REALTORS(R): Home Ownership Bigger Than Politics

REALTORS® heading up to Capitol Hill this week will be telling their members of Congress not to let real estate issues get caught up in election-year politics.
A case in point is long-term reauthorization of the National Flood Insurance Program, which expires in just two weeks. The bill is popular on a broad, bipartisan basis, with some three-quarters of the House passing the bill and most of the Senate passing a previous version of it. But because the bill is noncontroversial, it’s become a magnet for add-on provisions that could derail its consideration...

Consequently, REALTORS® will be asking their members to call for a vote on a "clean" bill on the Senate floor without delay. "This is something so simple that lawmakers can get done," said NAR Chief Lobbyist Jerry Giovaniello, who spoke before a packed room of REALTORS® Wednesday morning prior to their Hill visits at the 2012 NAR Midyear Legislative Meetings & Trade Expo.
Key real estate priorities, including the mortgage interest deduction, could come under the spotlight towards the end of the year as the Congressional session comes to a close and national elections are held. Lawmakers will be faced with expiration of the tax cuts enacted during the George W. Bush administration. The price tag for extending these cuts is some $4 trillion, which would put pressure on lawmakers to find offsets elsewhere. That would make cuts to real estate tax benefits — chief among them the MID — attractive, because they are among the biggest sources of cuts available to the government.

NAR Director of Tax Policy Linda Goold advised REALTORS® to resist calls by their members of Congress to find alternative cuts to the MID, because trading off the MID for cuts elsewhere is a false choice. "The MID has been in the tax code for as long as deductions have been in it," said Goold. "Home ownership is not a special interest."

One of NAR's consumer priorities, extending mortgage cancellation relief, also expires at the end of the year, so REALTORS® will be asking lawmakers to co-sponsor legislation to keep that benefit going. It exempts households that have had their mortgage modified or sold their home in a short sale from having to pay tax on any debt forgiven by the lender.

Other priorities during this week's Hill visits include getting more liquidity into commercial markets by raising a lending cap on some credit unions and creating a covered bond market, passing reforms to keep the FHA financially healthy, and getting lawmakers to write letters to prevent regulators from making it harder for creditworthy households to get reasonably priced mortgage financing.

— Robert Freedman, REALTOR® Magazine