Action Needed Now for U.S. Financial Crisis

Posted by Mitch Levinson on September 24th, 2008

During an Emergency Session of the NAHB Board of Directors at Fall Boards today in San Diego, the members present voted to support the administration on TARP (troubled assets relief plan). Congress is currently working on historic legislation to address the credit crisis. Help pass this vital aid for the financial markets now by contacting your representatives.

Although the builders present agreed that the plan has challenges specific to our industry that we will have to deal with over the next several years, all agreed the benefits of TARP substantially outweigh the risks of doing nothing. It is critical for home builders to call their Congressional delegation and urge them to act promptly on the financial markets rescue plan. The costs of doing nothing could be catastrophic.

Credit markets have been locked up for months and builders, as well as new home buyers, are suffering from a shortage of mortgage credit. Recently this situation has become more perilous. In fact, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke warn that conditions have deteriorated to the point of triggering a world-wide financial collapse.

The Treasury Department proposes TARP to stabilize the situation and negotiations are underway in Congress. The proposal will allow the Treasury to restore liquidity to the credit markets by purchasing up to $700 billion in troubled mortgage-related assets from financial institutions. The actual cost of this plan should be considerably less as the Treasury resells the assets and retains the proceeds.

Mortgage assets include residential or commercial mortgages and any securities based on such loans. It is hoped that this rescue plan will shore up housing finance markets and help stem the decline in housing demand and home values by providing an outlet and market for troubled mortgage assets. This can free up capital for housing, as well as other important sectors of the economy.

It is critical for home builders to call their Congressional delegation and urge them to act promptly on the financial markets rescue plan. The costs of doing nothing could be catastrophic.

Action Item:

Please take a moment to call you Senators and Members of Congress with this simple message:
•    The housing crisis and its impact on the financial markets are pushing the nation to the brink of financial collapse
•    The financial rescue plan being negotiated between the Treasury Department and the Congress is critical to stopping this from happening
•    Congress must pass the financial rescue plan now to help stabilize the finance markets and get credit flowing into the housing economy
Talking points:
•    Mortgage credit costs are increasing, and home builders are finding it more and more difficult to obtain any business credit
•    There are many real estate markets in the U.S. that have not seen the wild downturn in home prices, yet these markets are suffering the effects of the financial meltdown and extreme tightening of business credit
•    The passage of a financial rescue plan is crucial to calming the financial markets so that credit can begin flowing again into the economy
•    (Democrat) The rescue plan should provide taxpayer protections and include foreclosure mitigation measures to help homeowners stay in their homes
OR
•    (GOP) The rescue plan must not be slowed down by controversial provisions, such as an expansion of bankruptcy powers
•    Now is the time for Congress to come together in a bipartisan fashion to pass a rescue plan that stabilizes the financial markets so that credit can begin flowing and one of the biggest engines of the economy, housing, can begin to move this nation to prosperity once again
Action Item:
Help pass this vital aid for the financial markets now
Call congress toll free at 1-866-924-NAHB (6242)