Nation

NAR SUPPORTED PROVISIONS INCLUDED IN GSE REFORM LEGISLATION
On May 25, 2005 the House Financial Services Committee approved by a vote of 65-5 legislation to reform the housing Government Sponsored Enterprises (GSEs) i.e. Fannie Mae, Freddie Mac and the Federal Home Loan Banks. Stemming from Realtor® Hill Visits and letters to Members of Congress from NAR's Action Center booth during our Midyear Meeting, we were able to include several NAR-supported provisions preserving the housing mission of Fannie Mae and Freddie Mac. The provisions:
· Create a new, independent regulator for the GSEs replacing the Office of Federal Housing Enterprise Oversight to ensure the GSE's financial safety and soundness;
· Do not require the GSEs to shrink their retained mortgage portfolios. NAR opposed a "statutory limitation" and supported giving the regulator authority to adjust both portfolios and capital requirements for safety and soundness purposes.
· Explicitly allow the GSEs to continue using their automated loan underwriting systems, consumer education and counseling initiatives.
· Increase the conforming loan limits in high cost areas. This provision will raise the conforming loan limit in designated high cost areas to either the median home price of that area or 150% of the current limit.
· Create a new "affordable housing fund" composed of 5 percent of the GSEs after-tax profits that will be used for grants and programs to provide low- and extremely low-income housing. This fund is in addition to historic low- and moderate-income housing goals for the GSEs.
The bill (H.R.1461, The Federal Housing Finance Reform Act of 2005) now heads to the House floor for consideration soon. In the Senate, Banking Committee Chairman Richard Shelby (R-AL) is preparing a Senate version that he expects to introduce soon.

NEW MORTGAGE GUIDELINES PLANNED FOR 2006
Amid increasing concern about the risks of certain mortgage products, banking regulators are poising to issue new guidelines for mortgage lenders. Mortgage products that have hit regulators radar screens include: interest only loans (borrowers can pay interest and no principle in a loans early years); low- or no-documentation loans (borrowers provide less than full or no verification of income and assets); and, option ARMs (borrowers have multiple payment choices but making minimum payments can result in increasing loan balances). Recent data shows that the prevalence of alternative loan products is much more pronounced that previously thought, accounting for 61 percent of all mortgages taken out to purchase homes in January and February of 2005. In 2002, the products were only 2 percent of all mortgages. The new guidelines will be announced early next year. In May 2005, regulators issued, for the first time, guidelines for managing credit risk associated with home equity loans.

Report on the NAR Mid-Year Meetings May 9-14, 2005
In addition to the usual discussion about federal legislation of interest to REALTORS®, two topics received a lot of attention from this years attendees: the announcement that President George Bush would speak to REALTORS® on Friday, May 13 and a Monday, May 9 Wall Street Journal report that said sources close to the case have indicated the Department of Justice will sue the National Association of REALTORS® over its Internet display policies.

The Presidents Speech
In his speech, President Bush gave his assurance that he doesnt see the mortgage interest deduction as a negotiable item in any tax reform that Congress passes. The mortgage interest deduction is an important part of the tax code, the president said, because it enables more Americans to own a home. His remarks came as a reassurance after some news reports have explored the possibility that even bedrock tax code provisions could be open to change as part of tax reform. Bush also thanked REALTORS® for their key role in helping the country reach a record 69 percent homeownership rate and reiterated his support for small business health plans (HR 525 and S 406) giving small businesses the ability to band together and negotiate affordable health care rates, which is a top priority of the NATIONAL ASSOCIATION OF REALTORS® and received a standing ovation from the 4,000 REALTORS® who heard him speak.

DOJ Anti-Trust Investigation
NAR is considering blending key provisions of its two existing Internet listing display policies into a single set of rules governing all Internet displays of property listings from the MLS as part of its ongoing negotiations with the U.S. Department of Justice (DOJ). The department has been conducting an antitrust investigation of NARs Virtual Office Website (VOW) policy for the past 20 months.

NARs VOW policy, adopted in 2003, is based on the premise that real estate brokerage can be conducted online. It regulates the display of listing data on a Virtual Office Website, which typically provides more detailed property information and requires consumers to register, disclose certain information about themselves, and agree to terms of use. NARs Internet Data Exchange (IDX) policy, adopted in 2000, governs the advertising display of abbreviated listing data on MLS participants sites. Today, IDX displays of listings are the dominant method through which brokers share their listings with one another over the Internet.

NAR General Counsel Laurie said that an enhanced IDX policy that incorporates aspects of the VOW policy would serve as the foundation for continuing negotiations with the Department of Justice. Janik met with DOJ officials the week of May 9 as part of the ongoing investigation.

Contrary to the Wall Street Journals report, Janik said she was told by DOJ officials that a lawsuit against NAR has not been authorized yet by the department, and negotiations will continue. We are exploring with the DOJ the concept of blending the IDX and VOW policies into one that would govern all internet display of listings, Janik said.

Note: Saturday, May 14, the Board of Directors of the National Association of REALTORS®, in preparing to negotiate with the U.S. Department of Justice, voted to fold key aspects of its VOW policy into its Internet data exchange (IDX) policy and affirm the principle that brokers own their listings and maintain the right to determine their use.
Visit on Capitol Hill with the Colorado Congressional Delegation: On Wednesday approximately 100 Colorado REALTORS® met with our representatives and senators. Every member of Colorados delegation except Bob Beauprez supports HR 111/S 98, the Community Choice in Real Estate Act to keep banks out of real estate. Representative Beauprez reiterated his position, which is that he would support the legislation if it offered the same protection for banks to keep real estate companies out of the banking business. Senator Wayne Allard, Colorados most powerful federal legislator, promised to look into the Department of Justice anti-trust investigation. The delegation split along party lines over the Small Business Health Fairness Act: the Republicans generally support the concept but Democrats said a more broad-scale health insurance reform effort is needed, calling the Act a band-aid that would not solve the problem facing millions on uninsured Americans. Note: According to a recent study by NAR, 28 percent of REALTORS® are uninsured and another 4 percent have insurance through COBRA, which means they will likely become uninsured as well once their coverage expires.