In this edition:

1. RES Website Launched
2. Housing Stimulus Bill Moving Again
3. SHOP Act
4. NAR Meets with OMB on RESPA Reform
5. NAR Urges Congress to Sign Letter on RESPA Reform
6. NAR Publishes FAQs on FACT Act
7. Latest Housing Forecast
8. HUD & Colorado Looking Into Marketing Agreements
9. Announcements

i. RES Website Launched

Real Estate Services (RES) recently launched its new website, www.realtors.org/res, to better serve diversified real estate firms in maximizing their core business services, such as mortgage operations; title, escrow and settlement; home warranties and inspections; insurance and concierge service.

On the new RES web pages, you will find a variety of resources to support your business objectives including our newsletters, updates on hot topics, information on key issues affecting the industry, market reports and analysis, and background information on RES and the RES Advisory Board, to name just a few. If you would like to see a topic or issue featured on the website, please contact Kara Beigay at kbeigay@realtors.org.

ii. Housing Stimulus Bill Moving Again

In response to the unprecedented turmoil involving Fannie Mae and Freddie Mac last week, the Treasury and Fed on July 13th have taken actions which make it more likely the enactment of the recent Senate-passed housing stimulus bill will be expedited.

The Treasury has asked Congress to add provisions relating to its authority to purchase GSE securities and other measures relating to Treasury’s efforts to bolster the GSEs. The active involvement of the Treasury makes a veto of the final legislation less likely though a veto threat remains. Issues still remain including $4 billion in block grant funding for localities to purchase foreclosed properties, the effective date for the implementation of the new GSE regulator, seller funded down payments under the FHA program, and what the final loan limits will be. The recent weakness of Fannie and Freddie and the government’s actions to bolster the enterprises may in fact lead to arguments against increasing the loan limit provisions in the Senate bill.

Key elements expected to be in the final legislation include:

• FHA Modernization, including provisions to liberalize rules regarding condos
• An $8000 tax credit for first time homebuyers
• GSE Reform, including a stronger regulator
• Permanently increased loan limits for GSEs, FHA, and VA

There is still much potential for delay due to contentious issues, but the mini crisis over Fannie and Freddie has led to a political scenario where it is more important to get something done than to win on all points.

iii. SHOP Act

On June 10, 2008, NAR Treasurer Jim Helsel represented NAR at a bipartisan press conference introducing H.R. 6210, the Small Business Health Options Program Act (SHOP). As proposed, SHOP would offer tax incentives to encourage states to reform small group insurance markets and to make health insurance premiums more affordable for small businesses and the self-employed. It would also develop a nationwide insurance small-business purchasing pool that would still be subject to state insurance regulation to protect those who choose to participate.

In announcing its support for the Small Business Health Options Program (SHOP), NAR reiterated the importance of reforming the U.S. health care market for small businesses and independent contractors. In a recently conducted 2008 NAR Health Insurance Coverage survey, 82 percent of REALTORS® believed the current health care system is not meeting the needs of most Americans, and nine out of 10 REALTORS® thought that the U.S. health care system should be reformed. Nearly a quarter of NAR's 1.2 million members do not have health care insurance, and for most REALTORS® without insurance, the reason is cost. NAR continues to meet with both Senate and House offices seeking additional cosponsors. Other organizations supporting the SHOP Act include AARP, National Association of Homebuilders and the National Federation of Independent Business.

iv. NAR Meets with OMB on RESPA Reform

NAR staff met with officials from the Office of Management and Budget (OMB) on June 20, 2008 to discuss the Real Estate Settlement Procedures Act (RESPA) proposed rule from the Department of Housing and Urban Development (HUD). NAR explained to the OMB participants its opposition to the proposed RESPA rule and proposed a modified approach focused on clear disclosures and a Good Faith Estimate (GFE) formatted to mirror the HUD-1 closing statement. OMB will be responsible for reviewing the proposed RESPA rule once HUD has an opportunity to review the estimated twelve thousand comment letters submitted to HUD on the rule and make any changes before publishing a final rule. The comment period expired on June 12, 2008.

During the meeting, NAR delivered to OMB copies of an economic study prepared for NAR by Dr. Ann Schnare which demonstrates that HUD underestimated the costs of its proposed rule and overestimated its benefits. In addition, NAR provided OMB copies of a joint letter to HUD signed by NAR, the Center for Responsible Lending and the American Land Title Association, urging HUD to adopt a summary GFE accompanied by a full GFE matched to the HUD-1. The Administration has indicated that it would like to see a final rule published before the November elections. If HUD and the Administration choose to go forward, OMB is permitted up to 90-days to review the rule once HUD makes any changes based on the comment letters received.

v. NAR Urges Members of Congress to Sign Letter that Highlights Concerns With HUD’s RESPA Proposal

NAR and a coalition of industry organizations including American Land Title Association, Financial Services Roundtable, Mortgage Bankers of America, American Bankers Association, Community Bankers Association, Independent Community Bankers of America and American Financial Services Association, are urging Members of Congress to sign a letter to HUD Secretary Steve Preston asking him to reevaluate the current RESPA proposal.

