NAR Govt Affairs Update

Congress Returns to Washington, DC on September 5, 2007 Mortgage Market Turmoil will be a Top Priority Although Members of Congress have been at home during the “District Work Period” NAR has been working with Congressional Staff, Regulatory Agency Staff and other housing industry groups to address the serious issues that have developed in the Mortgage Market over the summer. NAR has prepared the following talking points to help you address potential questions from your members.If you would like to distribute this email you might want to use the PDF attached. TALKING POINTS:
Key elements of the administration proposal to be released today have already been suggested by NAR as early as April of this year.
Expansion of FHA insurance for Delinquent Borrowers FHA will offer government backed refinancing to subprime borrowers who have generally good credit records and income verification, even if the borrower has recently become delinquent. Current FHA underwriting rules prevent FHA from guaranteeing a loan to a delinquent borrower.
The waiver of the underwriting rule is designed to assist borrowers hit by so called “exploding ARMS”, which adjust substantially upward from an initial low teaser rate.
Fannie Mae and Freddie Mac have already adjusted their guidelines to permit refinancing for delinquent borrowers.
Eases 3% equity requirement for FHA insurance opening refinancing into an FHA mortgage to people who are upside down on their mortgages.
Raising the loan limits in high cost areas to $417,000 from current $362,000
Encourage Private Loss Mitigation Efforts. HUD and Treasury will work with lenders to identify borrowers at risk of default and encourage stepped up loss mitigation efforts.
NAR has produced a series of consumer education brochures with the Center for Responsible Lending, and NeighborWorks® America.
These brochures are available at www.realtor.org/subprime
Freddie Mac/Fannie Mae
The administration is not seeking to expand the ability of Freddie Mac and Fannie Mae to purchase loans, despite calls from NAR and some Members of Congress to do so.
Mortgage Forgiveness Tax Relief
The administration will ask for a temporary suspension of the law requiring that any amount of mortgage forgiveness be treated as income by the IRS.
In anticipation of potential problems, NAR worked with Congressmen Rob Andrews (D-NJ) and Ron Lewis (R-KY) to introduce HR 1876, the Mortgage Cancellation Relief Act of 2007 on April 17, 2007
Companion legislation in the Senate S. 1394 was introduced by Senator Debbie Stabenow (D-MI) on May 15, 2007
NAR will work closely with our REALTOR® champions on Capitol Hill when Congress reconvenes after Labor Day to implement the reforms necessary to develop greater stability in the market.