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In This Issue:
 REALTOR® Insider: D.C. News and Events
Business Report
Commercial Finance Report
Environment Report
Federal Tax Report
Housing Report
| | REALTOR® Insider: D.C. News and Events
| | | Obama Administration Announces Financial Regulatory Reform Plan | The Obama Financial Regulatory Reform Plan, announced on June 17, 2009, would change the regulation of all lenders and their holding companies, give the Federal Reserve Board supervisory power over large and complex entities that pose a systemic risk to the financial system, create a new consumer protection agency, and provide for managing future financial crises. Key objectives include restoring consumer and investor confidence in the nation's financial system. Of particular interest to REALTORS®, the plan would strengthen the national policy against mixing banking and commerce and create a Consumer Financial Protection Agency to consolidate the regulation of consumer protection laws related to mortgage loans and other financial products, including the Truth in Lending Act and the Real Estate Settlement Procedures Act.
NAR Summary of the Plan >
White House Press Release (including links to White Paper and Fact Sheets) >
Contacts: Jeff Lischer, 202-383-1117
Contacts: Tony Hutchinson, 202-383-1120
| | | | | Fannie Mae Confirms Short Sales Commissions Policy and Establishes Appeals Process | In discussions between NAR and Fannie Mae, Fannie Mae has reconfirmed its short sale commission policy and established a process for REALTORS® to follow if issues arise. On February 24, 2009, Fannie Mae sent Announcement 09-03 to its servicers instructing them not to negotiate commissions on short sales below the amount negotiated by the listing agent, unless the commission exceeds 6 percent. The Announcement reminded servicers that third party approvals (i.e., private mortgage insurers) may be required and can affect commissions. In response to concerns raised by NAR that some servicers of Fannie Mae loans are unaware of this policy or believe it is not binding, Fannie Mae has established a process for NAR members when short sale commission issues arise.
- Step 1: Determine whether the loan is owned or guaranteed by Fannie Mae. Only the holder of the loan is allowed to do this, so do so in the presence of your client or after obtaining their written permission.
Visit www.fanniemae.com /loanlookup, or
If you don't have convenient internet access, call: 1-800-7FANNIE (8am to 9pm Eastern Time)
- Step 2: If the servicer is unaware of or disagrees with the policy, provide a copy of Announcement 09-03 to the servicer and negotiate an appropriate commission based on the listing agreement (up to 6 percent).
- Step 3:Contact Fannie Mae if the dispute is not resolved directly with the servicer. Be prepared to provide the property address, name of owner, and Fannie Mae loan number (if available):
Call: 1-800-7FANNIE (8am to 9pm Eastern Time), or
Email: Resource_center@ FannieMae.com
Fannie Mae Announcement 09-03 (2/24/09) >
Contacts: Jeff Lischer, 202-383-1117
Contacts: Tony Hutchinson, 202-383-1120
| | | | | What to Do If You Think a Servicer Isn't Following the Making Home Affordable Program Guidelines | Members have called NAR asking what to do if they think that servicers are not following the guidelines for the Obama Administration's Making Home Affordable Program for modifying eligible mortgages and refinancing Fannie Mae and Freddie Mac mortgages. Here are the recommended steps to take:
- First, go to www.makinghomeaff ordable.gov — the official Treasury website for the Making Home Affordable Program. At the site, determine whether the loan is owned or guaranteed by Fannie Mae or Freddie Mac by clicking "Loan Look Up" on the ribbon on the top of the home page. Only the holder of the loan is allowed to perform this, so do in the presence of your client or after obtaining their written permission.
If the loan is a Fannie Mae or Freddie Mac loan, call (1) 1-800-7Fannie or (1) 1-800-Freddie, as appropriate, describing the specific inconsistency. Do this whether the issue relates to the refinancing or the loan modification program.
- Next, if the loan is not owned or guaranteed by Fannie Mae or Freddie Mac you can determine if the servicer is participating in the Home Affordable Modification Program (HAMP) by going to the website and clicking "Contact Your Mortgage Servicer" on the top ribbon. To date, 16 servicers are participating, covering more than 80% of all mortgages.
If the servicer is participating, the first step is to contact the servicer using the phone number or email address listed on the site so you can appeal the issue to a supervisor. Be sure to identify the specific provision of the guidance that you believe is not being followed. If the supervisor cannot or will not correct the problem, call 1-800-7Fannie to report the disagreement. Fannie is administering the program for the Treasury Department and will work to resolve the issue.
