The Building Group is Badly Hit by Foreclosures and are Seeking Assistance

January 19th, 2009 | Tags: Foreclosures

The building group has been badly hit by foreclosures and is seeking federal assistance. The lawmakers are planning to pass a recovery package by the middle of February. Those representing the building group came to Washington asking for $150 billion to infuse health into the real estate market.

About 80 builders came representing The National Association of Home Builders. They were mostly modest privately owned firms. They sought meetings with the lawmakers from their regions – in particular those who would be handling the rescue package being chalked out by President-elect Barack Obama.

Jerry Howard is the CEO of the trade group representing the builders. He warned them not to take the “usual squishy answers” of the politicians. He was giving a hot pep talk last Wednesday. He said that they must have a clear answer whether the lawmakers are with them or not.

The housing market crash has devastated the house building industry. Foreclosures have set off a chain reaction by causing prices to fall and sales to drop. It has affected many ancillary units like interior decorators, faucet sellers, lumber business and manufacturers of blinds among the many others. To bring back balance jumbo sized government help is required to give the sale of houses a boost and to put a stop to further flooding of the market with foreclosed houses.

The builders are angling for a package that will push down mortgage rates to below 3% for the first six months of this year. They are also in favour of tax relaxation for a limit of $22,000 on purchase of houses.

From all indications it seems that specifically housing aid is not among the prime targets of Obama’s rescue package. Relief to the housing sector will be most probably in the form of another bill that will lay down new specifications for the balance of $350 billion (second instalment of the $700 billion bailout package).

Mark Zandi of Moody’s Economy said, “They want to get the stimulus passed quickly. If they bring in the housing-related issues, it might get unwieldy.”

In an interview Obama said that he would be working with lawmakers to set in motion new measures to prevent further foreclosures. Obama said, “I think the most important thing when it comes to declining home values is number one, preventing further foreclosures. That just erodes home values across the board.”