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Ed Pinto of the American Enterprise Institute weighs in on how to heal the housing market.
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Well the march jobs report.
It was allows it wasn't that that was really the only way to describe that.
But maybe the rise.
In what the lackluster jobs report really high unemployment right still above 8%.
Could that actually be a good thing for the housing market joining me now.
President -- of the American Enterprise Institute.
And former chief credit officer at Fannie Mae and all -- mean is if the economy is not growing quickly -- the job market is lackluster.
Long term interest rates will stay low -- without the Federal Reserve's help that helps housing does not.
That helps housing in the short run but it doesn't.
I don't believe ultimately fix the problem we've been you know had low interest rates since late 08.
And -- they appear to be you know.
Staying low for the foreseeable future but it it hasn't really help fix the market -- and this fed.
Approval or regulation.
And guidance is just indicative of that that we've now got the Fed saying to banks.
Don't take the losses.
This is after we've been kicking the can down the road for years on losses continue to kick can down the road keep your Mario.
In your investment portfolio which banks do not normally owned real estate -- other than their branches in their buildings.
Keep this Dario as an investment rent -- out.
And then maybe you'll be able sell it down the road -- they they did that with Fannie Mae and Freddie Mac.
And Fannie Mae and Freddie Mac rented thousands of Mario's now Fannie Mae and Freddie Mac are bundling them up.
As.
Bulk sales the ones that they ran it so you've got the government on one hand saying to the banks do this and then -- got Fannie and Freddie.
Doing the exact opposite after having done what the Fed is telling the banks to do.
What really needs to happen with these properties is they have to get in the hands of local investors and local -- -- homeowners not.
The usual large institutions that are gonna lose track of them I mean if you look at who owns these are EO we're gonna own them they're the usual suspects.
Fannie Freddie and -- big 45.
Big banks.
That is not a recipe for.
You know healing the housing market getting in the hands.
Small investors getting the hands of real homeowners is I -- -- not.
-- -- not willing to sit really quickly better than not willing to sell on.
At the going price are they not.
And I will this on the going price because that have to take big losses and so the Fed saying postpone the losses maybe it'll get better but that's not the business -- bank is in the bank is supposed to.
Take their -- you know hit and then move on and make new loans not keep their balance sheet -- up hasn't went real estate Japan frank -- It's not like it it does.
That there is a solution here.
And and that is.
You could take you to open up the market for small investors -- actually allowing Fannie and Freddie.
To expand their financing for small investors in a safe way.
-- -- suggested this about a year ago it should be done it a 1000008.
Small investors would be brought into the market at no risk to Fannie or Freddie.
And this would soak up these problems you would have to keep him on banks' balance sheets you wouldn't have to keep my Fannie -- -- you wouldn't put him in ball.
Buyers at low prices he basically let the market take care of it that's it needs to be done.
And it was great to see you thanks for taking the time -- in hours of pleasure it was I think he always a pleasure talking with -- -- -- -- makes so much sense out of something that.
Is so complicated and I always appreciated thank you -- and town.
