Homeowners-

Your most 
important constituents



 A 2008 Issue Guide for
Federal and State Policymakers


Presented on behalf of the nation’s
75 million homeowners by the
American Homeowners Grassroots Alliance




 

Who are the Nation's Homeowners? American Homeowners' 2008 Priorities:      Budget and the Economy      Consumer Protection      Credit & Financial Services      Education      Energy and the Environment      Healthcare      Housing and Real Estate      International Trade      Tax      Technology and Communications

Who Are the Nation's Homeowners? Home ownership contributes to our nation’s social stability and home equity is the biggest source of saving for most homeowners. Among the most diverse U.S. population segments, the nation’s 75 million homeowners are the largest single identifiable U.S. voting block. They also vote - in a national survey 91% of homeowners said they are very likely to vote in the next election. Most homeowners are politically moderate: 23% are independents and the remainder is split evenly between the two major political parties. Many policy issues can have a significant impact on homeowners and home ownership. Housing is the single greatest monthly expense for most homeowners and requires that most homeowners exercise budgetary prudence with their remaining discretionary spending. Therefore any policy that substantially impacts the cost and quality of living inevitably affects most homeowners. The American Homeowners Grassroots Alliance (AHGA) focuses on issues that have significant economic impact on homeowners and home ownership. These include issues related to federal and state budgets, consumer protection, credit and financial services, education, energy and the environment, health care, housing policy, international trade, taxation, and technology and communications. AHGA also tries to reflect homeowners’ moderate political philosophy in the development of its positions. We analyze issues from the perspective of the average homeowner and share our recommendations with policy makers and the media. This Issue Guide is a concise summary those positions, divided into ten issue areas. More information about AHGA’s positions is at www.AmericanHomeowners.org. Also on the website is information about the consumer education programs of the American Homeowners Foundation (AHF). Established in 1984, AHF is a separate independent education and research organization providing homeowners objective guidance and tools to assist them in home buying, selling, remodeling, financing, and other major home-related areas.

1. Budget and the Economy Mortgage and consumer interest rates have a major impact on homeowners. Deficit financing by the federal, state and local governments competes for a finite source of funds and drives up mortgage and other interest rates for homeowners and other consumers. Governments should operate with a balanced budget. All programs and tax cuts should be subject to pay as you go rules and budget caps. No program, entitlement, or tax deduction, including those that benefit homeowners, should be exempt from scrutiny.
(back to top)

2. Consumer Protection
● Sharing of sensitive financial and other personal information should be subject to an explicit opt-out system.
● Legislation to provide stronger consumer protection against identity theft and Internet fraud should be enacted.
● The Consumer Protection Principles of the Consumer Federation of America should be reflected in all legislation
(back to top)

3. Credit & Financial Services
● The ability of government sponsored enterprises (Fannie Mae, Freddie Mac) to provide favorable financing to
homeowners should not be constrained by unnecessary legislation or regulations that would undermine the ability of GSE’s to provide favorable mortgage interest rates, and regulatory oversight of GSE’s should remain at HUD.
● RESPA should require lenders to reach early written agreement with clients on broker compensation and provide choices for the payment of mortgage broker fees. Title 8 (anti-kickback rules) should be more vigorously enforced.
● All professionals who arrange home financing should be subject to all Truth-in-Lending Act (TILA) requirements.
● Banks should be permitted to offer real estate brokerage services and vice versa. Both should be subject to all existing laws and regulations pertaining to their respective services.
● Predatory lending should be outlawed and consumer financial education should be expanded. w Loan originators should be required to provide home buyers an early and firm estimate of all costs and other
important information, and should be subject to severe penalties for noncompliance. w Title insurance companies should provide substantial title insurance discounts for refinanced loans under 10 years old. Lender title insurance commissions should be disclosed on HUD-1 statements and capped at 20%.
(back to top)

