Previous Issues

In This Issue:

REALTOR® Insider: D.C. News and Events

Obama Administration Announces Enhancements to HAMP, FHA Refinances

Business Report

House and Senate Approve Second and Final Health Care Bill

Commercial Finance Report

NAR Requests TALF Extension in Letter to the U.S. House Financial Services Committee

Conventional Residential Lending Report

NAR Posts Webinar on Upcoming HAFA Program

Environment Report

Flood Insurance Update

Housing Report

NAR, ALTA call on FHA to Clarify Stance on Private Transfer Fees


REALTOR® Insider: D.C. News and Events

 
Obama Administration Announces Enhancements to HAMP, FHA Refinances
On March 25, 2010, the Obama Administration, including Federal Housing Administration (FHA) Commissioner David H. Stevens, announced changes to the Home Affordable Modification Program (HAMP) and enhancements to the FHA’s refinance program. The Federal cost of these changes will be funded through the $50 billion allocation for housing programs under the Troubled Asset Relief Program (TARP).

Under the HAMP enhancements, unemployed borrowers meeting eligibility criteria will have an opportunity to have their mortgage payments temporarily reduced to an affordable level for at least 3 months and up to six months for some borrowers while they look for a new job. Eligible homeowners under HAMP must live in an owner occupied principal residence, have a mortgage balance less than $729,750, owe monthly mortgage payments that are not affordable (greater than 31 percent of their income) and demonstrate a financial hardship. Servicers are required to consider an alternative modification approach that emphasizes principal relief.

The FHA refinance option provides more opportunities for lenders to restructure loans for some families who owe more than their home is worth. This is a voluntary program for lenders and homeowners and is primarily targeted to non-FHA borrowers refinancing into a FHA-insured mortgage. To be eligible for a FHA refinance homeowners must be current on their mortgage. This rewards responsible homeowners and creates stabilizing incentives in the housing market.

Total mortgage debt for the borrower after the FHA refinancing, including both first and any other mortgages, cannot be greater than 115 percent of the current value of the home. This will give homeowners a path to rebuild equity in their homes and an affordable monthly payment. Lenders must write down principal of the original first mortgage at least 10 percent to reduce the debt burden on borrowers and the loans may not exceed 97.75 percent of the value of the home. All mortgage debt including second liens must be written down to a maximum of 115 percent of the current value of the home.

HAMP Enhancements Overview >
FHA Refinances for Underwater Homeowners >
HAMP, FHA Refinances FAQ >
Helping Homeowners with Financial Hardships: Two Examples >

Contacts: Jerome Nagy, 202-383-1233

Contacts: Jeff Lischer, 202-383-1117

Business Report

 
House and Senate Approve Second and Final Health Care Bill
On Thursday, March 25th, 2010, the Senate and House of Representatives approved the last of two health reform bills. HR 4872, the Health Care and Education Reconciliation Act, makes changes to HR 3590, the Patient Protection and Affordable Care Act, signed into law by the President on Tuesday, March 23rd. HR 4872 now goes to the President who has indicated that he will sign the bill.

While the House had already approved HR 4872 on March 21st, 2010, a second House vote was required when the version of the HR 4872 passed by the Senate in the afternoon differed from the House version. (Two two student loan provisions were deemed in violation to the Senate’s rules and were removed from the Senate version.) . As a result, the bill had to be reconsidered by the House once again.

The amended version of the bill passed the Senate by a 56-43 vote and the House by a vote of 220- 207.

For more information on the bill’s provisions and the roll call votes, please go to NAR’s Health Reform webpage located at www.realtor.org/healthreform.

For more information on NAR’s advocacy efforts on health reform, please go to www.realtor.org/healthreform.

www.realtor.org/healthreform >

Contacts: Marcia Salkin, 202-383-1092

Contacts: Ken Wingert, 202-383-1196

Contacts: Scott Rinn, 202-383-7508

Commercial Finance Report

 
NAR Requests TALF Extension in Letter to the U.S. House Financial Services Committee
Last week, NAR submitted a letter before the House Financial Services Committee hearing on “Unwinding Emergency Federal Reserve Liquidity Programs and Implications for Economic Recovery.” Specifically, NAR asked policymakers to extend the Term Asset-Backed Securities Loan Facility (TALF) for legacy and new newly issued commercial mortgage-backed securities (CMBS) through the end of 2010.

