Realtors® Oppose High Down Payment Requirement for Qualified Residential Mortgage Exemption

Washington, March 29, 2011

High down payment requirements being proposed by federal regulatory agencies as part of the upcoming rulemaking under the Dodd-Frank Wall Street Reform and Consumer Protection Act will unnecessarily burden homebuyers and significantly impede the economic and housing recovery, according to the National Association of Realtors®.

Six agencies, including the Department of Housing and Urban Development, Federal Deposit Insurance Corp., Federal Housing Finance Agency, Federal Reserve, Office of the Comptroller of the Currency, and the U.S. Securities and Exchange Commission, are developing a proposed risk retention regulation under the Dodd-Frank Act that requires lenders that securitize mortgage loans to retain 5 percent of the credit risk unless the mortgage is a qualified residential mortgage (QRM); FHA and VA mortgages would also be exempted. The purpose is to create strong incentives for responsible lending and borrowing.

“As the leading advocate for home ownership NAR supports a reasonable and affordable cash investment requirement coupled with quality credit standards, strong documentation and sound underwriting,” said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “A narrow definition of QRM, with an unnecessarily high down payment requirement, will increase the cost and reduce the availability of mortgage credit, significantly delaying a housing recovery.”

NAR believes that Congress intended to create a broad QRM exemption from the 5 percent risk retention requirement to include a wide variety of traditionally safe, well-underwritten products. Congress chose not to include a high down payment among the criteria it specified in the Dodd-Frank Act to guide the regulators in defining a QRM. Strong evidence shows that responsible lending standards and ensuring a borrower’s ability to repay have the greatest impact on reducing lender risk.

“We need to strike a balance between reducing investor risk and providing affordable mortgage credit. Better underwriting and credit quality standards have greatly reduced risk. Adding unnecessarily high minimum down payment requirements will only exclude hundreds of thousands of buyers from home ownership, despite their creditworthiness and proven ability to afford the monthly payment, because of the dramatic increase in the wealth required to purchase a home,” said Phipps.

The definition of QRM is important because it will determine the types of mortgages that will generally be available to borrowers in the future. Borrowers with less than 20 percent down could be forced to pay higher fees and interest rates, up to 3 percentage points more, for safe loans that otherwise do not meet too narrow QRM criteria.

NAR is concerned that a narrowly defined QRM will also require severe tightening of FHA eligibility requirements and higher FHA premiums to prevent huge increases in its already robust share of the market, adding additional roadblocks to sustainable home ownership.

“Saving the necessary down payment has always been the principal obstacle to buyers seeking to purchase their first home. Proposals requiring high down payments will only drive more borrowers to FHA, increase costs for borrowers by raising interest rates and fees, and effectively price many eligible borrowers out of the housing market,” said Phipps. “We strongly urge the regulators to consider the negative consequences of setting onerous limits on the availability of credit.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

2010 NAR Public Policy Accomplishments

Throughout 2010, NAR made significant progress educating Congress and the Obama Administration that a stable and sustainable housing market is the primary building block for any economic recovery. NAR had a series of successes in the regulatory and legislative fields, some of which are highlighted below.

As we look ahead to 2011, NAR will continue to advocate policy initiatives that benefit REALTORS® and consumers in the residential and commercial real estate industry.

Wall Street Reform and Consumer Financial Protection – On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act of 2010. This comprehensive reform of the nation’s financial services sector is the most sweeping since the financial reforms ushered in during the Great Depression. NAR worked with both Democrat and Republican members of the House and Senate committees responsible for the legislation to secure a “real estate professional exclusion” ensuring that the daily business of REALTORS® was not negatively impacted by this historic piece of legislation.

Me etings with Lenders – Starting in the summer of 2010, NAR’s elected leadership initiated a series of meetings with large lenders and servicers to discuss issues of concern for REALTORS®. The topics included origination issues (underwriting standards, appraisal issues, credit policy, condo financing); short sales; bank-owned properties; and the impact of the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act. NAR and the banks are discussing how we can work together to make significant improvements in all of these areas. The goal is to increase our mutual success and help support market recovery.

