Is home ownership really the American Dream? Has the recent set of financial regulations created more obstacles in reaching that dream?
Good questions with an easy answer: YES!
Some things have changed, such as clothing and car styles. Technology makes advancements every day.
But the dream of home ownership has not wavered. One group is working diligently to protect and defend this right. Realtors do not just sell house. Last week, during the National Association of Realtors' midyear meetings and trade expo, 14,000 Realtors came together in front of the Washington Monument in the District of Columbia in a "Rally to Protect the American Dream" to show support for the part real estate plays in the economic well-being of our country.
Their goal was to bring the message that 75 million home owners and the millions more that are waiting to be home owners do not need more regulations to inhibit them from purchasing.
Did Congress hear them? Loud and clear rang the support from Representatives and Senators. Twenty-five actually attended the event and many more opened their offices to Realtors carrying messages directly to Congress.
We concentrated on four issues that we believe Congress must act on immediately.
Reauthorize the National Flood Insurance Program to ensure access to affordable flood insurance which expires at the end of the month. The program has been extended 12 times since 2008, all short term extensions. More than 5.6 million property owners in 21,000 communities rely on this program to qualify for federally related mortgages. Without the NFIP, there would simply be more uninsured properties, taxpayers would still be “on the hook” for disaster assistance to these properties, and there would be no premiums to pay down any remaining loan balance or collect interest. On Friday, the House of Representatives again voted to extend the program for one month.
Take action to improve the short sale process. Improvement in the short sale process is urgent. Expedited decisions by lenders are necessary to reduce the time it takes to sell a property, improve the likelihood that the transaction will close and reduce the number of foreclosures. Legislators must continue to support the independence and integrity of appraisals and reform the government sponsored entities, Fannie Mae and Freddie Mac
Do no harm to the housing market. All reports seem to indicate an improvement in the housing market. But, it has not stabilized. More than 20 percent of all homeowners owe more on their mortgage than the current fair market value. Realtors have asked for a two year extension of the tax relief provided in 2007 assuring that individuals in the process of foreclosure, short sale or loan modification will pay no tax on the forgiven debt. Eliminating the mortgage interest deduction at this time will only add to the uncertainty in the market.
Remove the FHA regulations that prevent a qualified buyer from purchasing a condo in a complex that is not 50 percent owner occupied. Lenders have taken great pains to add safeguards to make sure that the individuals applying for a loan are well qualified. Since many condos are purchased by first time homebuyers with a limited down payment, they are limited to government backed loans. It is understandable that FHA wants to protect their interests, but adding unrealistic regulations to requirements for loan approval only prevent qualified borrowers from buying a home. We were given assurances that the regulations would be reviewed.
Recently, I heard a speech by someone whose family had emigrated from Mexico. After many years they were finally able to purchase a home. He believes the dream of homeownership is alive and well. After all, he said, no one ever had a dream to rent.
Joan Probala is the managing broker for Issaquah Windermere (Windermere Real Estate/East Inc.). She has 30 years of experience in real estate, construction and sales and is president-elect (2012) of the Seattle King County Association of Realtors.