Government Affairs Report - May 2011
The month of May was full as REALTORs® from throughout the state and the nation met in Sacramento and WashingtonD.C., to lobby state and federal elected officials. We met face to face with our legislators who, for the most part, were receptive to our messages.
In Sacramento, as we met with Senator Carol Liu and Assemblymembers Mike Eng and Anthony Portantino, our discussions centered around the budget -- as little else is occupying the minds of our representatives. CAR asked us to remind our Assemblymembers and State Senators that, while they were working on the budget, it would be folly to consider the following as potential new sources of additional revenue:
Do not reintroduce the idea of forced withholding on independent contractors. There is no evidence that independent contractors fail to pay their income tax obligations on a timely basis. Withholding means contractors are paying double so the state can float your money, earn interest on it, and repay you at the end of the tax year if you have paid too much.
Do not propose a sales tax on services. We explained the increase in the cost of housing as services such as appraisal, home inspection, termite inspection, escrow services, commission, etc. are taxed.
Do not eliminate the mortgage interest deduction. This deduction encourages home ownership which, in turn, promotes community stability and encourages long-term saving and investment.
In Washington D.C., during our discussions with Congresswoman Judy Chu and Congressman Adam Schiff, the theme was the very future of homeownership in America. The downturned economy and the housing crisis it has spawned, has spurred a great deal of talk about housing reform. When we met our Congressional representatives, we talked to them about:
The federal government must have a continuing key role in the secondary mortgage market to ensure there is capital for lending in all markets. While talks of reform to FANNIE MAE and FREDDIE MAC are fine, elimination of them, without a viable alternative will mean severely restricted mortgage capital on higher costs for qualified borrowers.
The current loan limits of $729,750 must be continued, giving equal access to the secondary market for everyone. The proposed Qualified Residential Mortgage (QRM) rule would deny access to affordable financing to otherwise credit worthy Americans.
Preserve home ownership tax benefits. Do not change the mortgage interest deduction.
Support HR 1498 which would require loan servicers to decide whether to approve a short sale within 45 days of completion of the short sale request.
Reauthorize the National Flood Insurance program for at least five years and end the uncertainly of extensions and shut downs.