Editor’s Note: The below article, which originally appeared in the December 2011 issue of Real Estate magazine, features updated information regarding the National Flood Insurance Program.
The NATIONAL ASSOCIATION OF REALTORS® (NAR) is a leading advocate regarding federal legislative and regulatory issues affecting the industry and homeowners. NAR’s efforts drove these accomplishments in 2011:
Restructuring the Secondary Mortgage Market
NAR advocated ongoing government participation in comprehensive secondary mortgage reform. Two bills were introduced that include some level of government participation. With the introduction of these bills, the debate has shifted from total privatization of Fannie Mae/Freddie Mac to how to structure government involvement.
FHA, Fannie and Freddie Loan Limits
NAR successfully supported a Senate amendment to reinstate the high-cost loan limits; House action is pending. NAR blocked proposals to roll Fannie Mae and Freddie Mac limits back to $417,000 nationwide and to eliminate the floor for FHA mortgages.
Risk Retention/QRM Proposed Rule
NAR spearheaded a 50-member coalition to oppose the proposed risk-retention rule under the Dodd-Frank Wall Street Reform and Consumer Protection Act. NAR believes the Qualified Residential Mortgage (QRM) exemption is too narrow. Imposing a minimum 20 percent down payment, stringent debt-to-income ratio requirements, and rigid credit standards will deny millions of creditworthy Americans access to low-cost, safe mortgages, while jeopardizing the fragile housing market.
Small Business Association (SBA) Commercial Property Refinancing
At the urging of NAR and other small business groups, the SBA expanded its program to accept refinancing for commercial real estate mortgages maturing after 2012. The new refinance program allows small businesses to refinance certain owner-occupied commercial real estate mortgages into long-term, fixed-rate loans. The program provides credit relief for property owners while helping stabilize the commercial real estate and small business sectors.
Mortgage Interest Deduction, Tax Reform and Deficit Reduction
NAR met with members of Congress and senior staff to raise concerns about looming efforts to cut back the mortgage interest deduction (MID) and prepare for future tax reform and the deficit reduction debates. NAR also worked with consultants on ways to evaluate reform proposals and develop data needed on the impact of changes to the limits on home-equity, second-home, and mortgage deductions.
National Flood Insurance Program (NFIP)
With NAR’s support, the House passed a five-year extension of the NFIP, which ensures affordable coverage for property owners in 20,000 communities nationwide. While the Senate continues to work on its version of the five-year reform bill, NAR has secured another short-term extension until December 16, 2011, to protect against a lapse in coverage and continues to advocate for long term reauthorization of the program.
Mortgage Assistance Relief Services Rule (MARS)
At the urging of NAR, the Federal Trade Commission (FTC) announced that it will no longer enforce most of the rule’s provisions against real estate professionals who help consumers obtain short sales from their lenders or servicers, while acting in their licensed capacity as real estate professionals. The prohibition against misrepresentation continues to apply.
Home Warranty
NAR sought legislation to require the Department of Housing and Urban Development to reverse guidance that treats compensation for the sale of home warranty contracts by agents and brokers as a RESPA violation. Working with industry partners, NAR secured a hearing on the issue in the House Financial Services Committee. NAR is working to secure co-sponsors for a House bill, while building support for a similar measure in the Senate.
Seller Financing Rule
In response to NAR comments, HUD published a final rule under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) that provides relief for those who occasionally provide seller financing. Seller financers only need to be licensed as a loan originator if, in a commercial context and habitually or repeatedly, they take a residential mortgage loan application and offer or negotiate terms of a residential mortgage loan for compensation or gain.
For the full list of NATIONAL ASSOCIATION OF REALTORS®’ legislative and regulatory accomplishments, visit www.Realtor.org.
