What else is new? The NAR is asking the government for handouts.
As I’ve mentioned before, the last thing we need is for the government to prop up inflated home prices. Nevertheless, the NAR came up with their four point housing stimulus plan a while ago, in an attempt to do just that. Last week they emailed realtors with a Call To Action to get them, and their clients, to email their representatives in Washington in support of the handouts. Chicago Association of Realtors President David Hanna is quoted: “Your action has never been so important, now is the time for you to stand up for your industry and demand the changes we need. Every Realtor must participate in this Call to Action, please contact your representatives and urge your peers and clients to as well.”
Here, in a nutshell, is what they are asking for:
- Make the $7500 tax credit available to all buyers and eliminate the repayment requirement.
- Make the 2008 FHA, Fannie Mae and Freddie Mac loan limits permanent.
- Target more funds to mortgage relief and create a federal mortgage interest buy-down program to make below-market rates available.
- Permanently bar banks from engaging in real estate brokerage and management.
Here, in a nutshell, are the problems with each of the four points:
- Why should people who make $200K per year get a tax credit from the government? For that matter, why should anyone? The government should not be subsidizing home purchases. Not to mention that this would cost at least $38B per year.
- As if Fannie and Freddie weren’t already spread too thin.
- The very existence of Fannie and Freddie is a buy-down program. They effectively lower mortgage rates. In fact, the entire economic bailout program is helping to lower mortgage rates and low mortgage rates is what got us here to begin with.
- And this will help the economy how? By keeping real estate commissions high? The NAR is positioning this proposal as necessary to keep the banks focused on fixing all their problems. But come on! Could anything be more blatantly anti-competitive?
It’s stuff like this that gives Realtors a bad name.