Making Home Affordable Program Website >
Site for Detailed Information on Making Home Affordable and Other Government Programs >
NAR's Website on Making Home Affordable Program >
Contacts: Jeff Lischer, 202-383-1117
Contacts: Tony Hutchinson, 202-383-1120
| | | | Business Report
| | | FTC Offers Identity Theft Testimony on Hill | On June 17, 2009, Betsy Broder, Assistant Director of the FTC's Division of Privacy and Identity Protection, testified on the FTC's efforts to combat identity theft before a U.S. House Subcommittee of the Committee on Oversight and Government Reform. The FTC also recommended new laws to establish security standards across the private sector and additional authority to seek civil penalties in data security cases. NAR supports commonsense efforts to combat identity theft and has co-branded products, with the FTC, to help businesses fight identity theft. In addition, NAR is working to ensure that identity theft legislation, such as that expected to be introduced by Rep. Wm. Lacy Clay (D-MO), Chairman of the Oversight Subcommittee, does not create hardships for small firms.
FTC Press Release >
FTC Testimony >
Contacts: Melanie Wyne, 202-383-1234
Contacts: Scott Rinn, 202-383-7508
Contacts: Ken Wingert, 202-383-1196
| | | | | House Hearings Consider Comprehensive Data Privacy Legislation | On June 18, two subcommittees of the House Energy & Commerce committee held a joint hearing to explore the privacy implications of online advertising and the practice of compiling information about consumers' web activities to serve them targeted advertising. During the hearing chairmen of the two subcommittees annouced that come this fall, they would propose comprehensive privacy legislation. It is expected that this legislation would require websites to provide explicit notice about how consumers' information is collected, used and stored and give consumers the ability to opt-out of data collection. Another expected provision would require that consumers must opt-in to allow website owners to share their information with third parties.
NAR, along with 16 other industry groups sent a letter to the members of the House Commerce commitee urging them to proceed with extreme caution when drafting legislation to avoid serious unintended consequences that could businesses struggling with the weak economy. We continue to urge Congress to be mindful of the impact of any privacy legislation on small business.
Contacts: Melanie Wyne, 202-383-1234
Contacts: Scott Rinn, 202-383-7508
Contacts: Ken Wingert, 202-383-1196
| | | | | NAR President Health Care Podcast & Webcast | On Monday, June 15th, NAR President Charles McMillian's latest President's Podcast summarized NAR's efforts and explained how members can find information on proposed solutions and submit questions to policy staff. To listen to the Podcast, please go to:
Listen to the podcast>
Questions can be sent to the President's Report inbox at presidentsreport @realtors.org. Please put "healthcare" in the subject line.
At the end of each week, a Q/A will be posted on Realtor.org. Additionally, NAR has unveiled a new landing page on Realtor.org where the latest news on the healthcare debate, NAR's health reform policy principles and Congressional communications, and other useful information are posted. That page is located at: www.realtor.org/h ealthreform.
Contacts: Marcia Salkin, 202-383-1092
| | | | | National Health Care Reform Debate Begins in Earnest | Building off of two years of formal hearings and discussions, the health care reform debate has begun in earnest in Washington, D.C. Congress has set an aggressive timeline for debate with the goal of delivering a final bill to President Obama by October 15. Five committees — Senate Health, Education, Labor and Pensions, Senate Finance, House Energy and Commerce, House Education and Labor and House Ways and Means — are involved in drafting health reform legislation. In the Senate, two bills, introduced by HELP Committee Chairman, Edward Kennedy (D-MA), and Finance Chairman, Max Baucus (D-MT) respectively, will be considered and then conferenced into one bill that will be put before the full Senate. In the House, the process will be more simple as the three chairs of the respective committees, Henry Waxman (D-CA), George Miller (D-CA) and Charles Rangel (D-NY), plan to introduce a single joint measure.
As outlined, all three bills would provide the self-employed, small employers and those without employer-provided insurance with access to an Exchange that would offer an array of private insurance products that are governed by a uniform national set of rating and underwriting rules. Insurance products offered through an Exchange would available to all eligible applicants regardless of their health history, be guaranteed to be renewed, and would not contain any pre-existing condition exclusions. In addition, premiums would be set on the basis of a limited number of factors — type of policy, geographic location and age — that would not include health status or claims history. By establishing new rating rules, standardizing administrative functions and creating larger pools of insureds, proponents of the bills believe that premiums will be reduced
NAR has already submitted comments to the Senate HELP Committee on the Kennedy measure and will comment on each of the other proposals as they are released. While much remains to be determined and all proposals will be much amended, many of the elements of the NAR-supported Small Business Health Options Program Act (SHOP) have been, or are expected to be, incorporated into the drafts.