Health Insurance Reform – NAR successfully raised the profile of the challenges that face the self-employed and small employers, including REALTORS®, throughout the 111th Congress’ debate over health care reform. As a result, the underwriting and rating reforms in the final bill — guaranteed issue policies, ban on pre-existing condition exclusions, limited age rating, etc. — are in line with NAR’s policy principles and will give the self-employed access to insurance with most of the characteristics of a group plan. In addition, individual affordability credits and tax credits for small employers will help to make health insurance more affordable for many NAR members who are currently uninsured.

First-Time Homebuyer Tax Credit – In November 2009, the $8,000 credit was again extended for purchasers through April 30, 2010. Those under contract by April 30 retained eligibility for the credit, so long as the transaction closed before July 1, 2010. An additional $6,500 credit was created for current homeowners purchasing a new or existing home between November 7, 2009 and April 30, 2010. These buyers were also subjected to the July 1, 2010 settlement requirement. In June 2010, NAR noticed that many purchasers who had signed contracts on or before April 30 were unable to close their transactions, particularly in short sales. At NAR’s urging, Congress extended the closing date requirement through September 30, 2010.

Protecting the Mortgage Interest Deduction – The Administration’s proposed budgets for Fiscal Years 2010 and 2011 included a recommendation that health insurance reform be “paid for” by limiting the value of the mortgage interest deduction (MID) and other itemized deductions for upper income taxpayers. The limitation proposal was based on an individual’s tax bracket. Itemized deductions for individuals in tax brackets above 28% would have not have received the value of their higher tax brackets. Rather, the “value” of itemized deductions would have been limited to 28 cents on the dollar, rather than the 33 cents or 35 cents to which they would have otherwise been entitled. NAR aggressively and successfully fought off changes to the MID through grassroots, advertising and similar advocacy tools.

FHA and GSE Loan Limits – NAR successfully advocated for legislation to once again extend the temporary higher loan limits for FHA and the GSEs in both 2009 and 2010. Had the limits expired, NAR estimates that more than 612 counties in 40 states and the District of Columbia would be negatively impacted, with an average decline in loan limits of more than $50,000. The current limits (at the greater of $271,050 [for FHA] and $417,000 [for the GSEs] or 125% of local area median up to $729,750) are now in place through September 30, 2011.

Small Business Lending Fund – On September 27, 2010, the Small Business Jobs and Credit Act of 2010 (H.R. 5297) was signed into law. Under this bill, which NAR supported, the U.S. Treasury is authorized to lend up to $30 billion to interested community banks to further expand lending to small businesses. As an incentive for community banks to participate and increase small business lending, participating banks’ interest rates will be adjusted relative to the amount of their small business lending activity. It is estimated that community banks could use the $30 billion lending fund to leverage up to $300 billion in new loans to small businesses. Additionally, NAR successfully worked to include provisions in the legislation that enhance Small Business Administration (SBA) programs and provide $12 billion in tax relief for commercial real estate practitioners and small businesses.

Flood Insurance – NAR secured a full one-year extension through September 2011 of National Flood Insurance Program (NFIP) authority, after supporting legislation, which twice broke congressional stalemates that led to multi-week shutdowns of the program. Without the program, thousands of property owners in tens of thousands of communities across the U.S. would not have been able to obtain the insurance necessary for them to obtain a mortgage in federal-designated floodplains.

Development of NAR Credit Policy – The Conventional Finance and Lending Committee proposed a NAR Credit Policy for consideration by the Board of Directors in November 2010 which was approved. The new policy calls for the lending industry to reassess and amend its credit policies to increase mortgage liquidity for qualified home buyers, including low and moderate-income families and first-time home buyers. The policy also includes specific recommendations.

Appraisal Reform – On July 21, 2010, the President signed into law the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act. The legislation includes the first major appraisal reforms in more than a generation. NAR worked with Congress on this legislation, which regulates appraisal management companies (AMCs), establishes new appraisal independence standards, and regulates automated valuation models (AVMs) and broker price opinions (BPOs). The legislation also sunsets the Home Valuation Code of Conduct (HVCC). NAR is currently working with the Federal Reserve on the implementation of regulations related to appraisal independence, which must be implemented within 90 days of enactment of the legislation.

How Can You Lose Something You Never Had To Begin With?

How can you lose something you never had to begin with?