4. Education Education is critical to our nation’s future. We must improve U.S. education at all levels.
● Educational budgets must be increased so that teacher salaries can be increased to draw better qualified teachers and more teachers can be hired to reduce class sizes and allow more attention to students in need. ● The “No Child Left Behind Act” must be fully funded in order for students and society to benefit from strong
systems of accountability based upon student performance, increased local control and flexibility, and the option for disadvantaged children to participate in public school choice programs or obtain supplemental tutoring.
● Student college loan programs must be enhanced to cover increases in tuition and room and board and
expanded so they are available to all qualified students in need.
(back to top)

5. Energy and the Environment Our nation must develop a balanced and comprehensive energy and environmental policy. The policy should include market-based conservation incentives and enhanced consumer education. Government-funded energy research aimed both at developing new energy technologies and reducing the environmental impact of existing energy sources must be expanded. The hydrocarbon based energy sources whose emissions are most adversely affecting public health and the global environment must be reduced and replaced with renewable energy sources to the greatest extend practicable as soon as possible.
● Tax credits to encourage higher standards of energy efficiency in new home construction and remodeling, and the purchase of hybrid vehicles and other energy efficient products should be made permanent.
● There should be an increase in funds earmarked for home weatherization for low-income homeowners,
and the program should be expanded to include active and passive energy systems.
● Federal funding for research into energy conservation and renewable energy technologies for home,
consumer, automotive, and industrial uses should be expanded.
● Laws to encourage teleworking, the creation of home based businesses, the greater use of public
transportation and the expansion of car-pooling should be enacted.
(back to top)

6. Healthcare Rapidly escalating health care costs are putting tremendous pressure on homeowners and federal, state and local governments. New and sophisticated medical technologies improve healthcare but are often very expensive. At the same time many laws and regulations often prevent market forces from reducing the costs of quality healthcare and affordable prescription drugs. Governments must seek ways of funding new technologies that improve the quality of healthcare. At the same time they must also seek to reduce costs through competition. As new programs, such as the Medicare prescription drug legislation are implemented, they should be monitored and adjusted if necessary. Efforts to contain healthcare costs through techniques such as allowing the importation of prescription drugs from other nation’s with demonstrated safe consumer drug track records, facilitating the growth of telemedicine so homeowners can remain in their homes longer, and governments to use their economic leverage in the procurement of prescription drugs should be continued and expanded.
(back to top)

7. Housing and Real Estate Home equity is the single largest savings vehicle and source for retirement security for most homeowners. Programs that help families achieve the dream of home ownership can be the most cost effective policy tools to both strengthen the economy and enhance savings in the U.S.
● Federal housing programs that help qualified low-income families accumulate the down payment to purchase a home should be strengthened. Congress should extend the Work Opportunity Tax Credit and Welfare-To-Work tax incentives to help the unemployed and economically disadvantaged on the road to home ownership.
● A national housing trust fund should be established to build rental housing for the lowest income families.
● The use of eminent domain procedures should be limited to acquisition of property for public use and not be
allowed as a tool for commercial real estate developers to seize homes.
● State real estate laws that would allow a real estate broker to represent both a buyer and a seller simultaneously (i.e. dual agency) should be repealed at the federal or state level.
● State laws requiring minimum levels of service or prohibiting rebates should be repealed.
● Required disclosures should be made in writing by real estate agents at the first substantive meeting with
consumers. They should identify all services provided, and sanctions should be imposed for violations.
● Entry standards and continuing education requirements for real estate brokers and agents should be increased.
● Real estate trade associations should be prohibited from advocating state legislation that would violate antitrust laws were those rules created by real estate associations or state commissions.
● Multiple listing Services should distribute all homeowners listings to all of the MLS members consumer-facing websites unless the homeowner gives written permission not to. Real estate brokers should erect no barriers to the redistribution of those listings by third parties. w At least half of the members of all real estate boards or commissions should be consumer representatives who have no ties to any segment of the real estate services community. w An agency relationship with a real estate broker or agent must be in writing and signed by the consumer.
(back to top)

