An interview with Governor Bob Ehrlich.
Robert L. Ehrlich was the 60th governor of Maryland from 2003-2007. He was a member of the U.S House of Representatives from Maryland’s 2nd District (1995-2003) and also a member of the Maryland House of Delegates (1987-1994). For the past 25 years, Gov. Ehrlich has participated in and debated federal housing policy. During Valuation Expo in Baltimore, MD on July 12th, Gov. Ehrlich gave the keynote address and expounded on the state of our economy now and how it will affect collateral risk in the future. Joan Trice, CEO and Founder of Appraisal Buzz, sat down with Gov. Ehrlich to discuss his thoughts on housing finance.
Trice: I had the pleasure of reading your recent book, Turning Point: Picking Up the Pieces After Eight Years of Failed Progressive Policies. For those who didn’t get to hear you speak at Valuation Expo, can you share with us your thoughts on housing finance?
Ehrlich: My basic message was familiar: Be careful about this election, as many of the same interests supporting Hillary Clinton were also present and active co-conspirators in generating the great housing bubble and subsequent economic meltdown just a few years ago.
Trice: During your keynote speech you referred to housing as the “classic political football.” What do you mean by that?
Ehrlich: Both sides of the partisan divide share an enthusiasm for home ownership, but they advocate far different approaches on how to get there. Today’s Democrats believe in seemingly limitless federal power to achieve their housing goals, including federal intervention in urban and suburban housing patterns around the country. Conversely, Republicans continue to advocate for market oriented approaches to most housing-related issues.
Trice: What are some of the outcomes in today’s economy following the crisis in 2008 and Dodd Frank?
Ehrlich: The irony of Dodd-Frank (and the failed “Stimulus” of 2009) is that neither was actually intended to fix what caused the problem in the first place. I should add Obamacare to this list as well – yet all three “solutions” served to expand the reach of federal power – precisely what the drafters had in mind. Larger government was the winner each time – to the detriment of market economics and individual freedom. Hopefully, a Dodd-Frank reform bill will be a high legislative priority for a Trump Administration.
Trice: You mentioned that FHFA’s (Federal Housing Finance Agency) inspector general issued repeated warnings that Fannie Mae and Freddie Mac may again require additional reserves against losses. Are these signs of another housing crisis in the future?
Ehrlich: The warnings are a result of Treasury’s decision to divert Fannie Mae/Freddie Mac profit to the general fund. As to the larger issue of housing finance, the Wall Street Journal has written persuasively about the ongoing dangers associated with the existing Fannie Mae/Freddie Mac model. Yet, I am pessimistic that any real reform could pass with Democrats in control of either chamber or the presidency.
Trice: Do you believe there are any actions that can be done now to prevent another housing crisis in the future?
Ehrlich: Elect political leadership that understands market economies – and will stand against future attempts to leverage lending institutions into underwriting risky loans in the interest of “social justice”. Everyone supports fair housing – so long as the individual can afford his/her mortgage. This simple equation should not be complicated, but too often race and class politics is brought into the discussion.
Trice: Once again I would like to thank you for taking time out and speaking with us. It was a pleasure having you at Valuation Expo.
Ehrlich: I enjoyed my time at the Expo and appreciate the very kind response to my remarks. For those who wish to read my most recent book, “Turning Point”, it is available on Amazon or in most Barnes & Noble stores.
Join appraisers from across the country at Valuation Expo in Las Vegas November 10th-12th. Featuring fresh speakers, new exhibitors and more networking opportunities than ever before. Registration is now open, for more information visit ValuationExpo.com.