Realtors push to improve market

Over the past year the U.S. housing market has made significant strides. A look ahead, however, shows a number of regulatory issues left unresolved that could potentially harm the industry in 2013.

Several regulations on the horizon stemming from the Dodd-Frank Wall Street Reform and Consumer Protection Act could affect housing, mortgage finance, and homeownership. In addition, the question of how to reform Fannie Mae and Freddie Mac still remains unclear. “As an advocate for homeownership, Realtors want to make sure any changes will not harm the progress already experienced in the housing market or will not make mortgage lending more challenging,” says Orlando Regional Realtor Association Chairman Steve Merchant, of Global Realty International.

A particular issue of concern to Realtors is a regulation that stems from Dodd-Frank: qualified mortgage (QM). This regulation requires that no lender make a mortgage loan without making a reasonable and good faith determination that the borrower has the ability to repay the loan. The full rule for QM has not been determined yet, but depending on the definition, this regulation could reduce many consumers’ access to credit. Realtors support a definition of QM that establishes strong consumer protections, promotes mortgage liquidity, and offers lenders a safe harbor to reduce litigation.

Dodd-Frank was created to address abuses in the industry. While Realtors recognize the need for additional regulation, they believe regulators must avoid adopting unrealistic requirements that will affect homeowners and potential buyers, as well as do harm to the recovering housing market.

“Issues such as affordable financing and available credit don’t just affect people who own a home – homeownership shapes communities and strengthens the nation’s economy,” Merchant said. “We need to ensure that any regulations and reforms do not jeopardize a housing recovery and ensure the dream of homeownership is available to all Americans.”