Report Outlines Initiatives Critical to Housing Stability

According to independent research and analysis by John Burns Real Estate Consulting, one of the nation's leading real estate consulting firms, four key initiatives are needed to stop the "vicious downward spiral" currently affecting housing, finance, and the economy at large.

The full report titled "Unlocking the Housing Market Recovery" is available in three formats — white paper, PPT and a 30 minute webinar. To download any of these versions, visit: http://www.realestateconsulting.com/video/housingrecovery.aspx

"It's clear that the general economic environment and the housing market woes are intertwined," said John Burns, CEO of Irvine, Calif.-based John Burns Real Estate Consulting. "There is a lot of rhetoric, but not a lot of facts, around the current need for stimulus and what exactly should be done."

In the report, the firm states that stabilizing home prices is central to an economic turnaround. The research outlines specific tactics that Congress, in conjunction with the Federal Reserve and US Treasury Department, should be considering as the new administration's economic team works to craft another stimulus package.

"We have done a ton of research, talked to a lot of important people in industry and government, and come up with an independent and objective set of recommendations supported by facts," said Burns. "Stabilizing housing is in the best interest of everyone. Some of our recommendations have already been accomplished, but many of them have not."

The report underscores the need to act quickly and identifies the following initiatives:

Stabilize The Banking System — Save local businesses by saving the local employers' bank.

• Continue insuring deposits up to $250,000 and unlimited amounts in payroll accounts
• Close all poorly managed and undercapitalized banks ASAP
• Keep lending money to stabilize the best and largest banks
• Properly dispose of bad loans, RTC-style, instead of the way it is currently being done
• Finance new banks to create competition for good loans
• Continue supporting commercial paper liquidity
• Continue liquidity guarantees on new bank debt

Stimulate Job Growth — Bring more jobs to the economy with short-term stimulus and smart government spending. 

• Fund infrastructure projects to create jobs 
• Stimulate short-term and long-term spending while recognizing that long-term saving is also needed 
• Allow companies to utilize their current losses to recapture taxes paid over the last 4 years so they can keep enough cash in the bank to meet payroll 
• Create government-backed initiatives to help banks make good loans to employers

Stimulate Responsible Home Buying — Stop home price declines by stimulating home buying by responsible individuals, to bring demand and supply back into balance. 

• Keep mortgage rates low
• Keep Fannie and Freddie lending and FHA insuring
• Temporarily provide a down payment match to all home buyers at a cost of approximately $40 billion
• Temporarily double the mortgage interest rate deductions for all homeowners at a cost of $188 billion per year

Support Responsible Loan Modifications — Stop home price declines by helping keep responsible people in their homes. 

• Provide financial incentives for loan servicing firms to modify loans 
• Create a vehicle to buy loans that have been responsible modified

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About John Burns Real Estate Consulting:

John Burns Real Estate Consulting is a national consulting firm that helps executives make informed decisions on the housing industry. Using independent third-party research and analysis, John and his team consult with executives all over the country and deliver the information they need to make housing industry decisions with confidence. The company is on retainer with many of the largest companies in the housing and investment industries.

For more information visit: www.realestateconsulting.com

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