California Association of REALTORS Calls for Reversal of Freddie Mac's Condominium Earthquake Insurance Requirement

The California Association of REALTORS (C.A.R.) has expressed strong opposition to a new condominium earthquake insurance requirement planned by the Federal Home Loan Mortgage Corp. (Freddie Mac), which they claim unfairly singles out California and discriminates against thousands of condominium owners and first-time homebuyers. C.A.R. President Ed Albers testified before a key state Assembly committee, stating that the requirement will harm hundreds of thousands of Californians, including low- and moderate-income families, who are struggling to achieve the basic dream of owning their own homes.

Key Takeaways:

• Freddie Mac's condominium earthquake insurance requirement is discriminatory and will harm thousands of Californians, including low- and moderate-income families.
• The requirement will lead to hundreds of thousands of defaults in California loans, effectively destroying the equity held by thousands of California homeowners.
• Freddie Mac's policy amounts to de facto redlining of California urban centers and is unduly burdensome, unworkably expensive, and ignores insurance capacity difficulties of the California market.
• The California Association of REALTORS is sponsoring a joint resolution (AJR 23) calling on President Clinton and the U.S. Congress to prevent Freddie Mac from imposing the requirement.
• C.A.R. is also sponsoring four urgency bills to address problems created by the Freddie Mac policy, including new lender disclosure requirements, utilization of the state's anti-discrimination law, and major changes affecting customary portions of mortgage agreements.
• The California Association of REALTORS has a membership of 104,000 and is one of the largest state trade associations in the United States.

Statistics:

• Freddie Mac reported net income of nearly $1 billion last year.
• The condominium earthquake insurance requirement is expected to harm hundreds of thousands of Californians.
• The requirement will lead to hundreds of thousands of defaults in California loans, effectively destroying the equity held by thousands of California homeowners.

Sources:

• C.A.R. Media Relations at 213-739-8304 or Carmedia@AOL.com or 74404.1260@CompuServe.com.
• AJR 23: Joint Resolution of the Assembly and Senate, authored by Assemblyman Dan Hauser (D-Arcata) and Assemblyman Phil Hawkins (R-Cerritos).
• Letter to President Clinton from California Lieutenant Governor Gray Davis requesting immediate action on the issue.
• Federal Home Loan Mortgage Corp. (Freddie Mac).