Daily Real Estate News  |  November 9, 2008  |   Expect a Regulatory Revamp in '09
The U.S. government's huge budget constraints will limit what the Obama administration can do as it seeks to improve the housing market and the economy, concluded a panel of government experts at the Regulatory Issues forum Friday.

“You won’t see another New Deal,” said Paul Light, professor of public service at New York University.

What you will see is a thorough overhaul of how financial services are regulated, said Howard Glaser of the Glaser Group, a public issues consultancy. That’s a top priority for Republicans and Democrats, so it’s probably that Obama and his administration will work with Congress on that issue in the early months of Obama’s presidency.

You can also expect the Federal Reserve to get explicit powers to regulate private-label Wall Street securities.

These securities are now essentially unregulated and are widely seen as the cause of the mortgage debacle that’s rocked the economy. Likewise, regulatory oversight of the U.S. Securities and Exchange Commission is expected to change under the Obama administration. “The SEC has a bull's eye on its back,” Glaser said.

There will likely be a federal effort to mitigate foreclosures, said David Horne, chief of staff of the U.S. Department of Housing and Urban Development. But details of a mitigation plan are still unknown.

But don’t expect global investors who hold securities of troubled mortgages to be cooperative partners in writing down the bad loans, either, said Home. “Foreign investors have no interest in participating in U.S. foreclosure relief.”

The financial services industry, which has historically been championed by Republicans in Congress, has “no credibility,” even with Republicans now, so the door is open for REALTORSŪ to get their voice heard among lawmakers and in the administration, Glaser said.

All of the experts echoed Glaser’s calling for REALTORSŪ to get highly involved in federal debate on how to solve the country’s economic and mortgage problems. REALTORSŪ bring a credibility that lawmakers listen to, so they have the power to make a difference.

—Robert Freedan