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This file contains material relating to Ginnie Mae, Financial Institutions Act, Housing Starts, Research Studies, GNMA Tandem Plan, Condominium.
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5/6/75 - National Forest Products Association
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5/6/75 - National Forest Products Association
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This file contains material relating to Ginnie Mae, Financial Institutions Act, Housing Starts, Research Studies, GNMA Tandem Plan, Condominium.
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Carla A. Hills Speeches
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The original documents are located in Box 1, folder "5/6/75 - National Forest Products
Association" of the Carla A. Hills Speeches at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 1 of the Carla A. Hills Speeches at the Gerald R. Ford Presidential Library
FINAL
NATIONAL FOREST PRODUCTS ASSOCIATION
MAY 6, 1975
THESE ARE NOT NORMAL TIMES FOR ANY OF US, AND FAR LESS
so FOR THE PRODUCERS AND MANUFACTURERS OF FOREST PRODUCTS
AND THEIR PREDOMINANT MARKET -- THE HOME BUILDING INDUSTRY.
I'M GLAD TO BE HERE TO SHARE MY THOUGHTS WITH YOU ABOUT WHERE
WE ARE AND WHAT CAN HAPPEN,
AT MY SWEARING-IN CEREMONIES BARELY TWO MONTHS AGO,
PRESIDENT FORD STATED THAT THEREAFTER ANYONE WHO HAD A
COMPLAINT ABOUT HOUSING SHOULD "HEAD FOR THE HILLS". THAT
BIT OF PRESIDENTIAL ADVICE HAS BEEN WELL-HEEDED. IN THESE
PAST 8 WEEKS I CAN TELL YOU THAT THE COMPLAINTS HAVE NOT
ONLY HEADED FOR, BUT HAVE ARRIVED AT "THE HILLS". BUT, THE
SOLUTIONS ARE TAKING A SOMEWHAT SLOWER PATH.
OUR GOAL WAS STATED BY CONGRESS MORE THAN TWO DECADES
AGO, "TO PROVIDE A SUITABLE HOME FOR EVERY AMERICAN FAMILY,
THAT GOAL IS IMPEDED TODAY BY A VERY SERIOUS SLUMP IN HOUSING
STARTS WHICH HAS RESULTED IN HIGH UNEMPLOYMENT IN HOUSING AND
RELATED INDUSTRIES SUCH AS YOUR OWN.
FORD
a
GERALD
LIBRARY
-2-
To SOLVE THIS PROBLEM HUD HAS PROPOSED NO MASS SPENDING
PROGRAM. CONGRESS, ON THE OTHER HAND HAS FAR TOO MANY
PROPOSALS PENDING WHICH WOULD SPEND HUNDREDS OF MILLIONS OF
DOLLARS,
OUR CRITICISM OF THESE PROPOSALS IS THAT THEY DO NOT
CURE THE CYCLICAL SWINGS FROM WHICH THE HOUSING INDUSTRY
REGULARLY SUFFERS, AND MAY VERY WELL DO SERIOUS INJURY TO
THE ECONOMY GENERALLY, AND THE HOUSING INDUSTRY IN PARTICULAR.
As WE SEE IT, THE ECONOMY IS NOW STIRRING, AND SOME
SIGNIFICANT IMPROVEMENT CAN OCCUR THIS YEAR. WE WANT TO
TAKE ADVANTAGE OF THIS UPTURN -- TO STIMULATE HOUSING WHERE
STIMULATION CAN BE HELPFUL, AND TO GUIDE HOUSING TO A MORE
STABLE FUTURE.
