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 In This Issue Realtor Insider DC News and Events Report House Financial Services Committee Prepares to Mark-Up Financial Regulatory Reform Legislation Business Report HUD Releases Additional RESPA FAQs CBO Releases Preliminary Analysis of Senate Finance Committee Health Bill; Finance Committee Vote Scheduled for October 13, 2009 Federal Tax Report Rangel, Pelosi Comment about Tax Credit Extension House Extends Credit for Military, Intelligence and Diplomatic Personnel Housing Report IVPI Interim Complaint Process Available in November 2009 FHA May Further Delay Implementation of New Condominium Rules NAR Supports Refinance Enhancements to Affordable Housing Program New HMDA Data Notes Expanded Role of FHA House Hearing on Solvency of FHA Realtor Insider DC News and Events Report  House Financial Services Committee Prepares to Mark-Up Financial Regulatory Reform Legislation On Thursday, October 8th, Rep. Barney Frank, Chairman of the House Financial Services Committee (HFSC), announced that the committee will begin deliberations on four components of the Obama Administrations' Financial Regulatory Reform, including H.R. 3126, the "Consumer Financial Protection Agency (CFPA) Act of 2009", on Wednesday, October 14th. The National Association of REALTORS® continues to work with HFSC staff to ensure that the broad reforms aimed at the mortgage and financial markets do not encroach on the commercial activity of real estate brokerage and management. As a result of these continuing efforts, Chairman Frank offered clarity, in a September 22nd memorandum to his committee members, regarding those business sectors that would not be subject to CFPA regulation for acting in their traditional capacities. Real Estate brokerage and management were included in the list of business sectors excluded. Tony Hutchinson 202-383-1120, Jeff Lischer 202-383-1117 back to top Business Report HUD Releases Additional RESPA FAQs On October 7, 2009, the Department of Housing and Urban Development (HUD) posted two new RESPA FAQs on its website. One FAQ is identified as "GFE — Summary of your loan (9)" that deals with prepayment penalties. The other FAQ is identified as "HUD-1 800 series (10)" and deals with recording origination points. The full set of HUD's FAQs posted in advance of the mandatory use of the new GFE and HUD-1 on January 1, 2009 can be found at HUD's website. HUD's FAQs Scott Rinn 202-383-7508, Marcia Salkin 202-383-1092, Kenneth Trepeta 202-383-1294 back to top CBO Releases Preliminary Analysis of Senate Finance Committee Health Bill; Finance Committee Vote Scheduled for October 13, 2009 On Wednesday, October 7, 2009, the Congressional Budget Office (CBO) released its estimate of the cost of the Senate Finance Committee's health reform proposal. The CBO estimated that the Finance bill would expand coverage to 94 percent of all legal residents at a total cost of $829 billion over 10 years. In addition, the CBO indicated that the legislation would reduce federal deficits by $81 billion over a decade and could lead to continued reductions in federal deficits in the years beyond the initial 10 years. While the measure is estimated to provide coverage to roughly 29 million legal residents who are currently uninsured when fully operational in 2019, the CBO's analysis did indicate that roughly 17 million U.S. citizens or legal residents would remain uninsured. An additional 8 million illegal residents are estimated to remain uninsured. The release of the CBO score clears the way for a final vote on the measure by the Senate Finance Committee, now scheduled for October 13, 2009 at 10 am. Given the need to merge multiple bills into one bill before any serious discussions of a final bill can begin, NAR has not taken a position on any of the health reform bills at this time. NAR has weighed in throughout the entire legislative process with the Senate and House members to make sure that the health insurance challenges facing the REALTOR community are fully understood. NAR has also been both visible and vocal about its opposition to any proposal that would limit the mortgage interest deduction (MID) as a means of "paying for" health reforms. To date, neither the House nor the Senate has reached into the itemized deductions basket to do so. NAR remains vigilant, however, as the health legislation goes to the Senate for consideration. No doubt hundreds of amendments will be filed and there is always a chance that a Senator might dip into the itemized deductions to "pay for" a modification of the Senate package. Visit www.realtor.org/healthreform