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Nation

MBA JOINS NAR IN CAUTIONING CONSUMERS ON RISKY LOANS
On August 24, 2005, James Hagerty of the Wall Street Journal reported that the Mortgage Bankers Association has joined the NAR, Federal Reserve Chairman Alan Greenspan, and bank regulators in sounding the alarm about interest-only loans. In a new report, MBA confirmed that home loans with low initial repayments are helping to put more consumers in homes but warned that such borrowers become vulnerable to "potentially substantial payment shocks." In particular, members of MBA are concerned that borrowers may be unprepared for the hefty increase in monthly payments when it comes time to pay off the principal, in addition to the possibility of a double payment shock if interest rates rise as the principal payments kicks in. The report also warns consumers about "payment-option" loans, which provide borrowers with several payment options each month, because the option leads to an increase in loan balances, or negative amortization. Note: To educate consumers on risky loans and abusive lending practices, NAR has released a new brochure in partnership with the Center for Responsible Lending. The brochure, titled “Shopping for a Mortgage? Do Your Homework First," can be downloaded for free or ordered at REALTOR.org.

RETIRING NAR C.E.O. OFFERS SAGE ADVICE AND OBSERVATIONS
NAR C.E.O., Terry Mc Dermott, urged association leaders to work with each other to achieve important legislative goals—including state protection of private property rights—in mid August at the NAR Leadership Summit in Chicago. The Summit annually bring together presidents-elect and executive officers of state and local Realtor® associations. McDermott, who is retiring from NAR at the end of this year after serving in his post since 1997, outlined five challenges association leaders will face in 2006.
· Passing state legislation to curb eminent domain abuses.
· Enacting a new online listing display policy as negotiated by NAR and the U.S. Department of Justice.
· Reacting constructively to the U.S. Government Accountability Office’s inquiry into competition in the real estate industry.
· Keeping banks out of real estate brokerage and property management.
· Ensuring tax law changes are positive for Realtors®.
McDermott stressed the benefit of collaboration and building coalitions with like-minded trade groups and organizations to overcome market challenges and achieve legislative goals. Finally, he predicted that the coalition supporting association health plan legislation would succeed in passing the Small Business Health Fairness Act in 2006.

NOTE: Congress is in recess until September 6, 2005.