Brought to you by NAR’s Regulatory and Industry Relations Division
September 2008 Newsletter
i. Federal Government Acts to Protect
Mission of GSEs and Stabilize the
i. Federal Government Acts to Protect Mission of the ii. Freddie Mac Webinar “Introduction
GSEs and Stabilize the Financial Markets to Short Sales for Real Estate
On Sunday, September 7, 2008, the Director of the Federal Housing Finance Professional”
Agency (FHFA) , James B. Lockhart, placed Fannie Mae and Freddie Mac into iii. SIFMA Allows TBA Pooling of
conservatorship, as authorized by the Housing and Economic Recovery Act Jumbo Conforming Mortgages
of 2008 (HERA). Lockhart now has all the powers of the GSEs' directors, iv. HUD Sends Final RESPA Rule to
officers, and shareholders, and has appointed new chief executive officers OMB; NAR Testifies Before
who report to him. Lockhart explained that he was taking action "to help Congress
restore confidence in Fannie Mae and Freddie Mac, enhance their capacity v. NAR’s Response to Credit Crunch
to fulfill their [housing] mission, and mitigate the systemic risk that has vi. Educational Materials Available
contributed directly to the instability in the current market." vii. Announcements
At the same time, Treasury Secretary Henry M. Paulson announced three additional steps under the GSE stabilization
powers granted by HERA:
1. The Treasury Department has entered into agreements with the GSEs giving it the right to buy their senior
preferred stock, as needed, to make sure they maintain a positive net worth. The agreement includes an initial $1
billion issuance of senior preferred stock with a 10 percent dividend.
2. The Treasury Department has set up the structure for the GSEs to borrow from Treasury if needed to maintain
their regular business activities.
3. The Treasury Department will purchase GSE mortgage-backed securities (MBSs) to support the mortgage market.
GSE MBSs are pools of mortgages structured as securities with a GSE guarantee of the prompt payment of
principal and interest. The GSEs either sell the MBSs in the financial markets or retain them in their portfolios.
On September 8, 2008, NAR President Dick Gaylord issued a statement commending Secretary Paulson and Director
Lockhart for their bold decisions "to bring stability and continued liquidity to the nation's mortgage market." Gaylord noted
the critical importance of making sure that the GSE mission is not interrupted. NAR will work with the Administration and
Congress to assure that there will continue to be a robust secondary mortgage market in good times and in bad. Continued
liquidity in the mortgage market is essential to the health of the economy.
ii. Freddie Mac Webinar “Introduction to Short Sales for Real Estate Professional”
Recently, Freddie Mac held two webinar conference calls entitled "Introduction to Short Sales for the Real Estate
Professional". During these calls, Freddie Mac covered various topics including its mission to homeowners, key statistics on
delinquencies and workouts, understanding the real estate professional's perspective on the current environment,
retention and liquidation workout options, and a focus on short sales. Based upon REALTOR® suggestions and several
questions that were referred back to Freddie Mac for further elaboration, an updated presentation is being developed. An
online version of the webinar/presentation is being worked on and should be available in the coming weeks on
iii. SIFMA Allows TBA Pooling of Jumbo Conforming Mortgages
On August 14, 2008, the Securities Industry and Financial Markets Association (SIFMA) announced it has decided to allow
jumbo conforming Fannie Mae and Freddie Mac (GSE) mortgage loans to be included in mortgage backed securities pools
known as "to-be-announced" or TBA pools. Jumbo conforming mortgage loans are loans above $417,000 made to
borrowers in specified high cost areas. As the most liquid secondary mortgage market, the TBA market enjoys very
favorable pricing, which translates into lower interest rates for borrowers.
SIFMA is limiting the amount of jumbo conforming mortgages included in any one TBA pool to 10 percent.
On August 7, 2008, NAR President Dick Gaylord wrote to SIFMA asking that jumbo conforming mortgages be allowed to be
included in TBA pools now that the high cost area GSE loan limits are permanent. The letter argues that it is time to treat all
GSE-eligible mortgages the same and permit pooling in TBA securities so all qualified borrowers may receive the full benefit
of GSE mortgages. The letter also asked SIFMA to prevent the concentration of jumbo conforming pools in some,
unbalanced, pools that would be priced differently by the financial markets. The 10 percent per pool limit accomplishes
NAR's recommended result.
iv. HUD Sends Final RESPA Rule to OMB; NAR Testifies Before Congress
The Department of Housing and Urban Development (HUD) submitted its final RESPA rule to the Office of Management and
Budget (OMB) on August 21, 2008. The Bush Administration had directed all agencies to finalize rules before the November
elections. With OMB having up to ninety days to review the rule, it will have to expedite its review in order for the final rule
to be published before the November elections. Additionally, on September 16, 2008, NAR testified before the House
Financial Services Subcommittee on Oversight and Investigations on HUD’s proposed RESPA rule. NAR continued to
recommend that HUD limit its reform efforts to coming up with simplified disclosures and a Good Faith Estimate format
that matches up with the HUD-1 to allow consumers to easily understand information at closing.
v. NAR’s Response to Credit Crunch
On August 14, 2008, NAR's CEO Dale Stinton sent a memorandum to the State Associations of Realtors® reviewing issues
that have arisen in connection with the credit crunch that began a year ago. NAR is hearing from members who are
extremely concerned about the continuing turmoil in the credit markets. NAR believes that these concerns are well-
founded. Since most lenders are now subject to much stronger underwriting standards imposed by federal regulators with
NAR support, we think that much of the current reluctance to make and invest in mortgage loans is an over-reaction.
