A Message from President Mike Theo: Was That Really Necessary?


 Mike Theo  |    June 06, 2012
MikeTheoLRG

When 14,000 REALTORS® gathered in Washington, D.C. on May 17, under the towering 550-foot monument to our first president, their rallying cry was the protection of the American Dream of homeownership. (Another 14,000 REALTORS® watched the rally live on the Internet!) At first you might ask, why was that necessary? The concept of owning a home is a universal goal of families in every corner of the world, and certainly here in America, right? So isn’t a rally in support of that concept redundant or unnecessary?

Good question. Yet there, in the middle of a city filled with an overabundance of government workers, lobbyists and homeless, who presumably share a common dream of having a nice place to live, the National Association of REALTORS® felt the need to demonstrate the virtues of owning a home in America, for all Americans to see.

So was that rally really necessary?

It was indeed necessary because today, in the wake of the Great Recession, there is a growing national debate, particularly in the halls of Congress, the White House and numerous federal regulatory agencies, questioning whether or not our nation invests excessively in promoting homeownership and whether those investments caused, or at least contributed significantly to, the collapse of the housing market and Great Recession that followed.

In the long run, history alone will hold the answer, but in the short run, the very essence of our long-standing, bipartisan, pro-housing tax and public policies is under attack. And during the recently concluded NAR meetings in Washington, these fundamental issues were the topic of hundreds of individual meetings in the halls of Congress on Capitol Hill. 

Specifically, REALTOR® leaders from every corner of America met with their congressional delegations and their staff, asking for their support of these key pending issues: 

 

  • Protect homeownership tax benefits: First and foremost, we are asking Congress to do no harm. While the housing market is improving, it is not yet stable. More than 20 percent of all homeowners owe more on their mortgages than the home’s current fair market value. The most urgent need is an extension of the tax relief provided in 2007 that assures individuals in foreclosure, short sales or loan modifications will pay no income tax on forgiving mortgage debt. Over the long term, during the tax reform debate, Congress must not impair the market by making changes to the mortgage interest deductions or property tax deduction. These longstanding provisions are woven into the fabric of our tax law as should remain.
  • Secure the future of homeownership: We are encouraging Congress to take action to improve the short sales process, support the independence and integrity of appraisals, enact comprehensive reform of the government-sponsored enterprises Fannie Mae and Freddie Mac, and have regulators establish qualified residential mortgage (QRM) and qualified mortgage (QM) rules that all reasonable access to credit for homebuying consumers.
  • Bolster commercial real estate lending: We are encouraging Congress to take action to bolster liquidity in the commercial and multifamily real estate market to avoid stalling our nation’s economic recovery.
  • Preserve the mission and purpose of the FHA program: We are encouraging Congress to ensure that the Federal Housing Administration (FHA) single-family program has the tools and policies in place to meet its mission of providing access to safe, affordable mortgage financing for qualified borrowers nationwide. And to do no harm to the FHA program by advocating initiatives and policies that unfairly burden homebuyers.
  • Reauthorize the national flood insurance program: We are asking Congress to reauthorize the National Flood Insurance Program to ensure access to affordable flood insurance.

 

These pending issues will strengthen homeownership in America, which is important not just for us or for the economy — it’s important for families and society. Homeownership increases student performance, increases civic participation, increases healthy lifestyles, increases property values, and decreases crime. And homeownership is important for politicians, too. There is nearly a 100 percent correlation between owning a home and voting in elections!

So was the rally really necessary? You bet. And now it’s up to each of us to continue the process of educating policymakers and the general public on the virtues of preserving, protecting and promoting homeownership as our American Dream.

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