NAR President Moe Veissi told a panel of U.S. senators yesterday that the last thing the housing market needs right now is another reason for lenders to decline your client’s mortgage loan application.
“Tight lending standards remain a problem,” he told the members of the U.S. Senate Banking Committee subcommittee on economic policy, “and we don’t want to give a lender another excuse not to approve a loan.”
The Senate panel was looking at long-term reauthorization and reform of the National Flood Insurance Program. NAR supports reauthorizing federal flood insurance for five years and making reforms that would strengthen the program. As it stands, the program is set to expire at the end of this month, and REALTORS®, when they’re in Washington next week for the Rally to Protect the American Dream and the NAR Midyear Legislative Meetings & Trade Expo, will make the program reauthorization an advocacy priority. Members will be meeting with members of Congress from their state in their annual Hill visits.
Many lawmakers on a bipartisan basis support reauthorization, but extending the program is always a challenge. Congress in the past several years has reauthorized the program in short-term increments, and a couple of times it allowed the program to lapse for a short period. Those lapses, as short as they were, have been very hard on the market. Thousands of transactions couldn’t close—and that’s what President Veissi means when he talks about giving lenders another reason to say no.
And the problem isn’t a coastal issue. As President Veissi says in his testimony, which you can see in the the 3-minute video above, flood plains are everywhere, so the absence of insurance is a nationwide problem.