THE MEASURES NOW PENDING IN CONGRESS THREATEN THE
INCIPIENT RECOVERY OF OUR ECONOMY AND, MORE IMPORTANTLY,
HOLD THE PROMISE OF ANOTHER INFLATIONARY CYCLE THAT WILL
EXACERBATE THE HISTORICAL SWINGS OF THE HOUSING INDUSTRY,
R. FORD LIBRANT
-3-
HIGH INTEREST RATES CAUSE MONIES TO FLOW OUT OF OUR
THRIFT INSTITUTIONS, CREATING A SCARCITY OF MORTGAGE FUNDS
AND A RESULTING DECLINE IN HOUSING STARTS, THE CURRENT
CRISIS IN THE HOUSING INDUSTRY IS ONLY THE LATEST
MANIFESTATION OF THIS CYCLE,
FORCING TREASURY BORROWING ABOVE A TOLERABLE LEVEL WILL
DEPLETE AVAILABLE CAPITAL, AND DRIVE UP THE COST OF MONEY
TO THE POINT WHERE THE ECONOMY WILL AGAIN PLUMMET. LEADING
THE PLUNGE, AS ALWAYS, WILL BE HOUSING, IT IS FEAR OF ANOTHER
$
SUCH PLUNGE THAT ACCOUNTS FOR PRESIDENT FORD'S GREAT CONCERN
WITH THE PROSPECT OF AN UNRESTRAINED FEDERAL BUDGET DEFICIT.
By HISTORIC STANDARDS, THE HOUSING SECTOR SHOULD BE
BEGINNING ITS RECOVERY, FEDERALLY INSURED SAVINGS AND LOANS
EXPERIENCED NET INFLOWS OF ALMOST TEN BILLION DOLLARS DURING
THE FIRST QUARTER OF 1975 -- WITH PERHAPS ANOTHER FOUR BILLION
COMING INTO THE MUTUAL SAVINGS BANKS, MORTGAGE MONEY IS
AVAILABLE.
WHAT IS HOLDING THE HOME BUYERS BACK?
GERALD ? FORD LIGHARY
-4-
THE ANSWER APPEARS TO BE A LACK OF CONSUMER CONFIDENCE.
THAT CONFIDENCE CANNOT BE RESTORED UNTIL THERE IS A CLEAR-CUT
DEMONSTRATION THAT THE RECESSION CAN BE CONTROLLED WITHOUT
ANOTHER BOUT OF INFLATION WHICH CAN ONLY LEAD TO A WORSE
RECESSION.
ANY MEASURES TAKEN TO COME TO THE AID OF HOME BUILDERS
AND HOME BUYERS MUST BE VERY CAREFULLY AND THOUGHTFULLY
APPLIED -- OR WE WILL SET THE STAGE FOR ANOTHER MORTGAGE
CREDIT -- AND ANOTHER HOUSING INDUSTRY CRISIS.
HUD HAS A NUMBER OF TOOLS ALREADY AVAILABLE TO DEAL
WITH THE PROBLEMS OF THE HOUSING INDUSTRY,
THE EMERGENCY HOME PURCHASE ACT OF 1974 GAVE THE
SECRETARY DISCRETIONARY AUTHORITY, THROUGH THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION, AFFECTIONATELY CALLED GINNIE
MAE, TO OPERATE A TANDEM PROGRAM. UNDER THIS PLAN, GNMA
MAKES COMMITMENTS TO PURCHASE, THEN PURCHASES FROM LENDERS,
MORTGAGES WRITTEN AT AN INTEREST RATE DETERMINED BY A
STATUTORY FORMULA, WHICH TODAY IS 8 PERCENT.
R.
FORD
BALD
GERALD
LID.
-5-
GNMA THEN SELLS THESE MORTGAGES TO FNMA OR PRIVATE
INVESTORS, AT AUCTION, ABSORBING THE DIFFERENCE BETWEEN
THE PURCHASE AND SALE PRICE AS A SUBSIDY. THE PROGRAM
THUS NOT ONLY PROVIDES A SHALLOW SUBSIDY FOR MORTGAGE LOANS,
BUT ALSO INCREASES THE TOTAL AMOUNT OF FUNDS AVAILABLE FOR
MORTGAGE CREDIT.
