2011 NAR Legislative & Regulatory Year in Review

Throughout 2011, NAR's legislative and regulatory agenda has focused on ensuring the continued flow of capital into the real estate market, preserving residential and commercial property ownership, and protecting the business interests of its members. NAR has made significant progress on all fronts and the issues highlighted below are just a sampling of the advocacy activity conducted on behalf of REALTORS® this year

Ensuring the Flow of Capital Into the Real Estate Market

FHA, Fannie, and Freddie Loan Limits—NAR successfully obtained a two year extension for the FHA limits, through December 31, 2013. This restored the previous FHA limits, helping consumers in 669 counties in 42 states. In addition, NAR fought proposals to roll the Fannie and Freddie conforming loan limits back to a single $417,000 nationwide standard. This proposal would have reduced loan limits in 124 counties in 21 states. Additionally, a House proposal to eliminate the floor (the low cost limit) for Federal Housing Administration-insured FHA mortgages did not advance. This proposal would have decreased limits in 257 counties in 34 states.

Risk Retention/QRM Proposed Rule—NAR spearheaded a coalition of nearly 50 members to oppose a rule proposed by six Federal regulators that would implement the risk retention requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Act requires entities that securitize mortgage loans to retain 5% of the credit risk unless the mortgage is a qualified residential mortgage (QRM) or is otherwise exempt (GSE loans (while in conservatorship) and FHA loans would be exempt). NAR's comment letter asks the six federal regulators to withdraw, revise, and republish the rule for public comment.

FHA Reform—NAR worked with Congress and the Obama Administration to protect the affordability and availability of Federal Housing Administration (FHA) mortgage insurance. Specifically, NAR successfully fought proposals to increase FHA's downpayment requirement to 5%. FHA estimates that such an increase would have eliminated 345,000 borrowers in the last year alone.

Preserving the Value of Property Ownership

Mortgage Interest Deduction, Deficit Reduction & Tax Reform—Given the near certainty that an effort will be made to cut back on the mortgage interest deduction, NAR has been meeting with Members of Congress and senior staff in preparation for future tax reform and deficit reduction debates. As no single proposal has yet emerged as the basis for reforms, these meetings have focused on building an understanding of the concerns that arise in the context of mortgage interest deduction (MID) reform and identifying those issues which require further discussion and education. In addition, NAR has engaged consultants to (1) devise the means to evaluate and compare reform proposals when they are formally proposed and (2) develop the extensive data needed on the impact of changes to the limits on home equity deductions, reduced caps on mortgage deductions and limitations on second home deductions. In anticipation of future advocacy efforts, NAR has also conducted voter focus groups and national polling on MID-related issues.

National Flood Insurance Program (NFIP)—With NAR's support, the House passed H.R. 1309 (Biggert, IL-R; Waters, D-CA) that includes a 5-year extension of the National Flood Insurance Program (NFIP). While the bill includes tough premium rate reforms, NAR successfully worked to minimize the negative impact of those reforms and defeated several privatization efforts, including one to terminate the NFIP. Thanks to REALTORS®, this effort failed on a 38-384 vote. While the Senate continues to work on its version of the 5-year reform bill, NAR has secured another short-term extension until May 31, 2012 and is working to ensure that Congress finishes the 5-year reform bill in the interim.

Protecting REALTORS®' Business Interests and Activities

Mortgage Assistance Relief Services Rule (MARS)—After continued efforts to urge reinterpretation or amendment of the rule, including a July 7th meeting between President Phipps and Federal Trade Commission (FTC) Chairman Jon Leibowitz, the FTC announced on July 15th that it will forbear from enforcing most provisions of its MARS Rule against real estate professionals who assist consumers in obtaining short sale approval from their lenders or servicers. Starting July 15, 2011, real estate professionals acting in their licensed capacity no longer needed to comply with most of the Rule's requirements, including the required disclosures, advance fee ban, and recordkeeping requirements.

Short Sales—To bring relief to distressed homeowners that want to execute a short sale in lieu of a foreclosure, NAR supports H.R. 1498, the "Prompt Decision for Qualification of Short Sale Act of 2011" that requires servicers to decide whether to approve a short sale within 45 days of completion of the file. This legislation, developed based on direct NAR input, was originally introduced in the 111th Congress. Based on continuing need expressed by REALTORS®, NAR encouraged the sponsors to reintroduce the bill in the current 112th Congress.

Home Warranty—After three years of effort to get the Department of Housing and Urban Development to withdraw an informal letter calling the sale of home warranty contracts by real estate agents and brokers a likely Real Estate Settlement Procedures Act (RESPA) violation, NAR began a legislative effort to get the guidance reversed. The topic was a major issue in a spring broker fly-in. NAR, working with industry partners, secured a hearing on the issue in the House Financial Services Committee in July 2011. Legislation to address the problem, H.R. 2446, has been offered by Representatives Biggert (R-IL) and Clay (D-MO). NAR is working to secure co-sponsors for the House bill, as well as securing support for a similar measure in the Senate.

The above items are just a small portion of the many issues NAR worked on in 2011. View a more detailed list of issues >

Notice: The information on this page may not be current. The archive is a collection of content previously published on one or more NAR web properties. Archive pages are not updated and may no longer be accurate. Users must independently verify the accuracy and currency of the information found here. The National Association of REALTORS® disclaims all liability for any loss or injury resulting from the use of the information or data found on this page.