In the letter, Members of Congress call on Secretary Preston to withdraw the current RESPA rule and work with the Federal Reserve Board (Board), which is currently reviewing the Truth in Lending Act (TILA) disclosures and expects to issue revisions, to develop one set of disclosure forms from the beginning to the end of the mortgage process that provide consumers with simple, clear explanations of their costs. Members of Congress state that if HUD does move forward under this rulemaking, they urge Secretary Preston to issue “a narrow proposed rule that truly simplifies the Good Faith Estimate and that better coordinates its terms with the HUD-1 Settlement Statement provided at closing.” They also note “the rule should avoid any conflicts with the Board’s current and forthcoming TILA revisions, and the effective implementation should coincide with the implementation of the TILA provisions to avoid burdensome costs and confusion to industry and consumers. ”

vi. NAR Publishes Website FAQs on Identity Theft Red Flag Guidelines and Affiliate Marketing Rules

The Fair Credit Reporting Act of 1970 (FCRA) was amended by the Fair and Accurate Credit Transactions Act of 2003 (FACT Act) late in 2007 adding several new regulations. These new regulations, scheduled to take effect in fall 2008, will affect NAR members that have affiliated businesses and those that deal with credit reports. To assist REALTORS®, NAR has posted to its website answers to frequently asked questions on two final rules – the Affiliate Marketing Rule and the Identity Theft Red Flag Guidelines.

The mandatory compliance date for the Affiliate Marketing Rule is October 1, 2008. The rule generally prohibits a person from using information received from an affiliate to make a solicitation for marketing purposes to a consumer, unless the consumer is given notice and a reasonable opportunity and a reasonable and simple method to opt out of the making of such solicitations. This notice is in addition to the privacy notices already mandated.

The mandatory compliance date for the Identity Theft Red Flag Guidelines is November 1, 2008. The rule requires users of credit reports to establish a program that will detect and respond to notices of address discrepancies. This rule will affect NAR members who use credit reports.

vii. Latest Housing Forecast

According to its latest forecast, NAR’s Pending Home Sales Index,* a forward-looking indicator based on contracts signed in May, fell to 84.7 in May, down 4.7 percent from an upwardly revised reading of 88.9 in April, and remains 14.0 percent below May 2007 when it stood at 98.5. Also in the report:

• NAR lowered its existing-home sales outlook for 2008, saying it now expects sales of 5.31 million.
• Existing home prices are expected to decrease with the aggregate median existing-home price projected to fall 6.2 percent this year to $205,300, and then rise by 4.3 percent in 2009 to $214,100.
• New-home sales are likely to fall 32.3 percent to $525,000 in 2008 and decline another 3.4 percent next year to $507,000.
• Pending home sales declined in all regions: 1.3 percent in the West, 2.9 percent in the Northeast, 6 percent in the Midwest and 7.1 percent in the South.

viii. HUD and State of Colorado Looking Into Marketing Agreements

The Denver Post reported that Colorado Director of Real Estate Erin Toll is investigating marketing agreements between Wells Fargo, Countrywide, and JP Morgan Chase and a number of Colorado real estate brokers. The agreements involve payments for joint marketing, space rental, and other things. HUD and Toll are examining whether the agreements follow RESPA’s guidelines. In some cases, the payments were as much as $12,000 a month. None of the real estate firms require the use of the lender’s services though one firm does allow its lender affiliate to exclusively train its agents in mortgage products.

Toll announced her intentions to conduct investigations of this type at NAR’s Real Estate Services Forum at our 2007 Las Vegas convention. NAR is monitoring this investigation and has posted an article on its website on the issue of RESPA compliance and marketing agreements to provide members with more information on the subject. Additional information on RESPA can be found at www.realtor.org/respa.

ix. Announcements

Real Estate Services Advisory Board Meeting

The next meeting of the Real Estate Advisory Board will take place at the St. Regis Hotel in New York City on September 3rd. The official program will begin on Tuesday, September 2nd with a Welcoming Reception and Dinner. On Wednesday, September 3rd the meeting will start at 8:30am and conclude at 2:30pm.

This meeting is being held in conjunction with the RISMedia Leadership Conference which is scheduled to begin with a half day session on Wednesday, September 3rd and conclude with a networking reception on Thursday, September 4th.

The meeting agenda is under development and we encourage you to send topic suggestions or recommendations to Ken Trepeta, RES Director at ktrepeta@realtors.org. For more information on logistics for the meeting, please contact Patricia Tarhon, ptarhon@realtors.org.

Real Estate Services Forum at 2008 REALTORS® Conference & Expo in Orlando

On Friday, November 7th at 10:45am, RES will host a forum during the 2008 REALTORS® Conference & Expo in Orlando. The tentative subject of this forum is an update on RESPA. For more information or to register for the Conference & Expo, please click here.