8. International Trade Homeowners and other consumers worldwide benefit from reduced tariffs and non-tariff barriers to international trade. The U.S. Congress should oppose special interest groups who put the wishes of their narrow constituencies ahead of the best interests of the economy, homeowners, and other consumers.
● Workers displaced by foreign trade should be provided expanded re-education benefits, including extending
unemployment benefits during the re-education period.
● Protectionist U.S. tariffs, such as the “new homes tax”, which adds $1,000 or more to the cost of a new home through tariffs on Canadian softwood lumber should be withdrawn.
(back to top)

9. Tax
● The current social security system should not be modified by other than minor rate adjustments to improve long term solvency. IRA, 401K, and other retirement savings plan contribution limits should be increased. Additional tax incentives for home ownership and retirement saving should be created. Annuity payments should be taxed at the same rate as dividends. w The alternative minimum tax (AMT) should be adjusted and indexed to exempt middle class homeowners.
● First time home buyers should be allowed a tax credit of 10% of the home’s price, capped at $6,000, and an affordable housing tax credit should be enacted to create more homes for low income taxpayers.
● The mortgage insurance premium tax deduction should be made permanent.
● The Employee Retirement Income Security Act of 1974 (ERISA) should be amended to permit investments by retirement plans in principal residences of children and grandchildren who are buying their first home.
● Tax credits and other incentives that promote business use of the home, affordable health care insurance, energy efficiency, and protection of the environment should be enacted or extended.
(back to top)

10. Technology and Communications Homeowners use technology to pay bills, buy products and services, plan vacations and business trips, and increasingly to telecommute, and/or facilitate home-based businesses. Students use technology tools to do school work and research. Telemedicine is allowing the chronically ill to remain in their homes longer and reducing the net cost of healthcare. The Alliance recommends that:
● The Internet tax moratorium should be permanently extended.
● Web sites should provide clear and conspicuous home page disclosure of company privacy policies and include procedures that give consumers the ability to control the disclosure of any information they provide.
● Federal and state telecom regulatory bodies must protect the interests of consumers and recognize property rights. Consumer representation on state regulatory bodies should be increased.
● Spam enforcement procedures should be included in international treaties. Congress should enact new laws to punish unauthorized use of spyware and phishing. Anti-spam laws should be strengthened if necessary.
● Federal programs and tax incentives to provide affordable broadband services to rural residents, economically disadvantaged citizens, and those who would benefit from telemedicine solutions should be expanded.
● Digital Rights Management (DRM) technology should not be mandated. Consumer’s “fair use” rights to make digital backup copies of music, movies, and books for personal use should not be abridged.
● It should be illegal to put any software code on computers without the owner’s expressed advance permission.
● Internet service providers or backbones should be allowed to offer consumers different pricing based on access speeds but should not be allowed to slow or restrict consumers’ access to commercial websites.
● The cable TV monopoly should be ended. Federal and/or state laws should be enacted to let competitors from other sectors enter the TV services market. w Internet-based (VOIP) telephone service providers must provide direct access to 911services. Congress should examine cost-effective alternatives to improve first responder interoperability.
(back to top)

Consumer Protection Principles of the Consumer Federation of America:
The marketplace must enable consumers to make informed choices among services, goods, and sellers:
● Unsafe goods and services should carry appropriate warnings if they put the user at risk.
● Contracts, advertisements, telemarketing, warranties, mailing envelopes, sweepstakes, and other written materials should not be designed to confuse, mislead, or frighten the public. Cooling-off periods should be available to consumers in transactions that have high financial risks or involve extended periodic payments.
● The marketplace must make available to consumers complete and accurate information regarding the goods and services they purchase. Information should be communicated in plain language, with written information printed in type that is legible and readable or, if broadcast, is audible and understandable, to a reasonable consumer. Consumers should have reasonable time to review disclosures before consummation of the transaction.
● When consumers are wronged in a marketplace transaction, appropriate and adequate redress must be available. Clear disclosures identifying how and where aggrieved consumers can complain must be provided. Redress must be provided in a timely manner and with a right of appeal.
(back to top)