Frank Says US Will Have More Renters
By: Freeman Liz
June 19, 2009
At a speech today for the National Association of Real Estate Editors (NAREE), Congressman Barney Frank (D-MA) restated his view that "homeownership for all as a goal is flawed." And that as there are many buyers or former buyers out there who would be "more appropriately renting", that "rent reform" will also be a priority with the administration.
The crisis that began with buyers acquiring property with zero down is a major issue -- Frank's stated goal is to eliminate 100% home loan financing altogether and legislate minimum investments of 5%. He also wants to cut sub-prime funding extremely, not as it currently is curbed by the market -- the fact that lenders are out of business and no one wants to buy those loans, but through passing laws.
Paul Kanjorsky (D -PA) also claimed that he felt rent reform was going to replace subprime lending as a top concern. He feels that current efforts have stopped the bleeding in the real estate and mortgage markets somewhat but that they are temporary "tourniquets" and more complete reform is necessary to support a complete recovery. Mr. Kanjorsky claimed that there are able institutions out there which deserve support as long as they are capable of servicing borrowers and cited Fannie and Freddie as examples. He offered up the possibility that the giants could be broken up into as many as 15 smaller corporations.
Both Frank and Kanjorsky advanced the idea that institutions should not be allowed to get so large that Americans cannot afford to let them go under. Extra-punitive measures were supported for larger institutions, including the immediate dissolution of shareholder equity and the firing of the CEO of the most egregious offenders.
However, Kandorsky indicated while we may not repeat this exact crisis, it's impossible to stop the next one-it will just be different. He asserted that it's part of America's history that we undergo some sort of financial crisis every 25 years or so. And, he claimed, "It's the nature of capitalism to fight containment."
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http://www.europeansexpills.com/comprar-cialis.html Comment by ElenaLisvato — August 06, 2009 @ 01:09PM -
They never mentioned exactly what was meant by rent reform. I wondered that also but no one who got a question in asked that. I do intend to look at the proposed legislation and see if rent reform is mentioned and what they are referring to. As far as lender reform, former governor and current Senator from Missouri Kit Bond was excoriating predatory lenders and lawless lenders and indicated that reform was largely directed at eliminating mortgage fraud rampant in these institutions. I did get a chance to ask him how that jibed with the fact the according to the FBI's Web site, the vast majority of mortgage fraud was perpetrated against lenders by borrowers. But no one's running around proposing legislative protection for lenders. Bottom line is everyone should understand their disclosures and if they don't it's not up to a lender to teach someone with a 5th grade education how to perform what a "reasonable" (in the legal sense) person should be able to do. On the other hand it behooves the lenders to protect themselves and if there are loopholes that allow them to be taken they should be closed. Most of these companies have stockholders and employees, who make a large portion of borrowers too. Anyway, Mr. Bond had no answer for that one.
http:// Comment by Liz Freeman — June 23, 2009 @ 05:23PM -
I'm curious if there were details on what "rent reform" might include?
Comment by jacqueline — June 22, 2009 @ 10:33AM -
You do kind of wonder why the government doesn't stay further out of things & let the markets correct themselves naturally. There should definitely be bigger consequences when lenders make mistakes.
It's not only that they lent money to people that they should not have lent to, they used very unethical tactics to change loans when people were pre-qualified for a fixed rate loan, and then switched them to ARMs after they were already in escrow.
It's not just the amount that someone put down on the home as an issue, it's that the monthly amounts due changed and went up drastically.
Comment by Holly Hess — June 22, 2009 @ 09:14AM -
Richard Florida of "creative class"fame has been saying the same thing--the idea of home ownership as the be all, end all must change and that the future is in urban centers where many people can't afford to buy so renting will take off. He actually argues that home ownership is more costly to the economy because the populace becomes less nimble and responsive. http://www.theatlantic.com/doc/200903/meltdown-geography/
Comment by MTM — June 22, 2009 @ 08:26AM -
Fannie and Freddie being GOOD examples of viable institutions? Yikes.
Comment by what? — June 22, 2009 @ 01:32AM -
too little too late. or rather, too much, too late. overkill in reform is going to take the industry down further. community banks and common sense are where we should be looking to for guidance.
Comment by REismylife — June 19, 2009 @ 06:07PM -
Kind of closing the barn door after the horse is out, isn't it? And do they intend to let him back in?
Comment by REismylife — June 19, 2009 @ 05:13PM
