Mortgage

NAR’s candidates won big in the elections. That doesn’t mean Realtors will get their way.

Election dims prospects for housing finance reform

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With a little help from the National Association of Realtors, Republicans regained control of the Senate and increased their majority in the House of Representatives in last week’s elections. But Realtors attending the trade group’s annual convention were told not to expect any action on causes that matter most to them, including housing finance reform.

Ever since the government put Fannie Mae and Freddie Mac in conservatorship back in 2008, there’s been a lively debate about their future — and what role the government should play in mortgage finance.

NAR and President Obama pretty much see eye to eye on the need to wind down Fannie Mae and Freddie Mac, while still maintaining a limited government guarantee for secondary mortgage market investors. Without some kind of government backstop, proponents say, investing in mortgages will be seen as much riskier, and borrowers will pay higher interest rates.

But some Republicans say that the best way to prevent another disaster like the last housing bubble is for the government to get out of mortgage lending altogether.

“There are people in Congress who think there should be no role for the government in the housing market. That makes it really hard to do anything on housing,” Mark Halperin, co-author of “Double Down: Game Change 2012,” told Realtors gathering in New Orleans this weekend.

Neither Halperin nor his co-author John Heilemann expect to see any action on housing finance reform or housing policy from the next Congress. In fact, they don’t expect major legislation of any kind will be passed in the next two years.

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“House Speaker John Boehner’s historic majority will be more conservative than any other Republican Congress in the history of the republic,” Heilemann said. “The polarization of politics is the context of everything going forward.”

The good news for Realtors is that congressional gridlock means that talk of limiting or scrapping the mortgage interest deduction as part of a broader overhaul of the tax system is not likely to lead to action anytime soon.

According to the Center for Responsive Politics, NAR made more than $10 million in independent expenditures on behalf of congressional candidates, placing six-figure bets on nine Republicans and four Democrats. All but one of the Republicans who received major backing from NAR — including soon-to-be Senate Majority Leader Mitch McConnell — were victorious on Election Day, as were three of the Democrats.