That’s the question that comes to mind when I read the Administrations continuing attack on housing. In Monday’s Wall Street Journal, another front page article states ‘Key Tax Breaks At Risk As Panel Looks At Cuts’. First sentence ‘Sacrosanct tax breaks, including deductions on mortgage interest, remain on the table…’ The article goes on to say ‘…these and other breaks cost the government about $1 trillion a year’. (emphasis mine).

But if the government never had these revenues to begin with, at least in the case of the MID, how can they claim it as a cost? It doesn’t cost them a dime. Wikipedia defines cost thusly: In business, retail, and accounting, a cost is the value of money that has been used up to produce something, and hence is not available for use anymore. Obviously that doesn’t apply here. The government hasn’t ‘produced’ anything of value and has not spent money on it therefore it is not a ‘cost’ to the government.

So the Government chooses to define costs as an economic model (unrelated to actual business, retail or accounting reality) and for their purposes they define it differently: Opportunity cost, also referred to as economic cost is the value of the best alternative that was not chosen in order to pursue the current endeavor—i.e., what could have been accomplished with the resources expended in the undertaking. In theoretical economics, cost used without qualification often means opportunity cost.

So apparently our government functions best in the world of theoretical economics where you can attribute something as a cost even if you produce nothing or spend any actual money on it. It’s not a real cost, it’s a theoretical cost. They could be making more money off us if we would just pay more taxes – so that lost opportunity becomes a cost in their eyes.

California has employed similar theoretical economics for years now – if we don’t increase a department’s budget as much as they requested, it’s called a cut even if they get more than they got last year. And you see where it got California.

The article went on to describe how the President’s Deficit Commission was looking at these ‘opportunities for revenue enhancement’ along with potential cuts in defense spending and a potential freeze on domestic discretionary spending. Hmmm, cut defense but just freeze spending at the current rate? How about this instead? How about making some REAL cuts to the massive spending and stimulus programs that aren’t working for sh**? How about that?  How about cutting the pork & earmarks like you campaignedyou would?

How about getting government out of the housing business and every other business which they are trying to regulate into insolvency and actually let businesses grow again and start creating real jobs instead of government jobs? When it has been proven time and again that a government run ‘business’ i.e. Postal Service, Welfare, Social Security, Fannie & Freddie, are not productive, are not competitive and constantly run at deficits in spite of massive infusions of our money, why would you continue to add more of these albatrosses – like healthcare, the financial regulatory agency, etc? Why is it that the only sector of our economy that has enjoyed robust job growth the past few years has been federal and state government jobs?

I was somewhat mollified to read an AP article a couple days later about the agenda Republicans are devolving, assuming they deliver the sound spanking on Tuesday anticipated by anybody this side of Mars (or Obama).  It involves $100 billion in spending cuts, tax reductions for individuals and businesses to stimulate real growth, and undoing elements of the healthcare program and the overreaching financial regulatory program. I hope they mean it. The attacks on housing have to stop.

Government, which has bloated up beyond all reasonable measure in this country, has exploded the past couple years and now encroaches into every aspect of our personal and business lives. It was  not meant to be so. If we don’t start reducing the role of government soon, we will either lose our Republic and the few remaining freedoms we take for granted today, or at some point we will face a much more volatile upheaval.

Well, Thomas Jefferson said it best when he said that every generation needs a new revolution. Hope and change wasn’t a revolution and has proven to be just more of the same – assuming you define ‘same’ as Chicago ward politics. Maybe this generation will finally stand up for something. You think?

Of course that’s just my opinion – I could be wrong.

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The opinions in this commentary are strictly Gene Wunderlich’s personal opinions. While any reasonable and/or rational indivdual should agree wholeheartedly,
the opinons reflected herein may not necessarily be those of the Southwest Riverside County AOR,  or any local or state government or other mental institution.

Realtor Action Fund – Your Best Investment in Real Estate

racAs a Realtor® you are part of one of the largest special interest groups in this country – the Realtor® Party, and you have a noble cause – preservation of the American Dream of home ownership. You may not like the idea of being a ‘special interest’ and you may disavow any inclination to participate in the political process that supports it, but that doesn’t change the facts.

Pericles summarized the concept in 500 BC when he said “Just because you don’t take an interest in politics doesn’t mean politics won’t take an interest in you.” I’ve updated that somewhat with the Wunderlich codicil “If you’re not at the table, you’ll probably be on the menu.”