DURING THE PAST YEAR, GINNIE MAE MADE COMMITMENTS TO
BUY $12.5 BILLION DOLLARS IN TANDEM PLAN MORTGAGES AT BELOW
MARKET INTEREST RATES, To DATE, WE HAVE PURCHASED ABOUT
$2.5 BILLION DOLLARS OF MORTGAGES LEAVING OVER $9.5 BILLION
STILL IN THE PIPELINE FOR PURCHASE,
A GOOD PROPORTION OF THE COMMITMENTS HAVE BEEN ALLOCATED
FOR SPRING-SUMMER HOUSING STARTS, WHICH SHOULD HAVE A
DESIRABLE BOOSTER EFFECT ON THIS YEAR'S HOUSING CONSTRUCTION,
GERMA A. FORD LIBRARY
-6-
HUD SUPPORTS PENDING LEGISLATION WHICH WOULD INCREASE
OUR TANDEM AUTHORITY AND EXTEND ITS AVAILABILITY FOR ANOTHER
YEAR, TO OCTOBER 1976. HUD ALSO FAVORS EXTENSIONS OF THE
AcT TO AUTHORIZE THE PURCHASE OF MORTGAGES COVERING MULTI-
FAMILY PROJECTS, AND INDIVIDUAL CONDOMINIUM UNITS, WHICH
ARE NOT FHA-INSURED.
THAT EXTENDED AUTHORITY SHOULD GIVE US A FLEXIBLE AND
LOW-COST MEANS TO ASSIST THE MORTGAGE CREDIT MARKET, WITHOUT
SIMULTANEOUSLY SETTING THE STAGE FOR FURTHER INFLATION-INDUCED
1
MORTGAGE CREDIT SHORTAGES,
THE VIRTUE OF THE TANDEM PLAN IS THAT IT IS SIMPLE, A
LESS EXPENSIVE MEANS OF INJECTING MONEY INTO THE MORTGAGE
MARKET THAN THE SUBSIDY PROPOSALS CURRENTLY BEING DEBATED,
AND -- MOST IMPORTANTLY -- CAN BE QUICKLY IMPLEMENTED,
HENCE, IT IS FAR MORE ADAPTABLE TO THE RAPIDLY CHANGING MARKET
CONDITIONS WHICH CHARACTERIZE THE HOUSING INDUSTRY,
A FORD LIBRAR
-7-
WE ARE ALSO URGING PASSAGE OF THE FINANCIAL INSTITUTIONS
AcT, WHICH CONTAINS MANY PROVISIONS AIMED AT REDUCING THE
SEVERITY OF FUTURE HOUSING CREDIT CYCLES,
THE AcT WOULD PERMIT DIVERSIFICATION OF SERVICES AND
INVESTMENTS BY INSTITUTIONS HEAVILY INVOLVED IN MORTGAGE
FINANCE, REDUCING THEIR VULNERABILITY TO ECONOMIC CYCLES,
THE ABOLITION OF INTEREST RATE CEILINGS, WHICH THE
ACT ULTIMATELY ENVISIONS, COULD STEM THE FLIGHT OF FUNDS
FROM LENDING INSTITUTIONS TO THE CAPITAL MARKET DURING
PERIODS OF TIGHT MONEY AND HIGH INTEREST RATES,
To ENCOURAGE BROADER INVESTMENTS IN RESIDENTIAL
MORTGAGES THE Act PROVIDES A TAX CREDIT ON A PERCENTAGE
OF THE INTEREST INCOME RECEIVED FROM MORTGAGE ASSETS,
THIS MORTGAGE INTEREST TAX CREDIT ALSO HAS A COUNTER-
CYCLICAL EFFECT BECAUSE THE RATE ADVANTAGE OF MORTGAGES
WILL RISE DURING TIMES OF TIGHT MONEY MAKING MORTGAGES
RELATIVELY MORE ATTRACTIVE TO INVESTORS WHEN CREDIT IS
SCARCE,
FORDS & LIDRARY GERALD
-8-
WE ARE TAKING OTHER STEPS WITHIN OUR EXISTING AUTHORITY
TO IMPROVE MORTGAGE CREDIT. FOR EXAMPLE, WE ARE COMMITTED
TO IMPROVING THE OPERATION OF FHA, IN THAT CONNECTION WE
HAVE INITIATED A PARTIAL CO-INSURANCE PROGRAM WHICH WILL
ELIMINATE MUCH OF THE RED TAPE ASSOCIATED WITH GOVERNMENT
MORTGAGE INSURANCE.
