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Daily Real Estate News | May 16, 2007 |
Banks in Real Estate Issue Takes on New Urgency
WASHINGTON – Efforts by REALTORSŪ to keep national banking conglomerates out of real estate brokerage and management have taken on new urgency in the wake of the subprime mess, as the banking companies that have made so many of the problem-plagued loans are the same ones that want to enter the real estate business, say legislative analysts with the NATIONAL ASSOCIATION OF REALTORSŪ.
The NAR-backed Community Choice in Real Estate Act (H.R. 111) would preserve the separation of banking and commerce by permanently keeping banks out of real estate. Momentum for the bill has grown quickly since it was introduced at the start of this session of Congress. It now has more than 220 cosponsors, more than every other bill in the House today except for a handful, the analysts say.
Another NAR-backed bill that preserves the separation of banking and commerce, by preventing commercial businesses like Home Depot from owning a type of state-chartered, federally insured bank called an industrial loan company (ILC), is seeing similar strong support. The House Financial Services committee passed the bill a short while ago, and the bill is now poised to be taken up on the House floor, although it’s not clear when.
During their visits to Capitol Hill this week, REALTORSŪ are urging their members of Congress to add their support to the two bills, if they haven’t already.
Support for Reforms to Fannie, Freddie
They’ll also be asking their members to vote for reforms to the oversight of the secondary mortgage market entities Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, which come up for a vote in the House this week. The legislation is strongly backed by NAR because it creates an independent regulatory environment for the entities, known as government-sponsored enterprises, while at the same time giving them the ability to offer competitive alternatives to subprime financing. Among other things, the reforms would increase their loan limits in high-cost areas, making conforming loans more viable and thus reducing the need for some borrowers to rely on much riskier subprime loans.
Other federal policies on REALTORSŪ’ advocacy agenda during their Hill visits this week are FHA reform and ensuring the affordability of property insurance in disaster-prone areas. Both are crucial for helping consumers get into, and safely stay in, homeownership.
Passage of a health insurance solution for small businesses and independent contractors like REALTORSŪ will be another priority, although no specific legislation is currently under consideration. REALTORSŪ will be urging lawmakers to continue the productive discussions they’ve been having since NAR-backed small business health plan legislation came so close to success last year. REALTORS’ goal is for lawmakers to find a market-based solution for introduction later this year.
— By Robert Freedman for REALTORŪ Magazine Online
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