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SHADOW INVENTORY UNLIKELY TO BRING DOWN PRICES, GSE SAYS POLL: VOTERS OVERWHELMINGLY FAVOR FINANCIAL REFORM LAWS of an opinion poll indicating financial reforms enacted in recent years remain popular with potential voters. In light of the events that led to the 2008 financial meltdown, potential voters seem to overwhelmingly favor financial reform laws designed to prevent abuse. Nearly three-quarters (73 percent) of Lake Research Partners released the results respondents support the financial reforms laid out by the Dodd-Frank Act while only 20 percent expressed disagreement, and support for Dodd-Frank crosses party lines. Republicans were found in favor by a 20-point margin, while Independents and Democrats supported the law by margins of 50 and 83 points, respectively. In addition, two-thirds of voters agreed that The GSE released a new economic and housing market outlook last month, examining recent trends in home price indices and speculating on the impact the industry's shadow inventory might have on prices. Freddie Mac's own Home Price Index Freddie Mac isn't afraid of the shadows. are at least 90 days past due or in foreclosure— have some experts worried about prices taking another tumble. Freddie Mac asserts that although delin- (HPI) for the country showed a 4.8 percent gain in the second quarter, the largest quarterly pick- up in eight years. Year-over-year, the national index posted a 1 percent increase, the largest annual appreciation since November 2006. Other HPI metrics also suggest a strength- the Consumer Financial Protection Bureau (CFPB) is a necessary entity. When asked whether or not companies under review by CFPB should be allowed to operate without the bureau's oversight, 63 percent of respondents said CFPB should remain in charge. The majority (60 percent) of voters expressed quency rates may be higher than before the re- cession, the "shadow" over the housing market is not as big as some may think. "While the shadow inventory persists, there ening market with CoreLogic's index rising 2.5 percent year-over-year for June and the Federal Housing Finance Agency's (FHFA) HPI posting year-over-year gains from February through May. In addition, the recovery is broad-based. By Freddie Mac's measure, from June 2011 to June 2012, 34 states (and the District of Columbia) posted gains in home prices. This was the larg- est number of states reporting annual apprecia- tion since April 2007. Freddie Mac speculates that even if national HPIs dip in the usually weaker autumn and winter months, the second-quarter HPI gains will likely eclipse any expected declines. While prices show positive growth in many is an important difference in today's market compared with those of recent years, and that's the substantially reduced amount of excess vacant housing," said Frank Nothaft, VP and chief economist for Freddie Mac. Data from the Census Bureau showed favor for more government oversight, while 73 percent support tougher rules and enforcement. When asked about states' rights, two-thirds of voters said they support a state's right to pass and enforce strong consumer protections and to ensure state laws take precedence over federal regulations. "This poll shows that American voters vacancies in U.S. homes for rent or for sale con- tinued to decline in the second quarter. Rental vacancy rates fell to 8.6 percent, the lowest rate since the second quarter of 2002. For-sale vacancy rates dropped to 2.1 percent, the lowest since the second quarter of 2006. Additionally, the for-rent market now ap- pears in relative balance with rental stock close to overall rental demand. This results in normal vacancy levels. The continuing drop in excess vacant stock states through this year, concerns about shadow inventory—the stock of single-family loans that 46 is important because it means that, in most markets, REO homes on the for-sale market don't have to compete with an oversized vacant inventory. "The housing recovery may finally be com- ing out from the shadows," Nothaft said. broadly and strongly support both Wall Street reform and the CFPB," said David Mermin, pollster and partner at Lake Research. "And they strongly favor specific components of the CFPB. After hearing arguments in support and in opposition, voters across party lines solidly favor the reform law." Among the other findings, more than nine in 10 (93 percent) respondents expressed favor for the policy that established more mortgage and foreclosure protections for servicemembers, and almost the same percentage (92 percent) favor a policy that requires banks, mortgage lenders, and other consumer creditors to provide clearer explanations of rates, terms, and fees. The opinion poll was commissioned by AARP, the Center for Responsible Lending (CRL), Americans for Financial Reform (AFR), and the National Council of La Raza (NCLR). CRL director of federal policy Gary Kalman said the results didn't shock him in the least. "Bipartisan support among voters should be no surprise: Who hasn't been hurt by the economic downturn? People get that commonsense oversight could have prevented it," Kalman said.

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