Weakened Housing Industry Lobbyists Ask Congress to Adopt 'No Harm' Stance - Bloomberg

Photo: Rich Clement/Bloomberg "We don't believe, frankly, that the way we've been successful in legislative and regulatory battles in the past is going to cut it this time," said Howard. Realtors The National Association of Realtors is doing its own grassroots campaign with an eight-month bus tour across the U. Today, confronted with stagnant home prices, mountingforeclosures and the thinning ranks of housing lobbyists, Howardand his remaining allies are asking for something new. Stop saying we're going to require everyoneto put 20 percent down on a house. Stop saying there's no rolefor the federal government. FannieMae and Freddie Mac, the largest sources of home lending in theU. Defaults aremounting, home prices are stagnant and a fifth of borrowers owemore on their mortgage than their property is worth. Trade groups for homebuilders and mortgage bankers arefeeling the pain, too, cutting staff and lobbying budgets. Many,including the National Association of Realtors, are shifting atleast some of their focus away from Washington, training theirmembers to educate the public and politicians about the value ofhomeownership. Real Estate agents and homebuilders fought to preservethe higher limits, saying the change would hurt home sales. Staff has shrunk by a third and lobbying expendituresin the first half of 2011 were about a fourth of the $4. Realtors Step Up Frustrated by the reception they're getting in Washington,the association, like the Realtors, is relying more on itsgrassroots, training members how to get the message out to theircommunities. Their message to local leaders and the home offices ofHouse and Senate members: "Don't make it harder right now,"said Kavanaugh, executive vice president of the Home BuildersAssociation in Louisville. The Realtors' jump in lobbying spending stands alone. The Fannie Mae and Freddie Mac bailout, now at more than$170 billion, has many politicians rethinking their allegianceto the cause. Budget cutters, in the form of a deficit-reductionsupercommittee, have put the mortgage interest deduction on thetable, a once-unthinkable act. Mostly, though,the association is mobilizing members to talk to lawmakers andcongressional staff about rulemaking. That was on the agendalast week when 50 mortgage bankers went from a Washingtonconference to meet with senior aides and lawmakers on CapitolHill. Of chief concern is an effort by regulators to writeminimum standards for mortgage borrowers. As drafted, the riskretention plan would require homebuyers to put at least 20percent down on a mortgage to qualify for the best rates. Housing lobbyists, lenders and consumer groups are unitedagainst the proposal, which they say would deny mortgages tomillions of would-be homebuyers and do little to reducedefaults. Overall, the market's problems are so intractable that amortgage policy overhaul is unlikely to make it onto thecongressional agenda until after the 2012 elections. You've got to restore consumer confidence so thatpeople will open up their wallets. Lobbyists and trade group membersdon't expect Congress to do anything, such as reducing thededuction for mortgage interest, that might hurt the recovery.