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UNC professor to speak on housing crisis

Posted December 16, 2008

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— A University of North Carolina at Chapel Hill professor will be among a panel to present ideas Wednesday on how to address the wave of foreclosures across the country and resurrect a responsible housing finance system.

Dr. Roberto Quercia, director of the Center for Community Capital, along with Sheila Bair, chairwoman of the Federal Deposit Insurance Corp., and others will speak at a forum hosted by the New America Foundation.

"The idea is to talk about options and responses to the current crisis," Quercia said.

Quercia will talk about responsible lending and will evaluate the financial and nonfinancial impacts of home ownership in a national community reinvestment loan program.

The program is administered by Durham-based Self-Help, a nonprofit community development lender.

For years, Self-Help has provided loans to low-income families without the high interest rates of the subprime market.

"I think it would be important to see the continuation of a program like Self-Help," he said.

Quercia also has ideas about how to deal with the housing crisis in both the short-term and the long-term.

In the short-term, he says, the goal has to be providing stability to the market. The government must try to stop foreclosures, or at least slow them down. And he also believes banks need to be lending more money.

"The key is they need to be encouraged to extend credit," Quercia said.

In the long-term, he says, the economy has to be stimulated, possibly with infrastructure and job-creation projects at the federal and state levels.

He also wants to see changes in the bankruptcy law to allow for the principal on mortgages to be reduced for homeowners who bought at the peak of the market and may lose as much as 30 percent of their home's value.

More than 2 million homeowners have lost their homes or are facing foreclosure this year, according to the New America Foundation, a public policy institute based in Washington D.C.

Its forum Wednesday, "Protecting Homeowners Today, Guiding Policymakers Tomorrow," will be from 9 a.m. until 11 a.m. Wednesday.

North Carolina's Center for Community Capital conducts research and policy analysis on the transformative power of capital on U.S. households and communities. Its analyses help policy-makers and members of the private sector find sustainable ways to expand economic opportunity to more people.

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