By NAR 2013 President Gary Thomas
Although August is time for the annual Congressional recess, activity in our nation’s capital is not slowing down. We’re continuing to work hard on vital issues like tax reform, flood insurance and mortgage lending.
We are especially focused, right now, on the future of housing finance. NAR is urging lawmakers to move forward on comprehensive, bipartisan legislation that will restructure Fannie Mae and Freddie Mac. We believe it’s vital for the protection of the 30-year mortgage. In a speech last week, the President also expressed his support for the 30-year mortgage and stated his commitment to ensuring consumer access to safe, reliable mortgages.
While NAR supports the idea of reforms that protect taxpayers, we believe government plays a critical role in mortgage lending, especially when private lenders flee the marketplace, which leaves too many buyers unable to access mortgage credit.
We’ve long supported reform of the Federal Housing Administration, and I have testified twice before Congress on the issue. Our position is clear—it’s important to shore up the long-term solvency of FHA, but not at the expense of the consumers it was designed to serve.
In Congress three different bills on reforming the secondary mortgage market have been introduced.
The House Financial Services Committee passed a bill, called “the Path Act” that would increase down payments, putting homeownership out of reach for many of our customers. We oppose the PATH Act because it does not include an explicit federal guaranty—meaning no public backing. If it were to pass the 30-year mortgage may no longer be available to buyers.
A Senate bill, introduced by Senators Corker and Warner, does include the government guarantee, but we are concerned that when private capital chooses not to participate in the market the flow of credit could dry up. We will continue to express our concerns, and are working to help shape the bill.
The third bill, introduced by Senators Johnson and Crapo, focuses on ensuring the long-term viability of FHA. It would fulfill FHA’s mission of providing low cost loans to qualified borrowers—particularly to low- and middle-income buyers.
Last week, the President came out for a government guarantee, the Senate has acted, and now it’s time for the House to get on board. Members of Congress are in their districts this month, so we’re encouraging our members to visit their representatives. Let them know “Home Ownership Matters.” We expect a lot of activity when Congress returns. So stay tuned, and be ready to take action!
By NAR 2013 President Gary Thomas
REALTORS® are finally being heard, and it makes you want to jump and shout!
Today President Obama delivered the message loud and clear—Home Ownership Matters!
I’m pleased to say that our efforts to make our voices heard by the Administration have had a positive impact. The President agrees with the National Association of REALTORS® (NAR) on an overwhelming majority of the housing finance issues of the day.
In a speech at the Desert Vista High School in Phoenix, the President spoke to area REALTORS® and others about housing policy and his vision for reform of the housing finance system. In the speech, he stated his commitment to ensuring consumers retain access to the 30-year mortgage—traditionally the quickest route into the middle class—and cutting red tape so that families have access to safe, reliable mortgages.
Additionally, the President expressed support for reform of the Federal Housing Administration (FHA) and the Government Sponsored Enterprises (GSEs). He said the Administration plans to continue the phase-out of GSEs Fannie Mae and Freddie Mac, now in conservatorship. At the same time, he supports the creation of a common securitization platform to encourage investment in mortgage-backed securities. NAR agrees with the Administration’s view that any new system includes a government guarantee.
The President said he supports the historic affordability role of the FHA, which is critical to first-time homebuyers. While we support the goal of maintaining the FHA as an affordable option, NAR believes the FHA should preserve access for all qualified middle class families.
The Administration calls on Congress to approve refinance programs that provide more relief to troubled borrowers. NAR supports the government’s refinancing program, known as “HARP,” along with “bright line” standards that provide certainty to community banks selling loans on the secondary mortgage market.
While we have concerns about specific FHA reforms, protecting loan limits and keeping down payments low, we believe recent bipartisan legislation introduced in the Senate is a good place to start. President Obama made good use of the bully pulpit in stating his commitment to protecting the dream of homeownership for all Americans.
Over the past year, REALTORS® have sometimes felt like a voice in the wilderness. No longer.