Last November, the first CMBS in over 18 months was sold with assistance from TALF. Additional loans are now in the program’s pipeline. However, due to the long-term nature and complexity of putting together CMBS deals — often taking between six months and two years to complete — potential investors will be excluded from participation as a result of the March 31, 2010, and June 30, 2010, sunset dates for legacy and newly issued CMBS, respectively. Given additional time, TALF will to continue to help thaw the nearly frozen private commercial mortgage markets.

TALF was created last year in an effort to thaw the frozen $900 billion CMBS market, which has been a significant source of funding for the commercial real estate industry in the past decade. Under the program, the Federal Reserve provides investors with low-cost loans to buy securities backed by commercial real estate debt. It is estimated that roughly a dozen more CMBS deals are in the works, with most investors hoping to tap into TALF.

Read NAR’s letter to the House Financial Services Committee >

Contacts: Jeff Lischer, 202-383-1117

Contacts: Megan Booth, 202-383-1222

Contacts: Vijay Yadlapati, 202-383-1090

Conventional Residential Lending Report

 
NAR Posts Webinar on Upcoming HAFA Program
NAR has posted a Webinar on its short sales web page to give REALTORS® more details about the Home Affordable Foreclosure Alternatives Program (HAFA) that takes effect April 5, 2010. For homeowners unable to retain their home through the HAMP loan modification program, HAFA offers the possibility that they will still be able to avoid foreclosure with a short sale or a deed-in-lieu of foreclosure. The Webinar provides an overview, but REALTORS® who will sell property covered by the HAFA program will need to become very familiar with the process and the forms that will govern the transaction.

NAR’s HAFA Webinar (45 minutes) >
NAR’s Short Sales Website, including HAFA Guidelines, Forms, and FAQs >

Contacts: Jeff Lischer, 202-383-1117

Contacts: Tony Hutchinson, 202-383-1120

Environment Report

 
Flood Insurance Update
The Senate adjourned without approving H.R. 4851, which would have extended a number of programs including the National Flood Insurance Program (NFIP). Authority for the NFIP expires at midnight on Sunday March 28, which will delay real estate transactions where a new flood policy is required but has not been issued before the expiration date. Efforts to reach bipartisan agreement between the House and Senate failed over how to pay for the broader bill. A procedural motion has been filed in the Senate setting up a vote the week of April 12th. NAR has stressed with Congress the vital importance of flood insurance to the real estate market. We will continue to make every effort and advocate for legislation that extends the program for as long as possible.

Visit NAR’s Homepage on Natural Disaster/Flood Insurance >

Contacts: Austin Perez, 202-383-1046

Contacts: Russell Riggs, 202-383-1259

Contacts: Helen Devlin, 202-383-7559

Housing Report

 
NAR, ALTA call on FHA to Clarify Stance on Private Transfer Fees
On March 23, 2010, the National Association of REALTORS® (NAR) and the American Land Title Association (ALTA) sent a joint letter to Federal Housing Administration (FHA) Commissioner David H. Stevens to request that HUD clarify its position prohibiting the use of private transfer fees for FHA-insured mortgages and oppose private transfer fees for other mortgages as well. Both NAR and ALTA believe these fees generate revenue for developers and investors but often provide no service for home buyers.

A private transfer fee commonly occurs when a builder agrees to add a covenant to the deed of each new home, or a homeowner agrees to add a covenant to an existing home, that requires future buyers of the property to pay a percentage of the selling price to a designated beneficiary. The transfer fee rule is a covenanted mandate so it is extremely difficult to reverse the requirement once it is in place. NAR and ALTA have concerns about the transfer fee because it increases the cost of homeownership. There is also virtually no oversight on where or how proceeds can be spent, on how long a private transfer tax may be imposed, or on how the fees should be disclosed to home buyers.

NAR, ALTA Letter to FHA on Private Transfer Fees >

Contacts: Jerome Nagy, 202-383-1233

Contacts: Megan Booth, 202-383-1222

Contacts: Scott Rinn, 202-383-7508

Monday, March 29, 2010

Useful Info:

Government Affairs Homepage

NAR News

Health Insurance Reform

First-Time Home Buyers Tax Credit

Home Valuation Code of Conduct (HVCC)

Short Sales

FHA News and Resources

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Contact Government Affairs staff