NAR Admits to Initiating Bush's Mortgage Bailout Plan
efinancedirectory.com
Sep 07, 2007 -- In a press release last week, the president of the National Association of Realtors applauded Bush's FHA mortgage bailout proposal, and admitted that the Association has been pushing for the bailout since early 2007. If the NAR continues to have their way, taxpayers will be forced to clean up the mess the realtors helped to create.
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Why the NAR Has So Much Political Influence
* The National Association of Realtors Political Action Committee (RPAC) is one of the largest trade association PACs.
* In 2006, RPAC contributed $3,752,005 to federal candidates (49 percent to Democrats and 51 percent to Republicans).
* The same year, RPAC also raised $1,716,960 in political contributions (from individual donors of $200 or more).
Source: OpenSecrets.com
The Voice for Real Estate
If you thought that there was nothing else that the NAR could do to discredit themselves further, you were wrong. In a recent press release, NAR president Pat Combs made it clear to everyone that the Association isn't looking out for public interests, but rather, their 6 percent commission check.
According to Combs' statement, the NAR applauds Bush's mortgage bailout because the proposed changes to FHA guidelines will 'ease the crisis in the mortgage industry'.
'NAR has been advocating for many of these FHA changes since early 2007. In letters, testimony, speeches and meetings, we have encouraged both Congress and the U.S. Department of Housing and Urban Development to make meaningful changes to the FHA that would stem rising foreclosures,' writes Combs. 'The proposed changes will allow more people to refinance with FHA insurance, like those that have fallen behind in their mortgage because of so-called exploding ARMs.'
The NAR neglects to mention that the proposed changes will also bail out the lenders who thoughtlessly offered exploding ARM loans in the first place. Also not mentioned: when somebody refinances into an FHA guaranteed loan, the risk is transferred to taxpayers. If the newly refinanced borrowers default on their mortgage once again, it will be American taxpayers who eventually pay off the loan.
And let's face it; the reason why many borrowers are defaulting now isn't because they have an ARM, but because they can't afford the house they are living in on their current income. That's why they got an ARM to begin with.
So, why is it that the NAR is so eager to keep this bubble artificially propped up at the expense of someone else? Why are they so eager to transfer the risk to taxpayers versus the banks who will no doubt keep the easy money train rolling if they can only get out of this mess?
Because, the NAR is the (self-dubbed) 'Voice for Real Estate', not the 'Voice of Reason'. They want to keep those 6 percent commission checks rolling in. The more people pay for a house, the more realtors make in commission. That's why they were so eager to encourage housing as an investment during the boom, and so eager to encourage the bailouts now. |
