Nation

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Nation

HOUSE PASSES H.R. 1427—GSE REFORM
On May 29, 2007, the U.S. House of Representatives passed H.R. 1427, the “Federal Housing Finance Reform Act of 2007,” by an overwhelming bipartisan vote of 313 to 104. The legislation overhauls the regulatory oversight of the government sponsored enterprises (GSE) of Fannie Mae, Freddie Mac and the Federal Home Loan Banks, and creates a new, independent regulator with broad powers analogous to current banking regulators. The regulator’s primary responsibility will be to ensure the safety and soundness of the institutions. The bipartisan bill was originally introduced by Financial Services Committee Chairman Barney Frank (D-MA), along with Representatives Richard Baker (R-LA), Mel Watt (D-NC) and Gary Miller (R-CA). The bill was overwhelmingly passed by the Financial Services Committee on March 29, 2007. NAR has long-supported GSE reform, and has led the support for H.R. 1427 by testifying in support of the legislation and employing NAR’s grassroots advocacy which resulted in over 35,800 REALTOR letters sent to the Members of Congress. One particular provision in H.R. 1427 that NAR and a number of our state associations focused our advocacy efforts on is the authority to allow regional adjustments to the conforming loan limits in high-cost areas, which will undoubtedly help more moderate-income working families in high-cost areas qualify for safer GSE loans. Now, on to the Senate where members are deeply divided on how to best regulate the GSE’s while the Bush Administration is pressuring for more control over them. Expect obstacles getting this legislation to the President for signature into law this year.

TIGHTER LENDING STANDARDS AFFECTING HOME SALES

Sales of existing homes declined nation-wide in April, largely the result of tighter lendiong standards and a drop in the number of subprime mortgage products, according to NAR analysts. Total existing home sales, including single-family, townhomes, condominiums and co-ops, fell 2.6 percent to a seasonally adjusted annual rate of 5.99 million units in April from an upwardly revised level of 6.15 million units in March, and are 10.7 percent lower that the 6.71 million-unit pace in April 2006. Accordinjg to NAR Senior Economist, Lawrence Yun, NAR anticipated the slower pace in home sales because many subprime products are no longer available and there is increased scrutiny by lenders to halt risky loan origination.