realtors fighting against losing commissions on REO rentals
As most regular readers know, I believe the National Association of realtors frequently tells self-serving lies. They try to portray their actions as serving the market or the interests of loan owners, but their first priority is themselves and generating commissions. When the interests of the market are in conflict with the self-serving interests of realtors to generate commissions, the statements and policies of realtors will always favor their own interests. Today’s article is a clear example of their narrow, self-serving focus.
March 1, 2012, 3:40 p.m. EST
WASHINGTON, DC, Mar 01, 2012 (MARKETWIRE via COMTEX) — Housing markets are complex and varied, and a government pilot program to turn bank-owned properties into rentals could be disruptive and counterproductive in some markets, according to the National Association of Realtors(R).
Disruptive and counterproductive to realtor commissions is more accurate. The bullshit they come up with is laughably transparent. Why would renting out houses be disruptive or counterproductive? To what end?
The truth is renting out houses rather than selling them on the MLS will help stabilize prices — something realtors give lip service to all the time. However, when stabilizing the housing market means foregoing commissions, they change their tune.
NAR urges the Federal Housing Finance Agency (FHFA) to proceed cautiously with its Real Estate-Owned (REO) Initiative pilot program to sell homes repossessed by government agencies to private investors to convert into rental units.
“As the nation’s leading advocate for homeownership and housing issues, Realtors(R) support efforts to reduce the high inventories of foreclosures, but all real estate is local and we are concerned that REO-to-rental programs are not necessary in some areas and could even hinder the recovery,” said NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami. “In many communities REOs are already moving well through the normal processes, so we urge caution when proceeding with a rental program.”
Urge caution? What’s the worst that could happen? They don’t even have a good bogeyman they can pull out of the closet to scare people with. There is no reason not to sell bulk rentals other than it reduces commissions for realtors.
According to a recent NAR analysis, while the overall visible inventory of foreclosures has been trending down across the country, there is a noticeable difference in foreclosure inventories in states that require judicial proceedings to foreclose on a property versus inventories in states that do not require the court’s intervention. Foreclosure inventories in judicial states are currently 2.5 times higher than non-judicial states. In addition, the disposition of foreclosure inventories is considerably faster in non-judicial states, where foreclosure sales rates are four times higher than in judicial states.
“Inventories of condos and single-family homes for sale continuously fell last year, suggesting that there is no significant oversupply of visible foreclosure inventory in the market,” said NAR Chief Economist Lawrence Yun. “Even the shadow inventories of distressed homes have fallen, though they remain elevated and are an ongoing concern. The government REO-to-rental plan could work in areas where buyers are not quickly absorbing the shadow inventory.”
To prevent further increases in foreclosure inventory, NAR has repeatedly called for improved lending to creditworthy home buyers and has urged lenders to make more loan modifications, mortgage refinancings, and short sales, which will help stabilize struggling housing markets.
NAr has been consistently self-serving in its advice. They want to loosen lending standards which serves them while causing losses to lenders and taxpayers.
“While REO-to-rental programs could be successful in a few communities, we believe that doing more to ensure mortgage availability for qualified home buyers and investors could be even more beneficial in helping absorb excess foreclosure inventories across the country,” said Veissi.
It’s hard to argue with their logic. If we let anyone with a pulse get a loan like we did during the bubble, we would certainly absorb the inventory, but what good would it do to put homes back into the hands of people who can’t afford them? Oh, yeah, that would create more sales and generate more commissions.
NAR urges that a national advisory board be created to ensure that current and future REO-to-rental pilot programs truly benefit the local community, minimize taxpayer losses and stabilize home values, and suggests substantial participation of local market experts, especially licensed real estate professionals, who have unparalleled knowledge of local market conditions.
LOL! realtors have unparalleled knowledge of market conditions?
The National Association of Realtors(R), “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.
Information about NAR is available at www.realtor.org . This and other news releases are posted in the News Media section.
This trade association is truly pathetic.