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Everyone knows that the U.S. housing market caused the current economic funk.
But here's the irony: The American housing market – a principal actor and victim of a bubble that burst, causing the worst recession since the Great Depression – may now be in a position to save the U.S. economy.
In other words, if we fix the housing market, we stand an excellent chance of fixing the economy.
And my housing plan may be the dual fix we've been looking for .
Plan Generates Huge Response
In Money Morning exactly one week ago, I presented a plan to fix the broken U.S. housing market. And while I wanted feedback on the plan, I was stunned to receive hundreds of e-mails, phone calls and comments – underscoring just what an intensely emotional topic housing continues to be in this country.
Many people lauded my plan. But I was somewhat surprised at the number of people who trashed it. For those critics, the main issue was that they didn't feel the plan addressed the real root causes of the current housing crisis.
I got an earful about what the root problems are. Eventually, it struck me. It wasn't my plan that people didn't like, it was that I didn't explain how my housing plan would fix those root problems.
Those root problems are no small thing. They caused the housing crisis in the first place. They're keeping the housing market from recovering now. And they're a major drag on the U.S. recovery – and could end up as a proximate cause, or key catalyst, of the much-feared "double-dip recession."
Key Problems With the U.S. Housing Market
According to the feedback I received, many of these "root causes" are very clear. The list includes:
- Too much government manipulation and stimulation.
- A free market that's not permitted to operate as such.
- Banker (Wall Street) greed that causes – and then perpetuates – wrenching boom-and-bust cycles.
- Too much easy money, which paved the way for too many easy loans.
- Too many (ineffective) regulations.
- Too few (effective) regulations.
- Too many houses on the market.
- Banks that have no incentive to lend.
- And a generally unhealthy economy.
I agree that all of those issues are root problems. But here's the thing: To fix the housing market – and with it, the U.S. economy – we can't just attack one, two or three of these.
We have to address all of them – and in a comprehensive fashion.
My plan proposes to do just that.
Try it on again. Only this time, when you comment, help me identify unintended consequences that could result from the plan, and let's make it better together.
When Government Involvement is OK
Let me start by saying that my plan isn't another government-manipulation scheme. It does require temporary government action (legislation) that is specifically designed to address these issues in a manner that will turn the market around. But it also puts a strict time limit on these initiatives, meaning the government intervention will eventually expire and allow the free market take over once and for all.
If you're cynical, like me, you're saying: "Yeah, but self-serving legislators pander to special interests to perpetuate government-controlled programs."
You're right, but that's another problem for another time – and involves throwing the bums out of office.
In the meantime, my housing plan recognizes that special interests profited egregiously from the de facto government backing of the aptly named government-sponsored enterprises (GSEs) Fannie Mae (OTC: FNMA) and Freddie Mac.
They have to be killed off.
T he plan calls for them to be unwound – and buried.
But in our advanced economy, there is a need for a "mechanism" that is able to transfer risk to investors who are willing to accept it.
That mechanism is called "securitization." That's what securitization does. And that's what Fannie and Freddie do.
GSEs such as Fannie and Freddie help increase the flow of mortgage money in the financial system. They amass a pool of money, which they can use to buy mortgages that they carry on their books as inventory, or that they repackage and sell. But there are a few things wrong with this model. And my plan fixes them all.
As I outlined last week, my plan creates a replacement pool of capital. But that money won't come from investors who believe that the government will backstop their Fannie and Freddie bonds; it will be free money "donated" by all the banks that "we the taxpayers" bailed out so that they could live to rip us off another day.
Under my plan, the new mortgage pool:
- Won't be government-backed.
- Will last for only 10 years.
- And will have to lend at prevailing rates based on its "cost of capital" (which will be zero).
Banks will be forced to lend on similar terms: In other words, in addition to the existence of the pool that banks will have to contribute to, banks will have to compete with one another and the pool by providing loans on the same basis as the pool offers.
And the pool will have risk-retention requirements – the same as banks. That should be 10%. This means the pool, and banks, will have to hold 10% of the value of their total loans as a reserve against possible future losses. After all, banks that overleveraged themselves without a substantial -enough cushion of capital reserves against crashing asset prices led to the credit crisis.
Because this is only a temporary liquidity pool – and because we aren't a communist dictatorship (even so, the banks owe us something for all the trouble they caused, and the trillions of dollars of economic damage they're responsible for) – banks should get a break on the taxes they pay on the profits they generate from the pool.