If you think the business of real estate is just about buying and selling houses, you only know half the story. The National Association of Realtors® is the largest grassroots political action group in this country representing more than 1.1 million Realtors® in our nation’s Capitol. Last year we invested more money in candidate elections and special campaigns than almost any other group. That’s the other business of real estate – the part that allows you to stay in your business.

A few members have voiced concerns over the recent decision by the California Association of Realtors® to increase our dues by $49 to cover this vital piece of our business. But in reading through those comments (comment summary on $49 investment), I realized some of you are simply not aware of what these critical funds are used for and the direct benefit you derive. For less than the price of 1 latte a month, you are insuring your political survival and generating a real and measurable impact to your bottom line.

So let’s break down what YOU get for that $49 investment.

  • Just last week we defeated a proposal from CA Senate President Darrell Steinberg that sought to impose a 3% accelerated withholding tax on independent  contractorsthat’s you. If you sold a $100,000 condo, the withholding from your commission check would be $90. On a median price home in Temecula last year that would have taken an additional $260.89 out of your check – every check all year long. If it wasn’t for our successful lobbying efforts you’d be  paying that already because Darrell tried the same thing 3 times last year. Is that worth $49 to you?
  • 1stHave you sold a home to a first-time homebuyer in the past year? Over 1.2 million first-time prospects have become owners since the inception of the tax credit last year – 450,000 of those would not have jumped into the market without that incentive. Who do you think lobbied to get that measure passed last February and then worked extra hard to get it extended and expanded in November against long odds? Selling side commission on a median price home in Murrieta last year was about $8,133. Is that worth $49 to you?
  • Last year Canyon Lake proposed an ordinance requiring every Realtor® to pay a $90 business license fee every year. If you worked in, advertised in, sold a home in, or even mentioned Canyon Lake in your website – you would get a bill for $90. We worked hard to modify that ordinance – not just for Canyon Lake but so that other Southwest California cities didn’t get the idea they could just reach into your pocket without a fight. Is that worth $49 to you?
  • Last election cycle we supported candidates in 9 local city council races. 8 of our candidates won including 3 Realtors®. Do you think it might be helpful to have people serving on our local councils and water boards who understand property rights issues, eminent domain, sign ordinances, zoning and so forth? How about in Sacramento? Or Washington DC? If we had more legislators in place who understood real estate or banking or appraisal issues do you think we’d be having some of the problems we’re having today? Is that worth $49 to you?
  • Would the loss of the mortgage interest tax deduction have any impact on home ownership? How about capital gains tax benefits for home owners? The  mortgage interest tax deduction and capital gains benefits are on the table every couple years in Washington DC as a source of potentially significant tax revenue. They will be again this year. Without your NAR lobby, these significant advantages to homeownership would have disappeared along with a chunk of your business during the past decade. It that worth $49 to you?
  • Would your business be impacted if a buyer could walk into any bank and buy a home from the same salaried employee who gave them a loan? NAR fought an 8 year battle to eliminate a loophole banks were trying to exploit to do just that. We won that fight in 2009. Is that worth $49 to you?

Those are just a few of the things your $49 does. Here’s a few things it doesn’t do:

  • Realtor Action Funds do not support a political party platform or agenda – they support the Realtor® Party. We support candidates who understand our issues at the local, state and national level regardless of party affiliation. Historically our expenditures are split almost down the middle at the federal level.
  • Realtor Action Funds do not support issues or legislation that is not real estate related. At the state level our analysts comb through every one of the 3,300 bills submitted in an average session. About 1,500 of these may be flagged as having some potential impact on either Realtors® or property rights. Our state directors discuss each of those bills to determine whether the Association will support it, oppose it, maintain a neutral position or if it really isn’t real estate related at all. We also sponsor our own bills to address specific real estate issues of concern to our members. You can read about the eight bills CAR  authored for 2010 here.
  • Realtor Action Funds do not support travel by Directors, they don’t pay for lobbyists salaries and they don’t pay for ‘pet projects’. If it doesn’t directly support a candidate or real estate related issue or campaign, it doesn’t come out of these funds. They are too precious to squander and the real need is growing exponentially.

rpacI hope this gives you a better feel for why this latest move was made by our state association. It was not a capricious decision and was discussed in detail for more than a year. In order to continue to be effective at the level our members have come to demand, we
must have the support of all members. 10% or 20% can’t continue to pay for benefits demanded and enjoyed by 100% of the membership. That’s neither fair nor equitable.

