Healthy markets require risk

Re: 'Real estate industry sells 'rescue' plan' (Sept. 30)

Dear Editor:

I'm not convinced that the markets -- real estate, stock, etc. -- are on the edge of collapse. Nor am I convinced that the "bailout plan" as presented is the right way to go. The last time I looked, a "market" was fueled by supply and demand, profit motive, and yes: risk! When is a market not a market? Answer: When a parachute is provided, removing the element of risk.

That said, I believe something needs to be done to stimulate the real estate market. A solid real estate market is the "soul" of a healthy economy.

Some suggestions:

• Lowering interest rates even lower than the rates we've enjoyed is a good tool.
• Adjusting capital gains taxes or even introducing a "cap-gain holiday" will help.
• Taking a look at restructuring mortgage loans (the interest rate and term) that are nonperforming but not yet in foreclosure could help
• How about the FHA/VA loan programs reducing credit-rating standards and refinancing (along with a concession by the lender) those loans that are in foreclosure?

A little here, a little there ... it could all add up to giving the real estate market a boost without removing the basic elements of what defines a true market: profit motive and risk!

Tony Fappiano
Broker-owner
Shoreline Real Estate Co.
Guilford, Conn.

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