Realtors lobby for help with home ownership

In a market many describe as "sluggish" Realtors continue to press for solutions. This past week a number of sources report that Washington is considering several proposals to breathe life back into the housing industry. Even though mortgage rates persist at their lowest levels seen in 40 years, sustained high unemployment and challenges to obtaining financing have prevented many would be buyers from realizing their dream of home ownership.

The National Association of Realtors (NAR) has pressed the Whitehouse to host a summit of policy makers, government stake holders and industry leaders who are focused on revitalizing the nation's housing and thereby stimulating the economy. According to a press release from NAR, "A housing recovery is key to America's economic strength, and NAR wants to make sure that proposed legislation and regulatory rules or changes to current programs and incentives don't further exacerbate problems within fragile real estate markets across the country.

"A broad discussion among all stakeholders about what needs to be done to put the housing market and economy on a path to recovery could provide valuable recommendations and solutions to promote responsible, sustainable home ownership and stabilize and revitalize the housing industry and economy," said the release.

Among the issues the NAR would like to see addressed is a commitment to continue FEMA's flood insurance program. Currently, the national program is only approved through September. When the program lapsed in 2010 policies for flood insurance could not be issued, queering many pending sales of real estate.

Another issue is the proposed guideline that requires a 20 percent down payment as a minimum for home loans. This measure has been opposed by both the NAR and banks and could drive more borrowers to the Federal Housing Administration. Currently, loans insured by FHA are available for 3.5 percent down although difficulty in qualifying still prevents many from participating. Many in the real estate sector have joined forces to fight such a change aimed at so-called Qualified Residential Mortgage loans, arguing that a 10 percent or 20 percent down payment mandate would deliver yet another damaging blow to the floundering housing market.

No one is advocating for a return to the "liar loan" atmosphere that lead to the housing bubble of recent history, but a requirement for 20 percent down will likely mean that many will never be able to own a home. According to the National Association of Realtors, drawing upon national savings rate data, "it would take 9.5 years for the typical American family to save enough money for a 10 percent down payment and closing costs, and fully 16 years to save for a 20 percent down payment and closing costs."

Another big concern, not just to NAR but to homeowners everywhere, is the loss of the Mortgage Interest Deduction. As the government looks for ways to increase revenue in an underemployed economy, many are advocating eliminating this deduction. This could have a significant impact on people's ability to sustain a home since an increased portion of their income would be subject to federal income taxes. This money can account for several house payments during the course of a year.

News agency Reuters reported last week that, among these other issues, the Whitehouse is working on proposals that may include measures that would encourage greater participation in its refinancing programs. According to the story, "The Obama administration is working on proposals to prop up the weak housing market and may back a plan to refinance government-backed mortgages at today's lower interest rates, the New York Times said, citing two people briefed on the discussions.

"We are looking at trying to encourage more participation in all of the programs, including those that help with refinancing," said Phyllis Caldwell, who oversees housing policy at the Treasury Department.

The officials are also working on a home rental program that would try to shore up housing prices by preventing hundreds of thousands of foreclosed homes from flooding the market by renting them out.

Although these issues are unresolved at the moment, Realtors continue to lobby for measures that will protect, preserve and promote home ownership.

Trust an expert... call a Realtor. Call your Realtor or visit www.cdarealtors.com to search properties on the Multiple Listing Service or to find a Realtor member who will represent your best interests.

Kim Cooper is a real estate broker and the spokesman for the Coeur d'Alene Association of Realtors. Kim and the association invite your feedback and input for this column. You may contact them by writing to the Coeur d'Alene Association of Realtors, 409 W. Neider, Coeur d'Alene, ID 83815 or by calling (208) 667-0664.