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 In This Issue Business Report NAR to Meet With OMB on RESPA Congress Holds RESPA Hearing NAR Sends Follow-Up Letter to HUD on Administrative Broker Commissions Federal Tax Report IRS Issues Guidance on Tax Credit Leasehold Improvements Renewal, Extension in Senate Housing Report Legislation to Permit Seller-Funded Downpayment Assistance Moving in the House NAR Unveils FHA Toolkit Product Business Report  NAR to Meet With OMB on RESPA NAR and other organizations representing the real estate mortgage and settlement service industry will meet with officials from the Office of Management and Budget's Office of Information and Regulatory Affairs (OIRA) regarding the Department of Housing and Urban Development's proposed rule on the Real Estate Settlement Procedures Act on September 24 at 3:30 p.m. This meeting follows the September 16th Congressional hearing conducted by the House Financial Services Committee Subcommittee on Oversight and Investigations on RESPA and a letter to OMB authored by Representatives Hinojosa and Biggert urging OMB to advise HUD to send the rule back to HUD with instructions to revise the proposed rule by coordinating RESPA and Truth in Lending disclosures with the Federal Reserve and other agencies. The September 24th meeting will be the fourth time NAR has met with OIRA officials at OMB on the proposed RESPA rule in the last nine months. In the most recent meeting on July 24th, NAR President-Elect, Charles McMillan, joined the Chairman of the Texas Association of Realtors®, Randy Jeffers and representatives from the Texas Land Title Association and the Independent Bankers of Texas to urge the withdrawal of the Real Estate Settlement Procedures Act (RESPA). Scott Rinn 202-383-7508, Marcia Salkin 202-383-1092 back to top Business Report Congress Holds RESPA Hearing On September 16, 2008, T. Anthony Lindsey, a Realtor® and CEO of GlobeCrossing in Charlotte, NC testified on NAR's behalf before the House Financial Services Subcommittee on Oversight and Investigations' hearing on the Housing and Urban Development's proposed Real Estate Settlement Procedures Act rule. The panel of industry and consumer representatives testifying included the American Land Title Association, the Center for Responsible Lending, the Mortgage Bankers Association, the National Association of Mortgage Brokers, the National Consumer Law Center, the National Association of Home Builders and the Real Estate Service Providers Association. HUD was invited to appear but declined the invitation. In addition to a large number of Subcommittee members who expressed concerns with the proposed rule and HUD's process, Representatives Hinojosa and Biggert announced they were sending a joint letter to OMB urging it to reject HUD's revised RESPA rule and to send it back to HUD with instructions to coordinate with the Federal Reserve and other agencies. (Letter Attached). In its testimony, NAR criticized HUD's proposed RESPA rule for, among other things, a revised four-page Good Faith Estimate that fails to easily match up with the HUD-1 statement and provide clear disclosures, as well as changes that will give competitive advantages to large lenders. NAR's concerns were echoed, in part or in whole, by the other industry and consumer groups who testified. When asked during the Q&A period, all panelists indicated it would be helpful if HUD would:
Read NAR's Testimony Scott Rinn 202-383-7508, Marcia Salkin 202-383-1092 back to top NAR Sends Follow-Up Letter to HUD on Administrative Broker Commissions On September 8, 2008 NAR sent a letter to the Department of Housing and Urban Development seeking clarification on the issue of Administrative Broker Commissions. NAR had earlier met with HUD on April 4, 2008 and submitted a follow-up letter to HUD on June 19, 2008 addressing HUD's lack of guidance under RESPA concerning the practice of charging an administrative commission or fee in a real estate transaction. The June 19th and September 8th letters are attached. June 19th Letter September 8th Letter Scott Rinn 202-383-7508, Marcia Salkin 202-383-1092 back to top Federal Tax Report IRS Issues Guidance on Tax Credit The IRS has released IR-2008-106, providing some guidance about how individuals who utilize the new $7500 first-time homebuyer tax credit will reflect the credit on their tax returns and receive the benefit from any refund. The notice reinforces the fact that taxpayers will be required to repay the credit, starting with their tax return for 2010, which will be filed in 2011. The IRS is designing a new Form 5405 for