NAR's Comments to the HELP Committee >
Contacts: Marcia Salkin, 202-383-1092
Contacts: Ken Wingert, 202-383-1196
Contacts: Scott Rinn, 202-383-7508
| | | | Commercial Finance Report
| | | NAR Convenes Commercial Real Estate Meeting to Develop Recovery Priorities | On Thursday, June 18th, NAR's Realtor Commercial Alliance Committee sponsored a Commercial Real Estate Industry Outreach Meeting at the Marriott Metro Center in Washington, D.C. Hosted by RCA Chair Bob Toothaker, NAR Liaison for Commercial and Business Specialties David Lockwood, and NAR Vice President and Liaison to Government Affairs Gary Thomas, this important event brought together a key group of allied commercial real estate associations representing a broad range of industry participants, as well some of the nation's largest commercial real estate firms. A list of attendees is attached.
The commercial real estate market represents a significant element of the nation's economic infrastructure. Yet, over the last year, the broader financial credit crisis has severely curtailed commercial real estate lending activity and brought securitization markets to a halt. Providing liquidity and facilitating lending is essential to restore confidence and stability to the industry as a whole. Meeting participants were successful in identifying commonalities and policy priorities and agreed to work together in both educating and providing to policymakers a package of principles and priorities to guide them in their efforts to address the current crisis in the commercial real estate credit markets. Moving forward, the group will be engaged in the refinement of a principle-based consensus document capturing what are the key policy issues that must be addressed to restore liquidity and stability to the markets. Following the final approval of this principle based policy statement, the group will also be convening in the near future to discuss further messaging and advocacy strategies.
View the list of attendees >
Contacts: Lisa Brechtel, 202-383-1090
Contacts: Jeffrey Hornberger, 312-329-5971
| | | | Environment Report
| | | Senate Committee Approves Wetlands Expansion Bill | The Senate environment committee approved S. 787, the "Clean Water Restoration Act." The bill would strike "navigable" from the federal definition of regulated waters and replace the term with the "waters of the United States" expanding — not restoring — the definition to "all... intrastate waters, including... all tributaries... and all impoundments of the forgoing." NAR policy is opposed to federal government encroachments upon private property rights. Thanks to REALTORS®, before approving the bill, the committee made two important changes that while taking small steps in the right direction, did not resolve NAR concerns with the bill's approach. As part of an amendment by Sens. Baucus (D-MT), Klobuchar (D-MN) and Boxer (D-CA), the bill now excludes prior converted cropland and waste treatment systems from the U.S. waters definition. While still expanding the Clean Water Act's reach to non-navigable waters, the bill would not expand it to "the fullest extent that these waters, or activities affecting these waters, are subject to the legislation power of Congress" — i.e., the original language of the bill. Rather it expands the scope only to the EPA and Corps' interpretation of regulated waters on January 9, 2001, which in effect would overturn two Supreme Court decisions that reigned in federal permitting authority.
It is still early in the process, and NAR will continue to oppose S. 787 as amended and seize every opportunity to educate members of Congress about the effects that the bill will have on property rights. Next step is consideration by the Senate but the timing of this is unclear, as at least one senator is expected to place a "hold" on the legislation, signaling an intent to filibuster. A companion bill has not been introduced in the House.
View NAR's most recent letter to the Senate Environment and Public Works Committee >
Contacts: Austin Perez, 202-383-1259
Contacts: Russell Riggs, 202-383-1046
Contacts: Helen Devlin, 202-383-7559
| | | | Federal Tax Report
| | | NAR Creates Flyer Using the First-Time Home Buyer Tax Credit with FHA Loans | NAR has received many inquiries from our members regarding how first-time homebuyers can use the tax credit with Federal Housing Administration (FHA) loans. NAR created a flyer to help members understand how the tax credit can be used in their respective state. The flyer identifies how to use the tax credit in one of the 11 states where housing finance agencies offer a product that monetizes the tax credit for FHA loans. It also provides some guidance for all other states where such programs do not currently exist.
NAR's FHA and the First Time Homebuyer Tax Credit Flyer >
In Depth: 2009 First-Time Home Buyer Tax Credit >
Contacts: Linda Goold, 202-383-1083
Contacts: Megan Booth, 202-383-1222
Contacts: Jerome Nagy, 202-383-1294
| | | | | IRS Calls for Repeal of Cell Phone Penalties | During 2008, the IRS began assessing penalties in situations in which an employer provided cell phones for their employees but did not require the employees to keep records of their personal use of the phones. Under provisions enacted during the 1980s, when cell phones were a luxury, rules were enacted that required cell phone users to distinguish their personal and business use. Personal use was treated as income to the employee.
A provision to repeal the 1980s rule was included in the House version of the rescue legislation that passed during the fall of 2008. NAR had joined more than 100 other organizations in calling for that provision. Unfortunately, the Senate version did not include the repeal provision. The House provision was dropped in the House-Senate conference.
