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Jay Weiser, Baruch College Zicklin School of Business associate professor of Law and Real Estate, on why government intervention is hurting the housin...
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Nightmare similar to the nightmare announced three.
And the government needs to just leave the housing market completely joining us -- -- so that governments should get out of the housing market completely.
-- I think it should get out as much as possible certainly I think that right now the -- -- is trying to.
-- maintain.
A level involved what we're we have pretty much socialize the entire housing market and that is one reason why we have this constant -- Lot of people say -- Our I think that investors will pick it up there is already interest from private investors in the housing market.
And if you sell it to them they will buy it and they were repositioned properties and that was done in the past it was done -- in with commercial property.
During the late eighties early -- -- with a resolution trust company.
AJ -- -- and the government is already enlisting the help.
Private investors there is private capital coming into the housing market that is helping to kinda get this system moving why isn't this sort hybrid system.
Efficient in your mind.
-- the hybrid system it isn't deficient because vulture investors are interest did.
In in doing deals and pretty much if you if you do a deal with a vote for investor.
You're going to get picked clean.
Because vulture investors have to be very aggressive in terms of how they how they do resolutions in terms of finding value in properties.
And they're not going to be and to the extent that they are even willing to enter into complicated joint venture agreements with the government they're either going to demand a very heavy discount and or fleece the government.
Whereas if you sell to vote for investors and you say here you you unload at the Gartman says here cures.
They will reposition the properties to where they think they can -- -- -- -- -- -- -- proposition when the markets are doing well in the housing market is is on upswing on an uptake but that's not what we're seeing right now I mean the government in essence is trying is subsidize and may be attractive the invest more attractive.
To investors because we are bouncing along the bottom to actually take a leap of faith and invest right now.
Is it is -- -- proposition to sell.
I don't believe it's -- hard proposition to sell I believe as long as you are ringing the dinner bell and you have subsidies.
Then the investors are going to be hunting the subsidies and and I think that as we've seen.
With the -- first time homebuyers credit you're just burning money your your prior guess just discuss that whereas if you say here.
We will sell it you pay us what the market will bear there are investors who will say fought on May want to rent these properties and may want sell them.
And then it's off the government's hands.
There's no doubt that investors already are playing a key role you know we see big time cash buyers who see a lot of investors around the country but.
When you say when you start to talk about investors and that the determining this summer quote unquote bolsters and others are just regular investors.
It seems like he gets a little bit murky you know we had a -- earlier this week you've said.
There's -- -- our cartel.
Between Fannie Mae Freddie Mac GSE and a big banks in they've essentially created a cartel.
That controlled all this and they all benefit from a do you sort of agree with that.
-- yes I don't I wouldn't -- cartel but I think that because they -- refusing to shell and ball which is what the resolution trust company did back in the 1990s.
They are sitting on this gigantic pile of millions of single family homes and the market isn't clear.
I wouldn't -- cartel because I think it's a matter of of policy and and nobody wants really realized losses current I also would not agree review that would deprive investors are coming in because the news reports that that -- -- -- say -- really only private investors are tiptoeing in.
And partly they can't get the product from.
Those big agencies in those big banks all right we're gonna -- signal but there any chance of this nightmare and downstream becomes something better without these changes that you're looking for our I don't think so because I think what we've got is.
We are sort of constantly kicking the can down the road here and -- costly pretending.
That that we want to be able to inflate prices and that's how we got into this mess with Fannie and Freddie.
And things I agree okay JJ was Herbert wrote college that -- goal of the business.