We welcome your input and questions and I encourage you to visit to take part in the discussion.


It's only pork when the other guy does it – NAR Survey.

realtor party

I love this political stuff. Thus I’m always surprised when Realtors® don’t understand how closely tied their personal success is to our collective Association success in our state capitols and in Washington DC. If you’re not at the table, you’ll probably be on the menu, especially these days when everybody’s being carved up.

But I’m betting that Realtor® response to this latest policy survey from NAR will have a response rate of 10% or less. Sad isn’t it? Yet only 18% of you managed to get off your asses for the 2 minutes it took to respond to the Call-for-Action to extend the First Time Homebuyer Credit – and that directly impacts your income for at least the next 5 months. Amazing.

Anyway, if you haven’t seen it yet, NAR recently posted this survey  so they’ll have a better feel for what you, the member, consider to be the most pressing agenda items for 2010. It’s a fun little Zoomerang survey, takes 5 minutes or so but they ask a lot of good questions.

Some will make you think in uncomfortable ways – for example take H2 & H3: are you in favor of federal legislation to boost home sales or otherwise contribute to our industry even if those policies will contribute to the budget deficit? Or, as congress looks for ways to reduce the deficit and pay for those programs that benefit us, do we allow them to put our sacred cows like property tax and mortgage interest deduction on the table?

I suspect most of us are adamantly opposed to federal pork and earmarks UNLESS they benefit us in some way. We hate the way YOUR congressman bellies up to the trough but OUR congressman by God better bring home the bacon or we’ll replace him.

Of course that’s just my opinion. I could be wrong.

And I hope I’m wrong guessing that less than 10% of you will bother to make your voice heard. But for that 10%, here’s your link.

H2. Please indicate your level of agreement with the following statement:

Given the fragile nature of today’s real estate markets, NAR should support federal legislation that boosts home sales or otherwise benefits the real estate industry even if those policies contribute to a greater U.S. budget deficit and higher long-term interest rates.

Strongly Agree ……………….. Neither Agree Nor Disagree ……………….. Strongly Disagree Unfamiliar with this issue

* H3. Please indicate your level of agreement with the following statement:

As Congress looks for ways to reduce the federal deficit and pay for new programs that benefit the NAR membership or real estate markets, such as healthcare reform or greater investment in infrastructure, changes to the tax benefits accruing to real estate (e.g. MID, deduction of property taxes, etc.) should be considered.

Strongly Agree ……………….. Neither Agree Nor Disagree ……………….. Strongly Disagree Unfamiliar with this issue

As NAR prepares its 2010 Public Policy Agenda, we want to hear from you. The link below will take you to a survey that asks for your views regarding federal public policy issues.   If you’ve already taken the survey, please disregard this email – and thank you for your participation!

We hope you will take a few minutes to give us your thoughts. With your help, we can make sure that our public policy resources are targeted appropriately on the issues that matter most to you and your clients.

Banks or the Crooks That Represent Them

It’s not unusual for me to field complaint calls from members – apparently they are labouring under the assumption that I 1) care and 2) can do something about it. (For the record I do and I try)

Most complaints have to do with one of two things – banks or the crooks that represent them. Sound familiar?

tellOne of the most prevalent complaints – and the subject of three calls today, have to do with the pre-quals/pre-approvals required by the banks before they’ll look at an offer. With many of your Buyers submitting multiple offers in hopes of landing one, this can be a very cumbersome and time consuming process in and of itself.

So the question is – is this really necessary? And the answer is – probably not…BUT.

vaultProbably not because it is my understanding that few banks actually require this as a matter of policy. So if you’re feeling brave and foolhardy you can call BS on the agent and ask to see that in writing from their lender or servicer. It’s supposed to be available. Of course doing this probably guarantees that your offer will never see the light of day but you’ll feel better in your heart. In some locales this may also constitute an MLS violation if they are mis-representing the reason for the request as a bank requirement. Yeah, you want to take that fight on.

beadsBut is there some legitimate reason for requesting a pre-qual from a 2nd source? You bet there is and we brought it on ourselves. How many of us with listings used to ask for a Buyer to be pre-qual’d with our lender of preference even back in the ‘good old days’? Why? Because too many deals were going sideways because fly-by-night agents using fly-by-night lenders w/fly-by-night escrows (often one & the same) were tying up properties with offers that couldn’t fund on a prayer even when First Franklin was handing out mortgages like Mardi Gras beads.

