This column is brought to you by the NAR Real Estate Services group.
As we approach 2014 and the implementation of numerous rules and regulations, a recent incident regarding FHA short sales and dual agency brings to mind this phrase I know I have often uttered: “You should have seen what they wanted to do.” So often in Washington an initial proposal or rule is terrible and one must fight to prevent a bad law from being enacted. However, the reality is that one usually cannot totally stop the legislation or regulation, but instead work to make it less harmful. In the case of dual agency, the initial proposal was to ban it completely. The end result would have been that two agents from the same brand or firm could not have participated in an FHA short sale transaction. This would have seriously curtailed the ability to complete FHA short sales as well as the universe of potential buyers who would see such properties among other things. At the time of this writing, HUD had delayed implementation of this rule and is working with NAR to address the issue.
Similarly, over the past couple of years, NAR has beat back mandatory 20 percent down-payment requirements, extremely stringent credit restrictions, attempts to end the FHA and Flood Insurance Programs, crippling capital requirements that would have severely increased the costs of credit for many, and numerous other major assaults on the mechanisms to achieve and maintain sustainable homeownership.
Nevertheless, such assaults will continue in terms of regulations and the implementation of new policies or laws. One example will be the fees and points limitations in the Ability to Repay/Qualified Mortgage Rule. NAR has been working for more than three years to level the playing field for various lender models, including affiliated businesses, in the calculation of fees and points under this rule. To date, we have secured a more favorable treatment of employee loan officer compensation and other revisions through the regulatory process, as well as legislation to fix numerous remaining issues, including the treatment of affiliated title and insurance charges. It is too soon to know the ultimate outcome, but the final rules will be an improvement over the original proposal. Even if we do not achieve all we need to, we will continue to work with both the Consumer Financial Protection Bureau (CFPB) and Congress to make additional changes.
