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 In This Issue Business Report August Health Insurance Reform Deadline Passes Without Floor Votes FTC Extends Red Flag Rule Compliance Date for Low-Risk Entities to November 1, 2009 Conventional Residential Lending Report The Fed's 5 Tips for Shopping for a Mortgage NAR Asks Obama Administration to Urge Servicers to Participate in the Upcoming Short Sales Program NAR Supports Potential FTC Rule on Unfair or Deceptive Practices by Non-bank Financial Companies Environment Report Report Describes Opportunities for Energy Efficiency House Approves Flood Insurance Extension Federal Tax Report IRS Warns Against Fraud in Claiming Homebuyer Tax Credit Housing Report NAR Applauds FHA Home Modification Program NAR Calls on State Presidents to Support HVCC Moratorium Business Report  August Health Insurance Reform Deadline Passes Without Floor Votes On Friday, the House Energy and Commerce Committee passed HR 3200, the House healthcare bill by a vote of 31-28 with all Republicans and 5 Democrats on the committee voting no. The markup ended a long couple of weeks of negotiations, but there was still an agreement to revisit the bill and pending amendments when the House returns to Washington in September. Concerned with the cost of the bill and provisions that would create an optional public insurance program, the committee's moderate Blue Dog members had earlier indicated their plans to oppose the bill unless amended to address their concerns. Changes sought included cutting the cost of the bill by $100 billion by restructuring the bill's tax credits for individuals, increasing the threshold for small businesses that would be exempted from the bill's employer mandate requirements and postponing any floor consideration of the bill until after the August recess. In the Senate, while progress was made, the Senate Finance Committee failed to consider a bill . Despite pressure from Senate leadership and the White House to move a bill prior to recessing on August 7th, Finance Committee leaders, Chairman Max Baucus and Ranking Minority Member Charles Grassley, continued to work methodically with a bipartisan group of four other Senate Finance Committee members on efforts to create a compromise bill that could successfully make it's way through the Senate. Unless unforeseen developments occur, the group of six and committee staff will continue to work through the August recess with a committee markup planned for September. NAR continues to meet with House and Senate offices and committee staff on the various components of the reform proposals. Staff continue to analyze the mammoth bills and consult with the members of NAR's Business Issues Committee and Federal Tax Policy Committee for specific policy input. NAR has not taken a position on any of the health reform bills at this time. Visit www.realtor.org/healthreform Marcia Salkin 202-383-1092, Ken Wingert 202-383-1196, Scott Rinn 202-383-7508 back to top FTC Extends Red Flag Rule Compliance Date for Low-Risk Entities to November 1, 2009 The FTC announced on July 29, 2009 that it will extend, until November 1, 2009, the date for financial companies and creditors to comply with the FACT Act's identity theft red flag rule. Included in the definition of "creditor" is one who "arranges for credit" and NAR has argued that the usual activities of real estate agents do not typically include arranging for credit. The latest extension will allow FTC staff to finalize further guidance for "low risk entities" such as real estate agents. In addition, the FTC will create a special link on the FTC website for small businesses and low-risk entities to assist them in achieving compliance. NAR staff continues to be in contact with the FTC as further guidance is being developed for low risk entities. FTC announcement on compliance extension FTC Red Flag Rule FAQs Melanie Wyne 202-383-1234, Scott Rinn 202-383-7508, Ken Wingert 202-383-1196 back to top Conventional Residential Lending Report The Fed's 5 Tips for Shopping for a Mortgage On July 29, 2009, the Federal Reserve Board issued a new publication, "5 Tips for Shopping for a Mortgage," to help consumers find the mortgage that is best for them. The 5 tips, including advice and helpful links, are: 1. Know what you can afford. 2. Shop around—compare loans from lenders and brokers. 3. Understand loan prices and fees. 4. Know the risks and benefits of loan options. 