The National Association of Realtors (NAR) told members attending the annual conference in New Orleans today that the debate over Fannie and Freddie’s future is likely to stall legislation regarding the restructuring of their current role into 2012 or beyond. It could also mean a push for further tightening of FHA lending standards and affect tax subsidies for homeowners such as the mortgage interest deduction and capital gains tax cuts enacted by President George W. Bush.
"We'll have to separate what people said before Tuesday, and what they (do when they) get to Congress," said Jerry Giovaniello, NAR's chief lobbyist, of the prospects of Democrats and Republicans forging compromises on pressing issues. "On GSE reform, we've been meeting with members since January ... members of both parties are saying the old model is dead."
President Obama has committed to putting forward a plan for restructuring Fannie and Freddie and the mortgage markets in general by the end of January.
Although NAR has opposed some recent changes in FHA underwriting standards that are intended to limit losses and stave off the need for a taxpayer bailout, "We support very tough FHA reform," Giovaniello said.
When it comes to Fannie Mae and Freddie Mac, NAR advocates converting the companies into government-chartered, non-shareholder-owned authorities that would continue to do what they do today: purchase and guarantee mortgages.
