In what looks like a shameless, yet successful bid (sorry) to gain some press, real estate conglomerate Realogy has proposed lowering mortgage rates on home loans drastically to stabilize falling home prices and boost new home sales.
The company said it has approached the Treasury with its proposal, though it’s unclear if the agency is taking them seriously or listening at all.
The plan would essentially call for a short-term government buy-down of interest rates to at least 4.5 percent, or lower, for 30-year fixed-rate mortgages on new and existing purchases up to $1 million in sales price.
Realogy said the program could be carried out and funded in a variety of ways as part of stimulus packages currently being discussed in Washington, though no details were provided.
The company, which is working with other organizations to “carry this message forward,” also conducted two related surveys, one with brokers and another with consumers, and the findings were, well, rather expected.
Mortgage brokers largely responded that a cut in interest rates would drive home sales and boost home prices, while the vast majority of consumers surveyed said they still saw homeownership as the best long-term investment out there.
But wouldn’t a proposal like this simply prolong the veritable low interest-rate party that led to this mortgage crisis in the first place? I guess the upside is more real estate agents could earn those fancy gold jackets.