To: Interested ALTA members
From: Kurt Pfotenhauer, Chief Executive Officer
Date:
January 5, 2009
Subject: ALTA Advocacy Update
We’ve received a number of calls past couple of months from ALTA members concerned about HUD’s use of preferred providers for closing and title services on HUD owned properties. After numerous weeks of back and forth with our HUD contacts, we still have not received a good explanation of HUD’s thinking on a practice that arguably violates RESPA. Here is our letter to FHA Commissioner Montgomery asking for his immediate review of the policy.
Interest rates on the 30 year conforming mortgage continued to drop last week to 5.1%, but another index that’s headed the wrong way is the percentage of Alt-A loans delinquent by more than 60 days. An extraordinary number of Alt-A mortgages will reset in 2009 potentially triggering another round of delinquencies and foreclosures. Policymakers attempts to limit foreclosures through modifications or court-ordered “cram-downs” are showing frustratingly limited results as an government report showed more than half of loans modified in the first quarter were again delinquent after six months even as Hope Now announced 2.2 million foreclosures were prevented in 2008.
As you know banks and lending institutions are walking a fine line between the competing desires that they lend more and reduce risk. Even as banking regulators are urging banks to build capital reserves they are also encouraging banks to make more loans. In case you missed Phred Dvorak’s article in the December 24 WSJ, it’s worth reading, “A Small Bank Juggles Its Roles.” I know that many of your community banks have similar stories as well.
President-elect Obama and House Speaker Pelosi discussed today the scope of an economic package after Congressional leaders lowered expectations of a quick economic stimulus bill on yesterday’s Sunday Shows. While governors are calling for $1 trillion in spending for infrastructure, Medicaid, unemployment insurance, food stamps and education as economic stimulus and budget-balancing proposals, pressure is mounting for property tax relief in a number of states as higher assessed values are on a 2-3 year lag, bringing tax bills this year much higher than what homes are currently worth in some areas.
Just a reminder - we indicated last week that Fannie Mae issued its Home Valuation Code of Conduct. Fannie Mae intends to issue a Selling Guide announcement with implementation details and provide Frequently Asked Questions (FAQs) on Wednesday, January 7, 2009.
As state associations are learning about bills that are being filed in state legislatures and set forth their agendas for 2009, ALTA is a clearinghouse of sorts for state legislative activity as what happens in one state either has or could occur in another. ALTA will continue to facilitate communication across state borders so we can all benefit from the experience of our peers. As important issues move in your state, please tell ALTA by emailing Justin Ailes at justin@alta.org so that ALTA can be a useful resource and first contact in your state’s advocacy. As the 111th Congress is sworn in tomorrow, we are active identifying where we need to play defense and opportunities to play offense at the federal level as well and we value your input and consultation. Please look for more from ALTA in the near future.
I would like to thank everyone who contributed to TIPAC last year because your commitment to the industry and TIPAC has been outstanding. We raised more money from more ALTA members than ever before, reaching an exceeding our $200,000 goal. The New Year brings new challenges and a new goal of $250,000 and we are grateful to be able to count on your continued support. Thanks again.
I hope you find the ALTA Advocacy Update useful and have a Happy New Year!
Best regards,