The public will be benefiting and banks need the profit motive to serve as an incentive. We want those banks to profit so that they can transparently rebuild their balance sheets and pay taxes again. (Another plan we need to talk about is breaking up all the too-big-to-fail banks).
The idea of "sunsetting" the pool is that it clears the way for other private-mortgage-money investors and syndicators to get into the business and compete profitably.
The ultimate objective here is clear: We want to get the U.S. government out of the mortgage-lending business, and let the free market take over after a transition period.
Save the Housing Market, Save the U.S. Economy
While we're getting mortgage financing back on track, we need to stabilize the sinking U.S. housing market itself. With my plan, tax credits will get prospective buyers off the fences they're currently seated on – and will spur them into action.
U.S. housing prices have fallen precipitously. S hould we just let them continue to freefall? No one knows what the natural equilibrium level should be in any town, county, region, state, or nationally.
What we can assume is that a housing-price bottom will eventually form. And if that "bottom" is significantly below where we are now, this country is in for a lot more economic pain.
That statement – more than any other – highlights what I said at the outset of this column: If we're going to save the U.S. economy, we have to fix the U.S. housing market. It also attempts to speak to free -market advocates, of which I am one, by saying that sometimes an engineered soft landing is easier to bounce back from than a full-blown crash.
My plan to offer tax credits against depreciation and credits for appreciation doesn't inordinately manipulate prices. It simply incentivizes people to test the waters sooner rather than later by subsidizing (yes, that's what I'm suggesting) the very real risk that new homebuyers would be taking by making a purchase at this point in a soft-and-unsteady market.
Don't be too quick to dismiss this part of the proposal: After all, we subsidize banks that take risks that are backstopped by taxpayers. Why not offer a small subsidy directly to U.S. taxpayers?
If the small tax credits (they could and should be limited to some range of home prices, if for no other reason than to avoid giving additional tax breaks to the uber-wealthy in this country) are enough to incentivize people to "bottom fish" for homes – and enough people decide that prices have come down to a level that justifies this investment or speculation – then we will have created a "floor" for housing-market prices that could hold.
It's a relatively market-based solution to a market-based problem. And it recognizes that markets need risk-takers and sometimes risk-takers need an edge to play.
If you're thinking that this tax-credit scheme is another government handout that's going to come back to cost us, you're right. And that's another reason I like the plan.
Time to Act
By giving tax credits against future tax revenue, the federal government is trading revenue from tomorrow (which it wouldn't be getting if the economy keeps sinking) for a chance to stabilize the housing market today. It will hopefully achieve that point of stability sooner rather than later – and will energize the U.S. economy at the same time.
What's wrong with forcing more fiscal discipline on profligate government spenders? Eventually, we are going to have to address spending in a meaningful way. If my plan is enacted, it will add to the question of what future revenue will be available to spend if we are giving taxpayers much-needed tax credits to stabilize the housing market and the economy now. I know it's fanciful, but part of my plan is designed to impose fiscal discipline on the federal government by repatriating taxpayer money back to taxpayers.
There are plenty of unintended consequences that will manifest themselves if my plan is enacted and implemented. I'm developing a list (it's short right now) and I would welcome your help. If we can work together to shape this plan so that it is better positioned to deliver the hoped-for impact on the U.S. housing market and the U.S. economy, we just might be able to present Congress and the Obama administration with a deal they can't refuse.
It's our country, our future and our obligation to our democracy to be part of the solution to our collective problems and not part of those problems. If you've got constructive comments and ideas for making our plan better, I will do my part to stitch them together so we can do what needs to be done for our country.
News and Related Story Links:
- Money Morning News Archive:
Columns by Shah Gilani. - Investopedia:
Government Sponsored Enterprise. - Wikipedia:
Subprime Mortgage Crisis. - Investopedia:
Securitization.
About the Author
Shah Gilani is Chief Financial Strategist for Money Map Press and boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker. The work he did laid the foundation for what would later become the Volatility Index (VIX) - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk and established that company's "listed" and OTC trading desks. Shah founded a second hedge fund in 1999, which he ran until 2003. Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see. On top of the free newsletter, as editor of The 10X Trader, Money Map Report and Straight Line Profits, Shah presents his legion of subscribers with the chance to earn ten times their money on trade after trade using a little-known strategy. Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on FOX Business' "Varney & Co."
the government should have no intervention, the housing market must be free like in a real free economy
I agree with the theory 100%. Fix the housing market and you fix the economy. But if part of the plan is to have big-banks start offering loans again and people still dont have the money to pay on those loans, what difference will it really make?