ALSO, WE ARE FINDING NEW SOURCES OF MORTGAGE INVESTMENT
FUNDS LESS VULNERABLE TO CYCLICAL PRESSURES.
IN ADDITION, HUD's IN-HOUSE STAFF IS CURRENTLY ANALYZING
THE HOUSING FINANCE SYSTEM TO ASCERTAIN HOW IT MIGHT BE
ALTERED TO MODIFY THE EXTREME CYCLICAL VARIATIONS IN HOUSING
PRODUCTION.
WE ARE ALSO LOOKING AT SEVERAL SPECIFIC ISSUES RELATING
TO HOUSING FINANCE:
WE HAVE UNDERWAY A STUDY BY THE SLOAN SCHOOL OF MANAGEMENT
AT MIT ANALYZING A WHOLE RANGE OF VARIABLE PAYMENT MORTGAGE
FORMS,
A.
FORD
GERALD
-9-
WE ARE FORMULATING SPECIFICATIONS FOR A STUDY DEALING
WITH RURAL HOUSING FINANCING, PARTICULARLY THE RELATIVE
COST AND AVAILABILITY OF HOUSING CREDIT IN RURAL AREAS AND
THE STRUCTURE OF THE RURAL HOUSING CREDIT MARKET. WE INTEND
TO SELECT A CONTRACTOR IN JUNE,
WE HAVE UNDERWAY AN ANALYSIS OF THE CURRENT STATUS OF
FHA UNSUBSIDIZED INSURANCE PROGRAMS, IN AN EFFORT TO
DETERMINE THE MOST APPROPRIATE ROLE OF FEDERAL INSURANCE
IN SUPPORT OF HOUSING PRODUCTION AND CREDIT.
-
ANOTHER, BUT RELATED AREA THAT WE ARE ADDRESSING, IS
THE NEED FOR IMPROVED DATA COLLECTION AND ANALYSIS REGARDING
THE CHARACTERISTICS OF OUR HOUSING STOCK, HOUSING PRODUCTION,
AND HOUSING FINANCING.
OUR ANNUAL HOUSING SURVEY, CONDUCTED ON OUR BEHALF BY
THE BUREAU OF CENSUS, MEASURES CHANGES IN THE NATION'S HOUSING
INVENTORY AND COMPILES DATA ON THE PHYSICAL CONDITION OF
HOUSING UNITS, THE NEIGHBORHOODS IN WHICH THEY ARE LOCATED,
AND RELATIVE CHARACTERISTICS OF THEIR OCCUPANTS. THE RESULTS
OF THE FIRST ANNUAL SURVEY, BASED UPON FALL 1973 DATA, WILL
BE PUBLISHED ON JULY 2.
R.
FORD
GERALD
LIBRARY
-10-
BOTH MR. COLVIN AND MR. MCGRATH HAVE SUGGESTED THAT
HUD INITIATE A MAJOR STUDY ATTEMPTING TO IDENTIFY THE COSTS,
BOTH ECONOMIC AND SOCIAL, ASSOCIATED WITH CYCLICAL SWINGS IN
HOUSING PRODUCTION. SUCH A STUDY WOULD BE AN IMPORTANT
COMPLEMENT TO THE RESEARCH STUDIES ALREADY UNDERWAY, I HAVE
ASKED OUR OFFICE OF POLICY DEVELOPMENT AND RESEARCH TO
DEVELOP A PLAN FOR SUCH A STUDY.
