Bush Plan to Ease Foreclosures Supported by Home Builders

WASHINGTON--(Business Wire)--A plan put forth today by President Bush to limit foreclosures by
working with key mortgage lenders and investment firms to freeze
interest rates for five years on certain subprime mortgages is
supported by the National Association of Home Builders (NAHB).

"The Administration's plan to help struggling borrowers stay in
their homes is one of several steps that can help stabilize the
housing market and reassure consumers and investors in the mortgage
market," said NAHB President Brian Catalde, a home builder from El
Segundo, Calif. "We applaud this action and urge Congress to follow up
quickly on pending legislation that would provide additional help in
easing the credit crunch and restoring confidence in the marketplace."

Specifically, Catalde called on Congress to:

- Enact FHA reform legislation to allow the agency to insure more
home loans and help subprime borrowers.

- Strengthen regulatory oversight of Fannie Mae and Freddie Mac
and allow them to purchase mortgages in high-cost markets.

- Enact legislation that eliminates taxes on mortgage debt that is
forgiven as part of a loan workout.

The Bush plan to stave off foreclosures, which emerged from
discussions with various groups including lenders, builders,
investors, consumer activists, housing economists and regulators, is
aimed at borrowers with loans that were originated between Jan. 1,
2005 and July 31, 2007, with rates that are scheduled to reset between
Jan. 1, 2008 and July 31, 2010.

Home owners with steady incomes who have been making timely
payments on their mortgages, but who cannot afford the higher adjusted
rate, could qualify for a freeze of up to five years on their current
interest rate if they meet certain conditions. They could also be
placed on a fast-track approach that would enable them to refinance or
modify their loans.

To ensure that the break is not granted to real estate speculators
or investors, the plan would only be available for owner-occupied
homes.

Separately, a UCLA Anderson Forecast study concluded that the U.S.
and California economies will weather the housing downturn without a
national recession and another report by Harvard said that even with
today's excess supply of unsold homes on the market, the underlying
demand for new housing will ultimately rebound to robust levels
through 2014.

On the opposite coast, a report from Harvard University's Joint
Center for Housing Studies, "Projecting the Underlying Demand for New
Housing Units: Inferences from the Past, Assumptions About the
Future," found that even with the large inventory of unsold homes on
the market today, the long term demand for conventional new housing
units will run at a strong clip of 1.82 million per year between 2008
and 2014.

"The basic market fundamentals for housing are still very strong,"
said Sandy Dunn, NAHB president-elect and a builder from Point
Pleasant, W.Va. "Once we work down the inventory of unsold units and
put the credit crunch behind us, demand among both first-time and
trade up buyers will return to more normal and sustainable levels."

The Harvard report concluded: "Do not mistake short-term reactions
to the housing slowdown as a harbinger of things to come for the
long-term. On the strength of demographically-driven demand for
housing, the market will bounce back from its currently suppressed
levels."

ABOUT NAHB: The National Association of Home Builders is a
Washington-based trade association representing more than 235,000
members involved in home building, remodeling, multifamily
construction, property management, subcontracting, design, housing
finance, building product manufacturing and other aspects of
residential and light commercial construction. Known as "the voice of
the housing industry," NAHB is affiliated with more than 800 state and
local home builders associations around the country. NAHB's builder
members will construct 80 percent of the more than 1.36 million new
housing units projected for 2007.

National Association of Home Builders
Donna Reichle, 202-266-8473
dreichle@nahb.com
www.nahb.org

Copyright Business Wire 2007