Pocket Listings Anyone?

CAR just presented an hour webinar on the subject of ‘Pocket Listings’. It becoming a problem the way the market is right now. And agents who are not following the letter of the law will come under increasing scrutiny from the DRE and other regulators. That’s what the rest of us need – more regulations to curb the avarice of a few. Ain’t that the way it goes?

REALTORS® marketing a property for which they have obtained a listing will generally place that listing on the Multiple Listing Service (MLS).  At times, however, listings are not placed into the MLS.  Listings not placed on the MLS are commonly referred to as “pocket listings”. This article will discuss the various legal issues and risks of pocket listings.  Please note that this article references the California Model Multiple Listing Services Rules (Amended February 2013). REALTORS®, however, must comply with their own local MLS rules.  Many local MLSs adopt the Model MLS Rules in its entirety, whereas other MLSs may have slight variations and may have different numbering systems.

II.  Pocket Listings

Q 1. What is a pocket listing?

A A pocket or off-MLS listing generally refers to a listing agreement that an agent has obtained but does not place on the MLS. A “pocket listing” is not a legally-defined term, and can have other meanings as discussed below.

Q 2. Is a pocket listing legal?

A Yes, a pocket listing can be legal. However, a pocket listing raises a number of legal and practical issues that agents should consider and address as discussed below.

For more information on ‘Pocket Listings’, the legality, the ethics, the fiduciary, get the answers from CAR Legal:

Pocket Listings – CAR Legal

9 year fraud battle has a happy ending.

Over the years I’ve written a lot about real estate fraud. Real estate fraud had only just come to our region in a big way back in 2005/2005 and Realtors® were trying to grapple with this new issue. Problem was, nobody else thought it was an issue. Banks didn’t care, law enforcement wasn’t interested, our DA, the Dept. of Real Estate, FBI – you name it, nobody cared.

And over the years I’ve written a lot about the Stonewood Case – a house kiting scheme with some investment undertones. By the time the law finally got on the case, the perp’s were indicted for $143 MILLION dollars. Yeah, not exactly chump change. It really jump started our foreclosure market back in 2006-2007 as these places started to dump back onto the market in ever increasing numbers.

It’s been a 9 year effort led by local Realtors®, some tenacious reporters, our board attorney and a bunch of victims who weren’t afraid to stand up.

Yesterday the last two perp’s were found guilty. Hendrix Montecastro and his mother Helen Padrino. There were 9 people indicted, the others were so guilty they all plead guilty. These two decided to test it in court and act as their own counsel. Yeah, that worked well. So instead of the few or tens of years their cohorts were dealt, Padrino is up for 30+ and Hendrix is down for 100.

All I can say is, he looks a lot better in his orange jumpsuit than he did in the 3 piece Armani’s he used to sport when he’d come into the office to try to intimidate us. Sentencing comes in a couple weeks.

You can read some of the history and testimony here:

http://www.pe.com/business/business-headlines/20130325-fraud-trial-guilty-verdicts-in-multimillion-dollar-ponzi-case.ece

Mortgage Debt Relief. Wassup?

Another question hanging about our heads this year-end involves extension of Mortgage Debt Forgiveness, that measure that allows lenders not to 1099 you for the mortgage debt relief sellers who have gone through a short sale or foreclosure receive.

At this point with all eyes focused on the fiscal cliff, it is unlikely anything specific to this measure will be passed this year. If there is a continuing resolution (kick the can down the road for 90 days and let the new Congress deal with it), debt forgiveness could/would likely be a part of that. Otherwise we just get to wait until after the first of the year. NAR is pushing very hard for this – it was the subject of a recent call to action for Realtors nationwide, and we are moderately optimistic it will be extended by the new congress but by no means assured. Join the club with all the other individuals, businesses, charities, military members and others awaiting their fate at the whim of the administration and the able hands of Congress.

I know this is very nerve wracking for people involved in short sales or foreclosures right now who don’t know if their phantom income (debt relief) will be taxed or not. Imagine shortselling your home at a loss of $100,000 to your lender. If you close prior to December 31st, you have no tax liability on that money. If you close after January 1, that $100,000 could be added to your regular income and taxed at your increased rate – a potential difference of $20,000+. And right now nobody knows what’s going to happen. Merry Christmas. I’ll provide any updates as they become available.