NAR has worked hard in response to these problems and has made significant progress described in the memorandum. The
Housing and Economic Recovery Act of 2008 (HERA) is a significant victory for housing. NAR will continue to work closely
with Congress, federal regulators, and our industry partners to help mitigate the housing market downturn. Attached to the
memorandum is a chart listing the key issues that have arisen in the context of the credit crunch, including the NAR
vi. Educational Materials Available
The Regulatory and Industry Relations section of NAR has several educational products available at the online REALTOR®
store (www.realtor.org/store) to assist your companies and REALTORS® in handling its everyday business operations.
This toolkit is an interactive education piece designed for REALTOR® members with
little previous experience in using products offered by FHA or members who have not
utilized FHA products in recent years. The toolkit provides an overview of FHA,
detailed information on FHA products, and resources to address common
misconceptions about FHA mortgage insurance programs.
Using the toolkit, REALTORS® will understand how FHA's mortgage insurance programs
help low- and moderate-income families become homeowners by lowering some of
the costs of their mortgage loans.
The components of the toolkit allow the user to learn how FHA has become easier to use and why FHA is a great
option for clients. The toolkit has several components including the FHA brochure, interactive CD, program booklet,
quick reference guide, and two pullouts.
Click here to order your copy of “Come Home To FHA: How FHA Helps REALTORS® Sell More Homes” Toolkit
The Real Estate Settlement Procedures Act (RESPA) sets strict rules that
prohibit referral fees or “kickbacks”. Thousands of RESPA complaints are
made every year. Violations can mean criminal penalties and big fines. NAR’s
“Introduction to RESPA” is a multi-media presentation that will give you the
tools you need to demystify RESPA including:
A RESPA overview
A RESPA slideshow with narration
Video Frequently Asked Questions presented by Phil Schulman
Click here to order your copy of “Introduction to RESPA” DVD
A great quick reference tool that provides examples of what the Real Estate Settlement
Procedures Act (RESPA) allows and prohibits to help licensees better understand and comply
with the Act. RESPA is a consumer disclosure and anti-kickback statute designed to inform
consumers of their settlement costs and to prohibit kickbacks that can increase the cost of
obtaining a mortgage. Real estate licensees must comply with RESPA; violators may receive
harsh penalties, including triple damages, fines and even imprisonment.
The RESPA Do's and Don'ts Card is a laminated card that provides RESPA Do's on one side and
RESPA Don'ts on the other. Sold in packages of 100 cards.
Click here to order your copy of "The RESPA Do's and Don'ts Card"
2008 REALTORS® Conference & Expo in Orlando
Below are several events that we thought may be of interest to you while attending the 2008 REALTORS® Conference &
Expo in Orlando. For more information or to register for the Conference & Expo, please click here.
“59-1/2 Minutes: A Member & Director Update”
When: Thursday, November 6 – 4:00pm to 4:59pm
“RESPA Reform: What’s Next?” - Real Estate Services Forum
When: Friday, November 7 - 10:45am to 12:15pm
Who: Anne C. Canfield, Consumer Mortgage Coalition
Ed Miller, Chief Counsel & VP of Public Policy, American Land Title Association
Phillip Schulman, Esq., Partner, K&L Gates
Kenneth Trepeta, Director, Real Estate Services
“Government-Sponsored Enterprise (GSE) Update: Fannie Mae, Freddie Mac, and the Federal Home
Loans Banks (FHLBs)”
When: Friday, November 7 – 10:30am to 12:00pm
Who: James Lockhart, Director, Federal Housing Finance Agency
“Schemes and Scams and Short Sales, Oh My!” - Risk Management and License Law Forum
When: Friday, November 7 – 12:30pm to 2:30pm
Who: Diana Williams, Fidelity National Financial, Tucson, AZ
Amy Heinz, Mortgage Fraud Program, Fannie Mae, Chicago, IL
James Ronan, Interthinx, Atglen, PA
“Removing the Long Pain from Short Sales”
When: Saturday, November 8 – 9:00am to 10:30am
Who: Walter S. Sanford, CRS, Sanford Systems Strategies, Kankaee, IL
“Broker Revenue Sources under RESPA”
When: Saturday, November 8 – 1:30pm to 3:00pm
Who: Phillip Schulman, Esq., Partner, K&L Gates
“Short Sale Solutions: For Real Estate Agents”
When: Sunday, November 9 – 1:00pm to 2:30pm
Who: Michael Spickes and Stacey Spickes, America's Home Rescue, Austin, TX
Your feedback is important to us as we want to make sure the information you receive is relevant and beneficial. If you have any
comments or suggestions for upcoming topics or issues you want covered, including recommendations on how to improve this
newsletter, please contact the Real Estate Services staff.
Real Estate Services Staff
Kenneth Trepeta – Director, firstname.lastname@example.org
Kara Beigay – Communications Manager, email@example.com (Media contact)
Patricia Tarhon – Project Coordinator, firstname.lastname@example.org