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Archive for the ‘Government’ Category

FHA Update -NAR – Congress

J. Andrew English J. Andrew English
Thursday, March 11th, 2010

NAR is asking Congress to refrain from raising the min downpayment requirements for FHA Loans.  In 2009, FHA insured more than half of the loans taken out by first time home buyers. NAR is concerned that the road to recovery will be delayed even further for the housing market if FHA loans become more difficult to acquire.  Critics are asking for FHA to increase the downpayment amount to 5% from its current 3.5%, amongst other stricter proposals. These proposals include higher down payment for borrowers with sub 600 credit scores, capping seller concessionsat a max of 3%, and so on…..

President Bush relocating to Dallas

J. Andrew English J. Andrew English
Monday, December 8th, 2008

President Bush has confirmed the purchase of a home in the Preston Hollow neighborhood of Dallas, Texas. The President previously resided in the same area during the 1990’s. It is believed the President spent 2.1 million on the 8500 sq estate home. However, it is also believed he will purchase the property next door. (priced at about 1.6 million) The use of the second property is up for speculation, however, common sense would lead me to believe it will be used for secret service. The President’s 2 acre estate will back to the 15 million dollar mansion of Mr. Tom Hicks.

NAR wants more Economic Stimulus

Donald L. Plunkett, Jr. Donald L. Plunkett, Jr.
Wednesday, November 12th, 2008

At its November 10th meeting in Orlando, the National Association of REALTORS decided to ask the U.S. government (taxpayers) to do the following:

1. Make the $7,500 first-time home buyer tax credit, enacted earlier this year as part of housing stimulus legislation, available to all buyers and eliminate the repayment requirement.

2.  Make 2008 Fannie Mae and Freddie Mac loan limits permanent.

3. Get the U.S. Treasury to target funds from the $700 billion federal economic rescue package to mortgage relief and create an interest-rate buydown program for residential mortgages.

4. Permanently bar banks from entering real estate brokerage or management.

Don’t hold your breath.  Even if they are all upheld, we are skeptical that any of these programs will do much good for the housing market.  For instance, it may sound good that Fannie Mae’s purchase limits stay inflated at over $729,950 in high priced markets instead of $625,500, but if that ends up making Fannie Mae hemorrhage money or the US Government to lose its AAA credit rating, how much good will that do?

Barring banks from real estate?  Considering how bad banks screwed up real estate lending the last 8 years, I don’t think Realtors have that much to worry about in real estate brokerage.

No down payments for first-time buyers (through a free tax credit) sounds great as a seller, except that many sellers will remain real estate owners after they sell and the credit will cause future pain.  No down payment mortgages are what got us into these problems in the first place.

The government needs to shore up its own finances.  When this happens, the economy, jobs, and YES residential real estate will benefit.

If you price your home to sell, it will generally sell, even in today’s market.  Take the proceeds and opportunistically re-invest.  Don’t get caught up in all these market-distorting programs.

RESPA

J. Andrew English J. Andrew English
Friday, May 30th, 2008

The term RESPA violation is thrown out often in the real estate world, yet most individuals have no idea what it really refers to. Real Estate Brokerages are not allowed to receive undisclosed illegal kickbacks from related service providers within the industry. For example, a RE Brokerage should not receive a kickback from a local Title Company for repeatedly sending business their way. The same holds true for loan officers. A loan officer can not pay a fee to a brokerage for closed mortgage transactions.

The Federal Government takes RESPA violations seriously because they are in place to protect the public and encourage free competition. RE Brokerages are in a position of trust with their clients. Clients take the suggestions of their brokers very seriously. As a result, RESPA wants to prohibit a brokerage from profiting at the expense of this trust w/out full disclosure. Look at it this way, if a broker is sending a buyer to a loan officer in hopes of receiving a kickback later, is the broker really serving the best interest of his/her client?

NAR repeatedly stresses to brokerages to keep up to date with changing RESPA guidelines. Despite this, new stories pop up regarding serious RESPA violations and the involvement of RE Brokerages month after month. In the real estate world, the relationships that are closely monitored are between Title Companies and RE Brokerages and Lenders and RE Brokerages. These two relationships are littered with opportunities for abuse by both parties.

NAR – DOJ – Proposed Settlement

J. Andrew English J. Andrew English
Wednesday, May 28th, 2008

Rather than go over the entire proposed settlement, a few points below: However, to view the proposal, please visit http://www.usdoj.gov/atr/cases/f233600/233607.htm

Both IDX and VOW websites will continue to be available to the public.

VOW websites will require email authentication for public use/access.

IDX related websites are not affected by the agreement.

VOW websites will continue to operate and be available to the public.

MLS’s will not be able to keep data away from VOW related websites.

NAR wasted an absurd amount of money on a 3 year legal battle that could have been settled years ago on the exact same terms.

Overall, any data that you could hand to a client in your office, you can also display through your VOW. This includes sold data, withdrawn data, expired data, pending ratios, etc… If you can give it to your client in person, you can broadcast it through your website. This is exactly what MLS’s wanted to avoid. NAR had argued that this data should be exclusive to its members, not the general public.

Builders Still Angry

Donald L. Plunkett, Jr. Donald L. Plunkett, Jr.
Tuesday, February 12th, 2008

Effective Feb. 11, the National Association of Home Builders announced it is political action committee (BUILD-PAC) is ceasing to make any further contributions to political candidates. It is holding off until Congress takes action on the economy. In other news, MDC Holdings (Richmond American Homes) reported a Q4 2007 cancellation rate of about 65% and a loss of $281 million. This is on top of bad news from just about every other builder (Standard Pacific, DR Horton, Toll Brothers, etc.)

Any time builders are mad, it is a mixed bag for homeowners. While no one wants a general economic slowdown or builders to lose money (after all, what investor doesn’t own a few homebuilder shares, even if it is in an S&P 500 index fund), one thing that many homeowners do want is for builders to stop building. The fact is, in recent years builders in places like Phoenix, Denver, Riverside, etc. have built way beyond actual demand. The number of homes in line to be developed in Florence and Coolidge, Arizona, for instance, was staggering. As a homeowner in Florence, you do not want 50 new home developments all around you undercutting you on price and incentives, especially because there is not an employment base to sustain that level of development right now (there will be one day). Builders should focus on more attractive niches like affordable infill and mixed use development, and even build-to-suit custom homes. Unfortunately, so much land was stockpiled that now must be written down, that this type of flexibility to cut back temporarily is simply not possible. Just remember, what is bad for builders is sometimes, but not always bad for homeowners.