PostandCourier reports that Nick Kremydas, Chief Executive Officer of South Carolina Realtors said: “Our national association says these next 100 days could be a real turning point, or a critical time when the government and these agencies failed to respond to the crisis.” “This is by far the most extreme (time) in terms of the potential for changes,” said 18 year veteran Mikell Richards of First Federal of Charleston, president of the Mortgage Lenders Association of Greater Charleston.  With the so-called super committee on deficit-reduction meeting now, issues like the Mortgage Interest Deduction (MID), Federal Flood Insurance and mortgage rules under Dodd-Frank all hang like daggers over the quivering heart of the housing industry.   U.S. Rep. Jim Clyburn, who is a member of the Joint Select Committee working on deficit reduction plans. Kremydas said Clyburn “told us frankly that there are many people in Washington interested in scaling back or eliminating MID (mortgage interest deduction) on second homes.”  Richards said the mortgage bankers are waiting for a decision from the Dodd-Frank established Consumer Financial Protection Bureau. Public comment has ended, and a decision may not come until 2012.  Dodd-Frank required at least 5 percent risk retention by lenders unless loans are considered a “qualified residential mortgage.” Dodd-Frank did not define what a “qualified residential mortgage” is and under proposed rules, a qualified residential mortgage could be one where the buyer makes a down payment of at least 20 percent.  This is seen by many professionals as a knee jerk over-reaction to the no down, no docs ‘liar loans’ before the mortgage/housing bubble burst. Large losses following events such as Hurricane Katrina has caused the Federal Flood Insurance program to at times be suspended while temporary federal funding is past. That slows loan closings and causes some loans never to close at all.  A 5 year extension in the program would avoid those issues.

(Nick Kremydas (l) U.S. Rep. Jim Clyburn (r) photo credit: Post&Courier and AP)