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Show Albs MynepOrt Senator Qmn Hatch f -I u m f ,M,HMMMM, Helping the housing industry "We're at rock bottom," said Walter Allan, a spokesman for the Home Builder's Association of Utah. "We're not meeting the needs of the potential home buyers in Utah we need 20,000 housing starts to meet the demand and it's doubtful we'll see over 2,000 in the last three months of 1981." That bleak outlook the view from rock bottom is less than panoramic is shared by home builders and buyers in Utah and across the nation. The housing industry, in fact, is at its lowest point in 40 years. National projections pro-jections show that 1981 's production of over a million new units makes it the lowest new housing year since 1946. The slump costs the American economy dearly wages are lost, tax revenues are down, and unemployment is up (the percentage of unemployed in the state) and perhaps its hardest impacts im-pacts are on those families who cannot find adequate housing at an affordable price. Rock bottom is, without a doubt, an accurate description. Nothing short of a revitalized economy will spell the relief of the market, but, until that happens, there are still important steps that can be taken to help. One of them is manifest in a bill I introduced in-troduced in the Senate that would liberate billions of dollars currently resting in ERISA regulated pension funds for investment in residential home mortgages. Current rules of the Employee Retirement Income Security Act, particularly par-ticularly the "prohibited transaction" rule, effectively prohibit pension plan trustees from investing in residential mortgages. My bill would remove that artificial barrier and make mortgage investment neither prohibited nor a violation of the "prudent man" rule, which requires fund trustees to make prudent investments. Mortgage investment is an excellent source of stable, secure, long term, high yield investment returns for pen-.sion pen-.sion plan trustees, as such, it is as prudent pru-dent as can be. Keeping pension plans out of the housing market deprives pen-sioneers pen-sioneers of excellent investment opportunities. oppor-tunities. Three requirements in my bill get a pension fund past its current restrictions restric-tions and qualify it for home mortgage investment: first, the investment must be authorized in the plan's document: second, the home mortgage security provided must be adequate; and third, the interest rate on the loans must be sufficient, as determined by a formula delineated in the bill. There is no question but that an expanded ex-panded supply of mortgage funds will help offset current and future shortages of mortgage money. Pension funds' assets represent the largest pool of long term investment capital in the country, with over $600 billion in assets now and an estimated $1.3 trillion by 1985, and their introduction into the mortgage market will certainly help Americans buy homes. And the beauty of it is this: such a bolstering of the housing industry will cost the federal government, or rather, the nation's taxpayers, absolutely nothing. |