I write this from England, so thankfully the US housing bust does not affect me directly. I visit America and I am aware of the type of ohusing bulit there recently. UK house prices have also dropped slightly recently but there the similarity ends. Shah's plan is probably the best plan to date but here are my key concerns. 1/ Too many houses have been built in the US generally and in some states significantly so as to exceed the number of buyers who have the income to sustain the mortgage cost – even at todays record low interest rates.… Read more »
To encourage RE investment both for primary homes and all others, eliminate the capital gains tax on all RE investments.
The best way to fix the housing market is to stop building such gigantic homes with so much square footage. Build homes half that size that people can actually afford. Do not let someone who makes only $50,000 a year buy a home that costs $200,000 or $250,000 with a mortgage payment of $1000 to $1500 a month. Heck if you make $50,000 a year buy a home that costs $50,000 or maybe no more than about $100,000 a year.
What do you think we should do with the rating companies. They did a lousy job then and I am
sure they will do it again. If securitization is going to work the bonds have to reflect the risk of default correctly. Would updating mortgagee financial bi-yearly or quarterly work?
Banks and corporations are the people you have to convince if you want legislation. Taxpayers have little clout in Washington. Taxpayers should be marching in the streets as they did in Cairo. Maybe when we get hungry.
The Real Challenge; how do you get Congress et al to accept and implement your suggestions which ring "very reasonable and effective" to me.?
That's all well and good. The bottom line is this. People who's lives have been devastated by this economy (loss of job, etc.) still will not be able to get their lives back because of poor FICA scores. In other words, No one will lend you money (for a home,etc.) because of a poor credit report. So we can talk all we want on how to fix the economy. For the people who's lives have been destroyed. They just try to survive day to day.
Though Reagan often touted his many tax reforms as cuts, in reality they often raised revenue by eliminating shelters; I call that increasing taxes. If you really want to get serious about fixing the housing market then reverse section 26 U.S.C. 469 of the Tax Reform Act of 1986 to restore many of the tax shelters, especially for real estate investments, it significantly decreased. This legislation significantly reduced the value of many such investments which had been held more for their tax-advantaged status than for their inherent profitability. This legislation contributed to the end of the real estate boom of… Read more »
Mr. Gilani, Once again, I laud your attempt at coming up with a solution. And I'm giving it another whirl. But first, I'd like to make a few more comments. You state that "sometimes an engineered soft landing is easier to bounce back from that a full-blown crash." Regrettably, I completely disagree with this statement. Time and time again in history, an economic slap on the wrist is simply not enough to trigger behavioral change. A crisis must happen in order to clear out the garbage. Otherwise, the rot remains and resurfaces another day. Arguably, a lot of the economic… Read more »
It is neither housing bubble, wars, nor national entitlement programs or even over spending by the public, that creates all the debt. It is the nature of how the Federal Reserve System creates our currency. All of our currency is debt. The bank bail out for example was simply replacing debt owed with more debt. The failure of several European national economies like Greece is debt-replacing debt. The Euro happens to based on the same design that gave us the Bank of England, which is the model for the modern Federal Reserve. Everything we purchase is debt-replacing debt. Consider the… Read more »
There is some merit in the overall plan. BUT: Yes Fannie and Freddy need to be eliminated or changed. If they went back to what they did a long time ago, package mortgages into bonds and then the bonds were sold on the open market. The bonds would be covered by the mortgages only. Period. Fannie and Freddy have no assets. they can't go bankrupt since they don't have stockholders, they have no real assets per se, and operating costs are covered by servicing fees. The Bonds are still on the books, and covered, by the mortgages and nothing else… Read more »
Your premise is based on the assumption that the obama administration and congress want a workable plan that would give control back to us over the country, our future and our obligation to democracy. I question that premise but I hope you succeed because there aren't too many options left. The "change" I see on the horizon is very bleak regardless of which administration is giving it to us!
