Charleston real estate professionals urge Sanford to protect market

South Carolina’s newest congressman says some government actions on Capitol Hill could hurt the Lowcountry’s real estate recovery. And people who work in the industry agree.

U.S. Rep. Mark Sanford picked real estate as the theme Friday in the latest in a series of town hall-style meetings he’s been holding since May, when he won the 1st Congressional District seat in a special election.

The former South Carolina governor said it was important for him as a federal lawmaker in Washington to understand what’s happening to the local housing market.

 

“This brings your feet back to earth ... this shows here’s something that is not working and we may want to tweak this, that or something else,” the Lowcountry Republican said after his remarks to the Charleston Trident Association of Realtors in North Charleston.

 

The local housing recovery has been a hot-button topic this year. Like many markets, the Charleston region is in the midst of a residential rebound that’s been helped by low interest rates and lower home prices compared to years ago, though both have been edging higher.

 

Friday’s meeting touched on topics such as the reform of the debt-laden federal flood insurance program, the Affordable Health Care Act, mortgage interest rates, and the threat of weakening the Federal Housing Administration’s role in housing financing for first-time and lower-income buyers.

 

Sanford, who was a partner in a local commercial real estate business before entering politics, spoke for about an hour. He opened with comments on why he was among those in the U.S. House who pushed for a one-year delay of reforms to the National Flood Insurance Program. That legislation is now making its way through the Senate.

 

Sanford, who called the bill “sensible,” said the federal insurer needs to explain more before implementing changes that trigger a jump in rates.

 

“I’ve been getting a lot of phone calls from Realtors up and down coast with alarm and what they are seeing is a dramatic increase in terms of premiums,” Sanford said.

 

Some of the more than 50 real estate professionals who attended the talk raised concerns about home financing, especially the possibility of Congress passing legislation to end Fannie Mac and Freddie Mac in a move that could doom the 30-year fixed-rate mortgage. Other legislation, if passed, could limit Federal Housing Administration-backed loan amounts and raise down-payment requirements.

 

“To change a program or to drastically hinder a program such as FHA ... by not having funds available for the people does drastically hurt not only the real estate industry, but the other industries that feed off the housing market,” aid Owen Tyler, president of the local Realtors group.

 

Tyler also called home ownership “the stability of this country, and when we continue to increase cost of home ownership we put up barriers.”

Reach Tyrone Richardson at 937-5550 and follow him on Twitter @tyrichardsonPC.

Report: Right to Rent Legislation Would Slow Growing Rate of Foreclosure

HR 5028 is designed to allow the federal government to modify the foreclosure process to allow homeowners the right to stay in their homes.  But the question does exist if a homeowner is unable to satisifay the mortgage will they be able to make the rent payment.  The bill has the initial appearance of all the other bills out of Washington to help homeowners, they look great on paper but in reality they are ineffective ...

RISMEDIA, September 23, 2010--As the number of homes around the country entering the foreclosure process continues to steadily rise, a recent report from the Center for Economic and Policy Research (CEPR) suggests that giving homeowners the right to rent their house at a fair market price may be one of the best ways to address the nation’s foreclosure crisis.

“With roughly one-in four mortgages underwater, the loan modification plans put forth so far have done little to help homeowners facing foreclosure,” said Dean Baker, Co-Director of CEPR and an author of the report. “Right to Rent, on the other hand, would benefit millions, provide families with real housing security, and could go into effect immediately.”

The report, “The Gains from Right to Rent in 2010,” analyzes the costs of renting versus owning a house in several major cities and finds that the Fair Market Rents in these metropolitan areas is often much lower than the cost of ownership.

“Ordinarily, the gap between owning and renting is not that large.” continued Baker, “Due to the enormous run-up in house prices over the housing bubble years, however, ownership costs now vastly exceed rental costs in many of the bubble markets and homeowners in these markets have much to gain from having the opportunity to remain in a home as a renter following a foreclosure."

The report documents the costs of renting and owning before and after taxes in 16 metropolitan statistical areas (MSAs) and details substantial savings gained from renting across all scenarios depicted. The various scenarios consider the costs of mortgage payments, property taxes, insurance and maintenance costs, and mortgage deductions. An appendix is included that compares ownership and rental costs across 100 MSAs as well.

Under Right to Rent legislation, such as HR 5028, sponsored by representatives Grijalva (NM) and Kaptur (OH), Congress would temporarily alter foreclosure laws to let foreclosed homeowners remain in their homes as renters for a substantial period of time. This would save families from being kicked out of their homes and would go far to stop the blight of foreclosures affecting many of our communities. This plan requires no taxpayer dollars and no new bureaucracy to implement.