FHA Reform Update: On Thursday (1/24) the House and Senate resolved their differences over FHA reform. Among the changes that will be forwarded to the President are an increase in the conforming loan limit to $729,750 (or 125 percent of the area median home sales price) and a decrease in down payment requirements. Congress also approved a one-year increase in the conforming loan limit for the Government Sponsored Enterprises (Fannie Mae and Freddie Mac) to $729,750.
Speaking at the C.A.R. meeting in Indian Wells on Friday (1/25), Charles McMillan, 2008 NAR president elect, reported on the impact of these changes. McMillan said the new loan limits will reduce foreclosures nationwide, provide more options for refinancing, reduce housing inventory, increase sales volume and increase liquidity in the mortgage markets.
Government Affairs Issues at the C.A.R. Business Meeting: More than 1,000 REALTORS® from throughout California attended the winter C.A.R. business meeting in Indian Wells last week. Alex Creel, who leads C.A.R.'s legislative activities in Sacramento, reported on real estate issues they’re monitoring in the Capitol:
Mortgage Interest Deduction: The State of California is now faced with a $14 billion deficit and lawmakers are looking for new revenue sources. According to Creel the California Legislative analyst recently released a report that recommends elimination of the state income tax mortgage interest deduction on primary and, in some cases, secondary residences. Currently there is no proposed legislation to alter the deduction. However, given the massive state budget deficit and the legislative analyst's report, C.A.R. will aggressively oppose any scheme that tampers with the interest deduction.
Agents of Equity Purchases: Current state law requires agents representing clients in equity purchasing transactions to secure a (literally) non-existent surety bond. C.A.R. is supporting legislation to eliminate the surety bond requirement and allow an errors and omission insurance policy to be used in lieu of the bond.
Common Interest Development Owner Rights: C.A.R. is supporting legislation that, among other things, will prevent an HOA from prohibiting property owners from renting their units.
Statewide Propositions: The C.A.R. Board of Directors took positions on the following measures that will appear on the 2008 statewide ballots.
Jarvis Initiative - California Property Owners and Farmland Protection Act. C.A.R. will support this proposition that will limit local governments ability to take residential property through the use of eminent domain.
League of California Cities Initiative – Homeowners and Private Property Protection Act. C.A.R. opposes the League’s eminent domain initiative because it does not adequately protect property rights and limit eminent domain activities.
C.A.R. will not take positions on Prop 91 (Transportation Funding); Prop 92 (Community College Funding); Prop 93 (Term Limits); or on the Indian Gaming propositions 94, 95, 96 and 97 because they are not directly related to real estate.