More layers of government intervention will only add fuel to the burning house. The problem is that government regulations created the housing boom (which the Wall Street bankers happily collateralized). This pushed prices ever upward. Now they need to return to a sustainable level. This is being delayed by (of course) more government regulations. Consequently banks hold non-paying assets instead of selling them. Buyers aren't stupid and therefore sit on the sidelines watching prices decline to levels supported by income rather than speculation (In Southern California this would be 2001 prices). And all the government bailout programs just waste more… Read more »
You have a plan that finally makes sense to me. I am in the rental business as a hobby and I would suggest that some instruction on the buyer's side would be of benifit to potential home buyers. Home owner ship is done out of passion, the right home with the right rooms, kitchen, neighborhood and large enough to impress the friends. If somehow home owners would consider the actual cost of ownership such as unility bills, maintenance and resale at the time of purchase they would reconsider the 4000 sq ft home on the golf course for a family… Read more »
Yes but wouldn´t Fannie and Freddie go bust trying to compete with lower interest rate loans.
That would leave an even bigger hole in the federal budget.
Shah Gilani: "Why not offer a small subsidy directly to U.S. taxpayers?"
Because it's too late:
http://tinyurl.com/USD-bancor
D. Chakalov
Have you read "Triumph of the City" by E, Glazier?
He laments North Americam tax bias towards (single family) owneer occupied hmes.
German experience (very low urban owner occupation) would appear to bear him out?
Lets start with a one time mortgage reset to current appraised property value and then begin your plan.
i read your article with much interest. As a non US citizen I wish you every success in getting your proposals implemented. I believe you are on the right track. The housing situation needs some tough decisions and some tough political backing. Arguments need to be won. You will probably be stonewalled at every turn and you will need to stay focused. Your plans need to be implemented as quickly as possible, otherwise it will be too late (in my opinion). I am presuming you have found like minded individuals to share your 'Board' and using your money morning site… Read more »
The root cause of this mess is NAFTA. We have to have jobs that add wealth to get things turned around. Owning a home is desire of most everyone for privacy in your castle, but they can't afford to do that working at McDonalds. Service jobs don't add enough value.
How to solve the housing crises. I am a Realtor and have been licensed as a broker in New York, New Jersey and Florida. I have been selling real estate for over 35 years and there is no question that this is the worst market we have ever been in since the great depression. I think your idea of a pool that the banks can draw from is a good one and I think the best idea is a tax credit like the one that ended about a year ago. That tax credit seemed to work well and helped to… Read more »
A bank sells $100,000,000 in mortgages currently @ average of 4.25%. Mixture of all types. Keeps $10,000,000. 2 questions
ONE :what can it invest the $10,000,000
TWO:Who is going to buy a long term bond from a bank $90,000,000 @3.25% without government backing ( 10 year ) A bank isn't going to stay in business if they aren't able to make money on their loans
I think a simple plan would be to have all mortage holders reduce rates to 2%, espically from banks that use government free money to borrow and then loan out. This would instantly free up the extra 3 to 5% that banks charge people and then indididuals could use that extra money to buy things thus stimulting the economy with all the money the banks and gotten.
ELIMINATE APPRAISALS. IF A BUYER WANTS TO PAY A PRICE AND IS QUALIFIED BY TIGHT UNDERWRITNG, MAKE THE LOAN. FOR COMMERCIAL PROPERTIES, IF THE PROPERTY IS PERFORMING, MAKE THE LOAN.
ON REFI'S, BOTH RESIDENTIAL AND COMMERCIAL, DO THE REFI AS LONG AS THE LOANS ARE PERFORMING.
I like this plan a lot, except for the one glaring omission: people without jobs can't be buying houses, and in so many cases are still losing their houses to foreclosure. That said, I agree that a fix to the housing market will be a great catalyst to fixing the entire economy. Two minor adjustments need to be included in this plan: The tax breaks need to be tied not to the overall value of the home, but to the relative value – the price per square foot. Someone who buys a 2500 square foot home for $350,000 doesn't deserve… Read more »
hopefully someone in close proximity to the congress or the white house is a subscriber ,or shah gets this article to them. so they can read it.
The tax credit idea is in use in Australia (it encourages negative gearing) and distorts the market as it pushes up prices (contributing to bubbles) when people buy simply to get tax rebates. This pushes lower income potential home owners out of the the market. The tax credit idea is therefore, from this point of view, initially effective but must be discontinued (a sunset clause) for all future buyers after the market is stabilised. Great care must be taken to ensure that the credits do not continue into the future as they have in Australia.
