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Friday, February 13th, 2009 at 2:10 PM

NAR Takes Credit

Dear Fellow REALTOR®,

Here’s our take on the Stimulis Bill and Treasury announcements made this week. We look at the Stimulis package AND the Treasury’s package holistically, in compliment with each other – mostly because that’s how the Obama team is looking at it. Your representatives, the NAR Board of Directors, asked us in November to do 4 things (with an unspoken but clearly understood mandate to PRESERVE what we already have). Here they are: 1) get loan limits raised for high cost areas, 2) make the $7,500 tax credit NOT a loan, 3) try to find ways to push interest rates down (which are higher than they should be due to systemic risk right now) by 200 basis points, and 4) help provide solutions to the foreclosure/short sale problem.

So here’s what we have achieved: 1) the loan limits will be raised to $727,000 in high cost areas, 2) the tax credit will be raised to $8,000 with NO payback [a true credit], 3) interest rates have come down 125-150 basis points, and 4) the bill has over $50 billion in it for foreclosure mitigation, with Geitners Treasury plan signaling that the second half of TARP and TALF will be used to mitigate foreclosures through a government guarantee, drive down interest rates by buying another $200-300 billion of mortgage paper from the GSES’s thereby freeing them up to do the same with new mortgages, and Fannie has just agreed to lift the cap of 4 investment properties eligible for loans and raise it to 10.

In addition, we preserved what we have – which some tend to forget is always on the table when these negotiations start up again – mortgage interest deductability, real estate tax deductability, and the $250,000/$500,000 cap gains exclusion (an overall package worth more than $100 billion and for some a very attractive funding source for their pet projects).

We did make a run at the $15,000 credit — and we would have loved to have gotten that or the Homebuilders $22,000 credit idea as well as their 5 year loss carryback deal, but they were considered too rich for this program. What it did do though is totally take the debate off of whether a tax credit should be reinstated at all (it expired last year) and whether it was a true credit or a repayable loan, and kept the conversation on how much it should be. It also kept the debate off of ‘what we are willing to give up to get a $15,000 tax credit’ and kept the debate again, on how much it should be. It’s pretty hard to complain when they give you what you ask for and you lose something you never had.

While we study the Treasury specifics on their major role in providing the rest of the housing solution — there is much more to come and we are working diligently with the Administration to help ‘unclog the pipeline’ and get capital flowing into housing again.

Sincerely,

Charles McMillan, CIPS, GRI
2009 NAR President

Posted on Friday, February 13th, 2009 at 2:10 PM in Psycho-babble | 16 Comments » | Print Print You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Reader Comments: 16 Responses

  1. Wow how poorly written was this. It really comes off as we got all of this for our organization. Maybe some time in the future congress will realize who they should be serving, cause the NAR does not seem to be concerned about congress’ constituents.

    LV Renter | February 13th, 2009 at 2:24 pm

  2. Did they really not send this through a spell checker or an editor? That just makes him look bad.

    uber_snotling | February 13th, 2009 at 2:28 pm

  3. Stimulis????? Wow.

    PB_Renter | February 13th, 2009 at 2:30 pm

  4. Well at least he got his name and title right…

    Kaz | February 13th, 2009 at 3:57 pm

  5. Those “achievements” will only perpetuate the unrealistic home prices. Preventing people from affording homes and renting instead. The sooner home prices come back to normal, the faster the economy will recover.

    no bubble here | February 13th, 2009 at 4:13 pm

  6. Gee… I wonder why the public’s perception is that Realtors are a bunch of uneducated opportunists.

    You have folks like The Princess of Bressi Ranch and then this chucklehead… I mean, it’s hard to have respect for an organization that is so completely incompetent.

    Jim… why the hell haven’t you staged a coup? The NAR needs to take a long hard look at itself and determine if they can move forward without doing some serious reinventing – because as it stands now, their entire message is off-putting and reeks of insincerity and opportunism.

    People don’t have enough money or patience to play their game anymore.

    Of course, when you put out an official communication that looks like it was written by a LOLcat… Geesh.

    HappyRenter | February 13th, 2009 at 4:28 pm

  7. Jim,

    You have got to love it when the weather is bad in SO CA as we all have more time to sit on the internet, read your blog, and keep warm and dry indoors!

    We will never have this much financial and housing news coming at us everyday like it is ever again…let us hope we don’t in our lifetimes! Many cannot withstand too many more blows!

    doughboy | February 13th, 2009 at 4:43 pm

  8. And these are the people perpetuating 6% commissions…

    I vote for the JtR coup d’tat.

    Aztec | February 13th, 2009 at 5:37 pm

  9. In Latin, the word “stimulus” refers to a pointed stake used by soldiers. It can also me an “goad” or “prick.” That being the case, perhaps an “-is” ending is not all that inappropriate.

    Blissful Ignoramus | February 13th, 2009 at 5:52 pm

  10. The article harkened me back to Al Gore’s “I invented the Internet” comment.

    stevea2z | February 13th, 2009 at 5:59 pm

  11. Jeebus.

    Wow, just wow. I think I need a cigarette after that email. and I need to change my shorts.

    Chuck

    Chuck Ponzi | February 13th, 2009 at 9:46 pm

  12. I wish I could spend a lot of money I don’t have…..all I got is an IOU.

    BottomFisher | February 13th, 2009 at 10:11 pm

  13. I think I’m going to hurl…

    Troubled Loner | February 13th, 2009 at 10:58 pm

  14. Thanks, NAR, now we can get back to those shopworn truisms: “Now is the time to buy” because “they’re not making anymore real estate.”

    jprice vincenz | February 14th, 2009 at 5:20 am

  15. “In addition, we preserved what we have … mortgage interest deductability, real estate tax deductability, and the $250,000/$500,000 cap gains exclusion”

    It doesn’t take a genius to see that once the current crisis is over, the rules will be changed somehow to try to ensure this Never Happens Again. And this will be done even if the waters of the Potomac run red with the blood of lobbyists.

    Jim, I’d be interested to hear which of the currently sacred cows of the real estate market you expect to see slaughtered before this is all done.

    Johan Larson | February 14th, 2009 at 5:02 pm

  16. Johan,

    I’m afraid the only slaughters coming out of this are current and future taxpayers.

    Business as usual. Everyone is corrupt. Everyone. Won’t change without a revolution.

    Chuck

    Chuck Ponzi | February 14th, 2009 at 10:35 pm

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