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USC Lusk Center for Real Estate Director Richard Green on the state of the mortgage and housing markets.
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In focus tonight the housing market new data out from core logic finds nearly two thirds of Americans with mortgages paid more than 5% on that mortgage.
Despite the fact that rates have been at all time lows so why -- low rates so out of reach and -- the Fed's recent move to push rates lower do anything to help.
Let's ask Richard Green director of USC's Lusk center for real estate.
I guess you know Richard the reality is -- most folks understand that banks aren't lending and that's a real reason that people can't get access -- they're also under water.
-- tell me.
In your view.
Why are these record low rates out of reach for so many people.
Well -- it's two things I think first of all as you said there -- a lot of borrowers were under water and so this reluctance to lend to those people.
And there's a program called the harp program but even then which allows -- were underwater refinance if they have a Fannie or Freddie loans.
But even then I think lenders are afraid of the consequences of doing one of these loans.
The second thing is.
That if you don't have easily documented income.
So if you don't have W two income lenders are very suspicious of anything you show them.
So suppose your small business owner.
Food is filing -- ninety -- Your income is not easy document that's not steady income lenders seem very reluctant he's making mortgages to someone like what and you mentioned the harp program there's also the -- program.
They have only -- to the third of the people that that there were they intended to help.
At the -- -- is government programs really haven't been a solution what needs to happen in this housing market.
Well I think it if the harp program could really be made to work very easily very transparently so.
If you're current on your mortgage and that's the key thing about the Hart program is that it's not rewarding people who have engaged in bad behavior toward -- people.
-- current on their mortgages.
If you're current on your mortgage you just get a refinance period.
And -- thing is one Mitt Romney's advisors Glenn Hubbard along with Chris Mayer.
A great idea that have been pushing the idea of allowing people to refinance sort of no questions asked if -- current on their mortgage.
I think that would be enormously beneficial to the housing market on the broader economy.
-- Richard the reality is is that people have said that there are consequences to that people do get hurt.
People who -- those bond investments connected to those mortgages -- take a hit.
They do and it and it look there's nothing that's a panacea but.
What this allows people to do it's that the borrowers who is exercise an option that for years and years and years borrowers has anyway which is that -- when interest rates fall.
They can refinance their mortgages and when investors in mortgages.
Make the investments they know that borrowers have that option and and and a sense.
Investors have been have gotten a windfall arising from the fact that.
Because -- -- -- pretty mortgages they've been guaranteed by the government.
And because borrowers are stuck are unable to refinance.
They don't refinance where is in years past they -- -- quite readily times and and that would unlock lots and lots of money that could help this economy Richard thanks for joining us tonight we appreciate your time.
You're welcome.