Marcia Salkin 202-383-1092, Ken Wingert 202-383-1196, Scott Rinn 202-383-7508 back to top Federal Tax Report Rangel, Pelosi Comment about Tax Credit Extension At a press conference on October 8, House Speaker Pelosi (D-CA) responded favorably when asked about the likelihood of extending the first-time homebuyer tax credit. When asked about the possibility of further housing legislation, she responded "Yes, there is under consideration whether we extend the first time homeowners credit. And the question is, would that be just first time homeowners or would you open it up to other purchasers of homes?" She shed no further light on whether the credit would be expanded, but did note that the cost of an expansion would be the major consideration in the decision process. When asked for comment, Bloomberg Wire Services reports that Chairman Rangel (D-NY) said, "There's no question that I think it should be extended; for how long, we should discuss." As yet, no formal action has been announced. 2009 First-Time Home Buyer Tax Credit Linda Goold 202-383-1083, Samuel Whitfield 202-383-1131, Megan Booth 202-383-1222 back to top House Extends Credit for Military, Intelligence and Diplomatic Personnel The House has voted 416 - 0 to extend through 2010 the benefits of the first-time homebuyer tax credit to military, intellilgence and diplomatic personnel. To be eligible, purchasers in these categories must have been outside the US on active duty for at least 90 days in 2009. The measure (H.R. 3590) now goes to the Senate. Timing and process for its consideration are unknown. 2009 First-Time Home Buyer Tax Credit Linda Goold 202-383-1083, Samuel Whitfield 202-383-1131, Megan Booth 202-383-1222 back to top Housing Report IVPI Interim Complaint Process Available in November 2009 The Independent Valuation Protection Institute (IVPI) was announced as an integral part of the Home Valuation Code of Conduct (HVCC). The purpose of the IVPI is to receive complaints from appraisers and users of appraisal services on the improper influence or attempted improper influence of appraisers. The IVPI has not yet been established but an interim web site is currently under development. Fannie Mae and Freddie Mac announced a complaint form that will appear on the interim Independent Valuation Protection Institute (IVPI) Complaint Web site. The complaint form is for demonstration purposes only and is not available for filing a complaint until the Web site is publicly available in November 2009. The Web site, http://www.ivpicomplaint.org, will collect complaints from any party about non-compliance with the HVCC or attempted improper influencing of appraisers or the appraisal process. Fannie Mae Freddie Mac NAR HVCC Web page Jerome Nagy 202-383-1233 back to top FHA May Further Delay Implementation of New Condominium Rules The new condominium approval process under Mortgagee Letter 2009-19 was to be effective for all case numbers assigned on or after October 1, 2009. While the new effective date is for case numbers assigned on or after November 2, 2009, NAR understands that the new effective date may be delayed even further. The site condo and manufactured housing condo project changes that have already taken effect are not affected by this delay. However, all other rules of the condominium program remain in effect. For example, lenders are permitted to offer spot loans until the new condominium rules go into effect. On July 31, 2009, NAR President Charles McMillan sent a letter to FHA Commissioner David Stevens recommending enhancements to the new condominium rule. Mr. McMillan also discussed NAR's recommendations at a meeting with the Commissioner on September 8, 2009. NAR is calling for: 1) a reduction in the owner-occupancy requirement, 2) eliminating or increasing the FHA concentration limit, 3) reducing the pre-sale requirement, and 4) clarification of the reserve study requirement. NAR has recently contacted FHA asking the agency to consider allowing spot loans under the new condominium rules when they go into effect. NAR Letter to FHA on New Condominium Rule Enhancements Mortgagee Letter 2009-19: Condominium Approval Process – Single Family Housing Jerome Nagy 202-383-1233, Megan Booth 202-383-1222 back to top NAR Supports Refinance Enhancements to Affordable Housing Program On October 5, 2009, the National Association of REALTORS® (NAR) President Charles McMillan sent a letter to the Federal Housing Finance Agency (FHFA) supporting temporary modifications to the refinance authority of Federal Home Loan Banks (FHLB) under the Affordable Housing Program (AHP). NAR supported the previous interim final rule