ALTA Advocacy Update - July 14, 2008
To: Interested ALTA members
From: Kurt Pfotenhauer, CEO
Date: July 14, 2008
Subject: ALTA Advocacy Update
This is the first email I will send to you each week updating you on ALTA's advocacy activities. I hope you will find it useful and will reach out if you have questions or concerns.
A lack of confidence has brought heavy pressure on Fannie Mae and Freddie Mac stock prices this year, but especially last week. The two companies hold or guarantee almost half of all outstanding mortgage debt in the country, worth over $5 trillion, and are key to providing a stable source of capital to residential markets. The companies were chartered by Congress and carry an implicit backing by the government, but are owned by private shareholders. Regulators are attempting to calm investor fear without indicating how far government intervention may reach if required. Late Sunday, before the opening of financial markets, Treasury Secretary Paulson announced a plan to support the GSE's by temporarily increasing their line of credit, allowing the Treasury to purchase the companies' stock (if needed) and adding the Federal Reserve as a consultant to a new GSE regulator created in pending housing legislation.
That bill, formally titled the Housing Rescue and Foreclosure Prevention Act (HR 3221), passed the Senate 63 to 5 Friday evening and now moves back to the House of Representatives. We support the bill which contains top ALTA priorities of FHA modernization and GSE reform and will help restore confidence and bring liquidity to the mortgage markets. Last week's collapse of Fannie and Freddie stock prices highlight measures in the bill that create a new, stronger regulator of GSE's with expanded powers to reassure investors that the companies are adequately capitalized and well managed. Although the White House last month threatened to veto the bill and HUD Secretary Preston has expressed reservations with portions of the bill, the President has called for less partisanship on the issue and expressed confidence he will reach a deal with Congress and sign the legislation. We agree.
ALTA has rallied its members in support of the bill, as have the Homebuilders, Realtors, and Mortgage Bankers. An ALTA Action Alert issued last Tuesday so far has produced 939 messages to the Senate from 470 ALTA members. ALTA's grassroots continue to grow: to date almost 4,000 messages have been sent by ALTA members to Congress and the President.
In addition to the Treasury's steps over the weekend, FDIC took over operations of Indy Mac Bank to maintain its banking services and set up a future sale of the bank. This, along with the Treasury Department's action, is key to stable and liquid mortgage markets and one of the reasons we are anxious to get HR 3221 to the President's desk. However all of this recent activity resolves, it will have some affect on consumers' home purchases and should be watched closely.
In other news, TIPAC contributions are on track for a record year. To date, we have raised just over $95,000 from 307 contributors and a phone campaign Thursday, July 24, will bring us a step closer to our 2008 goal of $200,000.
I am pleased Florida and New England have adopted the ALTA Principles of Fair Conduct, part of the Title Industry's Consumer Initiative, our strategy to improve oversight of the industry and educate and protect consumers.
Best Regards,
Kurt
