The National Association of REALTORS®’ (NAR’s) 2014 legislative and regulatory agenda continued to focus on creating a fundamentally sound and robust U.S. real estate market.
Here are the highlights of NAR’s 2014 federal legislative and regulatory accomplishments:
New QRM Rule Equals QM
After three years of strong NAR opposition, the six financial regulators released the final version of the Qualified Residential Mortgage (QRM) rule. The regulators listened to NAR when finalizing the rule, which now equates QRM with the “Qualified Mortgage (QM)” standard. As originally proposed, the QRM rule defined QRMs to require a 20 percent down payment. REALTORS® were among the most vocal opponents of the proposed rule and forged the broad-based Coalition for Sensible Housing Policy to draw attention to the proposal’s onerous down payment requirement and other credit-limiting features. As part of its outreach, NAR and its coalition partners gathered the support of 44 U.S. Senators and 282 House members, who wrote to regulators expressing their intent on QRM and opposing
the sizable down payment requirement. Learn more at www.REALTOR.org/qrm.
“Homeowner Flood Insurance Affordability Act” Becomes Law
After months of intense NAR outreach, the “Homeowner Flood Insurance Affordability Act” was signed into law, curbing flood-insurance rate hikes for homes and commercial properties. This bipartisan legislation is a responsible and balanced solution to skyrocketing flood insurance premiums unintentionally triggered by the Biggert-Waters reforms to the National Flood Insurance Program. NAR advocated for this legislation, which brings relief to property owners by ensuring a slow and steady phase-in of risk-based increases. Learn more at www.REALTOR.org/floodinsurance.
Rural Communities Protected Through 2020
NAR’s work with Congress over the last three years helped more than 900 communities at risk of losing access to federal Rural Housing Service programs by extending the eligibility of these communities through 2020. While this legislative language did not expand any program or authorize additional funds, it does retain the current pool of eligible communities (including those that have populations up to 35,000). NAR continues to work to revise the outdated RHS definition of “rural.” Learn more at www.REALTOR.org/rural-housing.
“The Mortgage Choice Act” Passes the House
NAR was instrumental in securing passage of H.R. 3211, “The Mortgage Choice Act,” which redefines a provision in the Dodd-Frank Ability-to-Repay rules that limits mortgage fees and points to 3 percent in order for home loans to be considered Qualified Mortgages (QM). This provision unfairly prevents brokers and affiliated lenders from making QM loans because affiliate services are collectively counted against the 3-percent cap, while individual services from large retail financial institutions are not. H.R. 3211 treats affiliated and non-affiliated service providers the same, while still protecting borrowers from risky loan products.
Elimination of FHA “Prepayment Penalty”
For years, NAR has urged the Federal Housing Administration (FHA) to eliminate post-payment interest charges on FHA single-family mortgages, as the policy placed an unreasonable burden on consumers who already face high housing and closing costs. In August, FHA published its final rule eliminating this charge, effective January 21, 2015. Learn more at www.REALTOR.org/fha.
FASB Maintains Current Lease Accounting Standards
NAR successfully opposed the Financial Accounting Standards Board’s (FASB) and the International Accounting Standards Board’s (IASB) proposed lease accounting standards that would reduce the overall borrowing capacity of commercial real estate lessees and lessors. As part of its efforts, NAR worked with industry groups to solicit key congressional offices to express their concerns with the proposal, while also working with FASB on ways to improve it. In August, the IASB and FASB announced that they were unable to come to an agreement on the proposed lease standards, with IASB opting for a single model and FASB opting to stay with the dual model favored by NAR. The rule will be finalized in late 2014 or early 2015, and go into effect in 2018. Learn more at www.REALTOR.org/lease-accounting.
For more information, visit www.REALTOR.org/political-advocacy.