So is a bank likely to take their property off the market for 3+ weeks in this market just on your say-so? Not bloody likely. Truth be told they prefer cash these days anyway. And of course aside from the altruistic, lenders may have other reasons to want to contact your clients, not all nefarious.

It can be frustrating for you and your client but right now you’re not setting the rules of engagement, are you? The real estate industry in general isn’t setting the rules right now and that can be problematic. Let your Legislator know banks need to get back into the lending business, government needs to focus on the latest crisis du jour, and let Realtors® get back to the business of housing. Everything works better when there’s that balance.

Years from now, survivors will talk about the 00 decade as one hell of a ride. They’ll be telling stories about this to their grandchildren. And they’ll be right. Of course that’s just my opinion. I could be wrong.

I’d love to hear from others that may have dealt with this issue successfully in their market. Or just tell me the problems that exist in your area. Like I care. Thanks.

Extend the First Time Homebuyer Tax Credit

  • Congress will soon debate if the home buyer tax credit should be extended beyond the currently scheduled expiration date of November 30th.
  • Conservative estimates of the number of first time homebuyers that took advantage of this program start at 350,000 and go up from there. Needless to say it was a lot of people and the impact on the market was substantial – to the point where the housing market is driving the economy back toward a sustainable recovery.
  • It is estimated that the tax credit extension will cost the government another $10 Billion if it’s extended for a full year. Compared to the $700 billion in TARP funds that went to Wall Street and the $787 billion economic stimulus bill passed earlier this year, $10 Billion seems pretty reasonable – especially when you consider that money went DIRECTLY TO CONSUMERS instead of to banks, insurance companies and other corporate entities.
  • Further, assuming the credit is extended, according to NAR Chief Economist Lawrence Yun, the resulting economic growth and job creation will automatically lead to a rise in federal tax revenue easily covering the cost of the credit.
  • This is where YOU, the Grassroots of our Association, are most powerful. If you haven’t received or responded to the earlier NAR Call-to-Action, please click the button. It will take less than 2 minutes of your time and if it lands you just one more first-time buyer during the next year, it will be the most profitable 2 minutes you’ve ever spent. Please click now.
  • cta

    Can We Just Keep Government The Hell Out Of Housing?

    The Wall Street Journal printed a piece by Gerald P. 0’Driscoll Jr. on 7/31/09, entitled ‘Signs of Life in the Housing Market’. It’s a great piece and, I believe, a pretty good summary of where we are.

    One of the issues he addresses echoes the point I was making a couple days ago when we talked about Ted Lieu’s Foreclosure Crisis Town Hall. The good and well-meaning Mr. Lieu is among a host of politicians nationwide who don’t really understand the true cyclicality of the housing market and view it as an opportunity for more ‘government intervention’. O’Donnell’s article takes this thinking to task as it applies to the national stage.

    “We’re the Government and we’re here to help you”  R. Reagan

    “Unfortunately, many public policy proposals have been aimed at propping up home prices, or at least cushioning their fall,’ writes O’Driscoll. “Nothing could be more counterproductive“. He goes on to note that “Government programs to prop up home prices have been half-hearted and ineffective overall, and mercifully so. A successful program to prop up home prices would have aborted the recovery process.” Read the article – it’s a good read.

    I worded it a little differently – “So we might be through the worst of it UNLESS, of course, some mis-guided legislation comes out that forces banks to pull back, seeks to inject additional government intervention at a state level or inadvertently extends the length of time this cycle lasts. And don’t tell me they’re not capable of screwing up a two car parade. To date – of the billions and billions of dollars spent on a variety of alphabet bail-outs, estimates range from 1.5 to about 3% of applicants actually successfully completing a loan mod through GOVERNMENT run programs like the much touted Making Home Affordable program. That’s abysmal!”

    hopeAnyway, as we wind down this latest greatest financial caper, let’s be wary of those who come late to the table with rescue plans. At this point we really don’t require further rescue, what’s happened to date has been piece-meal and ineffective and, as O’Driscoll comments, “For all the talk of the failure of the market, what is actually working IS markets. What failed were government policies of cheap credit and attempting to make housing affordable by stimulating demand.” He rightly credits land-use restrictions and ‘smart growth’ policies as being the culprits for a lack of affordable housing.