5. Get advice from trusted sources. "5 Tips for Shopping for a Mortgage" Jeff Lischer 202-383-1117, Tony Hutchinson 202-383-1120 back to top NAR Asks Obama Administration to Urge Servicers to Participate in the Upcoming Short Sales Program On July 24, 2009, NAR President Charles McMillan wrote to officials of the Treasury Department and the Department of Housing and Urban Development asking them to include a discussion of the importance of participation in the Obama Administration's upcoming Short Sales Program in their meeting with servicers on July 28, 2009. The new Short Sales Program, adopted in response to concerns raised by NAR on behalf of REALTORS® and others, promises to increase uniformity, transparency, and speed for short sales transactions. The Administration called the nation's top mortgage servicers to the July 28 meeting to express disappointment at the rate of implementation of the Making Home Affordable Loan Modification Program. Press reports indicate that there is widespread concern about the slow rate at which loans are being modified. One article reported the view that servicers have a financial disincentive to modify loans because they receive additional fees from investors/lenders for managing delinquent mortgages and are violating their contracts with the government to modify loans for qualified borrowers. As a result of the meeting, the Administration and the servicers agreed to a goal of 500,000 modifications by November 1. The Administration has set the end of August as its delayed target date for issuing guidelines and uniform forms for the Short Sales Program. NAR's Letter NAR's Short Sales Webpage Jeff Lischer 202-383-1117, Tony Hutchinson 202-383-1120 back to top NAR Supports Potential FTC Rule on Unfair or Deceptive Practices by Non-bank Financial Companies On July 30, 2009, the National Association of REALTORS® (NAR) President, Charles McMillan called on the Federal Trade Commission (FTC) to promulgate a rule to prevent unfair or deceptive acts or practices with respect to mortgage lending activities engaged in by non-bank financial companies. Mr. McMillan's letter was in response to a FTC advance notice of proposed rulemaking (ANPR) on mortgage acts and practices. The ANPR addresses activities that occur throughout the life-cycle of a mortgage loan, including mortgage loan advertising and marketing, origination, appraisals, and servicing. NAR has a strong stake in preventing abusive lending practices and supports the principal that stakeholders involved with mortgage lending activities should act in "good faith and with fair dealings" in a transaction and treat all parties honestly. Consistent with this, NAR supports the FTC's efforts and has supported similar efforts in the past. NAR previously supported the efforts of the federal banking agencies and their state counterparts to address abusive lending practices by issuing the Interagency Guidance on Nontraditional Mortgage Product Risks and the Statement on Subprime Mortgage Lending (Guidelines). In the letter, NAR urges the FTC to adopt regulations applicable to mortgage lending activities engaged in by non-bank financial companies such as non-bank mortgage lenders, brokers, appraisers, or servicers. In the letter, Mr. McMillan said "Too many homeowners and home buyers today are the victims of failure of the free market, the full scope and impact of which remain unclear, even today." NAR believes that a rule, as it applies to mortgage lending, should include general principles, with specific examples to guide those subject to the rule of the practices to apply and those to avoid. Codifying the FTC principles for non-bank financial companies will provide a level playing field for the mortgage industry and protect consumers across the board. NAR Letter to the FTC on Mortgage Acts and Practices of Non-Bank Financial Companies Federal Trade Commission Jeff Lischer 202-383-1117, Tony Hutchinson 202-383-1120 back to top Environment Report Report Describes Opportunities for Energy Efficiency The McKinsey Company, an influential business consulting group, has concluded that enhanced energy efficiency holds great potential as an energy resource to save energy, money, and reduce CO2, but only if significanct barriers are removed, and innovative approaches are used to exploit it. The report, "Unlocking Energy Efficiency in the U.S. Economy", outlines a comprehensive national strategy to tap into this resource that would spur technological