Left to Right: Anne Meczywor, Sandy Carroll, Andy Perenick, Chapin Fish and Debbie Dwyer.
Rally to Protect the American Dream
On May 17 we attended the Rally to Protect the American Dream, at which 13,800 REALTORS® gathered at the Washington Monument to celebrate home ownership. In addition to Berkshire leaders and others who attended the rally in person, 13,600 people attended virtually, at RealtorRally.org. Twelve members of Congress attended, including Sen. Johnny Isakson (R-Ga.,) and Rep. Steny Hoyer (D-Md.), both of whom spoke at the rally, and 29 major media outlets, including CNN and CNBC, covered the event. In a satellite media tour one day earlier, NAR President, Moe Veissi spoke with another 24 media outlets.
President Chapin Fish attended meetings on Capitol Hill to discuss the issues with our Senators. There were five (5) main issues this year: Taxation, real estate finance, property insurance, appraisal issues and commercial real estate issues.
Taxation: An exploding federal debt has forced tax reform into the limelight. In December 2010, a deficit reduction commission offered a variety of models for both simplifying the tax code and increasing the amount of revenue it generates. The combination of the deficit, the need to increase the US credit limit (aka the debt ceiling) and the fragile economy have lined up to force a major political debate about the relative mix of spending and revenue. As a result, a variety of tax laws, including those affected by commercial and residential real estate, could be reviewed with a focus on raising revenue.
Real Estate Finance: Coupled with a lack of available and affordable mortgage financing, delinquencies and foreclosure rates continue to be a significant concern. Federal policymakers are weighing a number of proposals aimed at creating healthier housing and mortgage markets.
• Government Sponsored Enterprises: NAR recommends that Fannie Mae and Freddie Mac be restructured in a manner that ensures consumers have a reliable source of mortgage funding in all types of markets, under all types of economic conditions. The restructured entities should be explicitly backed by the government, have no shareholders and be subject to tighter regulations on product, revenue generation and usage, and retained portfolios in order to accomplish their mission and protect the taxpayer.
• Credit Policies: NAR believes that regulators and the broader lending community needs to focus on providing mortgage financing to qualified homebuyers and investors, as well as homeowners wanting to take advantage of historically low interest rates. In order to ensure adequate access to mortgage credit, NAR opposes a narrow definition of what constitutes a Qualified Residential Mortgage (QRM) and supports a Qualified Mortgage (QM) definition that establishes strong consumer protections, incorporates important ability-to-repay standards, and offers lenders a safe harbor that reduces litigation exposure. NAR has also called for the expansion of residential and commercial lending products, including investor access to FHA 203K loan program, and supports efforts to increase consumer access to mortgage refinancing programs.
• Short Sales: NAR continues to push the lending industry to expedite short sales and is working with Congress to get legislation passed to make the short sales process more efficient. NAR supports H.R. 1498, which requires servicers to decide whether to approve a short sale within 45 days of completion of the file. NAR has also met with FHFA, the conservator of Fannie Mae and Freddie Mac (the GSEs), to advocate for servicing guidelines for Fannie and Freddie loans that speed up servicer response times on short sale transactions.
Property Insurance: For the past several years, Congress has been approving short-term extensions of the National Flood Insurance Program's (NFIP) authority to issue flood insurance policies while they continue to debate long-term fiscal reforms to the program. The most recent extension was on Dec. 17, 2011, when Congress extended it through May 31, 2012. NAR is urging Congress to use the additional time to complete work on a 5-year NFIP re-authorization bill to provide certainty and avoid further disruption to real estate markets.
Appraisal Issues: Over the last 18-36 months, a host of rules, regulations, and laws have been announced to further protect appraiser independence. NAR strongly supports the independence of appraisers and the appraisal process. Additionally, NAR opposes the use of indemnification clauses by Appraisal Management Companies (AMCs) which places pressure on the appraiser, compromises their independence, and has a negative effect on the quality of appraisal reports. NAR will also pursue legislative and regulatory efforts to require AMCs to retain competent and qualified appraisers.
Commercial Issues: More than $1.2 trillion in commercial real estate loans will come due over the next few years, and many of these deals will have trouble getting financing. Depressed conditions in the financial and small business sectors continue to negatively affect the commercial real estate industry, which threatens our nation's economic recovery. NAR supports protecting and enhancing the flow of capital to commercial real estate. NAR believes Congress and the federal government should consider legislation and regulation aimed at improving commercial real estate markets including:
1. accelerated depreciation
2. increasing the cap on credit union member business lending (MBL)
3. additional banking agency guidance related to term extensions
4. creation of a mortgage insurance program for performing commercial loans
5. improving credit availability for small businesses
6. creation of a U.S. covered bond market.