    I’ve been talking about that for years. The real housing crisis has been that for the last decade 500,000 people have moved into California but we’ve only been allowed to build enough homes for 2/3 of them. This created an artificial demand fed by cheap credit which brought us here today. Aside from extending the $8,000 buyer credit program, the government needs to stay the hell out of the housing market for awhile and just let it work. We’re closer to the end than the beginning if we can just keep our Legislators focused elsewhere.

    Small Business Call-to-Action.

    You may be aware that the Southwest Riverside County Association of Realtors has been a supporting Partner of the Southwest California Legislative Council since its inception. The SCLC, a coalition of Southwest California Chambers of Commerce, Legislative Representatives and business representatives – advocate on behalf of Southwest County Businesses. Each of you, as working Realtors, is the owner of your own business. The SCLC has proven to be an effective lobbyist for local concerns and we have a great dialogue with our local Legislators.

    Today the SCLC posted recommendations on the Proposition votes upcoming in May. I’ll cover that in other posts.

    They also issued this Action Alert to let your Legislators know how you feel on the Employee Free Choice Act. This is Federal Legislation that has a decidedly un-business friendly twist. While the bill’s impact on Realtors would probably not be significant, I encourage you to consider the impact from a small business standpoint.

    Click on the bills for more info and a chance to make your voice heard. You’ll be done in about 12 seconds. Thanks

    Take Action



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    Each year, the we take positions on issues that impact Southwest California businesses. We also provide you with the tools to play a role in our efforts! Click on a issue below for a brief summary and then submit your letter of support or opposition.

    Federal Proposals

    Action Needed: Protect Secret Ballot Elections for Southwest California Workers

    Two Federal proposals, H.R. 1409 and S. 560, would undermine long standing principles of workplace democracy and fairness and result in employees having less ability to determine if they wish to be represented by a union. It does so by allowing unions to collect employee signatures in public-or so-called “card check” and do away with the secret ballot process.

    H.R. 1409 – Employee Free Choice Act

    S. 560 – Employee Free Choice Act

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    One-Two Punch for Homeowners

    Hmmm – given the recent history I’m not sure I’d have picked the ‘One-Two Punch’ headline but maybe this will turn out better than the last go-around.

    One-Two Punch for Homeowners, Posted By Dick

    Posted: 19 Feb 2009 08:36 AM CST

    Yesterday President Barack Obama announced a $75 billion Homeowner Affordability and Stability Plan to help address the foreclosure crisis – the right cross in a one-two punch to help the housing market recover. The plan complements the new American Recovery and Reinvestment Act by promising to help up to 9 million homeowners refinance or restructure their current mortgage loans.

    In short, the plan will:
    1. Enable Fannie Mae and Freddie Mac to refinance loans owned or guaranteed by the GSEs.

    2. Create for a $75 billion Homeowner Stability Initiative, with incentives for servicers, investors, and borrowers to make their loans work, provided the loan amount is at or below GSE conforming loan limits.

    3. Provide more financial support for Fannie Mae and Freddie Mac, so they can make more loans at lower rates. The plan would double the potential Treasury investment in each GSE from $100B to $200B and raise their portfolio cap by $50 billion. Both steps will help keep rates low for all borrowers and could even lead to lower mortgage rates.

    Now, it’s our turn to get in the ring. REALTORS® need to get out there and help our clients and all homeowners who need help to take advantage of these resources.

    We have posted a Q&A on with details on who is eligible for help under the plan and how to apply. I encourage you to read it and pass the information along to your clients.

    We all know that an economic recovery depends on a stable housing market. And, I don’t need to tell you that our businesses depend on our ability to keep people in their homes. With your help, I know we can score a knock out on the credit crisis once and for all. – Dick Gaylord, 2009 Immediate Past President