WASHINGTON, D.C. - The National Association of Realtors® expressed support of President George W. Bush’s efforts to curb the increase in foreclosures due to irresponsible lending practices and complicated mortgage products by allowing modification of certain loans or freezing the interest rates for up to five years.
“The dream of homeownership should not turn into a family’s worst nightmare,” said NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif. “As the leading advocate for housing issues, NAR has been working with Congress and the administration to protect homeowners who may be facing foreclosure as the result of predatory lending practices and as the interest rates on many subprime loans reset. The loan modification program introduced by President Bush and U.S. Treasury Secretary Henry Paulson is a good first step in helping deserving families keep their homes.”
NAR has been working with Congress throughout 2007 to modernize Federal Housing Administration programs that will once again make the FHA a viable mortgage product and help protect many current and future homeowners by offering a secure alternative to subprime loans. NAR has also been pushing Congress to reform Fannie Mae and Freddie Mac and increase their conforming loan limits, which will not only help home buyers but also will help improve liquidity in the lending industry. “We are pleased that the administration has taken action today and are hopeful that Congress will now move quickly to approve FHA modernization and GSE reform,” Gaylord said.
Earlier today Senate Majority Leader Harry Reid, D-Nev., tried again to pass the FHA modernization bill supported by the administration, but the motion for unanimous consent was blocked. Sen. Reid and his staff have met with Realtors® and agree that enhancing FHA would help improve the housing market and protect homeowners and many who wish to own a home. “We hope that the Senate will see today’s action by President Bush, Secretary Paulson and Senator Reid as a catalyst to change and implement important reforms promptly,” said Gaylord.
NAR participated in meetings with Secretary Paulson and other industry influentials that he assembled to focus on the problem and finding a workable resolution. In addition, NAR has strongly communicated the need to change the IRS code that permits people who have been forced into foreclosure or short sale to pay income tax on the loan amount that is forgiven. Also known as the phantom income tax, NAR has called it an unfair burden and applauded the House of Representatives for passing legislation to change this. At the same time, NAR is pushing the Senate to act quickly to enact similar legislation.
The announcement by the president is not a bailout, but is designed for borrowers who have been making their payments on their existing loan. The administration estimates that 1.2 million families could be protected under his plan.
“The president has offered the American people an early holiday gift today. We hope Congress will also help make the holidays happy for millions of Americans by doing their part and move swiftly with FHA modernization, GSE reform and elimination of the mortgage cancellation tax,” said Gaylord.
