The National Association of Realtors® has made a strong push in the past several months to bolster rules and regulations for the lending industry that will protect consumers in the real estate transaction.

“Homeowners and communities experienced great pain from the subprime mess this year, and that led to a wave of foreclosures across this country,” said NAR President Pat V. Combs, of Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt. “As leading the advocates for homeownership, Realtors® believe that even one foreclosure is one too many, especially when it is the result of irresponsible lending practices.”

Combs spoke during a regulatory forum here at the 2007 REALTORS® Conference & Expo regarding the current condition of the mortgage market and the ongoing impact of problems in the subprime market. She was joined by Daniel H. Mudd, CEO of Fannie Mae, and Brian Montgomery, assistant secretary at the U.S. Department of Housing and Urban Development and commissioner of the Federal Housing Administration.

“There is no question that FHA and Fannie Mae play a central role in maintaining a strong and healthy housing market. We are honored to have leaders from two of the most important housing organizations with us today to talk about these vital issues,” said Combs.

NAR backs FHA program reforms that would make FHA-insured mortgages available for more low- and middle-income home buyers with lower down payment requirements and increased mortgage limits for buyers in high-cost areas. NAR also advocates increasing conforming loan limits of Fannie Mae and Freddie Mac and upping their supply of financing availability, which could help stimulate a stagnant marketplace.

Commissioner Montgomery emphasized the importance of modernizing FHA by offering risk-based pricing. “The more people we reach, the more people we can help,” said Montgomery. “FHA is an important component to helping people affected by the subprime crisis. A modernized FHA can offer safe alternatives to many American families looking to buy a home or refinance their current home out of an exotic loan.”

Realtors® at the forum learned how they could get involved to help create an environment that offers safe and affordable mortgage alternatives for all potential homeowners, as well as how to help current homeowners in need of refinancing alternatives keep their homes.

NAR also trumpeted its Responsible Lending Principles, which call for all mortgage originators to be held accountable for providing mortgages that are designed for lasting homeownership. Those include acting in good faith and treating all parties fairly and honestly – similar to the Realtor® Code of Ethics to which all NAR members subscribe. The principles also call for banning prepayment penalties and for providing more consumer protections with stronger enforcement against predatory practices.

“It’s important that lenders, agencies, regulators, policymakers and other industry participants are actively discussing lessons learned from the market turmoil and seeking sound policies and practices moving forward,” said Mudd. “We need to focus on increasing liquidity, stability and affordability in the mortgage market as we move forward.”

“By working together, we can all help many more families achieve and protect their dreams of homeownership,” said Combs.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.