NAR Economist Sees Opportunity for Credit Unions in Real Estate

SAN DIEGO – David Lereah, SVP and Chief Economist for the National Association of Realtors told members of ACUMA’s annual 2007 conference here on Monday that the problems in housing are due to “forgetting the fundamentals” of good lending principles and said there was an opportunity for credit unions to gain market share. The American Credit Union Association’s 2007 annual conference held April 1-4 at the Marriott Coronado Island Resort gathered 180 CU mortgage experts to hear Lereah and other speakers while networking and sharing ideas on how to make CU home loans a bigger share of the CU wallet. Lereah acknowledged that the problems in subprime lending didn’t involve CUs, but resulted from others “forgetting the fundamentals of sound lending.” “We learn our limits and then forget them,” he said, laying out the short history of real estate boom cycles in 1991, 1993and 2001-2005, which culminated in the first quarter of 2006. “Regulators didn’t regulate when they should have and so now, are overreacting.” He said that regulators and Congress will make changes, acknowledging that “they have to be careful, but we don’t want to discourage” borrowing for home ownership beyond returning to sound underwriting and limiting easy money to people who clearly have no way to repay large debts. Lereah said that housing affordability is improving and predicted a 1% price increase in existing homes even as sales of new homes will decline 10% this year, an improvement over last year’s 17%.