Responsible Lending: In 2007 NAR expects several pieces of legislation pertaining to predatory lending to be introduced in the new congress, including a new version of the H.R. 1182, the Miller Watt Prohibit Predatory Lending Act. Because appraisal issues are of concern to Representative Kanjorski, it is likely that there will be appraisal related language inserted into the predatory lending bill. The language is likely to be similar to that in H.R. 1295 the Responsible Lending Act and would enhance appraisal standards and oversight. The language would likely require lenders to obtain a written appraisal for higher cost mortgages, enhance the accountability of the Appraisal Subcommittee, improve federal oversight of state appraisal programs and protect mortgage borrowers by making a number of changes to Title XI of FIRREA. In addition, NAR will continue to monitor other legislative proposals, such as the Stop Fraud Act (S.2280) that also targets predatory lending.

Regulatory Issues: We expect to see activity on three fronts 1) the IRS is currently in the process of developing rules governing the qualifications of appraisers valuing property in charitable contributions. NAR will work to ensure that these rules do not pose a regulatory burden or compromise the ability of states to regulate the real estate profession. 2) NAR will continue to work with HUD and the VA to improve and streamline the process by which appraisals are conducted for real estate backed by federally assisted loans. 3) NAR also expects increased interest from regulators in the role that appraisers play in mortgage fraud and money laundering.

Tenants in Common: NAR will continue its dialogue with the SEC on the question of enabling real estate professionals to participate in and derive compensation from the brokerage of TIC securities. Following the motion approved by the Board of Directors in New Orleans, NAR will undertake efforts to educate state associations on the dynamics of the TIC marketplace and the need to encourage regulators to regulate TIC securities as real estate.

Terrorism Insurance: At the end of 2005, Congress extended Terrorism Risk Insurance program for an additional two years, and thus ensured the continued availability of terrorism coverage. It is set to expire at the end of 2007. To date, insurers have not demonstrated a capacity to provide terrorism coverage in the absence of federal backstop. NAR has been working with Congress and other interest groups to develop a proposal that would reduce reliance on the federal government in providing a backstop and increase reliance on the private sector, while ensuring that coverage remains affordable and available.

Commercial Insurance: Many commercial members are experiencing increased property and casualty insurance rates and even the exit of insurers in key markets. Because of this trend (particularly in the Gulf States), Congress will likely again consider several pieces of legislation that would increase the affordability and availability of coverage for commercial properties, as well as explore an optional federal charter, and/or create a federal backstop. It is likely that these insurance reform bills will be a top legislative priority in the new Congress. The findings of the RAND report on commercial property insurance issues will help NAR craft its positions on relevant legislation.

Commercial Lending: Federal regulators are concerned that many smaller banks have high concentrations in commercial real estate lending. With the pending implementation of the Basel II Accords, NAR will work with the appropriate regulators to ensure that changes in regulatory capital (that is the amount banks are required to hold in reserve to as risk mitigation measure) does not reduce the flow of capital for commercial borrowers.