WHILE WE ARE SEEKING TO DEAL WITH THE CURRENT HOUSING-
MORTGAGE CREDIT CRISIS WITH THOUGHTFUL ANALYSIS AND CAREFUL
MODIFICATION OF THE EXISTING SYSTEM, CONGRESS SEEMS BENT ON
IMPOSING DRASTIC NEW MEASURES,
TOMORROW A CONGRESSIONAL CONFERENCE COMMITTEE WILL
CONVENE TO HAMMER OUT THE DETAILS OF A MASSIVE OMNIBUS
HOUSING BILL, BETWEEN THEM, THE HOUSE AND THE SENATE HAVE
PASSED PROVISIONS WITH A PRICE TAG WHICH COULD EXCEED $2.4
BILLION DOLLARS. CONGRESS' REACTION TO THE HOUSING CRISIS
REMINDS ME OF THE AIRLINE PILOT WHO PROUDLY ANNOUNCES TO HIS
PASSENGERS, "WE HAVE A GOOD TAILWIND, PERFECT WEATHER, WE
ARE BREAKING ALL COMMERCIAL SPEED RECORDS." "BUT WE'RE LOST."
A. FORD
-11-
THE BILL'S LACK OF FOCUS MAKES ONE WONDER IF CONGRESS REALLY
KNOWS WHERE IT'S GOING, ALTHOUGH IT'S GOING THERE FULL SPEED
AHEAD.
To ILLUSTRATE, THE SENATE BILL AUGMENTS THE GNMA TANDEM
AUTHORIZATION WITH AN AUTOMATIC "TRIGGER" MECHANISM, WHICH
GOES INTO EFFECT WHENEVER HOUSING STARTS FALL BELOW A 1.6
MILLION ANNUAL LEVEL FOR FOUR CONSECUTIVE MONTHS,
IF THAT PROVISION HAD BEEN IN EFFECT OVER THE PAST 11
YEARS, THE TRIGGER WOULD HAVE BEEN PULLED IN EIGHT OF THOSE
11 YEARS, AT WHAT COST TO THE TAXPAYERS, I CANNOT SAY --
NOR CAN I SAY WITH PRECISION HOW MUCH WORSE OUR INFLATION
RATE WOULD HAVE BEEN BY NOW AS A RESULT, BUT I CAN SAY WE
WOULD HAVE OFTEN UTILIZED THIS RESOURCE WHEN IT WAS NOT NEEDED.
THE TRIGGER WOULD ROB THE "TANDEM PLAN" OF ONE OF ITS GREATEST
ASSETS -- ITS FLEXIBILITY, WHICH ALLOWS IT TO ADAPT TO RAPIDLY
CHANGING MARKET CONDITIONS,
BEYOND THAT, THE "TRIGGER" IS ATTACHED TO A LOADED GUN
-- WHICH MAY BACKFIRE. SUCH A "TRIGGER" MECHANISM WOULD.
ENCOURAGE CONSUMERS IN A WEAK MARKET TO DELAY CONTEMPLATED
HOME PURCHASES -- THUS DRIVING DOWN STARTS AND CAUSING THE
TRIGGER TO GO OFF AND FIRE A SUBSIDY AT PROSPECTIVE BUYERS
FORD
-12-
APART FROM SUCH GIMMICKS, ALL OF THE PENDING PROPOSALS
PROVIDE FOR A MORTGAGE INTEREST SUBSIDY. As A GENERAL
PROPOSITION, I AM CONVINCED THAT TEMPORARY INTEREST SUBSIDIES
WILL NOT SOLVE THE CYCLICAL PROBLEMS OF THE HOUSING INDUSTRY,
IN TIMES OF SCARCE CREDIT, AN INTEREST SUBSIDY FOR ONE SEGMENT
OF THE HOUSING MARKET ONLY SUBSTITUTES THOSE WHO RECEIVE THE
SUBSIDY FOR THOSE WHO WOULD HAVE BUILT OR BOUGHT IF THE
PRIVATE MARKET HAD OPERATED WITHOUT INTERFERENCE,
THE SUBSIDY DISRUPTS THE FINANCIAL MARKETPLACE WITHOUT
INCREASING THE TOTAL AMOUNT OF CREDIT AVAILABLE FOR
RESIDENTIAL CONSTRUCTION.
