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 In This Issue Realtor Insider DC News and Events Report NAR Urges Caution in Phasing Out the Fed MBS Purchase Program Business Report Senate Finance Committee Approves Fifth Health Reform Bill Commercial Finance Report Federal Regulators Reported Close to Issuing Guidelines for Commercial Mortgage Modifications Federal Tax Report Focus on Extending Tax Credit Intensifies Realtor Insider DC News and Events Report  NAR Urges Caution in Phasing Out the Fed MBS Purchase Program On October 15, 2009, NAR President Charles McMillan wrote to Federal Reserve Board Chairman Ben Bernanke, Treasury Secretary Tim Geithner, and Federal Housing Finance Agency Acting Director Ed DeMarco urging caution as the Fed unwinds its ongoing program to purchase $1.25 trillion of mortgage backed securities (MBSs) guaranteed by the government sponsored enterprises (Fannie Mae and Freddie Mac). NAR recommends four steps to avoid an interest rate spike, disruptions to the flow of mortgage capital, and a halt to the fledgling recovery in the housing industry. NAR requests an opportunity to meet to discuss these concerns. Read NAR's Letter Jeff Lischer 202-383-1117, Kenneth Trepeta 202-383-1294, Tony Hutchinson 202-383-1120 back to top Business Report Senate Finance Committee Approves Fifth Health Reform Bill On Tuesday, October 13, 2009, the Senate Finance Committee became the fifth and final committee in Congress to approve a health care reform bill. The committee vote was 14-9 in favor of the bill with Republican Senator Olympia Snowe (ME) joining all of the panel's Democrats to vote in "aye". Amended over the course of two weeks, the reform package would cost $829 billion over 10 years, reduce the federal deficit by $81 billion over that same ten year period and allow 29 million people who otherwise would be uninsured to obtain private coverage. It has been estimated that 17 million U.S. citizens or legal residents would still remain uninsured. The self-employed and small employers, such as REALTORS® and realty firms, would benefit from the significant changes that the amended bill makes to traditional insurance underwriting and rating practices, including requiring all policies to be guaranteed issue and bans on the use of pre-existing conditions or health status as rating factors for setting premiums. Self-employed individuals with no employees would be given an added advantage in that they could choose to purchase private health insurance as an individual or as a small business through the new health insurance exchanges. Significant differences remain between the Finance bill and the bill passed in July by the Senate Health, Education, Labor and Pensions (HELP) Committee. Senate leaders now have to meld the two bills into one before debate can begin in the full Senate. Major decisions have to be made on whether or not to include a government run public option, an explicit employer mandate, and at what level of income individuals would be allowed to access subsidies to buy insurance, or conversely, not subject to an individual coverage requirement. There are also significant omissions in both bills at the present time, including allowing non-profits and trade associations to access affordability credits to provide insurance to employees. These are all topics NAR continues to discuss with Senate and House negotiators. Given the need to finalize multiple bills before any formal debate of a final bill can begin, NAR has not taken a position on any of the health reform bills as a whole at this time. However, NAR has continued to weigh in throughout the legislative process with both 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, NAR has succeeded in keeping a reduction in itemized deduction out of all of the bills being considered in both the House and Senate. NAR remains vigilant as the health legislation moves toward full consideration by both Chambers. With hundreds of amendments expected to be filed and the cost estimates constantly shifting, it will be very tempting for someone to use itemized deductions to pay for a modification. Stay tuned to www.realtor.org/healthreform for updates. Visit www.realtor.org/healthreform Marcia Salkin 202-383-1092, Ken Wingert 202-383-1196, Scott Rinn 202-383-7508 back to top Commercial Finance Report Federal Regulators Reported Close to Issuing Guidelines for Commercial Mortgage Modifications On Wednesday, October 14, 2009, FDIC Chair Sheila Bair testified with others from the banking industry at a hearing of the Senate Banking Subcommittee on Financial Institutions. At the hearing, Bair stated that regulators are close to issuing new guidance for banks to use in modifying troubled commercial real estate (CRE) loans. Workouts for these loans, said Bair, are often in the best interest of all parties involved during tough economic periods. The forthcoming guidance will reflect this, and is intended to give banks the necessary resources to restructure weak credit relationships and manage real estate holdings in an organized way. At the hearing, Bair, along with several other witnesses, expressed concern over the state of the CRE market. Indeed, Bair cited CRE loans as "the most prominent area of risk for rising credit losses at FDIC-insured institutions during the next several quarters." Read the testimony Jeff Lischer 202-383-1117, Daniel Blair 202-383-1089 back to top Federal Tax Report Focus on Extending Tax Credit Intensifies While no official legislative action took place on the tax credit during the preceding week, the buzz generated increased measurably. REALTORS® have generated almost 500,000 letters to congressional offices via the REALTOR® Action Center. NAR's Call for Action to NAR members has achieved a higher response rate than any other previous Call for Action, underscoring the importance of the credit to REALTORS® and consumers alike. Several House members have introduced bills extending the credit in direct response to the communications from REALTORS®. Senate Majority Leader Harry Reid (D-NV) continues to express his desire to move the extension at the first opportunity. As yet, however, there is not a clear procedural path to enactment, nor is there any agreement on how (or whether) the provision will be "paid for." As yet, no revenue source for extending the credit has been identified. The "cost" is about $1 Billion for each month of extension. Take Action Now 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 Go to archived weekly reports >> Last Updated: 10/16/2009 Bira de Aquino |
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