Gregg Calls for Stimulus to Focus on Increasing Real Estate Value
HOUSING
New Hampshire Union Leader
Aoife Connors
Boston University Washington News Service
Jan. 28, 2009
WASHINGTON—The economic stimulus package “should be about keeping the value in people’s home,” Sen. Judd Gregg (R-N.H) said Wednesday, complaining that the Obama administration’s bill falls short of that goal.
“I am disappointed that the stimulus initiatives which we’re seeing so far…do not address in a more aggressive and robust way the issue of real estate prices and how we keep people in their homes and how we reduce foreclosures,” Gregg said at a hearing on the federal response to the housing and financial crisis by the Senate Budget Committee, where he is the senior Republican.
Foreclosures allow lenders to repossess a property to cover the cost of the outstanding mortgage.
There was a 1.13 percent rate of foreclosures in New Hampshire in 2008, lower than the national rate of 1.84 percent. But the foreclosure rate rose significantly from the 2007 figure of 0.21 percent in New Hampshire and 1.03 percent nationally. In 2006, there was a 0.02 percent foreclosure rate in New Hampshire and 0.58 percent in the United States.
“The biggest thing that is causing the economic problem,” Gregg said in an interview after the hearing, “is the price of real estate; a lot of people can’t afford their mortgages and so people have lost confidence because they can’t afford to pay for their homes.”
He added that he supported a proposal by Sen. Kent Conrad, the chairman of the committee, to give what Gregg called “significant” income tax credits to homebuyers.
“We need stimulus badly,” Gregg said, “but we need it in the right places…. The problem is to get some value in the real estate market so that we can give people confidence again.”
He added: “If we can stabilize real estate values it will result in two things: it will restabilize the financial industry and put confidence back in people in the value of their homes.”
Gregg said he agrees with Douglas Elmendorf, the new director of the Congressional Budget Office, who testified at the hearing. Elmendorf’s comment that “we should address the housing problem first in a stimulus … reinforces my own view,” Gregg said.
“There is another proposal under which the federal government, for 18 months to two years, would give many homeowners the opportunity to have a 30 year mortgage at a rate of around 4 percent. This would give people the opportunity to rewrite their mortgages to an affordable level and put value back into real estate” Gregg said.
He noted that the Federal Deposit Insurance Corp. is pursuing a proposal” to help people meet and rewrite their mortgages.”
Gregg told the committee he was “concerned that so much of the stimulus package is really outside the next two years…, and that’s not good. We’d like to get this money out the door sooner.”
Gregg added: “We’re in crisis, people are sober, there’s a sense of community here that often doesn’t exist in the Congress. There’s a willingness to work across the aisle, so let’s move on that issue right now while the iron is hot and we can get things done and there’s a good will to do that.”
He expressed praise for President Obama “for stepping up and saying he intends to do that.”
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