk homeowners;
- Stabilized housing prices can dramatically encourage a positive outlook to individuals and financial institutions to put money back into the economy;
- The government and the taxpayer should not lose. As the economy recovers, housing will be returned to the market; those previously offered rental of their foreclosed homes will have a chance to repurchase them; the government recovers its expenditures.
The economic stimulus of this Initiative cannot be understated. Not only do stabilized housing prices offer a solid base for the financial institutions to lend and invest in both companies and individuals, but it also directly improves the homeowner's capacity and willingness to build, spend and invest.
Finally, stabilized housing prices brought about by foreclosure purchases are critical to America's economic growth, individuality and independence. Those without equity are less able to respond to the many challenges that Americans face. As home values have declined precipitously, America's over 50 million homeowners with mortgages have lost over $1.5 trillion or more in equity value.
This approach enables the Administration to address the economic crisis at its source, halting and preventing an extended decline that erodes the wealth basis for ordinary Americans.
Labels: Obama's Bailout Plan Will Fail Unless it Stops House Price Depreciation
posted by We buy houses, Stop foreclosure
@ 12:24 AM
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