those who utilize the credit. The new form will be included in the Form 1040 packet and filing instructions that are distributed in late December and early January. The new form is not yet posted on the IRS website. While it has not yet officially announced its plans, the IRS will likely use the information on this new form to track the group of taxpayers who use the credit and provide them with instructions on how to make the repayment. This guidance will be issued later. The notice is issued in Q&A format and addresses only fundamentals about the credit. The reminders provided are descriptions of the amount of the credit, the homes that qualify, the income limits and the exceptions to the repayment requirement. View key provisions Homebuyer Tax Credit FAQs Seller-funded downpayment provision Linda Goold 202-383-1083, Megan Booth 202-383-1222, Helen Devlin 202-383-7559 back to top Federal Tax Report Leasehold Improvements Renewal, Extension in Senate For much of 2008, the Senate has struggled with legislation that would renew and extend the 15-year life for leasehold improvements. No controversy surrounds the provision itself, but this provision is part of an enormous package of expired and expiring provisions that have passed the House several times but that remain mired in the Senate because of fundamental disagreements over the proper method for "paying for" extensions of current policy. Over the summer, the Senate tried and failed three times to bring this so-called "extenders" package (H.R. 6049) to a debate. Now, with time running short, Senators Baucus (D-MT) and Grassley (R-IA) have agreed to a group of extender bills. Some extenders are "paid for" with revenue offsets; other are not. The high stakes issue in all this debate is the extension of the so-called "patch" that would prevent moderate income individuals from falling subject to the alternative minimum tax (AMT). This one provision carries a revenue "cost" of more than $60 billion for just one-year extension. This substantial cost is a major factor in the debate. To date, none of the "pay-fors" that are under consideration in the extenders process would affect real estate. The Senate is tentatively scheduled to vote on the Baucus-Grassley agreement on Tuesday, September 23. This could change, however, given the likelihood that Congress will be absorbed with the new proposals to shore up the financial system. Linda Goold 202-383-1083, Jeff Lischer 202-383-1117, Helen Devlin 202-383-7559 back to top Housing Report Legislation to Permit Seller-Funded Downpayment Assistance Moving in the House On September 16, the House Financial Services Committee approved H.R. 6694, the "FHA Seller-Financed Downpayment Reform and Risk-Based Pricing Authorization Act of 2008". This bill, introduced by Rep. Al Green (D-TX), will allow seller-funded downpayment assistance to continue for certain borrowers. H.R. 3221, the Housing and Economic Recovery Act, which became law in July prohibited these types of programs beginning October 1, 2008. H.R. 6694 would allow seller-funded downpayment assistance for borrowers with credit scores above 619. Borrowers with scores between 620-680 would be required to pay a higher up-front premium (3%) and higher annual premiums (1.25%). Borrowers above 680 would not have higher fees. The bill is expected on the House floor this week. Jerome Nagy 202-383-1233, Megan Booth 202-383-1222 back to top NAR Unveils FHA Toolkit Product Mortgages backed by the federal government through FHA represent the biggest growth area in home financing today. Members unfamiliar with how FHA works and why it's easier and quicker to use today than in previous years can learn what they need to know in an FHA Toolkit available in the online store on REALTOR.org. The FHA Toolkit is an interactive publication providing valuable information on the use of FHA for financing mortgages. The toolkit is a tri-fold publication. Contents include an 1) interactive CD presentation on how FHA has improved recently including a video FAQ and links to additional resources on the Internet; 2) the FHA brochure; 3) a booklet providing detailed information on the various FHA products and who is best suited to use each product; 4) pull out cards on temporary FHA programs available to alleviate the current mortgage and foreclosure crisis; and a "quick reference" pull out card. FHA Toolkit at REALTOR Store Jerome Nagy 202-383-1233, Megan Booth 202-383-1222, Scott Rinn 202-383-7508 back to top Go to archived weekly reports >> Last Updated: 09/19/2008 Bira de Aquino |
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