As you have acknowledged, your plan requires that the government intervention be temporary. That is a most unreasonable expectation in today's USA.
The author of this article is just another big govt person.He believes that his plan,forced on others, can fix all these problems. Why not just let the markets decide?Of course,the only way you get to a free market, healthy housing sector, is for the people in the country getting wealthier.That would take major changes in our economic system,including a much smaller govt,that isn't likely to happen.
hyip, You are dreamimg in color, the government are involved and there's no way you or I can change that, however, in Shah's plan all they would do is give Tax breaks to stimulate house sales. I think this has tremendous potential and only one disadvantage, which incidentally is a selfish one, it would probably stop prices from going down. Why is that bad for me? because I am looking to buy at the bottom but in all seriousness Shah's plan looks very plausable and has sound economic basis. Shah if I can offer any meaningful input I will, after… Read more »
I'm not an economist or a financial whiz, but this seems very much like a solution I've been thinking about for a long time but have never heard proposed. In addition to the reasons Mr. Gilani suggests, I believe that people's inability sell their homes has greatly contributed to the stagnation of the economy. When you can't sell your home, or rent your home, you have little freedom to take advantage of employment or business opportunity that would help get things going again. People are stuck – they remain where they are, which damages the economic recovery, or they walk… Read more »
Congrats to Shah Gilani.
Let's be part of the solution, not the problem.
Hand wringing and blaming others has never ever solved a problem.
I applaud his positive approach.
Once the plan is worked out, including knowing some of the major unintended consequences,
Let's all ask our Congressmen to co-sponsor a bill to implement the "Gilani Plan".
Although against government intervention and specifically subsidies, there is merit in the plan. After all, the winding up to this problem is so complex and integrated into the decision mechanisms that determine price, that it appears reasonable to unwind the governmental intervention events to create a stable landing. However, the home owner tax incentive for new mortgages may not stem the foreclosure bomb of 880,000 homes plus about 40% of homes with mortgages being underwater causing concern for more future foreclosures. To help in price bottoming, the underwater home owners need an incentive to "stick" it out. Perhaps the underwater… Read more »
Why not include a trillion dollar citizenship plan in your proposal, as follows:
1. Give US Citzenship to a million people who invest $1,000,000 each in residential real estate in the U.S.
2. This can be any number of single family homes and condos to equal the $1,000,000 investment.
3. You do not recieve your final green card until you hold the investment in good standing for a total of five years.
I believe adding this to your plan will help stabilize the housing market quickly.
Thank You
Ron Kaufman
Agree 100% about stabilizing the economy by putting a floor under real estate. Also could incorporate a "PAR" as outlined by investment fund manager John Hussman. He suggests we reduce the principal of problem loans today for a future "price appreciation return" on the property back to the loan originators. Get mortgage payments back to true ability to pay via earned income now — i.e. 28%.
Mr. Galani, I commend you with offering us a very workable solution, but unfortunately your critics are reacting the same way as critics of Rep. Paul's budget proposal. They cannot think of a solution of their own, but find it easier to be critical of a plan that can actually stop the ship from sinking!!! The problems that we need to correct took decades to create and the solution will be more then an overnight effort. As with my reponses to your article last week, we need "statesmen" in DC to offset the "politicians" to adopt this or a variation… Read more »
I did not read your original proposal, but even though you have tried to explain it further, I have difficulty with it. I don't think any solution will work if it does not begin with drastic cuts in Fed.Gvt. spending. Furthermore, the primary reason why few are biting at the fire sale prices and low interest rates is that they have lost confidence in the US economy. And for very good reasons. Even with tax incentives, which I don't like, I don't see people taking the risk on a major investment that will likely decline. This is especially true when… Read more »
I believe Anthony Balistreno is on the right path. The quicker the foreclosed properties can get back in the market and stabilize prices, the quicker the housing recovery can take place, notwithstanding the fact that you have to have incentivized and qualified buyers to purchase the homes. To stimulate jobs, you have to have new construction. New homes won't sell as long as there is a ready supply of exisiting homes at lower prices. Create tax credits and let investors buy these homes to rent to families that have been ruined with this problem caused by banks and Wall Street… Read more »
