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.
By Bill Armstrong, Treasurer, National Association of REALTORS®
Last week, NAR participated in a positive meeting with Fannie Mae, Freddie Mac, and the Federal Housing Finance Administration (FHFA) —the federal agency in charge of housing finance oversight. We talked about additional ways to improve the short sales process for mortgages backed by Freddie Mac or Fannie Mae. I was pleased to participate and to represent NAR along with Scott Louser, 2012 Vice President and Liaison to Government Affairs.
All in all it was a great meeting, made even more so by the fact that we brought a number of REALTORS® with us so that officials at FHFA could hear directly from those in the trenches, about the difficulties they experience during a short sale. And bringing together the individuals facing those challenges day in and day out – REALTORS® – with those in charge of oversight, is the most effective way to convey the reality of the situation and the need for a solution.
Now, fortunately there has been some progress recently, such as the amendment Freddie Mac made to its policy on short sales affidavits, at the request of NAR and the American Land Title Association. We continue to push lenders to implement the updated policy.
But as we all know, short sales continue to be an issue for many REALTORS®. That’s why NAR is working hard with both the GSEs and regulators to find real, workable solutions that will simplify the process, and we won’t rest until that happens. FHFA has been open to discussion and were very interested in hearing directly from REALTORS®. So I am optimistic that changes will be made that will benefit REALTORS® during a short sale…and rest assured that we here at NAR will continue to push for them to happen.
On Tuesday, it was my honor to testify before Congress on behalf the National Association of REALTORS®. The House Financial Services Committee held a hearing focusing on entities that support the mortgage market, which include FHA, Ginnie Mae, Fannie Mae, Freddie Mac, Federal Home Loan Banks and other private lenders. Witnesses included, Treasury Secretary Timothy Geithner, as well community advocates, academia and industry representatives.
Fortunately, NAR was prepared and had a plan for the future of the GSEs. In light of the conservertorship of Fannie Mae and Freddie Mac, NAR developed principles for the future of the GSEs and shared them with the House Financial Services Committee. Proudly, of the nine speakers, NAR provided one of only two plans submitted at the hearing.
As we have seen with this issue, there has been ample dialogue on the GSE’s problems and little discussion on a solution. NAR recommended to the committee that Fannie Mae and Freddie Mac scrap their current private-profit and public-loss structure in favor of government-chartered, non-shareholder owned authorities. Further, NAR recommended that these entities should be subject to tighter regulations on product, profitability, and minimal retained portfolio practices in a way that ensures the protection of taxpayer monies.
Some argue that the GSE’s should be completely privatized to minimize the exposure to taxpayer dollars. However, the last 18 months have demonstrated that private capital flees the marketplace in economic downturns. Had it not been for Fannie, Freddie and FHA, the financial crisis would be much worse than it has been.
Let us not forget that the 30-year fixed rate, pre-payable mortgage was not created by any private institution loathe to take on long-term interest rate risks. Rather, the federal government created 30-year fixed-rate loans in 1934, which instilled confidence back in the housing market as consumers were wary of the 5-year loans that previously existed.
I hope you’ll recognize that this is but the first of many conversations regarding how we can mend and improve a housing finance system that has served us well for many years. I also hope you’ll be proud that NAR came to the table with a plan to help Congress and our industry design a secondary mortgage model that will serve America’s best interests today…and in the future. Vince Malta – 2010 NAR Vice President and Liaison to Government Affairs
In the classic movie, Mr. Smith goes to Washington, Jimmy Stewart’s character is appointed to fill a U.S. Senate seat and when faced with the reality of politics, he doesn’t back down.
Well, I may not be serving in Congress, but as your NAR President, my job is to represent you on critical issues. No matter how tough the challenge, you can count on me not to back down.
I just returned home to Texas after a full week in Washington, D.C., where I continued to press regulators on a few vital issues.
Last Wednesday, I met with FHA Commissioner Dave Stevens (a former REALTOR®) to discuss implementation of components of the Home Valuation Code of Conduct. We asked that FHA, Fannie Mae and Freddie Mac, adopt a consistent frequently asked questions document to address implementation concerns and codify that document with existing appraisal policy.
Commissioner Stevens agreed that requiring two appraisals in declining markets adds little benefit to underwriting and likely increases the cost of the transaction to the consumer. He also directed staff to work with the GSEs and New York Attorney General on our FAQ idea.
On Friday morning, I had a chance to meet with Freddie Mac’s new CEO Ed Haldeman, and HVCC was also on our agenda. Mr. Haldman agreed to work with FHA, Fannie Mae and the Federal Housing Finance Agency on a common set of FAQ’s. In fact, he promised that he would get back to me within two weeks with a status report.
The meeting with Freddie Mac was a great opportunity to talk about a few other hot issues.
Specifically, I thanked Freddie for coming out with guidelines that do not allow servicers to reduce commissions on short sales deals.
Mr. Haldeman also said that Freddie is willing to give waivers on their condo guidelines and he said they will be more vigilant in communicating with lenders on this issue.
We also learned that the Treasury Department and GSEs are working on guidelines related to short sales and the making Home Affordable program. We expect to see them in the next 30 days. Mr. Haldeman also agreed to emphasize the importance of short sales over foreclosures in discussions with the Treasury.
In Washington, D.C., progress can often be slow, but I am confident that the REALTOR® voice is the leading voice on policies that will define the future of our industry and our business. I urge you to get involved. Together, we can end 2009 on a high note, United Toward Tomorrow. – Charles McMillan, 2009 NAR President