Realtors' legislative agenda includes cancellation of PMI

The National Association of Realtors' 1999 legislative agenda aims to expand home-ownership opportunities, preserv private property rights, preserving the mortgage interest deduction and protect the ownership of online real estate data, according to R. Layne Morrill, NAR immediate past president.

Morrill discussed the association's legislative achievements for 1998 and provided a legislative outlook for next year during NAR's annual convention in November, according to a press release from the association.

"Every victory we score for real estate is a victory for property owners and our national economy," Morrill said in the release.

The major public policy thrust this year for NAR was a campaign to increase the limits on mortgages insured by the Federal Housing Administration. Congress passed legislation in October to raise FHA's mortgage insurance limits to a higher range, with a minimum limit of $109,032 and a maximum limit of $197,620.

The bill was signed into law by President Clinton Oct. 21, and the new limits are now effective. This change will allow up to 175,000 additional households to enter the market over the next five years, Morrill said.

"Enactment of this provision is a big win for home buyers. In the past, FHA's mortgage insurance limits were out of whack with reality. Raising these limits is allowing FHA to meet the needs of prospective buyers who don't qualify for conventional financing, but who qualify to buy using FHA when it is available to them," he added.

Another provision in the law provides uniformity to metropolitan areas with several different FHA limits. Since FHA limits generally are assigned on a county-by-county basis, some metro areas have in the past had a variety of limits.

The new law allows the county with the highest limit within a single metro area to dictate the prevailing limit for all other counties within that area, NAR stated.

A second key public policy victory for the association this year involves legislation to force lenders to cancel private mortgage insurance when it is no longer needed.

This measure passed Congress in mid-July, and takes effect July 29, 1999.

This law provides for automatic cancellation of the insurance once a threshold of 22 percent equity is reached. In addition, homeowners will be able to request cancellation when their accumulation of equity reaches 20 percent.

"This will protect homeowners from paying millions in unnecessary private mortgage insurance. We believe automatic cancellation will save them untold hours and costs in dealing with lenders over these issues," Morrill said.

One issue likely to be at the legislative forefront next year is tax reform, including proposals to replace the current system with a "simple" flat tax system, or a system including a consumption tax.

"We'll be quick to point out that the mortgage interest deduction is a key benefit of homeowner-ship, and it is definitely worth saving," he said.

"Simplicity should not be the only standard for evaluating or reforming a tax system. We support simplification, if it is reasoned and produces actual improvements. However, we do not support change that wipes out the good with the bad just for the sake of change," Morrill added.

Another issue involves the protection of private property rights. The association will continue to push for legislation to make it easier for property owners who feel their rights have been violated, or who have experienced a property "taking" by government, to file suit in federal court and have their concerns addressed in a timely manner. Such legislation passed the House last year, but stalled in the Senate this summer.

"This bill provides an alternative to the often time-consuming state and local administrative process for appealing land use decisions. It provides fairness by letting property owners have their say in court. It clearly will help level the imbalance caused by over-regulation and cumbersome use restrictions imposed by municipalities," Morrill said.

One industry trend-related issue on the association's legislative agenda involves the protection of information, including real estate data, that is exchanged through the Internet.

Legislation to protect the collection of factual data from unfair use by others passed the House this year, but not the Senate. Specifically, the bill would prohibit the copying, repackaging and re-marketing of data collected by others.

Such information, particularly the selection and arrangement of data in multiple listing system compilations, is information that must be protected as "intellectual property," and this legislation would help accomplish this, Morrill said. NAR plans to pursue reconsideration of this bill next year, he added. [[In-content Ad]]