“Policymakers realize the root causes – falling home prices, mounting foreclosures and a frozen credit market – must be addressed now. The plan being developed must get to the heart of the problem to successfully stabilize mortgage markets and home prices and restore confidence in global financial markets. Ensuring that credit-worthy home buyers, builders and other small businesses have access to credit is absolutely essential to putting this economy back on track. NAHB stands ready to work with the Administration, Congress and the Federal Reserve to achieve these aims and to restore a healthy housing finance system,” said NAHB CEO Jerry Howard.

The NAHB response came after Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke met with congressional leaders on Thursday evening to brief them about a plan aimed at solving the financial crisis. “What we’re working on now is an approach to deal with systemic risk in the capital markets,” Paulson said at a press briefing after the meeting. The next day (Sept. 19), President Bush held a press briefing with Paulson, Bernanke and SEC Chairman Chris Cox. Bush said: “We must act now to protect our nation’s economic health from serious risk.” The final plan is expected to be fleshed out in coming days in meetings between Administration officials and members of Congress.

In another example of how rapidly events are moving forward, the Treasury Department and Securities and Exchange Commission each made major announcements on Sept. 19. Treasury said it was establishing a temporary guaranty program to insure the holdings of any publicly offered eligible money market mutual fund. The SEC said it was placing an immediate – and temporary – halt on short selling of financial stocks to protect investors and markets. Short selling is a practice that allows investors to bet on a decline in a company’s stock price.

This week’s extraordinary developments began on Monday when Lehman Brothers filed for bankruptcy, Bank of America struck a $50 billion deal to buy Merrill Lynch and the Dow plunged 500 points. The next day, the government bailed out insurance giant AIG.

Amidst the backdrop of this financial turmoil, the NAHB Housing Finance Task Force held its first meeting this week in Chicago. The task force was formed to address evolving housing credit conditions and to examine the long-term implications of the federal government’s move to seize control of Fannie Mae and Freddie Mac. This includes developing guidance for Fannie and Freddie’s new regulator, the Federal Housing Finance Agency, and the next Congress and new Administration. Moving forward, the task force will develop a series of policy recommendations on how to restore the health of the nation’s housing finance system.

For more information, contact Dave Ledford at 800-368-5242, x8265.

Prior to the committee markup, NAHB sent a letter every House member urging support for the legislation. The House is expected to consider the measure next week. NAHB continues to urge both chambers to pass the bill before Congress adjourns for the year in October. However, continued opposition from  the Bush Administration and the Senate could push this debate into next year, during the start of the 111th Congress. To view the legislation, click here and type the bill number in the box in the upper center screen. For more information, contact Scott Meyer at 800-368-5242, x8144. [return to top]

"By not extending these incentives now, and specifically excluding incentives for newer, more efficient homes, Congress leaves a gaping hole in its strategy when it comes to seeing improved energy efficiency in the building sector," said Howard. "More importantly for our members and their customers, extending this credit now ensures that it is in place when the housing market fully turns around. That way, more home buyers can reap the benefits of high-efficiency homes constructed with the help of this tax incentive."

The Senate is expected to vote on energy tax extenders legislation next week. For more information, contact Elizabeth Odina at 1-800-368-5242, x8570. [return to top]

At  issue is an attempt to alter the definition of “required use,” which would prohibit a home builder from offering any incentive in exchange for a home buyer’s use of the builder’s affiliated mortgage or title companies or any other affiliated business. Home building companies that have affiliated mortgage and title companies have formed these entities primarily to offer consumers better finance choices and improve the likelihood that the home sale closing occurs as promised and in a timely manner.

Contrary to HUD’s assertion, Still said that home builders in general do not increase selling prices of homes to offset these incentives. “The competitiveness of the marketplace simply does not allow this to occur,” she said. "If a home builder does not offer consumers new homes at fair prices, combined with settlement services at fair terms, these consumers will choose a more desirable alternative.” For more information, contact Scott Meyer at 800-368-5242, x8144. [return to top]