Sunday, March 07, 2010
The Ultimate Solution for Housing Market?
Fred Glick is an outspoken realist for the mortgage and real estate world who has appeared on CNBC and NPR's Marketplace. His latest idea could help steady the shaky real estate market AND create thousands of new longer term jobs.
The downward pressure on housing prices is largely due to the rising tide of lower priced foreclosures. The main purchasers of these foreclosures are investors with cash -- not the buyer who needs a home. He is rarely able to get a mortgage for such distressed properties. The buyer usually ends up paying a retail price after the investor flips it.
Why not let the government have these properties fixed up to standards that an owner occupant can finance properly before moving in? This would provide jobs for the construction trades that are hurting and recoup the "bailout", with interest, when the home closes. Fred's bottom line:
"We gave people jobs, we moved property faster and for more money, we added to the number of mortgages in the system with quality property that made mortgage backed security investors happy and to top it off, we stimulated an economy with the taxpayers making money"
Maybe the Fed Should Listen to Fred.