Get a room full of real estate industry leaders and the person who called the meeting could get an earful on the current housing market.
That is what happened to Rep. Robert Dold (R-Kenilworth) Tuesday morning in his Northbrook office when he invited 10 real estate professionals from different parts of the industry to his office for a roundtable discussion.
“There was a high level of frustration in the room,” Dold said after the meeting. “This is a first step. There will be more meetings. This was a meeting to get an idea of what we in the role of government can do."
Dold’s agenda included foreclosure, loan modification and refinancing, under water properties, real estate values, mortgages, stumbling blocks to doing business and other issues.
When it comes to underwater real estate — a property worth less than the mortgage balance — Koenig & Strey Vice President Connie Conway of Glenview expressed anger at people who abandon property for economic reasons when they can continue to meet their financial obligations.
“We should start by doing something about the walk aways,” Conway said. “People are walking away from their property and they have the means to pay. It would make banks less hesitant to lend to borrowers.”
Scott Ginsburg of Northbrook, the chief executive officer of Prism Mortgage in Deerfield, sees a lot of frustrated potential borrowers. He disagreed with Conway. He sees very few homeowners who do not fight as hard as they can to keep their homes.
“I’m not in love with bankers,” Ginsburg said. “We have to find ways to consider the homeowner. Banks are making money. Now we have to find ways to help the consumer.”
Ginsburg told the story of a potential customer who had an 800 credit score seeking a mortgage with a 57 percent loan to value ratio and income nearly five times the monthly payment. The loan was declined because Ginsburg could not provide proof of a $90.18 bank transaction.
Dold sees possible legislation and more latitude for community banks and other institutions as a possible way to help people like the one Ginsburg described. He acknowledges new laws may not happen too easily.
“We can do that but I’m not sure how quickly it would be,” Dold said about possible new laws. “What we can do is give community banks more flexibility. If the appraisal comes in at $470,000 instead of $500,000 maybe the person has to put 22 percent down instead of 20 percent.”
Deerfield appraiser Rick Hiton was also unhappy with regulation and red tape. Though he has been in the business a long time, he can no longer do appraisals in downtown Chicago as he once did as a result of new federal regulations.
“I’ve been an appraiser 30 years and I can’t appraise on the Gold Coast,” Hiton said. He was referring to new federal regulations that require an appraiser to work within a certain radius of their residence.
Dold also recognizes the current reduction of real estate values is one of the major problems for the economy as a whole. “There is no question as we look at the economy and jobs housing is a big, important aspect,” he said.