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Left to right: SILVAR Past President Gene Lentz, Board Director Bill Rehbock, Affiliate Chair Richard Miller, Board Director David Tonna, President-elect Carolyn Miller, C.A.R. President LeFrancis Arnold, President Suzanne Yost, Los Gatos/Saratoga Chair Cassie Maas, and C.A.R. Past President Jim Hamilton

SILVAR members from the Menlo Park/Atherton and Los Gatos/Saratoga districts had the opportunity to meet and listen to California Association of REALTORS® President LeFrancis Arnold at their meetings this week. Meeting California REALTORS® across the country is part of his duty as president of the state REALTOR® association, said Arnold.

Arnold said SILVAR REALTORS® are very fortunate to be working and living in Silicon Valley because compared to other parts of the state, the region was not hit as hard by the housing downturn. He has observed the growing interest in residential real estate here and in the state from foreign buyers.

“The housing industry is one of the most important assets in California,” said Arnold. Proof of this is in the billions of dollars of residential real estate purchased by international investors. Arnold noted the top foreign buyers come from Canada, China, Mexico and Great Britain, and they are looking at properties in California.

“No immigrant comes to America with a desire to be a tenant. They dream of homeownership,” said Arnold.

Global real estate is growing in importance, said Arnold. Foreign investors and immigrants create opportunities and bring diversity not only in housing, but also in the election process. It is important that everyone, regardless of race, is given the opportunity for homeownership. Arnold said another part of his duty as C.A.R. president is to meet with legislators and deliver this message. It is what C.A.R., SILVAR and the National Association of REALTORS® do at the state, local and national levels.

Arnold underlined the importance of political advocacy. REALTORS® at the local, state and federal level fight legislation that will negatively affect homeownership and allow REALTORS® to be political activists. He stressed advocacy for homeownership needs to continue because the threats are very real, particularly proposals to impose transfer taxes and continuing discussions on eliminating or reducing the mortgage interest deduction (MID).

Left to right: SILVAR President Suzanne Yost, Menlo Park/Atherton Chair Chris Isaacson, C.A.R. President LeFrancis Arnold and SILVAR Past President Gene Lentz

Arnold said REALTORS® at the local, state and national level will continue to work as a team and fight legislation that hurts the American Dream of homeownership.

“Each of us has a role to play,” said Arnold. “We have to continue to fight for homeownership rights.”

This week SILVAR members joined their fellow REALTORS® from across the nation and convened in our nation’s capital for the National Association of REALTORS® Midyear Business Meetings and visits with members of Congress, including U.S. Representatives Anna Eshoo and Mike Honda during the meetings.

The SILVAR delegation included SILVAR President Suzanne Yost, President-Elect Carolyn Miller, NAR Directors Jeff Barnett, Jim Hamilton, John Tripp, C.A.R. Directors Leannah Hunt, Susan Tilling, Federal Political Coordinator and SILVAR PAC Trustee Carole Feldstein and Joanne Fraser.

Below are the issues that were brought to the attention of our legislators.

REO Bulk Sale Initiative
FHFA (Federal Housing Finance Agency) has announced a pilot program to bulk sale 484 properties in Riverside/San Bernardino/Los Angeles counties, though no date has been set for these sales. Nineteen members of California’s Congressional Delegation have signed on to a letter to Acting Director Edward DeMarco stating their opposition to a proposed bulk sale pilot program for Fannie Mae REOs. Many members of Congress on both sides of the aisle have been frustrated with how Edward DeMarco has utilized the GSEs in addressing their distressed properties and as a tool to address the housing market.

REALTORS® informed members of Congress that bulk sales of Fannie Mae and Freddie Mac properties will cost the tax payers money because they will be sold for less than what they could receive if these properties were sold individually.

Preserve the Mission and Purpose of the FHA Program
The House Financial Services Committee has passed H.R. 4264, the “FHA Emergency Fiscal Solvency Act of 2012,” that will provide FHA (Federal Housing Administration) with additional tools to mitigate risk without overburdening consumers. Several members of Congress have written to the U.S. Department of Housing and Urban Development (HUD) to express concern over FHA’s condominium policies that make it very difficult to purchase a condo with FHA financing.

REALTORS® asked members of Congress to Support H.R. 4264, the “FHA Emergency Fiscal Solvency Act of 2012,” as it was passed out of committee. The bill seeks to balance the need to improve the fiscal solvency of the FHA fund with costs and availability to consumers. Members of Congress were also asked to submit comments to HUD opposing the condominium regulations, and expressed concern that qualified homebuyers are being shut out of often the most affordable homeownership option available.

Protect Homeownership Tax Benefits
H.R. 4202, which has been introduced in the House of Representatives, would extend the mortgage cancellation relief for two more years, through December 31, 2014. H.R. 4336, a similar bill, which would extend it for one year. The Senate as introduced S. 2250, which also extends the mortgage cancellation relief for two years. REALTORS® urged that more time is needed to restore equilibrium in the market. More than 20 percent of all homeowners currently owe more on their mortgages than the current fair market value of their homes. Members of Congress were asked to co-sponsor H.R. 4336 or H.R. 4202.