THE PENDING BILLS CURRENTLY PROVIDE FOR ONLY 400,000
HOME PURCHASERS TO RECEIVE INTEREST SUBSIDIES, THE MOST
PESSIMISTIC PREDICTIONS FOR THIS YEAR ARE FOR THREE TIMES
THAT NUMBER OF STARTS, SO THE SUBSIDY MAY NOT ONLY FAIL TO
INCREASE BUT MAY ACTUALLY DETER NEW STARTS. SOME HOME BUYERS
MAY WELL DELAY PURCHASES IN THE HOPES THAT NEXT YEAR THEY
WILL BE ONE OF THE LUCKY FEW TO RECEIVE AN INTEREST SUBSIDY,
GERALD R. FORD
-13-
THE DEPTH OF THE PROPOSED SUBSIDY IS ALSO OF CONCERN.
THE SIX PERCENT INTEREST RATE PROVIDED FOR IN BOTH THE HOUSE
AND THE SENATE PROPOSALS IS UNREALISTICALLY LOW. CONVENTIONAL
MORTGAGES HAVE NOT BEEN AT THAT LEVEL SINCE 1966. THE THIRFTS
ARE FORCED TO PAY INTEREST ON LONG-TERM ACCOUNTS AT SEVEN
PERCENT OR HIGHER. THERE IS NO WAY THEY CAN COMPETE WITH
SIX PERCENT MORTGAGES, HENCE, PRESSURE WILL BUILD TO EXTEND
THE PROGRAM, AND THE FEDERAL GOVERNMENT WILL HAVE ALL BUT
TAKEN OVER THE PRIVATE MORTGAGE CREDIT MARKET,
THE PROGRAM IS TERMED "TEMPORARY". BUT, AS WE ALL KNOW,
ONCE A "GIVEAWAY" PROGRAM IS ENACTED INTO LAW, THE PRESSURE
FOR INDEFINITE CONTINUANCE IS ALMOST IRRESISTIBLE,
AND, IT SHOULD BE NOTED THAT THE HOUSE VERSION ALLOWS
THE ALTERNATIVE OF A SEVEN PERCENT INTEREST RATE THROUGHOUT
THE ENTIRE LIFE OF THE MORTGAGE. IN OTHER WORDS, THE PUBLIC
COULD BE PAYING FOR THE COST OF A SO-CALLED "EMERGENCY TEMPORARY'
MEASURE FOR THE NEXT 30 YEARS,
GERALD A. FORD
-14-
THESE INTEREST SUBSIDY PROGRAMS ARE NOT ONLY UNWISE,
BUT ALSO UNNECESSARY IN VIEW OF RECENT EXPERIENCE. THE RECORD
SUGGESTS THAT VERY HIGH LEVELS OF DEMAND AND PRODUCTION --
WELL OVER TWO MILLION ANNUAL STARTS -- CAN BE SUSTAINED WITH
INTEREST RATES RANGING FROM 7-1/2 TO 8 PERCENT. MORTGAGES
BEARING ALMOST THAT RATE ARE NOW AVAILABLE UNDER THE TANDEM
PLAN.
ANOTHER DANGER I SEE IN THE PENDING PROPOSALS IS THAT
THEIR IMMEDIATE EFFECT WILL BE TO STOP -- RATHER THAN STIMULATE
-- HOME BUYING, IT WILL TAKE A CERTAIN AMOUNT OF TIME FOR
THE MEASURE TO BECOME LAW; AN ADDITIONAL PERIOD IS NECESSARY
TO DRAFT REGULATIONS TO IMPLEMENT THE LAW; FURTHER TIME IS
NEEDED FOR APPROPRIATIONS. HENCE THE PROBABLE TIME FRAME
FOR IMPLEMENTATION IS NEXT FALL -- OR PERHAPS EVEN WINTER,
IN THE INTERIM, POTENTIALLY ELIGIBLE FAMILIES CAN BE
EXPECTED TO POSTPONE HOUSING PURCHASES UNTIL THE CHEAPER
MORTGAGES COME INTO BEING. DURING THAT HIATUS, HOUSING
CONSTRUCTION COULD GO FROM DEPRESSED TO ALL BUT NON-EXISTENT.
