NAR Members & Our Concerns Were Heard by Congress Last Week

WASHINGTON — It’s not enough for House and Senate lawmakers to pass legislation that will help bring health back to the housing industry; they have to fashion bills that can go the distance and get President Bush’s signature.

Thousands of REALTORS® at the 2008 NAR Midyear Legislative Meetings & Trade Expo are spreading that message this week in the halls of Congress.

The May meetings — REALTORS®' chance to trek to Capitol Hill each year and meet with their legislators — are coming this year at an opportune time.

The House last week passed sweeping foreclosure prevention legislation that includes NAR-backed reforms to FHA and the secondary mortgage market companies Fannie Mae and Freddie Mac.

The House bill also creates a tax credit for home buyers and would make permanent the FHA and conforming loan limit hikes authorized earlier this year as part of an economic stimulus package.

But the bill also includes a controversial plan to let FHA insure replacement financing for buyers after their troubled mortgage has been written down to 85 percent of the current appraised home value.

FHA Commissioner Brian Montgomery has characterized that plan as a “federalization” of the mortgage market and the White House has threatened a veto.

What About the Buyer Tax Credit?

The provision threatens to derail not only the long-sought reforms to FHA and the secondary mortgage market companies, but also holds hostage the homebuyer tax credit. If considered by itself, the tax credit would pass the House and the Senate overwhelmingly and would probably be signed by the president, said NAR tax analyst Linda Goold, speaking at a federal issues update Wednesday.

The House version of the credit, for $7,500, is for first-time buyers and could be taken for the purchase of any home as long as it’s the buyer’s primary residence. The Senate version is for $7,000 and would be for any buyer but it’s limited to foreclosed homes. NAR prefers the House version.

Update Flood Insurance Program

Also on REALTORS®' agenda: flood insurance and small-business health plans.Reauthorization of the national flood insurance program is probably the fastest-moving NAR issue in Congress.

The Senate this week passed a five-year reauthorization in a bill that also provides money for the Federal Emergency Management Agency to update flood mapping. It also forgives almost $18 billion in debt that FEMA incurred after Hurricane Katrina and other disasters. President Bush would probably sign that bill.

However, the House version would add wind damage to the program, something the Senate and the president oppose. Even so, the bill is likely to be passed in some form in the next few weeks because Congress is determined to act before the hurricane season begins in June, said NAR analyst Mark Washko at the forum.

Keep Moving on Health Insurance Bill

Just out of the starting gate is a new attempt at small business health insurance legislation, and the early signs are encouraging. Drafted over the last 15 months with close help from NAR, the Small Business Health Options Program (S. 2795), was designed specifically to address concerns that derailed NAR-backed health insurance legislation two years ago.

Like the previous legislation, the bill would encourage states to reform state purchasing pools and would give a role to associations to help members band together to shop for affordable coverage.

But in a change, it wouldn’t prescribe the minimum benefits that plans must cover, and it would be overseen by state regulators, though with some federal involvement through the U.S. Department of Health and Human Services.

Key interest groups representing small businesses, insurance commissioners, and some insurance providers have either come on board or had positive words for the bill, signaling that it could be effective at getting the health insurance ball rolling again.

A House companion bill, H.R. 5918, was introduced shortly after the Senate bill. “We have a tall order ahead of us,” NAR Chief Lobbyist Jerry Giovaniello, said candidly at the forum.

But thanks to NAR’s bipartisan approach to all of its issues, he added, lawmakers should welcome REALTORS®’ visits this week.

— By Robert Freedman for REALTOR® magazine online