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!