GERALO R. FORD LIBRARY
-15-
FINALLY, CONGRESS' PROGRAMS, DESIGNED TO RELIEVE THE
CURRENT DOWNTURN, COULD END UP ACTUALLY TAKING EFFECT DURING
AN IMPENDING UPTURN WHICH CURRENT FORECASTS PORTEND -- JUST
IN TIME TO DO THE MOST HARM, BY CAUSING ANOTHER INFLATIONARY
SPIRAL IN HOUSING COSTS,
CONGRESS HAS DIAGNOSED THE PROBLEM OF THE HOUSING INDUSTRY
AS BEING HIGH MONTHLY MORTGAGE PAYMENTS. UNFORTUNATELY,
CONGRESS SEEMS LIKE THE DOCTOR WHO ANNOUNCES THAT HE HAS
SUCCESSFULLY TREATED THE PATIENT FOR APPENDICITIS, ONLY TO
CONFESS THAT THE PATIENT HAS DIED OF SOMETHING ELSE IN THE
INTERIM. THAT SOMETHING ELSE MAY BE A HUGE FEDERAL DEFICIT
AND AN EXACERBATED MORTGAGE CREDIT CRISIS,
IN SHORT, THERE IS MUCH THAT IS COUNTERPRODUCTIVE IN
THE BILLS NOW UNDER CONSIDERATION. THERE IS FAR MORE FLEXIBILITY
IN OUR CURRENT LAWS THAT PERMIT US TO ENCOURAGE AND TO GUIDE
THE RECOVERY OF THE HOUSING INDUSTRY, WE CONTINUE TO SUPPORT
MEASURES SUCH AS EXTENSION OF THE GNMA TANDEM PLAN, AND AN
EXPANSION OF THAT AUTHORITY TO CONVENTIONALLY FINANCED MULTI-
FAMILY PROJECTS AND INDIVIDUAL CONDOMINIUM UNITS.
R.
FORD
GERALD
-16-
BUT WE KNOW THAT WE CANNOT SPEND OUR WAY OUT OF THE
HOUSING SLUMP, WITHOUT INVITING A NEW AND MORE CRIPPLING
INFLATIONARY SPIRAL -- IN WHICH HOUSING WOULD BE THE FIRST
TO SUFFER,
WHEN YOUR PRESIDENT COLVIN, IN FEBRUARY, KINDLY SENT
ME A LETTER OF CONGRATULATIONS ON MY NOMINATION, HE SAID:
"You ARE FACING AN ENORMOUS CHALLENGE, FOR THERE IS NO AREA
MORE VITAL TO OUR NATION'S ECONOMY AND ITS PEOPLE THAN HOUSING.' 11
I APPRECIATE THE ENORMITY OF THAT CHALLENGE, ALL OF US
AT HUD ARE DEDICATED TO IMPROVING OUR COUNTRY'S HOUSING
SITUATION,
FUNDAMENTALLY, AS I SAID EARLIER, WE SEE THE KEY TO
IMPROVED HOUSING AS IMPROVED CONSUMER CONFIDENCE, CONFIDENCE
THAT INFLATION IS UNDER CONTROL; CONFIDENCE THAT THE JOBLESS
RATE WILL DECLINE; AND, MOST OF ALL, CONFIDENCE THAT OUR
ECONOMY IS UNDER INTELLIGENT AND PRUDENT DIRECTION,
GERALO A. FORD
-17-
GOVERNMENT CANNOT CREATE CONFIDENCE BY ITSELF. THE
COOPERATION, COUNSEL, AND CONSTRUCTIVE CRITICISM OF THE
PRIVATE SECTION ARE INDISPENSABLE TO OUR SUCCESS. AND,
THE COMPANIES MAKING UP THE NATIONAL FOREST PRODUCTS
ASSOCIATION ARE INDISPENSABLE TO HOUSING. I WILL THEREFORE
NOT HESITATE TO CALL UPON YOU FOR ASSISTANCE.
THANK YOU.
1
SERALD FL. FORD