The Washington Report

In This Issue
Realtor Insider DC News and Events Report
NAR Urges Use of Local Residential and Commercial REALTORS® for the Public-Private Investment Program (PPIP)

Business Report
NAR Files Comments with HUD on RESPA's "Required Use" Definition

Housing Report
NAR Testifies on Need for Increased Capacity for FHA

NAR Urges Use of Local Residential and Commercial REALTORS® for the Public-Private Investment Program (PPIP)

On April 9, 2009, NAR President Charles McMillan wrote to Treasury Secretary Geithner, Federal Reserve Board Chairman Bernanke, and FDIC Chairman Bair asking that they require participants in the Public-Private Investment Program (PPIP) to take advantage of the extensive experience of local commercial and residential real estate professionals in the management and disposition of real property acquired as an inevitable consequence of participating in the program. The PPIP provides for investors to purchase troubled loans and securities from financial institutions to improve their balance sheets. These investors will, over time, acquire title for some of the real property secured by mortgage loans or included in securities purchased under the program. The letter urges the use of residential and commercial REALTORS® in implementing the PPIP.

NAR Letter
Treasury PPIP Website

Jeff Lischer 202-383-1117, Tony Hutchinson 202-383-1120

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NAR Files Comments with HUD on RESPA's "Required Use" Definition

On April 8, 2009, NAR President Charles McMillan submitted a comment letter on the definition of "required use" in HUD's regulations implementing the Real Estate Settlement Procedures Act (RESPA). "Required use," as defined before HUD's 2008 rulemaking, prohibited any "person" from tying an incentive or discount to the use of a settlement service unless it fell under the affiliated business arrangement (AfBA) exclusion. HUD's final rule, published November 17, 2008 again made clear that the type of incentives typically offered to consumers by real estate brokers and agents (gift cards, free home inspection) remain legal as long as they do not require the use of a particular settlement service. The new "required use" definition also substituted the term "settlement service" for "person" which means that now, only "settlement services" e.g. real estate brokers/agents, mortgage lenders, title companies (but not homebuilders) may lawfully offer such incentives and tie them to a package of settlement services under the AfBA exclusion.

In light of concerns expressed by some over the impact of these changes, HUD has now requested further public comment on whether the "required use" definition should be withdrawn and additional rulemaking pursued. NAR's comment letter reiterates to HUD the importance of preserving the traditional practice of providing consumers with incentives and discounts that are not tied to the use of a particular settlement service but takes no position on withdrawal of the entire definition.

NAR letter to HUD

Scott Rinn 202-383-7508, Marcia Salkin 202-383-1092, Kenneth Trepeta 202-383-1294

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NAR Testifies on Need for Increased Capacity for FHA

J. Lennox Scott, member of NAR's Real Estate Advisory Board, testified before the Senate Appropriations Subcommittee on Transportation and Housing and Urban Development on the importance of the FHA mortgage insurance program. In his testimony Mr. Scott urged Congress to provide additional resources for FHA to increase its staffing and its investment in technology. He also urged FHA to allow the $8000 tax credit to be provided as an advance loan to be used for downpayment. The testimony also requested that the FHA loan limits be made permanent and that FHA implement the condominium changes that will ease purchasing a condominium with FHA insurance.

Testimony

Jerome Nagy 202-383-1233, Megan Booth 202-383-1222

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Last Updated: 04/14/2009 Kara Beigay