Half of Americans Oppose Bailout for Troubled Homeowners

Underscoring just how divisive the nation’s mortgage crisis has become, a new study released Tuesday morning finds that 51 percent of Americans oppose using Federal bailout funds to help pay the mortgages of homeowners who are in default; 43 percent, in contrast, favor helping borrowers in trouble. The survey, conducted by Reecon Advisors, Inc. — a firm founded by well-known former National Association of Realtors chief economist David Lereah — found that opposition to using bailout money to help defaulters is greatest among men (58.3 percent), elderly (56.2 percent) and those living in the Northeast (56.1 percent). Support for helping defaulting homeowners is greatest among young people age 18 to 24 (69.1 percent) and those earning less than $20,000 a year (60.1 percent). “These findings indicate that there are significant political barriers to proposals now being drafted in Congress to use some of the remaining $700 billion of bailout funds to help stem foreclosures by helping defaulting homeowners with their mortgages,” said Lereah, who noted that the outcome of current housing proposals being debated by Congress could shape real estate “for many years to come.” The survey also found that consumer confidence in real estate is significantly higher than the stock market, despite the depression in property values. By a wide margin of 53.7 percent to 30.8 percent, those surveyed still think real estate is a better long-term investment than the stock market, considering the current economic situation. Confidence in real estate is highest in the South (58.6 percent) and West (58.4 percent), and among young people 18 to 24 (63.8 percent). The stock market, however, ranks highest with those aged 35-49 (34.7 percent). Lereah was widely ridiculed by housing bears for cheerleading housing during the recent boom cycle, when he served as the chief economist at the NAR. After leaving the realtor-led lobbying group last year, the economist now says he has become much more bearish on real estate than he was earlier. “I was a public spokesman writing about housing having a good future,” Lereah told Money Magazine in a recent interview. “I was wrong. I have to take responsibility for that.” “I never thought the whole national real estate market would burst,” he told the magazine. Lereah now says he expects home prices to fall another 5 to 10 percent during 2009. Write to Paul Jackson at [email protected].