To hear national real estate trade groups tell it, the Housing and Economic Recovery Act of 2008 enacted eight weeks ago was the most important federal housing bill in the last 30 years. The National Association of Realtors, Mortgage Bankers Association and National Association of Home Builders were downright over-the-top in their praise of the bill’s contents, the lofty results it was supposed to achieve and the branches of government that brought it about. But now, with an even bigger federal government bailout of the financial sector on the horizon, the groups’ claims for the prior bill sound all the more ridiculous.
Modern-day press releases function more like teasers to entice reporters than meaningful commentary on news events. And enthusiasm for anything in these days of woe is all well and good. But was it really necessary for real estate trade groups to commend the president of the United States and thank Congress for finally doing something, even though what they did clearly wasn’t nearly enough? Haven’t subsequent events demonstrated the fallacy of their predictions that the housing markets could be revitalized by yet another federal mortgage program, a laughably misnamed "first-time home buyer tax-credit" and some small-time reforms to an obscure regulatory agency? And as long we’ve taking a few potshots, can we please retire the hackneyed phrase "American dream of homeownership" now that we all know some people shouldn’t own their own home?
As a break from the current crisis, let’s take a quick look back at what these trade groups said about the housing stimulus bill.
NAR claimed the bill would:
- "help bring stability to the housing markets,"
- "stem the rising rate of foreclosures,"
- "go a long way in helping people buy and keep their homes,"
- "help the housing and mortgage industries,"
- "go a long way to help stabilize the housing market and make the dream of homeownership more attainable for many Americans,"
- "boost the U.S. economy," and
- "ensure that every American who can afford to own a home and wants to do so will have the opportunity and that everyone who responsibly owns a home is able to keep it."
The Realtors group thanked Rep. Barney Frank and the House of Representatives for their bipartisan effort to pass the bill and commended President Bush for his quick action in signing it. And there was also this gem: "We are pleased that the president and Congress worked together to enact meaningful legislation that protects and enables families in this country to continue to strive for and enjoy the dream of homeownership."
The mortgage bankers group called the bill "the most important piece of housing-related legislation in more than a generation," and predicted it would:
- "help stabilize the mortgage market,"
- "help stabilize home prices,"
- "stop the downward spiral of home prices in parts of this country,"
- "provide additional tools for lenders to work with borrowers to avoid foreclosure whenever possible,"
- "help thousands of families across the country refinance their mortgage and stay in their homes,"
- "encourage home buyers to get off the sidelines and into the market," and
- "help quell the turmoil in the credit markets."
The group also proclaimed that "leaders in both parties and both chambers deserve a lot of credit for getting this bill done," and heaped extra praise on Frank and Rep. Charles Rangel for their efforts to "spur development of affordable housing."
The home builders group, which was almost cautious by comparison, said the "landmark" legislation was "aimed at ending the current cyclical downturn in the housing industry, helping home buyers and strapped borrowers, and strengthening the housing finance system."
The group’s president and two members predicted the bill would:
- "get home buyers back into the marketplace,"
- "stop the slide in home prices,"
- "provide a lifeline to borrowers facing foreclosure,"
- "improve mortgage liquidity,"
- "bolster confidence in Fannie Mae and Freddie Mac,"
- "help take inventory off the market,"
- "restore a more normal supply-and-demand balance,"
- "stimulate buying and selling activity,"
- "contribute to a much-needed turnaround in housing" and
- "provide prospective buyers a major financial incentive to get off the fence and jump back into the market."
The group also quoted Sen. Chris Dodd, who, in a turn of phrase almost identical to the MBA’s comment, called the bill "the most important piece of housing legislation in a generation." The NAHB also commended "Congress and the President for taking this action to provide much-needed relief to the American people."
With so much hyperbole in the air, will there be any superlatives left for the even bigger bailout that’s already on the horizon?
Marcie Geffner is a freelance real estate reporter and former managing editor of Inman News.
Copyright 2008 Marcie Geffner. All rights reserved. No part of this article may be used or reproduced in any manner whatsoever without written permission of the author. Reprinted by permission of the copyright holder.
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