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April 2009
Index of all
messages
from the Association President
It’s PSF time again!
By Barb Cline, AAR President
Yes, the industry is experiencing a “down” market right now. Even so, there is much to be thankful for.
Although prices have fallen in many neighborhoods throughout the metro area, the inventory of available homes is shrinking and the days on market is shortening. The Aurora metro area’s market is stabilizing somewhat. I encourage each of you to continue to be involved in the industry and recognize the good things that are happening.
PSF matters
I would also like you to be aware of how important your Political Survival Fund (PSF) donations are. Many of you know its value and invest in our business by making a contribution to it when you can. Some do not see the value; if that is you, I would like the chance to change your mind.
The Political Survival Fund (PSF) consists of invested funds from REALTOR® members who are interested in protecting real estate interests and property rights. Although PSF investments help support candidates on all levels, the majority of PSF dollars go toward local interests, which are based on recommendations from local boards and associations.
The Political Survival Fund is nonpartisan, supporting above all else REALTOR® interests. Our PSF dollars are spent fighting really important issues, including the two outlined below.
Mortgage interest deduction
Did you know that the federal government’s current budget proposal would reduce this important deduction for thousands of families? The MID is a remarkably effective tool that facilitates homeownership. While only about 30 percent of all taxpayers in any given year itemize their deductions, more than three-quarters of homeowners use the deduction. My clients look at the MID as a huge incentive to purchase a home. Without that deduction, I am certain that our business would be different. NAR opposes any changes to current law.
Banks in real estate
This is an issue that the National Association of REALTORS® (NAR) has fought since it was first introduced. In early 2001, the Federal Reserve Board and the U.S. Treasury Department proposed rules to expand the powers of national bank conglomerates. The agencies proposed allowing these conglomerates to engage in real estate brokerage and management, reclassifying these activities as financial in nature. NAR strongly opposed the proposed rule, arguing that the Bank Holding Company Act of 1956 and the Gramm-Leach-Bliley Act (GLB Act) of 1999 do not authorize banking firms to provide real estate brokerage and property management services, as these are non-financial, inherently commercial activities.
Had banks been allowed to engage in real estate brokerage, it would have created anti-competitive and anti-consumer concentration of power within the financial services sector, which would have ultimately increased costs for homebuyers. Financial holding companies and bank subsidiaries with direct and indirect federal subsidies would have (1) competed unfairly with real estate firms and their affiliates because they have access to cheap sources of capital (thanks to federal deposit insurance and loans from the Federal Home Loan Bank System); and (2) cross-subsidized their commercial operations. Permitting banks to engage in commerce would have compromised bank lending decisions and created conflicts of interest while restricting consumer choice and competition among mortgage lenders.
NAR has been opposed to this from the outset and has fought long and hard to protect the rights of property owners. And thankfully, on March 11, 2009, President Obama signed into law the FY2009 Omnibus Appropriations Act that permanently prohibits banks from entering the real estate brokerage and management businesses.
Do your fair share
These are only two of the many issues that come before our business. I encourage you to make your fair share donation to PSF so that we can continue to conduct business in an industry that protects real estate interests and the property rights of individuals. Come to AAR’s annual PSF Breakfast (see more on page 7 of this issue) April 17 at 8 a.m. I hope to see you there.
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