National Public Radio and the Wall Street Journal recently called attention to this old tax rule and the dilemma the IRS faces in enforcing outdated rules. The IRS and Treasury have now called for Congress to repeal the 1980s rule. No timetable has yet been established, however, as the health reform legislation is currently the sole concern of the tax-writing committees.
Contacts: Linda Goold, 202-383-1083
Contacts: Lisa Brechtel, 202-383-1090
Contacts: Samuel Whitfield, 202-383-1131
| | | | | Health Reform Introduced with No Pay-for Provisions | Both the House and Senate have begun formal deliberations on health reform. The Senate Finance Committee is operating on a separate track from Senator Kennedy's Health, Education, Labor and Pensions Committee (HELP). The HELP Committee mark-up has begun. Because it has no jurisdiction over revenues, however, it does not include tax provisions. Only the Senate Finance Committee and House Ways and Means Committee can recommend revenue provisions.
The Senate Finance Committee had intended to release its package during the week of June 15 and to begin markup the week of June 22. That date has slipped. The Committee will not begin its markup until early July.
Neither the Finance Committee nor the Ways and Means Committee has agreed on the revenue raiser package. While both Chairman Rangel and Chairman Baucus continue to state their intentions to "pay for health care out of health care provisions," it is believed that additional revenues will be needed. NAR continues to be vigilant in efforts to fend off changes to the mortgage interest deduction.
Contacts: Linda Goold, 202-383-1083
| | | | Housing Report
| | | HUD Announces New Condominium Requirements for FHA Mortgages | The US Department of Housing and Urban Development (HUD) announced changes to the condominium approval process for Federal Housing Administration (FHA) insured mortgages in their release of Mortgagee Letter 2009-19. These changes are made in accordance with the Housing and Economic Recovery Act of 2008 (HERA), which prescribes changes to FHA's Section 203(b) Condominium Program. FHA will now allow lenders to determine project eligibility, review project determination, and certify to compliance of the National Housing Act. The lender is required to retail all the project legal documents, contracts, plans, insurance coverage, and other documentation in connection with their review and approval of the condominium project. HUD will continue to maintain a list of approved condominium projects. The requirements of the mortgagee letter are effective for all case numbers assigned on or after October 1, 2009.
Condominium hotels, sometimes referred to as "condotels", timeshares or segmented ownership projects, houseboat projects, multi-dwelling unit condominiums are not eligible under the FHA Condominium Program. Manufactured housing condominium projects are now eligible for FHA mortgage insurance. Site Condominiums are considered as single family detached units encumbered by a declaration of condominium covenants so condominium approval is not required but the Condominium Rider must be included in FHA case binders submitted for insurance. The changes regarding site condominiums are effective immediately.
Mortgagee Letter 2009-19: Condominium Approval Process — Single Family Housing >
HUD List of Approved Condominiums >
Federal Housing Administration >
Contacts: Jerome Nagy, 202-383-1233
Contacts: Megan Booth, 202-383-1222
| | | | | HUD Announces Increase in Dollar Amount for Energy Efficient Mortgages | The US Department of Housing and Urban Development (HUD) announced increases in the dollar amounts of energy efficient improvements in the Federal Housing Administration's (FHA) Energy Efficient Mortgage (EEM) Program. These changes are made in accordance with the Housing and Economic Recovery Act of 2008 (HERA).
Mortgagee Letter 2009-18 provides guidance to approved mortgagees on the new statutorily authorized maximum mortgage amounts for the program. In addition to the FHA maximum mortgage amount limit the mortgage loan amount for an EEM can be increased by the cost of effective energy improvements. The maximum amount of the portion of the EEM for energy improvements is the lesser of 5 percent of (1) the value of the property, (2) or 115 percent of the median area price of a single family dwelling, or (3) 150 percent of the conforming Freddie Mac limit.
Mortgagee Letter 2009-18: Energy Efficient Mortgages — Increase in the Dollar Amount of Energy Efficient Improvements >
Contacts: Jerome Nagy, 202-383-1233
Contacts: Megan Booth, 202-383-1222
| | | | | REALTORS® Support Increased Resources for FHA | Last week the House Financial Services Subcommittee held a hearing on FHA Oversight and Fraud. FHA's market share has grown from less than 3 percent to more than 25 percent in a short period of time, and NAR urged support for increased FHA staffing and technology resources to keep up with the demand. Despite negative media reports about FHA's soundness and oversight, studies show that FHA remains financially sound and should remain so in the coming years. In fact, HUD Secretary Donovan testified recently that FHA is expected to earn $1.7 billion in FY2010. In a submitted statement, NAR urged Congress to provide funding to upgrade antiquated computer systems and for additional professional staff.
Read NAR's statement >
Contacts: Megan Booth, 202-383-1222
Contacts: Jerome Nagy, 202-383-1233
| | | | | | Monday, June 22, 2009 | | |
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