Friday, May 13th, 2011
Dear C.A.R. Member,
Greetings from Washington, D.C.! This week, your Leadership Team and I are in our nation’s capital, meeting with California’s congressional delegates and representatives from leading housing industry groups, including Fannie Mae and Freddie Mac, Federal Housing Finance Agency, and others.
This is a busy time of year in the legislative arena, on both the national front and in California. Last week, nearly 2,000 members of the REALTOR® Party of California were out in full force in Sacramento for the Association’s annual Legislative Day activities, which included a march to the Capitol. Many of you met face-to-face with your state legislators to discuss the issues that affect our industry — and your livelihood. I want to thank you for participating in Legislative Day because it’s more important than ever to make certain our interests are represented and that our voices are heard before elected officials craft legislation that impacts our industry.
For example, one impending issue that will significantly impact our industry is the future of Fannie Mae and Freddie Mac, the government sponsored enterprises (GSEs) that purchase or guarantee mortgage-backed securities on the secondary mortgage market. Congress has been debating changes to the GSEs. Proposals for “reform” include legislation to phase out and eventually eliminate Fannie and Freddie altogether. Elimination of the GSEs, which purchased or securitized two out of every three loans written in 2010, would have grave consequences for home buyers and sellers, the real estate market, and the economy as a whole. Almost overnight, financing would dry up. Interest rates would increase, and borrowers would be forced into the exotic loan products that helped create the current financial climate. These are scenarios the struggling housing market can ill afford now.
It’s important that REALTORS® understand the potential damaging effects of phasing out Fannie and Freddie. For more details about the GSEs and their importance to real estate housing finance.
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