Possible Breakthrough on ASHI Legislation in Congress

(Washington, D.C.) – Recent action in the U.S. Senate could be a breakthrough for ASHI legislation that would require all Housing and Urban Development (HUD) housing counselors to provide specific, favorable counseling on home inspections to prospective homebuyers.

The legislation was conceived and drafted by ASHI in close cooperation with Congresswoman Nydia Velazquez (D-NY), a member of the House Financial Services Committee and the Subcommittee on Housing.

Rep. Velazquez sponsored the ASHI legislation and is spearheading the effort to move it through Congress.

Velazquez has been successful in adding her bill to the House versions of both the Predator Lending Bill and the Wall Street/Financial Reform Bill. Both those bills passed the House and were sent to the Senate for further consideration.

Both of these larger bills have languished due to inaction in the Senate Banking Committee.

However, a breakthrough came in late March when the Senate Banking Committee reversed course and passed its version of a Wall Street reform bill out of committee.

With this action, the debate will move next to the Senate floor. That debate will lead to an opportunity to pass a bill containing the ASHI language and send it to President Obama to be signed into law.

Background

ASHI lobbies Congress to seek maximum federal government support and endorsement for voluntary home inspections. Federal policies have an enormous impact on every aspect of the homebuying market in the United States.

Over the years, ASHI has been successful in urging HUD to expand and improve its communications to consumers regarding the benefits of obtaining home inspections.

ASHI and Rep. Velazquez collaborated to create HR2130, the Consumer Protection Home Inspection Counseling Act.

The legislation represents ASHI’s latest effort to employ HUD as much as possible as the largest, most powerful and influential advocate to promote home inspections to the broadest possible audience.

HR2130 recognizes that one of the best means for homebuyers to protect their interests and make good purchases is to make the choice to obtain a home inspection. The nation never has had a greater need for well-informed homebuyers.

However, many prospective homebuyers do not fully understand home inspections, or how to obtain them, or when.

Further, homebuyers confuse home inspections with the appraisal or other required inspections.

This lack of timely, correct information is a serious barrier preventing many homebuyers from obtaining professional, independent home inspections.

The ASHI bill sponsored by Rep. Velazquez will address this problem by requiring that all HUD housing counselors be fully trained to provide counseling on home inspections to the homebuyers they counsel.

 HUD will create new materials and tools to achieve this purpose. HUD will actively communicate the reasons to obtain home inspections, when, how and where to look to obtain further information.

HUD will provide educational materials, some of which were drafted with ASHI input, to counseling customers.

In addition, the agency will accomplish these tasks by improving on the existing housing counseling programs already authorized and funded by HUD. 

(See below for details of the home inspection counseling provision.)

Rep. Velazquez introduced HR2130 and immediately set about to amend it to a larger bill arising from the House Financial Services Committee. She succeeded in adding it to the Predatory Lending Bill as it passed both her committee and the full House.

However, controversies surrounding predatory lending have caused that bill to stall in the Senate.

Undaunted, Velazquez worked to add the same provision to a later bill, known as the Wall Street/Financial Reform Bill. That bill has, too, stalled in the Senate — until recently. 

In early March, with the completion of the health care debate in sight, the winds shifted in the Senate. Sen. Chris Dodd (D-CT), Chairman of the Senate Banking Committee, signaled he would move aggressively to pass the Wall Street Bill.
His committee completed work immediately prior to the Easter recess, approving the bill on a party-line vote for Senate floor action later this spring. 

Because of the ongoing controversy surrounding the Wall Street Bill in the Senate, ASHI did not attempt to add the home inspection language in the Senate version of the bill. In the alternative, the strategy is to support any version of a Wall Street Reform Bill clearing the Senate — then prevailing on ASHI’s friends in the House to include the home inspection provision during the House-Senate conference that will be required to create a single-consensus bill to be sent to the president. 

ASHI has been working behind the scenes in the House and the Senate to implement this strategy. 

Of course, the strategy hinges on the Senate taking up some version of a Wall Street Reform Bill so that a House-Senate conference may ensue.  

Sen. Dodd has indicated his intent to pass the bill on the Senate floor in April or May, perhaps sending a bill to President Obama by the Memorial Day recess. 

Many political variables may intervene to delay or halt this pathway to passage. But given the Senate Banking Committee action, and backing for a Wall Street Reform Bill from President Obama, the chances for a bill with a home inspection counseling amendment have never been greater. 

ASHI will continue to move the legislation and may issue a Legislative Alert to the ASHI membership as necessary to support the effort.

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Highlights of the Home Inspection Counseling Provision

(a) PUBLIC OUTREACH 
(1) HUD shall take such actions as may be necessary to inform potential homebuyers of the availability and importance of obtaining an independent home inspection. Such actions shall include: 

(A) publication of the HUD/FHA form HUD 92564 – CN entitled ‘‘For Your Protection: Get a Home Inspection,’’ in both English and Spanish languages; 

(B) publication of the HUD/FHA booklet entitled ‘‘For Your Protection: Get a Home Inspection,’’ in both English and Spanish languages; 

(C) development and publication of a HUD booklet entitled ‘‘For Your Protection—Get a Home Inspection’’ that does not reference FHA-insured homes, in both English and Spanish languages; and 

(D) publication of the HUD document entitled ‘‘Ten Important Questions To Ask Your Home Inspector,’’ in both English and Spanish languages.

(2) AVAILABILITY – The Secretary shall make the materials specified in paragraph (1) available for electronic access and, where appropriate, inform potential homebuyers of such availability through home purchase counseling public service
announcements and toll-free telephone hotlines of the Department of Housing and Urban Development. The Secretary shall give special emphasis to reaching first-time and low-income homebuyers with these materials and efforts.

(3) UPDATING – The Secretary may periodically update and revise such materials, as the Secretary determines to be appropriate. 

(b) REQUIREMENT FOR FHA-APPROVED LENDERS. – Each mortgagee approved for participation in the mortgage insurance programs under Title II of the National Housing Act shall provide prospective homebuyers, at first contact, whether upon pre-qualification, pre-approval, or initial application, the materials specified in subparagraphs (A), (B), and (D) of subsection (a)(1). 

(c) REQUIREMENTS FOR HUD-APPROVED COUNSELING AGENCIES. – Each counseling agency certified pursuant by the Secretary to provide housing
counseling services shall provide each of their clients, as part of the home purchase counseling process, the materials specified in subparagraphs (C) and (D) of subsection (a)(1).
 
(d) TRAINING – Training provided by the Department of Housing and Urban Development for housing counseling agencies, whether such training is provided directly by the Department or otherwise, shall include 

(1) providing information on counseling potential homebuyers of the availability and importance of getting an independent home inspection; 

(2) providing information about the home inspection process, including the reasons for specific inspections such as radon and lead-based paint testing; 

(3) providing information about advising potential homebuyers on how to locate and select a qualified home inspector; and 

(4) review of home inspection public outreach materials of the department.

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