What statement(s) related to housing—policy, or otherwise—would you want to hear in the presidential debates?
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Despite improving home sales performance during 2012, neither the housing markets nor the housing finance sector has recovered from the 2008 collapse. The National Association of REALTORS® (NAR) believes there can be no full economic recovery until the housing markets have recovered. It is therefore important that during the presidential debates the candidates address housing-related issues which are central to our national recovery.
The Housing Finance System
NAR believes that a successful housing finance system requires a robust secondary mortgage market. The current uncertainty must give way to a carefully designed mortgage finance system that creates a consumer-friendly public and private mortgage system and includes both a primary and a secondary mortgage market. Great care must be taken to balance the need for enhanced regulation with the operation of a mortgage finance system that will ensure the flow of mortgage capital to all markets, at all times, and under all economic conditions. Moreover, financial reforms enacted in the Dodd-Frank Wall Street Reform Act must not impede responsible mortgage lending by creating an overly restrictive system. NAR supports the following:
- A robust secondary mortgage market with a strong federal regulator.
- Balance safety and soundness of lending institutions with the needs and concerns of creditworthy individuals.
- Enforce the law but erect no barriers to qualified borrowers seeking to purchase a home. (Assure clear and workable definitions for qualified mortgages and qualified residential mortgages.)
A thriving real estate industry and market requires the tried and true tax policies that support homeownership, promote capital formation, enhance economic growth and sustain community reinvestments. NAR rallies around three central tax policy principles:
- Current tax policy has supported a homeownership system that is unequaled in the world and must be continued and strengthened.
- The real estate tax rules create no significant complexity burdens and should be preserved.
- Some features of the tax system need modification to continue facilitating investment in income-producing real estate.
NAR is unwavering in its support for the mortgage interest and property tax deductions and believes that other favorable housing provisions should be added, such as: removing barriers to investment in income-producing residential and commercial real estate; and implementing improved low-income housing provisions. Tax rate reduction should not be the only goal of tax reform.
A September 6 article by Nick Timiraos in The Wall Street Journal, “Why the Candidates Aren’t Talking About Housing Issues,” concluded: “Mr. Obama has learned how difficult the housing problem is to fix, while Mr. Romney has discovered how hard it is to talk about in a sound-byte-driven campaign cycle. In short, housing doesn’t fit easily onto a bumper sticker.” Truer words were never spoken. Since 2008, we have experienced a roller coaster economic disaster. What we want to hear from our presidential candidates is a commitment to provide leadership and cooperation. For President Obama, that means confronting the current regulatory uncertainty due to three major regulations: QRM, QM, and Basel III by providing clear direction to the regulatory agencies to promote sensible lending. For Governor Romney, it means providing strong leadership in preserving measures that encourage and facilitate homeownership like the mortgage interest deduction and a healthy and sustainable secondary mortgage market.
Both candidates must begin to demonstrate they are aware of the huge role housing plays in our nation’s economic recovery.
Joseph M. Ventrone is Vice President of the National Association of Realtors’ Regulatory and Industry Relations Department.
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