HUD Issues Guidance on Home Warranty Contracts and RESPA
The General Counsel’s office at HUD issued guidance on the appropriate circumstances under which brokers and agents can be compensated on a per transaction basis for selling home warranties. NAR and industry partners have been working for more than two years to get HUD to accept legitimacy of these of these arrangements after an earlier intepretive letter raised great concerns for real estate professionals and their partners in the home warranty industry.

While HUD has accepted that agents and brokers can be paid on a per transaction basis and that review of transactions should be done on a case by case basis, concerns remain. HUD is accepting comments for 30 days and are due by July 26, 2010. NAR and its industry partners will be submitting comments and seeking additional clarifications.

HUD Guidance >
Electronic Comment Submissions >

Contacts: Kenneth Trepeta, 202-383-1294

Contacts: Marcia Salkin, 202-383-1092

Contacts: Scott Rinn, 202-383-7508

Conventional Residential Lending Report

Freddie Mac Revises HAMP Backup Modification Requirements
On June 18, 2010, Freddie Mac announced that it has revised certain eligibility, solicitation and reporting requirements for its HAMP Backup Modifications program.

The Freddie Mac HAMP Backup Modification option applies to all active stated income HAMP Trial Period Plans with an effective date on or before May 1, 2010 (previously April 1, 2010), and that have been deemed ineligible for a permanent HAMP Modification.

Under the revised Freddie Mac guidelines, if a borrower has made three HAMP Trial Period payments by June 18, 2010 and meets the Freddie Mac Backup Modification eligibility requirements, servicers must cancel the HAMP Trial Period Plan and evaluate the borrower for a Freddie Mac Backup Modification. Freddie Mac is requiring servicers to send an eligible borrower a Freddie Mac Backup Modification offer no later than 30 calendar days from the date of this notice, Bulletin 2010-14.

For further details, please review the Freddie Mac Bulletin (link below).

Freddie Mac Bulletin 2010-14 >
Template for report >

Contacts: Jeff Lischer, 202-383-1117

Contacts: Tony Hutchinson, 202-383-1120

Financial Regulatory Reform Nearing Completion
In the very early hours of Friday, June 25th, the House and Senate conference on Wall Street reform completed their work and voted to finalize H.R. 4173, the “Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.” It is expected that the House will vote to accept the revised version of the proposed legislation on Tuesday, June 29th, with the Senate following suit on the following Wednesday or Thursday. As initially proposed, President Obama could have the most sweeping financial regulatory reform bill since the Great Depression on his desk for signature prior to Independence Day.

Attached below is a link to the House Financial Services Committee page containing all of the actions taken on each section of the legislation.

HFSC: Dodd-Frank Wall Street Reform and Consumer Protection Act Conference >

Contacts: Tony Hutchinson, 202-383-1120

Contacts: Jeff Lischer, 202-383-1117

Environment Report

EPA Delays Lead Paint Certification Rule
On June 18, the Environmental Protection Agency (EPA) announced that it will provide renovation firms and contractors additional time to obtain the requisite training and certifications to comply with the new Lead Renovation, Repair and Painting (RRP) Rule. Until October 1, the EPA will not fine workers for lacking certification if they have applied to enroll or are enrolled in a class by September 30 and complete the training by December 31. This is largely a response to the Senate voting, May 27, to delay those certification requirements with an NAR-supported amendment to a supplemental spending bill (H.R. 4899). While delaying enforcement of the same requirements, the Agency wrote that it will continue to enforce the rule’s other requirements pertaining to lead-safe work practices.

Read the EPA Memorandum >

Contacts: Russell Riggs, 202-383-1259

Contacts: Austin Perez, 202-383-1046

Contacts: Helen Devlin, 202-383-7559

Flood Insurance Update
With progress on the larger bill (H.R. 4213) that includes a year-long extension of the National Flood Insurance Program (NFIP) stalled, attention has turned to efforts to moving an NFIP-only bill through Congress.

On June 23, the House unanimously passed by voice vote separate legislation that would extend only the NFIP until September 30, 2010 (H.R. 5569). NAR has been urging Congress not to wait for agreement on H.R. 4213 and pass the NFIP extension separately. Now that the House has acted, our focus has turned to the Senate where NAR is urging quick passage of the House bill.

As of Friday June 25, the Senate had not acted. NAR has written multiple letters including a joint industry letter and followed up directly with key members of the Senate to take up and immediately pass H.R. 5569. NAR has also issued an all-member Call for Action to keep up the pressure on the Senate. We would encourage you to write your members of Congress; just click on the link below to “Take Action Now!”

Since June 1 the NFIP has not had statutory authority to issue new or renewal flood insurance policies, which are required for mortgages in the 100-year floodplain. The various lending authorities (FEMA, Fannie, Freddie, etc.) have issued guidance describing the documentation they will accept as proof of flood insurance purchase while the NFIP is shutdown.

Visit the Flood Insurance Update page listed below to download the authorities’ guidance documents for lenders during the NFIP lapse.

Flood Insurance Update >
Take Action Now! >
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

Federal Tax Report

June 30 Closing Date Remains Unchanged
The Senate has adopted Senator Harry Reid’s (D-NV) amendment to the pending jobs and extenders legislation (HR 4213) that would extend the closing date for the homebuyer tax credit from June 30, 2010 to September 30, 2010. The amendment would apply only to purchasers who have satisfied the April 30 binding contract rule for the $8000 and $6500 tax credits. The amendment creates no new eligibility for the credit. The provision is now part of HR 4213, the pending Jobs/Loophole Closer bill. Passage of HR 4213 requires 60 votes. Three efforts to achieve the 60 votes have failed.

Even if the bill can secure the necessary 60 votes, several more votes will be required in the Senate. The bill then returns to the House. There is no guarantee that the House would adopt the Senate amendment.

The extension could be offered to another bill that includes tax provisions. The Senate will be considering a small business bill that includes tax provisions during the week of June 28. NAR continues to aggressively push House and Senate leadership to extend the date.

The Home Buyer Tax Credit >

Contacts: Linda Goold, 202-383-1083

Contacts: Samuel Whitfield, 202-383-1131