The Washington Report

In This Issue
Business Report
Health Reform Update/NAR Participates in Senate Small Business Committee Health Reform Roundtable

Commercial Finance Report
Commercial Real Estate Industry Group Policy Statement
Joint Economic Committee Sponsores Hearing on Commercial Real Estate

Federal Tax Report
House Likely to Propose Surtax to Pay For Health Reform
IRS May Recommend Relief for Some Incomplete Exchanges

Housing Report
Appraisal Foundation Announces Changes to USPAP for 2010-20011
FHA Modernization Bill Introduced
Dave Stevens Confirmed as FHA Commissioner

Health Reform Update/NAR Participates in Senate Small Business Committee Health Reform Roundtable

Efforts to reform the health care system continue to be the focus of numerous and difficult discussions on Capitol Hill. In the Senate, Senator Max Baucus (D-MT) continues to work with both Democratic and Republican members of his Finance Committee on drafting a reform bill that could successfully garner bipartisan support. If discussions are successful, a Finance reform bill could be introduced the week of July 13th. The Senate Health, Education, Labor and Pension (HELP) Committee continued to work through 300+ filed amendments to Chairman Edward Kennedy's alternative health reform bill. HELP deliberations begin again on July 13th. And in the House, plans to introduce a formal reform measure on July 10th faltered as the chairmen of the three committees with jurisdiction continued to deal with concerns of moderate Democrats needed to assure successful passage of a reform bill. Plans are now to introduce the bill early in this week with the Energy and Commerce Committee to begin consideration shortly thereafter.

NAR's effort to advocate for reforms needed by Realtors also continued. On Thursday, July 9th, the Senate Small Business Committee held a Roundtable discussion with small business representatives to discuss the needs of the self-employed and small employers. Ron Phipps, NAR's First Vice President, was invited to participate. As one of two small businessmen – as opposed to representatives of organizations representing small businesses – Mr. Phipps ably laid out the unique needs of real estate agents, brokers and firm owners that must be considered in the health reform debate. The Roundtable was the third in a series of meetings in the past two weeks with the White House, Department of Health and Human Services and the Senate at which Mr. Phipps represented NAR's members. NAR continues to work with Congress and the Administration to make sure the needs of Realtors are met in a final proposal, but has not taken a formal position at this time on any of the bills being considered.

Visit www.realtor.org/healthreform

Marcia Salkin 202-383-1092, Ken Wingert 202-383-1196, Scott Rinn 202-383-7508

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Commercial Real Estate Industry Group Policy Statement

As directed by the participants from the 6/18 NAR-sponsored Commercial Real Estate Industry Outreach meeting, association staff met on Tuesday, June 23rd at the offices of the National Association of REALTORS® and drafted a Consensus Group Policy Statement. The staff followed the recommendations from the 6/18 meeting in creating a Group Policy Statement that outlines in simple terms the most important principles and goals that should be considered essential to the development of any policies or efforts aimed at restoring liquidity and revitalizing the commercial real estate credit markets.

Lisa Brechtel 202-383-1090

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Joint Economic Committee Sponsores Hearing on Commercial Real Estate

On Thursday, July 9th, the Joint Economic Committee sponsored a hearing entitled, "Commercial Real Estate: Do Rising Defaults Pose a Systemic Threat?" NAR was invited to testify, and Jim Helsel, NAR's 2009 Treasurer, acted as our witness. The testimony offered a snapshot of the problems facing the commercial markets, discussing how the overall economic crisis in the global financial markets is directly impacting the fundamentals of commercial real estate, causing the worst liquidity challenge since the early 1990's. According to the testimony, deteriorating property fundamentals, declining property values and a severe tightening of the lending markets are all factors contributing to the current crisis. And without quick action to stabilize the credit markets and inject liquidity into the system, there will be a wave of further defaults and delinquencies. NAR supports programs, such as the Term Asset-backed Lending Facility (TALF) and the Public Private Investment Program (PPIP), which seek to provide additional liquidity support for the credit markets. NAR's testimony asked that the TALF program be extended for another year. NAR will continue to support and promote federal tax policies that strengthen and support commercial real estate while also working with policymakers to ensure that proposed changes to accounting principles do not impede efforts to revitalize the securitized credit markets.

