You're watching...
DePaul University Real Estate Professor Rebel Cole argues the Fed can't do a lot about housing and has a bleak outlook for recovery.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
And right I want it and move on to the campers to her moment that is that -- -- carries though if the Fed is doing enough but to find a fix for housing is the Fed.
Really involved like they should be -- bring in rebel Cole real estate finance professor at DePaul University.
I you heard what our correspondent in Washington said rebel what do you make of kind of the comments -- getting so far on housing from the Fed Chairman.
Well.
End of the Fed can't do a whole lot about house in this is really purview.
-- and FHA and Fannie and Freddie.
So -- really not they have the right party to -- the problem is -- minutes.
Estimates are there's twelve million homes that are under water.
-- six million that are delinquent their four million that are serious delinquent.
And there's two million in the process of foreclosure.
And almost another million that had been for closer in the hands of banks so this massive shadow inventory.
That's continuing to drag down hills and Case Shiller Index is down about 30% from its 2006 high is continuing to go lower.
All right so that -- we're seeing is can't make that mortgage rates incredible obviously we were looking at record look -- record low considering.
If we continue move in the direction of we do get QE3.
From Fed Chairman Bernanke in and the Federal Reserve overall mean what we see more pressure on the dollar what does that it is it really of a boost if banks won't loan.
A to borrowers out there the refinance -- refinancing -- process is still so complicated is -- -- make -- difference at the end of the day for housing -- QE.
You just hit the nail on the head I just tried to refinance my house.
I put a 10% down payment when I took out alone five years ago they know what 30% the paperwork is a -- that every.
That just -- -- due diligence you have to do to put together.
Credit underwriting standards have swung so far the other side.
The creditworthy borrowers can't get a mortgage and until they deal with that.
We're not going to be able to get the housing market off.
The private label more respect securitization.
Machinery is dead the only thing is -- being financed -- Fannie Freddie and FHA.
When you think housing comes back I mean we're hearing some economists say two years three years what's your call.
Well if you look at the inventory out there the that are almost certainly get in foreclosure you're looking at four -- five million properties.
We're processing less than a million per year you do the math and we're looking out another half decade.
Another OK so 2000.
Sixty sentencing him something like that as -- -- her calling broken.
When he would just have this huge base element obviously this 25 billion dollar settlement and the the thinking is that banks can move on get past this but many bank analysts are coming on to the program is saying no banks will not move bonds at -- -- you that your view all of that means that the banks will continue.
To be very difficult when it comes to doing deal.
This going to be really bad for the banks because they don't have the documents they need to foreclose that's why they were forcing them.
That was what brother -- was -- out.
Now they're going to have to do with the right way it's very expensive and they may not be able to -- this is gonna drag out foreclosures even longer it's not gonna speed things up.
And other issues they're talking about helping -- a million borrowers with twenty billion dollars.
The average can't modification was almost 70000.
Everything's really -- gonna be about 300000.
Not a million.
That's a drop in the bucket that we've just less than 5% of that the inventory.
Nothing's gonna change from that settlement that was all political theater to get the attorneys general reelected -- to get a bomber elected.
-- as anything else in your mind.
That it is bet that -- -- is going to be speaking in this -- -- gonna monitor hairs or anything else in your mind that he could or could not say today.
That would make investors that are -- could have cashed in housing stocks right now fill any bit better about the overall sector.
I like to see.
Announce a program of lending to homeowners as he bailed out Wall Street with that trillion dollars.
It's gonna take about a trillion dollars to bail out main street and they could do they need a little loan programme to individual homeowners with equity.
As a pre shared appreciation that would be.
Essentially budget neutral he could bail out the housing market if he set shows.
But it looks like he just wants to bail out Wall Street -- we'll see what he has to say already monitoring the Fed chairman's comments this afternoon rebel -- Real estate finance professor DePaul universe of.