Reauthorize the National Flood Insurance Program (NFIP)
In July 2011, the House of Representatives voted 406-22 to approve a five-year reauthorization of NFIP, H.R. 1309. The Senate Banking Committee has since unanimously reported a similar bill, S. 1940, which continues to await full Senate consideration. Forty-one senators recently wrote their leadership urging them to bring up such a measure for debate. REALTORS® thanked members of Congress for voting for H.R. 1309, and urged the Senate to pass a five-year flood insurance reauthorization bill before the current temporary extension of the flood bill expires on May 31.

Secure the Future of Homeownership
During the first session of the 112th Congress, the House Financial Services and Senate Banking Committees held numerous hearings on the housing market, primarily focusing on foreclosure/loss mitigation and the state of the nation’s housing. Year-to-date, the House Financial Services Committee has not held any hearings on GSE reform, appraisals, short sales or QRM/QM. The Senate Banking, Housing and Urban Affairs Committee held only one two- part hearing on the state of the nation’s housing market. NAR expects that with a renewed focus by the Administration and Congress on housing concerns, additional hearings on all three issues will be initiated and that NAR will be a primary participant.

REALTORS® asked that reforms of the secondary mortgage market be comprehensive, and the federal government must have a continued key role in the secondary mortgage market in order to ensure that there is capital for mortgage lending in all mortgage markets under all market conditions. REALTORS® asked for a hearing on H.R. 1498 or S. 2120. This legislation requires services to decide whether to approve a short sale within a specified time frame of completion of the short sale request. REALTORS® also seek increased educational standards for appraisers, and support state regulation of all appraisers, regardless of their source.

Bolster Commercial Real Estate Lending
Representatives Ed Royce (R-CA) and Carolyn McCarthy (D-NY) introduced H.R. 1418, the Small Business Lending Enhancement Act of 2011, to increase the member business lending cap from 12.25 percent to 27.5 percent of total assets for well-capitalized credit unions. The Senate has introduced S. 2231 as a companion bill. In June 2011, the House Financial Services Committee voted to pass H.R. 940, the United States Covered Bond Act of 2011. This legislation facilitates the creation of a U.S. covered bond market, which would provide an additional source of commercial real estate lending. The Senate has introduced S. 1835 as a companion bill.

REALTORS® asked that Congress pass H.R. 1418 and S. 2231. Credit unions can fill in the commercial real estate lending gap and help get capital to the struggling small businesses that occupy commercial space. They also seek passage of H.R. 940 and S. 1835 to create a U.S. covered bond market, which would complement the fragile commercial mortgage-backed securities (CMBS) market by providing an additional new source of capital for the commercial real estate industry.

VIEW PHOTOS

The National Association of REALTORS® is asking REALTORS® to contact their members of Congress to warn them about the dangers to the housing market and the economy of reducing or eliminating the mortgage interest deduction and making other tax changes that could hurt home owners. REALTORS® should have received the Call for Action on Wednesday night. Its launch came just hours after the co-chairs of President Obama’s bipartisan Federal Deficit Reduction Commission, charged with the task of finding ways to balance the budget by 2015 and to reduce the deficit by $4 trillion by 2020, released their recommendations in a draft report titled “The Moment of Truth.”

The plan called for significant reductions to the mortgage interest deduction and other major tax reforms. The panel recommended converting the deduction to a 12 percent non-refundable tax credit available to all taxpayers, capped at $500,000, and limited to principal residences only (no credit for interest from second residence and equity). The panel also recommended the elimination of itemized deductions and the taxation of capital gains as ordinary income.

The deficit commission voted on the plan today, and while it received a majority 11-7 vote, it fell short of the super-majority needed (a vote of at least 14 of its 18 members) to prompt immediate congressional action. Regardless of the outcome of today’s vote, it is imperative REALTORS® make their voices heard now because individual recommendations like cuts to the MID and other programs impacting home ownership could be included in federal budget legislation in early 2011.

The tax deductibility of interest paid on mortgages is a powerful incentive for home ownership and has been one of the simplest provisions in the federal tax code for more than 80 years. In a new survey commissioned by NAR and conducted online in October 2010 by Harris Interactive of nearly 3,000 homeowners and renters, nearly three-fourths of homeowners and two-thirds of renters said the mortgage interest deduction was extremely or very important to them.
 
Recent progress has been made in bringing stability to the housing market and any changes to the MID now or in the future could critically erode home prices and the value of homes by as much as 15 percent, according to NAR’s research. This would negatively impact home ownership for millions of Americans, including those who own their homes outright and have no mortgage.

Any further downward pressure on home prices will hamper economic recovery, raise foreclosures and hurt banks’ abilities to lend and likely tip the economy into another recession, resulting in further job losses for the country. It will effectively close the door on the American dream.

REALTORS® must remain vigilant in opposing any plan that modifies or repeals the mortgage interest deduction. Please answer NAR’s Call for Action now and let your representatives know that the Mortgage Interest Deduction (MID) is vital to both home ownership and our economy.

June 2017
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