Foreclosures Building Groups Spend Millions In Lobbying

May 14th, 2008 | Tags: Foreclosure Notice

Foreclosures have taken over the country. In its wake the building groups are spending millions in lobbying. The sub-prime mortgages were peddled to gullible borrowers who are now unable to keep pace with the floating interest. One by one houses are being knocked off by foreclosures until the numbers have become so high that the lenders are feeling the weight. This sheer weight of numbers is pulling down the real estate market. There are too many houses and too few buyers. The result is that the building industry has come to a screeching halt. This has led to a snowballing effect because the industry takes under its umbrella many other types of business units like architects, designers, furniture makers, drapery sellers etc. Ultimately it tells on the entire economy.

There is a lot of public criticism leveled against the building group for having allowed this crisis to take place. It was they who took the easy money from sub-prime mortgages and started off the building boom. The government is now labouring to solve the problem and the natural inclination is to give importance to the borrowers; most of the sympathy wave is towards them. This has alarmed the building group who are trying to use $3.2 million in lobbying for their cause in the corridors of power.

Last year the trading group lobbied on regulating Fannie Mae and Freddie Mac. The latter two are government supported mortgage companies. They wanted affordable housing, redevelopment of areas that have been environmentally damaged, efficiency in energy fields, insurance against terrorist attack, reforms pertaining to immigration, and also on their favourite subjects relating to tariffs for cement, lumber and imports.

In the second half the groups spent $2 million on lobbying as per reports from the public records office of the Senate. In the first half of 2008 they have already spent $1.2 million. Their main target is to give a push to the sagging real estate market through legislation. It wants a break in taxes on an emergency basis. This would offset the gains made during the housing boom with losses incurred by foreclosure years. Tax credit should be awarded to first time house buyers amounting to $7,500. Over a decade it will cost $3.8 billion. The group also wants tighter lending conditions, as this will disallow a repeat of the present foreclosure crisis. But too stringent laws will stop mortgage activity and adversely affect the building group.