Two Changes Needed for Housing to Rebound: Mortgage Exec

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The housing market won’t trend up significantly until it hits bottom, the chairman of the Mortgage Bankers Association, Michael Berman, told CNBC Monday, and two changes need to take place before that happens.

What is needed is clarity about the foreclosure process and the role of Fannie Mae and Freddie Mac , said Berman, speaking from the association’s 97th annual meeting in Atlanta. He is in favor of limited government support of the housing market.

“We need some safety net through a government-guaranteed security that can provide that stability, both liquidity to the market in general, and if people want to get a 30-year mortgage, they can get it,” he added. “But also it helps to stabilize rates, because there’s not credit risk to the bond investors.”

Berman said that the press is blowing the foreclosure situation out of proportion.

Federal banking and state regulators are examining whether mortgage companies cut corners on their own procedures when they moved to foreclose on homes, and some banks have halted foreclosure proceedings until they have reviewed their processes.

However, Bank of America and GMAC, two of the biggest lenders, are gearing up their foreclosure actions this week, after a brief pause.

Mortgage Mess - A CNBC Special Report
Mortgage Mess - A CNBC Special Report

Nonetheless, Berman sounded an upbeat note.

“There is a growing optimism, when you compare it to what was going on a year ago, there’s an optimistic view today. It’s certainly not a month or two that we’ll see it [recover], but it's a trend and the trend is positive.”