Call to Action: NAHB is asking members to contact their Senators and Representatives to urge them to co-sponsor the Homeowner Flood Insurance Affordability Act, (H.R. 3370 and S.1610), which was introduced in Congress last week to address problems stemming from implementation of the Biggert-Waters Flood Insurance Reform Act.
Implementation of the Biggert-Waters Act has caused serious affordability concerns due to significant increases in flood insurance premiums. There are also concerns related to remapping of the Flood Insurance Rate Maps. If not corrected, these issues will severely impact the sale and construction of new homes as well as remodeling in many communities across the nation.
When the Homeowner Flood Insurance Affordability Act was introduced on Oct. 29, Rick Judson noted that “NAHB commends Sens. Robert Menendez (D-N.J.) and Johnny Isakson (R-Ga.) and Reps. Michael Grimm (R-N.Y.) and Maxine Waters (D-Calif.) for championing identical bipartisan legislation in the Senate and House that will provide relief from soaring flood insurance premium rates for countless home owners across the nation.”
The provisions in the insurance reform bill, Judson said, “will prevent undue hardship on the recovering housing market, help current and future policyholders keep their premiums affordable, prevent home values from dropping, and make the National Flood Insurance Program more effective for years to come.”
Learn more about the legislation in the current issue of NAHB’s Washington Update. Go to BuilderLink to write your Senators and Representative to urge their support of the Homeowner Flood Insurance Affordability Act. Contact: Kedrin Simms Brachman (800-368-5342 x8413).
NAHB Weighs In on Proposed Credit Risk Retention Rule
NAHB scored an important victory for builders and home buyers in August when regulators withdrew a proposed qualified residential mortgage (QRM) standard that would have resulted in 20% downpayments becoming the market standard. At the time, the regulators set out a new proposal that would align the definitions of a qualified residential mortgage with the qualified mortgage (QM), a move that NAHB supports.
We followed up last week with extensive comments urging regulators to adopt a QRM standard that ensures safe mortgage lending and prudent underwriting standards and does not exclude large numbers of creditworthy borrowers from the opportunity to purchase a home. Specifically, we urged the federal agencies to adopt a revised definition of a QRM that equates with the definition of the QM that was included in the Ability to Repay standard scheduled to go into effect on Jan. 10, 2014. The QM provides sound underwriting criteria and excludes risky products such as negative amortization and no documentation loans, we noted in our comments. And importantly, the QM does not include a specific downpayment requirement.
NAHB also voiced strong opposition to a proposed alternative, called QM-plus, that would require a 30% downpayment and other more conservative underwriting criteria. In particular, NAHB is concerned that responsible consumers would be forced into more expensive mortgages simply because they do not have 30% or more for a downpayment.
Our comments also addressed commercial and multifamily real estate lending and urged the regulators to differentiate multifamily from other commercial real estate loans and to allow subordinate loans in order to ensure a stable and liquid market for multifamily financing. You can read NAHB’s extensive comments here. Contact:Jessica Lynch (800-368-5242 x8401).
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