Read the testimony

Lisa Brechtel 202-383-1090

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House Likely to Propose Surtax to Pay For Health Reform

The so-called "Tri-Committee," the group of House committees with jurisdiction over various facets of health reform, is close to introduction of a reform proposal that will include proposals for the additional revenues that will be needed to fund the endeavor. (The House Tri-Committee is comprised of the Energy and Commerce Committee, Education and Labor Committee and Ways and Means Committee.) House leaders continue to resist the Administration proposal to limit itemized deductions for upper-income taxpayers. It is believed that the Tri-Committee will propose a surtax on upper-income individuals. There are several models for a surtax; it is not yet known which of them the Committees will propose. The House Ways and Means Committee will have sole jurisdiction over a surtax or other revenue proposal.

Linda Goold 202-383-1083

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IRS May Recommend Relief for Some Incomplete Exchanges

From time to time the IRS releases its responses to members of Congress who make inquiries about various tax problems their constituents are experiencing. The IRS has released a so-called "Information Letter" based on such an inquiry. The IRS responded to an inquiry from Senator Dodd (D-CT) noting the challenges that some investors have had in completing the second leg of like-kind exchanges because of the bankruptcy or other failure of qualified intermediaries. The IRS points out that it has no authority to waive either the 45-day or 180-day requirements, but has indicated its awareness of the challenges. It states "We are aware that taxpayers who entered into a deferred like-kind exchange may have financial hardships where a QI filed for bankruptcy and did not complete the exchange. For this reason, we are considering some type of relief for taxpayers in this situation." No timetable for a relief proposal was provided.

Linda Goold 202-383-1083, Lisa Brechtel 202-383-1090, Samuel Whitfield 202-383-1131

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Appraisal Foundation Announces Changes to USPAP for 2010-20011

The Appraisal Foundation announced changes to the 2010-2011 Uniform Standards of Professional Appraisal Practice (USPAP) at its meetings in New Orleans. The new edition will offer FAQ and advisory opinions, similar to what is in the current edition of USPAP. Revisions focus on improving the Ethics Rule, the Competency Rule and Standard 3: Appraisal Review, Development and Reporting. Appraisers and users of appraisal services are encouraged to begin familiarizing themselves with the changes to the document as soon as possible

The 2010-2011 USPAP is expected to be available in October of this year. ASB has issued a Summary of Actions document, which explains the changes that are being made and the rationale for those changes.

Appraisal Foundation
Summary of Actions Document

Jerome Nagy 202-383-1233, Chere LaRose-Senne 312-329-8455, Megan Booth 202-383-1222

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FHA Modernization Bill Introduced

On Friday, Representatives John Adler (D-NJ) and Christopher Lee (R-NY) introduced H.R. 3146, the "21st Century FHA Housing Act of 2009." This NAR- supported bill contains a number of improvements to the FHA single-family mortgage insurance program to insure that it remains available and affordable to American Families. The bill provides valuable technical corrections that will allow FHA to provide greater access to FHA mortgage insurance for condominium and energy efficient mortgages. In addition, the bill provides FHA with sufficient resources to operate safely and effectively. These resources include the ability to hire qualified staff and upgrade decades-old technology systems. H.R. 3146 will also provide additional risk management tools to ensure taxpayer money is not threatened, as well as flexibility for the HUD Secretary to develop innovative foreclosure prevention programs. A similar bill is expected to be introduced in the Senate shortly.

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

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Dave Stevens Confirmed as FHA Commissioner

David H. Stevens, former President and Chief Operating Officer of the Long and Foster Companies, was confirmed unanimously by the U.S. Senate on July 10 as Assistant Secretary for Housing/FHA Commissioner at the Department of Housing and Urban Development. President Obama's pick for the position, Mr. Stevens was strongly endorsed by NAR and will oversee HUD's major housing programs and the FHA mortgage insurance fund. He will also administer important regulatory programs such as RESPA. It is expected that he will be sworn in and assume his duties this week.

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

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Last Updated: 07/10/2009 Bira de Aquino