Informing people about the foreclosure and short-sale process and emphasizing the importance of a mortgage interest deduction for homeowners are among several goals and bills the Washington Association of Realtors plans to pursue this legislative session.
Association president and real estate agent Phil Harlan, policy director Bill Clarke and public affairs director Barb Lally shared these plans with The Olympian’s editorial board Wednesday.
Although foreclosures and short sales are not too common in South Sound, they represented a little more than 20 percent of all closed sales in Thurston County in November, Harlan told the board.
A short sale happens when the homeowner has to sell property for less than the value of the mortgage; it involves persuading the lender to agree to accept less than the full amount.
With that in mind, the association is telling its members and clients about details the seller needs to know about the short-sale process, as does the buyer who wants to purchase such property.
The association also supports ways in which mortgages can be modified so the homeowner can stay in his or her house.
“People could restructure the loan and be successful and be in their house and maintain ownership, and keep that home off the market from creating a glut of inventory,” Clarke told the board.
About 1,500 homes were for sale in Thurston County last month, Northwest Multiple Listing Service data show.
Another area of concern for the association is talk nationally of capping the mortgage-interest deduction at $500,000. In other words, those who purchased a home for more than that amount wouldn’t be able to write off the mortgage interest on their income taxes, an idea that has stimulated homeownership for years.
This is not a statewide idea, but it’s one that emerged during a recent meeting of the federal deficit commission, which proposed it as one of several budget-balancing tools.
“I just believe any reduction, elimination of the mortgage interest deduction is going to kill our economic engine,” Harlan said, adding that it also would unfairly single out homeowners who live in more expensive markets, such as Seattle or San Francisco.
The association also plans to support two bills, Clarke said.
One would prohibit private transfer fees, and the other would maintain the current status of the real estate business and occupation statute, he said. Private transfer fees are common to states such as California, Clarke said, and one problem is that title-insurance companies have trouble documenting the fees.
A second issue is that, in practice, a developer collects a 1 percent fee for each lot sold in a subdivision, and in some cases, those fees are bundled and sold as a security, similar to mortgage-backed securities, which contributed to the current recession.
“Another motivating factor is that federal mortgage agencies won’t lend on private transfer fees,” Clarke said.
The private transfer fee bill doesn’t have a bill number yet, and the other bill number was not available.
Rolf Boone: 360-754-5403 firstname.lastname@example.org www.theolympian.com/bizblog