You can let Congress know how you feel about this by clicking here:

 Do No Harm To Housing

Half Empty or Half Full

It’s all in the perspective. A recent media article featured data from a report by  RealtyTrac showing that the Riverside-San Bernardino area remains #3 in the nation for foreclosure activity. I cringe when I see these kinds of articles. Because while the underlying report data is accurate, a reporter, who typically knows little about real estate, has no idea what the data means. They have no perspective, thus their summaries are often misleading to their readers causing unwarranted confusion and concern.

For example, data shows that Murrieta has 1 home in every 149 in foreclosure for a total of 264 ‘foreclosures’. Temecula was close behind with 258 ‘foreclosures’ and 1 in 152 households, Lake Elsinore had 147 ‘foreclosures’ with 1 in 151 households. They then compared our region with the national average of 1 in 686, making us sound pretty bad off.

But while the data is accurate – the media interpretation is not, or at least incomplete.

So, as Paul Harvey used to say, “Now, the rest of the story…” I’ll use Murrieta’s numbers, since that’s what the article used, but the statistics and comparables are very similar across all markets in Southwest California.

First, it’s not surprising that our area still ranks high on the foreclosure scale – after all it was just a few years back that we were among the top three in the nation with Sacramento and Stockton (which still rank #1 & #2). But rather than 264 homes going back to the bank as the article intimated, there were just 140 in June for Murrieta, down 43% from last June. And only 25 of those are actively on the market for sale. Bank-owned homes as a percentage of our market has continued to decline to just 7% of our active market in July. The number of both REO and Short Sales on the market has dropped by half since January.

Preforeclosure delinquencies are down 8% for the region, and Notices of Sales (NOS) are down 28%. The only number that bumped up slightly in June was Notices of Default (NOD), which were up 3% (68 to 70). The rest are in some stage of the foreclosure process but may never revert to the bank. Homes actually going back to the bank are down 68% from last June, 3rd party (courthouse step) sales are down 22% and cancellations of foreclosure sales by banks are up 17%.

Two additional trends are affecting our market right now. First, after long delays and numerous moratoriums, banks may finally be starting to move more aggressively on properties that have been in foreclosure for 1, 2 or 3+ years. This ‘shadow inventory’ concern has been hampering a sustainable recovery in housing. It’s past time for an honest accounting – by the banks and by delinquent sellers. We’re also seeing a slight up-tick in foreclosure activity on homes that were granted loan modification 2 – 3 years ago but have subsequently fallen back into foreclosure.

Second, counteracting the increased foreclosure activity is an apparent willingness and/or ability of banks to successfully complete short sales. Maybe they finally figured out they make more money on a short sale and that it’s less deleterious to the market. Rising median prices also means fewer people under water which means more people able to refinance at today’s record low rates into more affordable mortgages.

So there you have it. Yes we are still #3 in the country for ‘foreclosure activity’ and with 1 in 150 homeowners still being affected that’s not great. Compared to North Dakota with just 3 foreclosures in the whole state and a ration of 1 in 105,833 homeowners in default, we look pretty dismal. It’s all in your perspective.

But we’re still selling homes at a record pace this year and our prices are inching up. Compared to where we were four years ago, or even a year ago, we’re headed in the right direction. They didn’t tell you that.

RealtyTrac, a trusted source of foreclosure information, publishes a nifty little ‘Heat Map’ showing foreclosure activity by zip code for any area of the country. If you’re curious, it’s a great way to spend a little time when you’re not on facebook. Here’s the data http://www.realtytrac.com/trendcenter/trend.html & here’s the local numbers: Perspective. http://www.slideshare.net/genewunderlich/8-realtor-report-13973332.

 

SRCAR Hosts City Managers Forum

The Southwest Riverside County Association of Realtors recently held their 3rd annual ‘Breakfast with the City Managers’ event and featuring Bob Johnson (Temecula), Rick Dudley (Murrieta), Frank Oviedo (Wildomar), Bill Rawlings (Menifee) and Tom Evans (Lake Elsinore).  The event is one of the highlights of the year for many members and this year was no different.

City Managers reminded us how fortunate we are to be living and working in our communities. Our cities may not exactly be thriving during these challenging times but they are all doing way better than most. Despite last year’s pilferage of redevelopment funds and the added insult of stripping VLF funds equaling 22% of Wildomar’s budget and 18% of Menifee’s, infrastructure improvements, job attraction and parks continue to figure prominently in each city’s action plan.

