To: Interested ALTA members
From: Kurt Pfotenhauer, Chief Executive Officer
Date: June 29, 2009
Subject:        ALTA Advocacy Update

Another week, another opportunity for ALTA to testify about title insurance.  This time, ALTA travelled 30 miles east of Washington, DC, to testify in Annapolis, Maryland, at a public hearing on "issues or concerns" relating to title insurance.  Curiously, no members of the public testified on any "issues or concerns," but the almost three hour hearing heard from individuals representing organizations critical of the industry and industry members eager to defend their important work.  Check out more information on the wide-ranging, unscripted hearing by clicking here.

ALTA sent this letter to all Members of Congress to urge support of legislation that would expand the federal tax credit for home buyers to $15,000.  This unrestricted credit would pull a lot of money off the sidelines to work through the excess housing inventory, which is an essential first step to broader economic recovery.  Moreover, we really need to get this done soon, while interest rates are still at historic lows.  The legislation would:

· expand the tax credit for first-time home buyers from $8,000 to $15,000,

· remove income and other restrictions on who can qualify for the credit to have a more direct impact on our nation’s troubled housing industry

· extend the home buyer credit to multi-family properties used as the borrower’s primary residence

· eliminate income caps of $75,000 and $150,000 on individuals and couples seeking to claim the credit, and

· continue the current credit, which expires December 31, 2009, for one year after enactment.

Steps like this are so helpful that California lawmakers are looking to expand their own similar incentives for homebuyers after a $100 million state tax-credit program, which was set to run until March of next year, has already been spent due to its overwhelming popularity and boost to the market.  Home prices continued to rise in California for the third straight month in May as well.  News like this is noteworthy because California’s real estate market is viewed by many as a barometer of the national market.  Incentives like this are working.

But, legislation doesn’t pass when representatives don’t hear directly from their constituents, so be on the lookout for an ALTA Grassroots Alert asking all members of the title industry contact their Senators and Representatives to support the two bipartisan bills.  Let me also ask anyone who receives the ALTA Grassroots Alert to forward it to the other individuals in your office and ask that they take 2 minutes to send an email to Capitol Hill to urge support.  A special thanks to those of you who filled out ALTA’s recent $8,000 First-Time Home Buyer Tax Credit Survey, which helped our policy team formulate our letter. 

As is typical in a week preceding a Congressional recess, things were busy on the Hill.  ALTA covered three hearings in the Senate Banking and House Financial Services committees on the President’s sweeping financial regulatory reform plan.  Click each hearing title to read a brief summary of that hearing. 

Monday, June 22, 2009 - Senate Banking Committee Hearing: Over-the-Counter Derivatives: Modernizing Oversight to Increase Transparency and Reduce Risks

Wednesday, June 24, 2009 - House Financial Services Committee Hearing: Regulatory Restructuring:  Enhancing Consumer Financial Products Regulation

Thursday, June 25, 2009 - House Financial Services Subcommittee on Financial Institutions and Consumer Credit Hearing: Improving Consumer Financial Literacy Under the New Regulatory System

Yesterday’s New York Times has an excellent editorial outlining the debate over new regulation of the financial services sector and a prediction on where all this appears to be headed – an investigatory commission to find the root causes and find consensus on how to proceed.  A key sticking point in the debate is the Administration's proposal to create a new Consumer Financial Protection Agency, which has been attacked by the American Bankers Association has having very serious flaws.  Plans for having the Federal Reserve as a systemic risk regulator are also drawing heat as Congress investigates the political pressure Fed Chairman Ben Bernanke exerted on Bank of America during its purchase of Merrill Lynch.  In addition, there appears to be waning public confidence in the $787 billion stimulus plan. 

The Federal Reserve took no additional action at its meeting last week on its key interest rate benchmark.  Rates for 30-year fixed mortgages edged to 5.42% last week according to Freddie Mac.  Check out this Wall Street Journal article to read why we’ve got to keep our eyes on home prices as they will be a leading indicator of an economic rebound.  Meanwhile, existing home sales were up in May, but the median home price fell 17% from a year earlier, and new home sales did not rise.  Fortunately, however, mortgage applications did rise 6.6% last week – for the first time in a month.  This week, we’ll look for construction spending statistics on Wednesday from the Commerce Department and the unemployment rate for June from the Labor Department on Thursday.

Also be sure to check out this editorial from Alan Greenspan from Friday’s Financial Times regarding the threat of inflation this editorial from Alan Greenspan from Friday’s Financial Times regarding the threat of inflation.

ALTA also met last week with Representatives Spencer Bachus (R-AL), Steve Israel (D-NY), Ed Perlmutter (D-CO), and Joe Donnelly (D-IN), and Senators Kit Bond (R-MO), Saxby Chambliss (R-GA), John Cornyn (R-TX), Mike Johanns (R-NE) and Richard Shelby (R-AL).

Thanks to members like you TIPAC has raised $115,000 to date and is on plan for reaching this year’s goal of $250,000.  As we won’t ever let you forget, TIPAC is essential to ALTA’s success on Capitol Hill, and with so much activity at the moment, the vitality of TIPAC has never been more important.

Finally, you will likely take little comfort in knowing that members of Congress were not spared from financial hits due to the sour real estate market.  Roll Call reported this morning that Representatives’ annual financial disclosure statements reported a number of losses on the sale of real estate.  All the more incentive to stabilize home prices.

I hope you find this ALTA Advocacy Update useful.  Email me if you have questions or comments.

Best regards,