Time For Troop Surge On The Front Lines Of The Housing Crisis

Time For Troop Surge On The Front Lines Of The Housing Crisis

Why the army of 1.2 million Realtors should be deployed to fight the war against negative equity.

By any measure, the administration’s attempts to resolve the housing crisis have been, and continue to be, dreadfully ineffective. And they’ll continue to fail while they offer solutions that are worse than the policies that created the crisis in the first place.

Instead, let’s find real solutions and engage an army of Realtors, 1.2 million strong, to address the real problem.

The problem isn’t a big mortgage payment or a temporary drop in home value. The problem is $4 trillion in negative equity that was created by an epic credit bubble.

The best Washington can come up with is to incentivize mortgage servicers and lenders to push payment-focused loan modifications, which only leave homeowners upside down in a prison of debt, albeit with affordable payments. If we ever want to return to a healthy housing market, or a strong consumer base in our consumer driven economy, we’ll have to address the reality that millions of U.S. households are terminally upside down. And, as the administration has already realized, that can only be accomplished the way Realtors do things, one household at a time.

Realtors are on the front lines in this struggle. Like homeowners, their personal wealth has been adversely affected by the dramatic change in the housing market. Some may say Realtors took advantage of the housing bubble and helped create the crisis. However, in reality, they simply and dutifully followed our leaders in Washington, and the powerful financial institutions on Wall Street who rewrote the rules of the game.

Yes, these rules were often supported by the Realtor’s own industry leaders, who pushed for new loan programs, home-buyer tax credits and unsustainably low interest rates. Those same leaders encouraged them to ignore negative signs in the market and ceaselessly insisted that “now is a great time to buy;" even writing and promoting books on why the bubble would never burst.

We shouldn’t blame the foot soldiers for the mistakes of their generals.It is in every Realtor’s best interest to see this nation get back to a healthy housing market. One where 25 percent of homeowners aren’t upside down in their mortgage, one where homeowners make their mortgage payments, and one where foreclosure isn’t a daily headline.

What we need are for our generals in Washington to develop policies that make sense, translate them into coherent marching orders, and unleash a troop surge of ready, willing, and able-bodied Realtors that can and will make real gains in the struggle against negative equity and return us to a healthy housing market, one household at a time.

The reality is that there is no one solution to this problem. Some owners are in homes they will never be able to afford; some are suffering temporary job loss; while others have already abandoned their home and moved on. Mortgage servicers are not equipped to address the problem. They lack the manpower to answer their phones, let alone talk with each owner, visit their home, and walk them through their options. Realtors have the manpower and are eagerly awaiting clear instructions on how to best help homeowners and make a difference in their community. The truth is that their livelihoods depend on it.

Our army of Realtors should be mobilized now, as they can be the front-line resource for homeowners looking for a rational way to win their personal housing battle that will, in turn, lead to our winning the war against negative equity, returning us to a healthy housing market, and perhaps even a strong national economy.

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