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The Silicon Valley Association of REALTORS® (SILVAR) praises Congress for finally passing one of the real estate industry’s key legislative priorities, a 5-year reauthorization of the National Flood Insurance Program (NFIP), also known as the “Biggers-Waters Flood Insurance Reform and Modernization Act of 2012.” President Barack Obama is expected to sign it into law.

According to the National Association of REALTORS®, the 5-year reauthorization will bring certainty to real estate transactions in more than 21,000 communities nationwide where flood insurance is required for a mortgage. The bill ensures the program will continue long-term for more than 5.6 million business- and home owners who rely on it.

The passage of the flood insurance bill is the culmination of a successful multi-year REALTOR® campaign and a final push at the National Association of REALTORS® (NAR) Midyear Legislative Meetings & Trade Expo in May 2012. During their meetings SILVAR members joined thousands of REALTORS® nationwide and met with their members of Congress in Washington, D.C. and urged action on the National Flood Insurance Program (NFIP) and several other priority issues. 

Since 2008, Congress had been extending the NFIP a few months at a time. Twice this led to shutdowns, including one that stalled more than 40,000 home sales in June 2010 alone. The NFIP will be in effect until Sept. 30, 2017.

The NFIP has averted $16 billion in losses by strengthening millions of properties against floods. Without NFIP, there would be more uninsured and unmitigated properties, taxpayers would still be “on the hook” for disaster assistance to these properties, and there would be no premiums to pay down any remaining loan balance or collect interest.


During the National Association of REALTORS® 2012 Midyear Meetings on May 14-19, REALTORS® met with Members of Congress and urged action on NAR’s priority issues, including the National Flood Insurance Program (NFIP). SILVAR is happy to learn that the U.S. Senate today passed a 60-day extension of the NFIP, avoiding a lapse in the program which was set to expire on May 31. (The U.S. House of Representatives voted on a separate measure, H.R. 5740, to extend the NFIP for 30-days last week.) A lapse would have affected thousands of real estate closings across the nation.

While this extension is a positive development and will ensure program continuity, it is not the long-term solution that NAR has been advocating. NAR is firmly committed to working with our congressional allies on passing a five-year National Flood Insurance Program reauthorization and reform bill. The bill, H.R.1309 – the Flood Insurance Reform Act of 2011, passed the House of Representatives and is awaiting action in the Senate.  

The current program will be extended for 60 days to allow additional time for the Senate to take up and pass the Flood Insurance Reform Act of 2011. While NAR expects the bill to be passed, it remained an unfinished item at press time.

NAR thanks members who pushed their Senators to take up H.R.1309. Their efforts helped move NAR very close to its goal. SILVAR members were among the 13,000 REALTORS® at the State Capitol who urged legislators to pass the extension.

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.


There’s good news and bad news. First the good news …

On Monday, September 26, the U.S. Senate passed the Continuing Appropriations Act (H.R. 2608), which also includes a provision extending the National Flood Insurance Program (NFIP) until November 18, 2011. Next week, the House is expected to approve this extension and has ensured that there will be no lapse in NFIP authority in the interim.

The National Association of REALTORS® is urging Congress to finish its work on the 5-year reauthorization bill (H.R. 1309) before this latest extension ends, in order to provide certainty and avoid further disruption to real estate markets.

And the bad news …

After an unsuccessful attempt to include an extension of the existing loan limit in the continuing resolution to keep the federal government running, Congress failed to extend the FHA (Federal Housing Administration) and GSE (Government-sponsored Enterprise) mortgage loan limits.

On Oct. 1, the conforming loan limits will decline in 669 counties in 42 states, including San Mateo and Santa Clara counties. The new limits will be equal to 115 percent of the local area median home price (down from 125 percent). The high cost cap will fall from $729,750 to $625,500.

The National Association of REALTORS® will continue to work with Congress to attempt to restore the higher limits as quickly as possible.


March 2023


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