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Posts Tagged ‘Government’

Arizona anti-deficiency statute update

Donald L. Plunkett, Jr. Donald L. Plunkett, Jr.
Wednesday, August 19th, 2009

With the budget mess in Arizona, it is not clear whether Gov. Brewer would veto a revision to the new bill SB 1271, the anti-deficiency bill which allows banks to go after you for a deficiency judgement unless you lived in the house for 6 months.  Many experts feel this bill will have a negative effect on investment properties, second homes, and investing in general in Arizona real estate.

The Arizona Association of REALTORS is pulling out all the stops and most of the local associations (Prescott, Central Arizona – Payson, Tucson, Phoenix, etc.) have emailed us with an urgent Call to Action.  They want us to contact the governor and urge her to sign HB 2008.

Here are the talking points on why SB 1271 is bad:

  • Removes any incentive for a lender to work with a borrower of a distressed loan
  • Places the burden solely on the borrowers, allowing banks to conduct “risky” lending without consequence.
  • Bankruptcy cases will increase dramatically since protection against deficiency judgment as been removed.
  • Family owned property for children going to college or elderly parents may lose their anti-deficiency protection if the trustor did not occupy the home for six consecutive months.

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.