The continuing debate in Washington D.C. regarding the extension of the payroll tax reduction has spilled over into real estate. The proposal to extend the tax cut, passed by the United States Senate, is paid for by increasing the Guarantee Fees on Fannie/Freddie and FHA Loans. NAR has strongly opposed this diversion of housing resources to pay for a non-housing use. Use
this link to read the letter NAR sent to Senator Harry Reid (D-NV) the Senate Majority Leader.
Additionally, this issue is far from settled. The House of Representatives will vote later today on a Motion to Go to Conference, which is expected to pass, and that will be followed by a Motion to Instruct the Conferees. The House has decided not to take an up or down vote on the Senate package. It is unclear when and if Senate Majority Leader Reid will bring the Senate back for a conference committee, since the Senate adjourned on Friday for the rest of the year. If there is a conference committee, NAR will continue to oppose the usage of the GSE Guarantee Fee to pay for the Unemployment Insurance/Payroll Tax Cut Extension Package.
Bottom Line: The increased fee is NOT a done deal, so stay tuned.
Source: National Association of REALTORS® Government Affairs