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Agent: Realtors Sell Houses but They Also Follow Legislation, Voice Concerns

The National Association of Realtors follows public policy and has questions about the Dodd-Frank Act, which calls for at least a 20 percent down payment on purchasing a home.

Realtors do more than list and sell homes. Advocating for issues that help homeownership is an integral part of the local, state and national priorities of the National Association of Realtors.

The value placed on reporting on the housing market underscores the importance of housing to the economic recovery and stability of the country. The National Association of Realtors (NAR) is working hard to evaluate and recommend regulatory items that will ensure that home ownership is attainable for hard-working families.

“A strong housing market recovery is essential to the nation’s economic strength,” NAR PresidentRon Phipps, broker-president of Phipps Realty in Warwick, R.I., said in a letter to the secretaries of the Treasury and Housing and Urban Development and director of the National Economic Council.

“The housing market is in a fragile recovery, and our goal is to ensure that regulatory or legislative changes help lead the way out of today’s economic struggles and not jeopardize the recovery.”

Phipps said more regulation and legislation that tighten access to credit and affordable safe mortgages are not the solution to righting the housing market and economy.

“We want to make sure that any legislative and regulatory changes don’t jeopardize a housing and economic recovery, so that anyone who is able and willing to assume the responsibilities of owning a home has the opportunity to pursue that dream,” Phipps said.

In an attempt to correct the problems that developed in the financial market, legislators have considered methods that would in actuality cause more problems. NAR is working hard to ensure that legislators understand the results of their actions.

The Dodd-Frank Act requires a 20 percent or larger down payment which could negatively impact over a third of homebuyers, according to some studies. The Heritage Foundation, in a May 31 letter to regulators, called the 20 percent down payment requirement “utterly at odds with the realities of today’s housing market,” where only 16 percent of first time buyers in 2010 would have met the standards for a lower-cost qualified mortgage.

Over stringent underwriting standards are preventing credit-worthy buyers from obtaining a loan or a reasonable interest rate. Phil Mazzaferro of Absolute Mortgage had a client recently who failed to qualify under the new guidelines. "My client had a bank account that reached over seven figures. They wanted to secure a $300,000 loan  on a home that was assessed at $1.3 million. Because their bank account was accumulated investment income and not reported as income on tax returns, they did not qualify for a loan," he said.

There also are added requirements for FHA approval of condominium projects. Restrictions have forced many owners into foreclosure simply because condominium projects were no longer FHA approved.  Steve Tedrow, branch manager with Windermere Mortgage, has had the opportunity to help many clients acquire FHA funding by actually working with homeowner associations to submit the required paperwork to verify qualification according to the new guidelines. 

“Many of the projects have been hit hard by foreclosures. To make matters even worse for sellers, the new federal guidelines prohibit loans on condominium complexes that have a greater than 15 percent foreclosure rate. This is just forcing more owners into foreclosure,” Tedrow said.

Washington Realtors count many successes in their efforts to increase homeownership.

The new Mortgage Foreclosure Fairness Act went into effect on July 22. It is legislation that forces major lenders to meet with residential borrowers that are facing default. Specifics are written that highlight time limits, conditions and cost of working with a mortgage counselor in an attempt to forestall a foreclosure. A borrower now has the opportunity to demand to meet with the lender in person to facilitate mediation.

Transfer fees can no longer be put on title by the developer. Transfer fees are little known costs that are charged to the buyer every time that home is sold. They guarantee income in perpetuity to the developer.

Fireplaces have long been considered a positive addition to any home.  In the last legislative session, legislators considered a bill to force sellers to completely decommission fireplaces before a home could be sold, adding expense for a seller already hit hard by falling home prices. Although tabled in this session, this has the possibility of coming up for discussion in the future.

Realtors are working hard on these issues and many others that protect homebuyers and sellers in their quest for the “American Dream.”

Joan Probala is the managing broker for Issaquah Windermere (Windermere Real Estate/East Inc.). She has 30 years of experience in real estate, construction and sales.

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