innovation and create jobs, while saving energy and making the US economy more efficient. View the Report Russell Riggs 202-383-1259 back to top House Approves Flood Insurance Extension The House of Representatives approved legislation by Reps. Waters (D-CA) and Frank (D-MA) to extend authority under the National Flood Insurance Program until March 31, 2010. Without this authority, the program could not issue policies effectively preventing property buyers from legally obtaining mortgage loans in federal designated floodplains. The extension is needed to give Congress more time to consider long-term reforms to the program. Next the Senate must approve the legislation before the program's current expiration date, which is September 30th. NAR's Letter of Support for the Flood Insurance Extension Austin Perez 202-383-1046, Russell Riggs 202-383-1259, Helen Devlin 202-383-7559 back to top Federal Tax Report IRS Warns Against Fraud in Claiming Homebuyer Tax Credit The IRS has released IR-2009-69 noting that at least one tax return preparer has been convicted of fraud in falsely claiming the first-time homebuyer tax credit on behalf of the taxpayer. The release does not describe the nature of the fraud, but the release serves as a reminder of the consequences of any fraudulent claim. The individual who has been convicted of fraud faces up to three years in prison and a fine of up to $250,000. The IRS has updated its computer screening capacity in order to identify fraudulent claims. To date, the IRS has 24 criminal fraud investigations pending related to the tax credit. NAR's FHA and the First Time Homebuyer Tax Credit Flyer In Depth: 2009 First-Time Home Buyer Tax Credit Linda Goold 202-383-1083, Megan Booth 202-383-1222, Jerome Nagy 202-383-1294 back to top Housing Report NAR Applauds FHA Home Modification Program On July 30, 2009, the Federal Housing Administration (FHA) announced in Mortgagee Letter 2009-23, FHA's Home Affordable Modification Loss Mitigation Option, to assist FHA borrowers under the Making Home Affordable Program. The new FHA-Home Affordable Mortgage Program (FHA-HAMP) allows borrowers with a FHA loan currently in default to use a partial claim of up to 30 percent of the unpaid principal combined with a loan modification. The objective is to help borrowers who are in default to modify their mortgage and create an affordable payment. The program becomes effective on August 15, 2009. NAR applauds the new program as another tool in addressing the current real estate crisis. NAR President Charles McMillan said "these changes expand the Obama administration's Making Home Affordable Loan Modification Program to include FHA borrowers, and REALTORS® are optimistic that this will have positive implications for thousands of homeowners. Helping more families stay current on their mortgage and remain in their homes will reduce the impact of foreclosures on families and communities." FHA-HAMP Mortgagee Letter 2009-23 Mortgagee Letter 2009-23 Attachment: FHA-HAMP Guidelines Jerome Nagy 202-383-1233, Megan Booth 202-383-1222 back to top NAR Calls on State Presidents to Support HVCC Moratorium On July 27, 2009, NAR held a Webinar with State REALTORS Association Executives and Government Affairs Directors to discuss steps states may take to address concerns with the Home Valuation Code of Conduct (HVCC). In the Webinar, state presidents were asked to contact their respective Attorney General's (AG) office asking that the National Association of Attorneys General (NAAG) support a moratorium on HVCC. State presidents were also asked to write their real estate commission to call on the House Financial Services Committee Chair, Barney Frank, to hold hearings on the Home Valuation Code of Conduct and its impact on the real estate industry. NAR has been very active in calling for a moratorium on HVCC. In June, NAR reiterated calls for a moratorium on HVCC in a letter to New York Attorney General Cuomo and Federal Housing Finance Agency (FHFA) Director James Lockhart. NAR President Charles McMillan followed up the letter in meetings with the New York Attorney General's office, FHFA Director Lockhart, and Fannie Mae earlier this month. We also support HR 3044, which calls for an 18-month moratorium on HVCC. NAR's HVCC Page State HVCC Information Pack Jerome Nagy 202-383-1233 back to top Go to archived weekly reports >> Last Updated: 08/12/2009 Bira de Aquino |
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