that allowed AHP subsidies for refinancing eligible households' mortgage loans under the Hope for Homeowners Program and the initial pilot program to use the AHP to restructuring mortgages by the FHLB of San Francisco. This initial rule allows the FHLBs to establish AHP homeownership set aside programs that provide subsidies for refinancing or restructuring eligible households' mortgage loans under the Hope for Homeowners Program. This interim final rule expands the use of AHP for households eligible for other federal, state, and local programs for targeted refinancing, in addition to Hope for Homeowners. Use of AHP subsidies in conjunction with the additional eligible programs will provide leverage and enhance the effectiveness of each program, which will ultimately allow more to families keep their homes with safe, affordable mortgages. NAR has supported amending programs to restructure subprime and Alt-A mortgages to help families keep their homes. NAR applauds the counseling requirement for households seeking AHP assistance but recommends the extension of the sunset date. We agree that counseling is an important component of successful refinancing. Counseling provided by reputable and competent organizations such as those affiliated with NeighborWorks® can provide a variety of counseling options and help homeowners understand the various refinance options and programs available. The current interim final rule recommends the program sunset on July 30, 2010. We understand there will be a significant number of mortgages that will reset after July 30, 2010. NAR believes extending the sunset date of this program will benefit many more homeowners and further help to stabilize the real estate market. NAR Letter to FHFA Supporting Refinance Enhancements to AHP Jeff Lischer 202-383-1117, Jerome Nagy 202-383-1233 back to top New HMDA Data Notes Expanded Role of FHA On September 30, 2009, the Federal Reserve published its article on the 2008 Home Mortgage Disclosure Act (HMDA) data. One of the major findings of the report is the expanded role of the Federal Housing Administration (FHA). By December 2008, FHA's share of the total market was 30 percent. The report adds by the end of 2008 almost 50 percent of all purchase transactions were insured by FHA or guaranteed by VA. The report also notes that the credit quality of FHA originations improved significantly in 2008. This dispels the myth that FHA became the dumping ground for subprime after that market collapsed in August 2007. In fact, FHA's FICO scores increased significantly while loan-to-value (LTV) ratios have decreased in 2008. Over 60% percent of FHA's purchase volume increase between 2007 and 2008 was to borrowers with prime quality FICO scores (above 660). FHA insured mortgages with LTVs above 95 percent fell from 72 percent in 2007 to 67 percent in 2008. According to the report, "Taken together, the FICO scores and LTVs reported for 2008 suggest that the growth of FHA loans has predominantly involved loans with lower-risk characteristics than in 2007." HMDA Report Jerome Nagy 202-383-1233, Megan Booth 202-383-1222 back to top House Hearing on Solvency of FHA The House Financial Services Committee, Subcommittee on Housing held a hearing last week on the future of the FHA program. FHA recently announced that it accounts will fall below the 2% required for excess reserves. REALTOR® Boyd Cambell of Lanham, MD testified that FHA has never been more important in the market, and although its capital reserves have fallen, remains fiscally sound. The 2009 audit, which will be released later this month, will show FHA actual total reserves are higher than they have ever been — with combined assets of $30.4 billion. In fact, the audit is also expected to confirm that FHA has "positive" reserves — meaning they have adequate resources to cover all claims and expenses from their portfolio. FHA Commissioner Dave Stevens testified that FHA does not need a federal bailout and poses no risk to American taxpayers. NAR supported the changes FHA is making to increase its capital reserves and proposed a few additional reforms to help the housing recovery. These include proposals to: make permanent the current loan limits for FHA and the GSEs; modify procedures to make it easier to purchase a condominium with FHA insurance; extend the $8,000 first-time homebuyer tax credit; and release a formal streamlined short-sales policy. Download NAR's Testimony Jerome Nagy 202-383-1233, Megan Booth 202-383-1222 back to top Go to archived weekly reports >> Last Updated: 10/12/2009 Bira de Aquino |
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