May 2009 Archives
May 28, 2009 7:43 AM
In a May 27 Wall Street Journal article, writer Brett Arends concluded that very safe long-term inflation protected government bonds are better investments than buying a home. The bonds will likely provide a higher annual return than historical long term home appreciation rates, which are just above 4% (that historical average, by the way, has been changed very little by the combination of unprecedented run up in home prices during the first half of this decade, followed by the unprecedented retreat of those prices in the second half). The author did not consider other important factors that make homes a much better investment in reaching his conclusion, however.
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Homes Are Still Good Investments.
May 21, 2009 1:03 PM
The Obama administration is considering giving a single federal agency authority to regulate mortgages and other consumer-oriented financial products as part of the Administration's broader overhaul of financial regulation. Consolidation of the oversight of financial products that is now split between the Fed, the Securities and Exchange Commission, the Federal Trade Commission, and others would greatly improve efficiency. Assuring that the oversight organization is free from political influence and staffed with competent professionals dedicated to protecting consumers is essential. In designing the new institution we need to study the reason for regulatory failures at the Fed, SEC, OFHEO, and other agencies, and build protections against politicization into the new organization.
May 12, 2009 4:49 PM
Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development (HUD), today announced that the Federal Housing Administration will permit its lenders to allow home buyers to use the new $8,000 federal first time buyers tax credit for their down payment. The credit would otherwise not be available to the home buyer until they filed their next annual federal tax form. In some cases the home buyer would not otherwise have a large enough down payment to purchase the home. To get around that dilemma, HUD will allow FHA's approved lenders to provide buyers short-term bridge loans for up to the amount of the credit. This will enable home buyers to use the funds immediately if they are needed to complete the purchase. This is a wise decision that will help both home buyers and the recovery of the housing market, and is consistent with the intent of Congress in passing the home buyers tax credit.
May 5, 2009 1:08 PM
The Ford Foundation and the MacArthur Foundation are going to invest $50 million in a new nonprofit effort to help municipalities buy foreclosed homes from financial institutions. The foundations hope that the National Community Stabilization Trust will stop or reduce declines in home values. They are optimistic that their investment will attract additional private capital because it will be securitized by the investments, and will also encourage similar efforts by others.
The Ford and MacArthur Foundations deserve the thanks of American homeowners for the creation of the Trust. Despite the substantial amounts of taxpayer money invested by the government to help mitigate the housing crisis, more is needed. These two foundation's worthy effort stands in marked contrast to the paltry or nonexistent efforts of most mortgage lenders who have failed to use the taxpayer money they have received to address the crisis that they created.
