Congress set out to dig deeper into understanding whether or not we are in a housing bubble [Reuters] and to further understand the state of US mortgages. Late edition hat tip to Lansner.

Democratic Senator Charles Schumer of New York mused: “To paraphrase Shakespeare: Is there a bubble or isn’t there a bubble? That is the question.”

They tapped the following experts:

Richard Brown of the Federal Deposit Insurance Corporation:
The Federal Deposit Insurance Corporation (FDIC) preserves and promotes public confidence in the U.S. financial system by insuring deposits in banks and thrift institutions for at least $100,000; by identifying, monitoring and addressing risks to the deposit insurance funds; and by limiting the effect on the economy and the financial system when a bank or thrift institution fails. Not a whole lot of careful mortgage underwriting going on these days.

Patrick Lawler of the Office of Federal Housing Enterprise Oversight
OFHEO promotes housing and a strong economy by ensuring the safety and soundness of Fannie Mae and Freddie Mac and fostering the vitality of the nation’s housing finance system. They were asleep at the helm during the Fannie Mae accounting scandals.

Dave Seiders of the National Association of Homebuilders
NAHB is a trade association that helps promote the policies that make housing a national priority. This is a trade group so its not providing neutral insight so I would take any opinions they provide very lightly.

Tom Stevens of the National Association of Realtors
The core purpose of the NATIONAL ASSOCIATION OF REALTORS® is to help its members become more profitable and successful. This is a trade group that has been spinning a weakening housing market until about a month ago. I would take any opinions they provide very lightly. Have you noticed that David Lereah, their chief economist, who has polarized public opinion about this, has been largely silent recently? President Tom Stevens has become the spokesman.

So now we have these four individuals testifying about the market: 2 represent government entities that have been largely dormant and 2 represent trade groups that have been the housing markets biggest cheerleaders. I am not sure anything that can be said will be useful to Congress. More of a PR op.

For a summary of comments and prepared statements:
Mr. Bubble Goes To Washington [Lansner]

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One Response to “Congress Gets Shakespearean: Housing To Be Normal, Or Not To Be Normal”

  1. Now that you mention it, Lereah has been MIA for the NAR — hadn’t noticed that. Stevens tenure is about to end, so we soon won’t have him to kick around any more. But let’s give it one more shot.

    The Washington Post carried a piece last Saturday about (essentially) NAR President Stevens getting caught in the market … um … correction.

    “his old house in Great Falls has now been on the market for a year at the price of $1.45 million.”What I should have done,” confessed the senior vice president of NRT Inc., parent of Coldwell Banker Residential Brokerage, “was listened to my agent and cut the price by $50,000 to $100,000 early on, and the property would have sold last October.” Or, even better, he said, “I should have listed it a month earlier,” when the market was only just beginning to lose air.”

    And on, and on he goes.

    I don’t know what average days on the market is in the DC area, but I bet it is less than 365. And Stevens hasn’t sold yet…