President's Perspective

The Emergency Economic Stabilization Act of 2008 -- a life preserver, not a bailout

By Greg Hrabcak
President

The recently passed Emergency Economic Stabilization Act of 2008 has received lots of media attention in the last few weeks, much of it negative.

It's been commonly referred to as a "bailout" but I prefer to look at it as a positive, bi-partisan move, which will prevent the so-called credit crisis from getting worse.

I view the Emergency Economic Stabilization Act of 2008 as a life preserver to housing and financial markets in need of help --- and while we're using nautical references -- one that will chart the markets on a course to smoother seas ahead.

The legislation is a crucial step toward again getting cash flowing through the country's financial system, making it easier for homebuyers to realize the American dream, and easier for current homeowners who are struggling to refinance and save their homes.

By requiring the governmental agencies that purchase troubled mortgages from financial institutions to work with lenders and borrowers to modify or refinance loans and make every effort to avoid foreclosure,the act will help keep hardworking people in their homes.

By encouraging homeownership and preventing more foreclosures, the act will help stabilize the national economy while having an impact on nearly every neighborhood in every community.

By restoring liquidity to the mortgage market, lenders will again be able to make loans to not only homebuyers, but small businesses as well, fueling the housing market and the nation's entrepreneurial spirit.

Those loans will now become more widely available and less costly, something that will have a positive impact on borrowers for years to come.

NAR President Dick Gaylord said it best last month when he praised the act's passage: "Protecting Main Street not only benefits individuals, families and communities, but also supports the larger U.S. economy."

While rates may change and the market can skyrocket and plummet in a single day of trading, housing remains the backbone of the American economy and the American way of life.

As REALTORS®, we must do everything possible to protect and promote that American dream.

For more about the credit crisis and how it affects REALTORS®, visit www.realtor.org/creditcrisis.