According to a recent article on HousingWire.com, a survey conducted by Reecon Advisors Inc. found that 51% of respondents opposed the use of federal bailout funds to assist homeowners in default on their mortgage, while 43% were in favor. According to an unscientific online survey launched by Big Builder last week, 46.2% of our readers support some form of federal assistance for distressed borrowers, while 53.8% oppose such a measure.
"All it will be is a very expensive 'stop gap,'" noted one respondent.
However, one supporter noted, "People are losing their jobs at a tremendous rate. Unemployment will not pay an average mortgage, much less food, utilities, etc. If people continue to be evicted because of this, then the economy and home values will take longer to stablize."
Said Reecon founder and former National Association of Realtors chief economist David Lereah in view of the results, "These findings indicate that there are significant political barriers to proposals now being drafted in Congress to use some of the remaining $700 billion of bailout funds to help stem foreclosures by helping defaulting homeowners with their mortgages." Not surprisingly, 83.4% of Big Builder's survey respondents agreed with that assessment, while 8.3% both disagreed and remained unsure, repectively.
"Do not spend bailout funds," advised one respondent. "Restructure existing mortgage amounts, terms, and interest rates so the current owners can stay in their homes where they pay a reduced mortgage payment during their ownership, but do not make these mortgages assumable. When the current owner sells, you will be able to create a new market-rate mortgage."
While Reecon survey respondents said that they believed real estate was a better long-term investment than the stock market by a margin of 53.7% to 30.8%, Big Builder readers were split regarding how this might bode for the home building industry in the short term. While some felt that the current conditions on Wall Street would prompt more consumers to put their dollars in real estate, others pointed out that a return of consumer confidence--predicated on a market bottom and job security--was necessary before such investment would occur.