President John Rice’s Midyear Conference Notes
The following are notes provided by New Hampshire Association of REALTORS President John Rice (pictured at right) after attending the NAR Midyear Legislative Meetings in Washington, D.C., May 15-19, 2012.
Ed Demarco, FHFA Director: Fanny and Freddy continue to play leading roles in the housing market. Regulation streamlining and more clarity in the short sale process is coming in September. Their strategic plan calls for: 1.) Building the future, to include rebuilding the secondary mortgage market, issue certificates with or without government guarantee and a wide array of mortgage products; 2.) Contracting the enterprises footprint in the marketplace — greater reliance on private financing; and 3.) Continuing to ensure full effort to service trouble borrowers.
Carol Galante, HUD Acting Assistant Secretary for Housing: Wants to modernize regulations and policies that create opportunities. Wants to make changes to condo lending policies. Committed to strong and stable FHA, managing risk, while making a wide range of loans available.
Housing Policy in 2013
Mark Zandi, Chief Economist , Moody’s Analytics: Very rosy outlook: The housing slump is over. We’re close to seeing distressed sales fading. Appreciation should happen next year. A regulating environment should define the rules. You can’t have a 30-year fixed mortgage without a governmental role of some kind. Rates are going up next year, but the 2013 market will be strong, like a “light switch” going on. It’s going to happen quickly.
Predicts that Virginia will be the key swing state in the presidential election and that Obama will likely win, but it won’t make much difference to the economy either way. In ether case, the real estate market will be measurably better in the next four years.
Susan Wachter, Professor of Real Estate and Finance, Wharton School of Business: It’s a good thing that housing prices went up 1 percent nationally last year. We need regulations so that buyers can take advantage of low rates. It should be “OK to lend.” Prices are reflecting fundamentals. We should not be tightening credit. Without Fanny/Freddy we’d be in a second recession right now. There is no solution to their impending demise and no clear sense of where we are going. There is too much risk in ARMs, which can only go up right now. The fundamentals are in place for a recovery, but the European economic crisis is a huge concern to the global economy.
Renee Glover, President and CEO of Atlanta Housing Authority: Atlanta is recovering well. People want to be downtown — especially as they age. There is a fundamental shift to urbanization. But in creating new regulations we need to be “thoughtful.” Fannie and Freddy have been providing necessary liquidity. We need to have financial strategies in place that maintain our global competitiveness.
Cutler Dawson, President and CEO, Navy Federal Credit Union: They will write 40,000 mortgage loans this year. Service members believe in the American Dream, even though they move every 3-5 years. The key to continued recovery is consumer confidence and low unemployment.
A 20-minute roundtable discussion on mortgage lending brought together three captains of the industry. Joe Rogers, Exec VP at Wells Fargo, indicated that his bank has stayed involved with FHA and will be introducing “judgmental” underwriting where there are limited comps. Pat Sheehy, EVP at JP Morgan Chase confessed that we know it’s NOT true that 20 percent down payments are needed. 100 percent financing is still done. Still, they are more cautious originating loans and ask themselves: Are loans of investment quality?
They are in discussions to free up credit. Every “declined” loan is automatically reviewed to ensure they are not being too conservative. The worst thing we can do is foreclose on a seller. Since 2009, they have quadrupled their workforce involved with short sales. They have streamlined their process in their own portfolio and in some cases are getting a 17-day response. Matt Vernon, BOA Home Loan sales executive, wants to educate consumers that “sustainable” home ownership does matter.
Small State Subforum
By the numbers: Iowa, with 6,315 members, is largest of “small” states. New Hampshire (4,932) is fifth, right behind Mississippi (5,089) and just ahead of Nebraska (4,039). Maine is seventh (3,982), RI next (3,940) and Vermont is No. 14 at 1,780. There are 20 “small” states. California (153,179) and Florida (106,950) are 1-2 in terms of overall membership.
Some neat ideas:
- For RPAC, “Pie the broker” for $25, or pay $35 to get out of it
- REALTOR Talent show
- $100 per ticket event, for a chance to win $5,000
- “REALTOR Week” featuring lunch, educational events and gala event, Governor declared “REALTOR Day”
- One association held a lunch and learn for “big brokers” so that the Association could better tailor its services to their needs
My REALTOR Party
We heard three outstanding examples of the Smart Growth grants at work:
- In Memphis, Tenn., a $25,000 “Game Changer” grant helped the city demolish homes in blighted areas in a REALTOR/City partnership. Blight there detracts as much as 6 percent from local property values.
- In Santa Fe, NM, a “Smart Grant” of $15,000 helped fund a master plan with city planners that improved an urban “entrance corridor” that included a provision for residential development where the city had previously been hostile.
- In Atlanta, a smart growth grant allowed a charette to discuss where what they wanted their community to like in the future. The grant promoted Smart Growth techniques such as transit-oriented development — it also enhanced the REALTOR reputation and connected them with town fathers.
- In Acadia, WA, where two REALTORS were running for two of the council seats, NAR sponsored a candidate’s forum and help build up a Facebook and political presence.
New Jersey and Florida had some outstanding Homeownership Matters videos, which could be customized here. New Jersey produced a REALTOR Resource “tool kit” for all legislators so that they could be well-informed on REALTOR positions.
“Rally to Protect the American Dream”
An estimated 11,800 REALTORS in blue “R” T-shirts flocked to the mall in front of theWashington monument. New Hampshire had about 20 members there. North Dakota sent a bus that drove for two days to get there. The 90-minute rally featured rousing speeches in support of homeownership and speeches by congressmen from Georgia and Maryland, both former REALTORS. As each speaker came on, about eight state presidents filled risers behind them, until every state and territory was represented. It was an honor and privilege for me to represent our state at this historic event.
The highlights of the morning included an impassioned speech by a Hispanic broker from California, who said immigrants coming to America don’t dream about getting a good job so they can rent an apartment. They, of course, want to own their own home. The normally soft-spoken NAR Chief Economist Lawrence Yun surprised all, getting pumped up and telling legislators not to mess with our housing recovery by fiddling with the Mortgage Interest Deduction.
For the first time in a while, we met with both New Hampshire Representatives and both Senators. I think all were engaged, although Congressman Bass spent much time talking about the deficit. While he said he clearly supports all things REALTOR, he also indicated that everything was on the table to reduce the deficit — including MID. I think all of our legislators were lukewarm on the REALTOR commercial plank to expand small business lending and enact covered bonds legislation; Preserving the mission and purpose of the FHA program also did not seem to receive an open-ended endorsement.
Protecting Homeownership Tax Benefits, especially MID, was heartily endorsed, as was extension of the National Flood Insurance Program. I am not sure anyone really grasped outright the nuances of the “Secure the Future of Homeownership” plank — expediting short sale decisions, maintenance of appraisal independence and integrity and establishing QRM/QM rules that maximize consumer access to credit.