I agree with Paul, Again no one not even you address the HUGH problem of people who are "Under Water" with their Home Mortgage. A great deal of people have simply "Walked away" and let their property be foreclosed. BUT, there are a great number of people in the country who continue to pay their monthly payments. But, they cannot sell and pay the difference in the mortgage amount and the reduced value of their home. They are not sellers or BUYERS. As values decrease this pool of people continue to grow. I have heard stats that 25% to 35%… Read more »
In order to get the foreclosures and forfeitures and bankruptcies under control I would offer a housing buy down program. And it is simply just that, if a homeowner is late on payments and is in risk of foreclosure, and their current income would not qualify them for their current home, they would be able to turn over their home to the lending institutions, if they would purchase a previously forclosed home that they could afford. Their would be no penalty, only closing, title and minimal real estate costs. And if possible I would offer this to previously forclosed owners.… Read more »
Our Shah Gilani for Treasury Secretary. Then, he can implement the "Gilani Plan" and help correct a broken financial system. Timothy Geithner, may be highly intelligent with a world of practical experience, but he is not the man for our current times. He is just a "hackey" for big banks on Wall Street. Anyone out there, strongly connected to the White House? Or maybe, Money Map Report should start its own grass roots campaign to help Mr. Gilani fill this highly esteemed and influential position. Shah Gilani is the man for the times to help make it possible! He is… Read more »
From Canada I look at what has occurred in the US and I am amazed at how the US system works. I agree the Government should not be in the mortgage business. However, in Canada we have a government organization called Canadian Mortgage and Housing Corporation(CMHC) who provides "insurance coverage" to the banks for higher risk mortgages. However, the premiums for that insurance is paid for by the buyer as part of their mortgage payments. This helps protects the banks but as well allows the buyer to buy a home with only 5% down. The other difference is the money… Read more »
I agree that the housing problem needs to be fixed to have a healthy economy again. I am a retired banker, a commercial banker that is (not a wall street investment banker) and I've made hundreds of home loans and several thousand commercial real estate loans. The roots of the collapse of banking and the banking crisis started when Glass-Stegal was repealed in the Clinton administration with his then treasury secretary Mr. Rubin playing a heavy hand, in the1990's. This was followed by investment banks and commercial banks merging and the credit standards of borrowers (especially home buyers) being allowed… Read more »
Excellent article! I know the rules are some what different in Canada, but it also comes down to simple math. I suggest a minimum 10% D.P. across the board locked in for a minimum of 10 years. Monthly mortgage and tax payments cannot exceed 35% of ones after tax income. Canadians are about to enter some very rough times. Over 5 million first time buyers across Canada in the past 11 years purchased their first homes with little or no D.P. When the cost of borrowing begins to increase later this year, these people are in big trouble! History repeats… Read more »
There are many areas across the country with stable housing markets. I know of three personally: Littleton, CO, Casper, WY and Springfiled, IL. Any plan to incentivise folks to buy in unstable areas (bottom fish) will almost certainly hurt the folks who have to buy in stable areas in some way which would not be fair. Also, banks will always find a way to add to their bottom line not matter who it hurts, so I applaud your effort but would not support any incentives or govt handouts to get the job done.
Definitely on the wrong track. Because the banks can easily sell off loans, they have no responsibility for consequences, and only take the commissions. I would have made any bailout require new lending. As it is the banks borrow from the Fed, buy Treasuries with little risk, and the taxpayers provide them even more wealth. In Canada the bank that makes the loan holds the loan and is thus responsible for profit or loss. Changes the whole market attitude. At one time we had 13 loans on income property in the US, and not a single one in the end… Read more »
Dear Mr. Gilani, US Housing Solution I have been in the real estate business for almost thirty years. I'm knowledgeable about the housing market (locally) but my main involvement is commercial development. I am generally sure of one thing in commercial development, commercial development follows roof tops and we have not seen any new roof tops attracting commercial expansion. Quite the opposite; poor housing market feeds a poor commercial market. Commercial vacancies are substantial and not improving. I can't recall a locally financed commercial startup in the last four years either. You cannot count the shadow vacancy of the downsized… Read more »
Houses should not be investments. They should be for common people. Soon as all these investors lose thier asses. The price of a home will be affordable to common poeple again. That's what will fix the housing market. At this point, investors might put their money into businesses that actually produce exportable products. Hence offsetting all the imports that keep the deficet high and the economy low. instead of worring about incentives to buy over priced realestate the government should make incentives to business large and small. That would help with the unemployment numbers. lMore people productivly employed equals better… Read more »