CALL FOR ACTION UPDATE: SENATE PASSES STIMULUS PACKAGE WITH INCREASED LOAN LIMITS

Thanks in part to the lobbying by C.A.R. and NAR members; the Senate passed their version of an economic stimulus package on Thursday, February 07, 2008. The Senate version expands rebate checks for seniors and disabled veterans and includes the same increases to the conforming loan limits for both GSE and FHA found in the House stimulus package. The House has already announced that they plan to vote on the Senate version of the stimulus package and expect to quickly pass the stimulus package with a bipartisan vote. The President is expected to sign the legislation early next week, ahead of the Congressional self-appointed deadline of February 15th. The increase in the conforming loan limits will last through 2008, but C.A.R. and NAR continue to lobby for FHA and GSE reform, making these increases permanent.

Thank you to all of you who either called Senator Boxer late last year or responded to last week’s Calls-for-Action requesting that increases to FHA and GSE loan limits be included in the Senate’s version of the stimulus package. Once again, you’ve made a difference.

COMING UP THIS WEEK IN SACRAMENTO

The legislature has been conducting a limited number of hearings over the past few weeks. Currently, the legislature is in the middle of the bill introduction process that will conclude February 22.

This week, C.A.R. will support if amended SB 1055 (Machado) Cancellation of Mortgage Indebtedness, which is scheduled to be heard by the Senate Revenue and Taxation Committee on February 13. Recently, the federal government enacted the Mortgage Debt Relief Act of 2007 that permits 3 years of mortgage debt relief by not requiring borrowers to pay income tax on debt forgiven in a “short” sale. This statute will apply to tax years from January 1, 2007 through January 1, 2010. SB 1055 would provide limited conformity to federal income tax laws by mortgage debt relief only for tax years 2007 and 2008. C.A.R. will support SB 1055 if it is amended to provide the same 3-years of debt relief that the federal statute allows.

ISSUE UPDATES

Loan Limit Increases Pass House, Move to Senate
The House passed an economic stimulus package that includes an increase in the loan limits for Fannie Mae, Freddie Mac, and FHA. President Bush supports the bill, under which the FHA limit will increase to as much as $729,750 in high-cost areas (to 125 percent of local median home prices). This is a one year increase, pending final passage of FHA reform, which passed the House and Senate last year. The Fannie Mae and Freddie Mac conforming loan limits will be increased for one year up to $729,750 (from $417,000). The bill also allows a 50-percent bonus depreciation for leasehold improvements made in 2008 for the 2008 tax year. The remainder of the cost of the asset will be amortized over the remaining 38 years of the structure’s life. The Senate is expected to consider the bill, H.R. 5140, with the loan limit increases, this week. NAR has a Call For Action in effect, asking senators to support the bill. Members can send a letter online.

Senate Tax Package Aims at Stimulus
The Senate Finance Committee, which oversees tax issues, has reported a bill that includes the tax portion of the stimulus package. The centerpiece is a $500 rebate ($1,000 on a joint return) that will be sent to most households, including retirees and veterans. A $300 rebate would be available for each child, without restriction on the number of eligible children. The rebate would phase out for upper income taxpayers. The economic stimulus bill in the House contains a similar, but higher, rebate: $600 to each individual ($1,200 on a joint return). The Senate Finance Committee legislation, like the House bill, includes the 50 percent bonus depreciation for leasehold improvements. It would also allow state housing agencies to issue additional mortgage revenue bonds to assist eligible homeowners refinance subprime mortgages.

NAR: Wetlands Guidance Needs Work
Draft guidance on wetlands by EPA and the U.S. Corps of Engineers could confuse the scope of the federal government’s authority to regulate wetlands and which waters should be regulated, NAR says in comments on the guidance. NAR suggested that EPA and the Corps institute a rulemaking that would clarify these issues and help to develop a streamlined and effective wetlands regulatory program.

NAR NEWS

2008 Conference & Expo: Call For Presentations
Industry speakers interested in being considered for a session presentation at the 2008 NAR Conference & Expo, Nov. 7-10, in Orlando, Fla., should submit practical, timely information by Feb. 29. For more info contact Roz Kriener, 312/329-3283, Pamela Vaughter, 312/329-8886 or send an e-mail to CFPinfo@realtors.org.

President’s Podcast: Loan Limit Increases are Crucial
NAR President Dick Gaylord in his latest podcast explains how increasing the loan limits for FHA and the two secondary mortgage market companies, Fannie Mae and Freddie Mac, would benefit homeowners, buyers, and help strengthen the housing market. He urges REALTORS(R) and consumers to call on Congress now to pass an economic stimulus package that raises the loan limits.

Miami-Dade County Recognized for Housing Portal
NAR and the U.S. Conference of Mayors have named Miami-Dade County an Ambassador City for its Housing Central Web portal, a virtual one-stop housing center that connects residents with affordable homes and rental units and provides information and resources for area families

LEGAL

Court Enforces E-mail Settlement
A settlement agreement negotiated via e-mail is enforceable, the Appeals Court of Massachusetts, Suffolk, ruled, affirming the trial court.

Legal Podcast: Undisclosed Dual Agency
Real estate educator Adorna Carroll discusses how salespeople can avoid this liability risk in the latest podcast from NAR legal affairs.