Real estate organizations are putting more pressure on federal lawmakers to take stronger and decisive action to ease problems in the housing industry soon, even during the transition period between the outgoing administration of President George W. Bush and that of president-elect Barack Obama. Several leading groups are making proposals and pressing legislators to take action, including the National Association of Realtors.

"Our members (Realtors) see firsthand the impact that an unstable housing market is having on communities all across this great country," said NAR President Richard Gaylord. "The U.S. Treasury and Congress need to work together to ensure that the American people — not Wall Street and large banks — benefit from the economic recovery plan."

A recent NAR survey found that nine out of 10 homeowners believe owning a home is still the best long-term investment they can make. However, nearly one-third of those surveyed said they were postponing plans to buy a new or existing home because of the current economic environment.

About half of real estate brokers surveyed said they would expect home sales to increase by 10 percent to 25 percent in their markets if mortgages with substantially lower interest rates were available.

In an effort to move the government to act, NAR recently sent a letter to U.S. Treasury Secretary Henry Paulson calling on him to refocus the Housing Finance Agency's efforts on restoring strength to the mortgage-backed securities market. That would help lower mortgage rates for all home buyers and for those who need to refinance their existing mortgage.

The Realtor association provided an economic analysis demonstrating that a reduction, or buy-down, of interest rates by just 1 percent could result in up to 840,000 additional home sales and reduce the inventory of homes by as much as 20 percent. Current inventories equal to a 9.9-month supply could be decreased to about a 7.5-month supply.

"These changes would help stabilize home values and the housing industry," Gaylord said. "The Treasury Department has gotten off track by focusing too much attention and stimulus money on Wall Street and banks that are in turn using the money for mergers and acquisitions. The administration needs to get back to the original intent of the plan — stabilizing the mortgage and housing markets to help families avoid foreclosure."

The NAR proposal includes consumer-driven provisions that would eliminate repayment of the first-time home buyer tax credit and expand the credit to all home buyers. It would also increase mortgage loan limits permanently and focus the economic stabilization efforts on supporting the housing and mortgage markets instead of providing capital to banks with no strings attached, according to an NAR report.

WEB WAR

A battle is heating up within the real estate brokerage industry between ForSaleByOwner.com and the National Association of Realtors.

On Nov. 12, ForSaleByOwner distributed a news release announcing it was the first "by owner" real estate website to enable home sellers to advertise their property on the Realtor.com website, which is owned by NAR, without being listed with a local Multiple Listing Service. The release said the new direct access to Realtor.com follows the May 2008 settlement between the U.S. Department of Justice and NAR.

The settlement gives consumers access to Realtor.com without the expensive cost of a commission fee, according to Greg Healy, vice president of ForSaleByOwner. "We are the first to offer this new consumer-friendly access to Realtor.com. In today's challenging housing market, sellers need cost-saving ways to sell their homes," he said.

ForSaleByOwner is offering the inclusion of Realtor.com exposure to homeowners for a fee of $200.

When I asked for a response from NAR, I received this message from Lucien Salvant, NAR's managing director of public affairs: "The settlement agreement between the National Association of Realtors and the Department of Justice made no provision to allow unlisted properties, such as 'for-sale-by-owner,' to be referred to Realtor.com, which is NAR's website. There are no pure 'for-sale-by-owner' homes on Realtor.com."

Realtor.com is the most visited of any real estate website. It receives about 5 million visitors monthly.

Q: Does a significant number of homeowners have an "upside down" mortgage?

A: Yes, an increasing number of homeowners are finding themselves "upside down" or "underwater" with their mortgage, meaning they owe more on their mortgage than their home is worth. Currently, at least 7.5 million homeowners are in that position, according to a report from First American CoreLogic, a research firm. Another 2.1 million homeowners are nearly at that point, with their homes worth less than 5 percent more than the balance on their mortgages.

The extent of the problem varies from state to state. California, Nevada, Arizona, Florida, Georgia and Michigan account for about 58 percent of all homeowners who are underwater with their mortgage, although they only account for 36 percent of all mortgages. Nationwide, nearly one in five homeowners with a mortgage owes more to their lender than their properties are worth. However, when you discount the above-mentioned states, the rate drops to one in 10.

Being underwater with a mortgage can be very frustrating for homeowners, in some cases tempting them to "walk away" from the property. That's a situation that often leads to foreclosures, one way or another. The first step a homeowner should take to solve the problem is to contact their lender and try to work out a modified and affordable program of mortgage payments. Most lenders would much prefer doing this than taking title to the property.

To find out more about Jim Woodard and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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