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 In This Issue Conventional Residential Lending Report OFHEO Agrees Not to Reduce Conforming Loan Limits Fannie Mae Updates and Clarifies Its Declining Markets Policy Diversity and Fair Housing Report Resources to Mark the 40th Anniversary of the Fair Housing Act Multicultural Real Estate Associations develop policy partnership Conventional Residential Lending Report  OFHEO Agrees Not to Reduce Conforming Loan Limits On March 26, 2008, the Office of Federal Housing Enterprise Oversight (OFHEO) released its final guidance on calculating conforming loan limits (CLLs). OFHEO is the federal regulator for Fannie Mae and Freddie Mac. In a major victory for the housing and mortgage markets, OFHEO reversed course and agreed to drop its proposal to decrease CLLs when the government survey of national average house prices shows a decrease. NAR's comment letter argued that OFHEO lacked statutory authority to lower CLLs and that the worst possible time to reduce CLLs is during a declining market. The OFHEO decision means that the current CLL of $417,000 will stay in effect until there is a net increase in home prices. OFHEO will keep track of any decreases (for 2006 and 2007, the combined decrease is 3.65 percent) and will offset the decreases against future increases. Only when there is a net increase will OFHEO increase the CLL above $417,000. OFHEO’s Announcement OFHEO’s Final Guidance Jeff Lischer 202-383-1117, Marcia Salkin 202-383-1092 back to top Fannie Mae Updates and Clarifies Its Declining Markets Policy On March 24, 2008, Fannie Mae announced changes and clarifications to its declining markets policy. This policy generally requires that the maximum loan-to-value ratio (LTV) that would otherwise apply to mortgages it buys must be reduced by five percentage points if the home is in a declining market. As a practical matter, this means that the minimum down payment will be five percentage points higher. (Freddie Mac has a similar policy.) Fannie reminds lenders and appraisers to make their own judgment about local market conditions. The announcement states: "Relying solely on a [Desktop Underwriter®]message without further due diligence may be inappropriate in specific instances as there may be stable submarkets within a given market." REALTORS® may remind lenders that a DU message that a property may be in a declining market is not the last word. Some of Fannie's changes will make financing easier:
Fannie Mae Announcement 08-06 Jeff Lischer 202-383-1117, Marcia Salkin 202-383-1092 back to top Diversity and Fair Housing Report Resources to Mark the 40th Anniversary of the Fair Housing Act On April 11, 1968, President Lyndon Johnson, honoring the life and ideals of Rev. Martin Luther King, Jr., signed the history-changing Fair Housing Act. This landmark Act prohibited discrimination concerning the sale, rental, and financing of housing based on race, religion, national origin, sex, disability and family status. This year REALTOR® members and associations proudly observe the 40th Anniversary of the Fair Housing Act, as well as Martin Luther King's memory, and continue to work hard to provide fair access to affordable housing and homeownership. By commemorating Fair Housing Month in April, we have the opportunity to help educate consumers on the important role REALTORS® play in implementing positive change within our communities. Again this year, NAR is providing a wealth of resources and tools that support homeownership and strong communities. Whether you take advantage of the special offers the At Home with Diversity® course is extending this month, host a Fair Housing Poster Contest, or just display the complementary 40th Anniversary commemorative poster in your location, NAR makes it easy for every REALTOR® association and member to get involved. For more information and ideas on what you can do locally, visit our Diversity website. Kyle Lambert London 202-383-1203, Fred Underwood 202-383-1132, Ted Wright 202-383-1206 back to top Multicultural Real Estate Associations develop policy partnership At this week's National Association of Hispanic Real Estate Professional's (NAHREP)Conference, NAHREP, the National Association of Real Estate Brokers (NAREB) and the Asian Real Estate Association (AREAA) joined forces to joinlty advocate on real estate issues with significant impact on predominantly Hispanic, African American and Asian American communities. A five point plan addresses issues resulting from subprime lending, predatory lending, and foreclosures. These actions focus on protecting homeownership, reversing declining markets policies, increasing multicultural counseling, restoring the public's trust, and protecting the housing system. Many of their specific policy actions are similar to NAR's priorities for the year. For example, NAR is working closely with the three organizations on declining markets policies and has led efforts to reform FHA. During the conference, Rebecca Gallardo Serrano, a REALTOR® from Santa Clara, CA, was installed as Chair of the National Association of Hispanic Real Estate Professionals. Fred Underwood 202-383-1132 back to top Go to archived weekly reports >> Last Updated: 03/28/2008 Bira de Aquino |
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