"As the nation's leading advocate for homeownership and housing issues, NAR understands how integral homeownership is to the nation's economy," said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. "A strong housing market recovery is essential to the nation's economic strength."
"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," he added.
In its letter, NAR cautioned that recent proposals could make a near-term housing recovery almost impossible, not to mention making it harder for millions of hard-working families to own their own homes.
Phipps said more regulations 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," he said.
NAR urged support for policies that ensure qualified borrowers can obtain safe and sound mortgage financing. The organization called on regulators to revise the high down payment requirements of the Qualified Residential Mortgage (QRM) exemption from risk retention requirements under the Dodd-Frank Act. A broad QRM definition would encourage sound lending and reduce future defaults without delaying or denying homeownership to millions of creditworthy borrowers, the NAR said.
NAR also asked regulators to reduce the overcorrection in underwriting standards for mortgages from the Federal Housing Administration and government-sponsored enterprises because the now-too-stringent standards are preventing qualified borrowers from getting loans.
"Mortgage availability remains a concern, and borrowers continue to find it increasingly difficult to find affordable mortgage options," Phipps said. "Requiring a higher down payment does little to reduce default risk, and only strips home buyers of their savings and increases the number of borrowers who are unable to purchase a home."
"We cannot have a viable housing market and economic recovery until creditworthy borrowers are able to obtain mortgage financing," he added.
NAR is also recommending extending the FHA and GSE mortgage loan limits, which it calls critical to providing liquidity in today's housing market. Reverting to the statutory limits on Oct. 1 would reduce limits in 669 counties and 42 states and territories; the average decline in loan limits will be more than $68,000.
NAR said it also believes that the National Flood Insurance Program is essential to a properly functioning real estate market, and urged Congress to pass a long-term reauthorization of the program before it is set to expire Sept. 30. The program ensures access to affordable flood insurance for millions of homeowners.
"We look forward to working with Congress and the administration to not only preserve, but also strengthen the American dream for future generations," said Phipps.
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