Housing Recovery Plan Called Into Question

NEW YORK CITY-Just one short week ago, President Barack Obama called for “no more red tape” and “no more runaround” from the banks, offering homeowners the chance to save about $3,000 a year on their mortgages by refinancing at historically low rates. But with mortgage origination and home prices nearing bottom, the commercial real estate industry is divided over whether the President’s plan and new Financial Fraud Task Force will help—or hurt—the already troubled housing market.

“To get into these massive banking crises and massive recessions, the typical answer is to re-inflate the economy, which is what they are doing, and there’s noting wrong with that until a point,” says Joel Ross, president of New York City-based Citadel Realty Advisors and GlobeSt.com blogger. “At some point, you lose control of it potentially. If you keep re-inflating and re-inflating for too long, it feeds on itself.”