Every city is also experiencing some degree of revitalization as well. Unemployment rates are lower in our region than the national average and significantly lower than the rest of Riverside  County. There are new apartment buildings going up in Temecula and 5 new housing tracts under development in Wildomar. New restaurants, shops and businesses are starting to fill in some of those shuttered buildings that have populated our region for the past few years. Public safety in our cities is among the best in the nation as is our education system. While there have been some municipal lay-offs, our cities have been able to negotiate with their employees and service providers to maintain a high level of service to residents within the economic realities of our times.

All acknowledge that there are still challenges ahead for our region. One manager opined that it might be 20 years before the cities see a return to the level of property tax revenue they enjoyed just four years ago. But as the cities diversify their base that becomes less significant. Temecula currently gets only about 10% of its budget from property taxes while Menifee, one of our newest cities, relies on property taxes for nearly 50% of their budget. An aggressive business attraction plan aims to reduce that dependency over the next few years.

Both Murrieta and Temecula have held discussion about the merits of becoming a charter city and you’ll be hearing more about that. The managers  also shared the challenges and frustrations of dealing with some aspects of our state and federal government. One recent example was the state’s last minute decision to  recalibrate the way they assess the cities and gave cities a three day payment window or be assessed penalties. Two of our cities took hits of nearly $2 million dollars, the others lost lesser amounts. It can be vexing to be a pro-business region in California.

Should you have an opportunity to visit with any of our local City Managers, you will find them most helpful and ready to expound on the positive things happening in our region. While each city strives to maintain its own identity and be the best for its own residents, there is a great sense of shared community among the cities acknowledging that a business gain in Lake Elsinore benefits Menifee, a new overpass in Temecula is good for Murrieta traffic and a new brewpub in Wildomar would be good for me. Talk to your City Managers. They are good folks and eager to keep our cities moving in the right direction.

DRE releases interpretation on appointment of office manager


Effective July 1, 2012, pursuant to Business and Professions Code (B&P) Section 10164, an employing real estate broker or corporate designated broker officer may (but is not required to) appoint a licensee as a manager of a branch office or division of the employing broker’s or employing corporate designated broker officer’s real estate business and delegate to that manager responsibility to oversee and supervise operations and licensed activities. The appointed manager will share with the employing broker or corporate designated broker officer the liability of potential license discipline should violations of the Real Estate Law occur at the branch or division location.

While the appointment of a branch or division manager is completely voluntary under B&P §10164, a broker or designated broker choosing to appoint a branch or division manager must follow the guidelines set forth by B&P §10164. A licensee cannot be appointed as a manager if the licensee holds a restricted license or has ever been subject to a bar order. If the branch or division manager is a salesperson, the salesperson must have at least two years of full-time real estate experience within five years preceding the appointment. Whenever an appointment of a branch or division manager is terminated or changed, brokers or corporate designated broker officers should immediately notify the DRE in writing.

DRE’s Licensing Unit has developed a new form titled, “Branch or Division Manager Appointment” (RE 242), which will be used by a broker or corporate designated broker officer to appoint or terminate branch or division managers. This new form will be available no later than July 1, 2012. Licensees wishing to add or cancel branch offices should continue to use the Branch Office Application (RE 203).

 

CAR OPPOSES AG’s Homeowner Bill of Rights.

California Homeowners Bill of Rights:

A Lesson in Political Expediency & Unintended Consequences.

California Attorney General Kamala Harris announced in a much heralded press release today that her ‘California Homeowners Bill of Rights’ has ‘taken a key step toward passage’. Here’s the key step – she bypassed every preliminary opportunity for the bill to be discussed, debated or voted on in either the Assembly or the Senate. What she did, or had her minions in the Legislature do for her, was have the bill introduced to a ‘two-house conference committee’ that voted this morning to pass the bill. That means tomorrow or, more probably Monday, the full Senate and Assembly will vote on the bills – SB 900 & AB 278 with no discussion.

You’ve heard me discuss the measures previously as the Nevada Suite of bills, so named for the deleterious results Nevada experienced after passing similar legislation last year. Did I mention the ‘special committee’ was made up of 4 Democrats and 2 Republicans? Now guess what the vote was? That’s called a ‘procedural matter’ in Sacramento. Roughly translated it means ‘bend over’.

Here’s C.A.R.’s take on the issue:

C.A.R. is OPPOSING conference report, AB 278, containing anti-foreclosure legislation sponsored by the state Attorney General. C.A.R. opposes provisions in this measure which will allow anyone to stop the foreclosure process by filing a lawsuit, merited or not, C.A.R. agrees that careful and balanced reforms to the foreclosure process are necessary. However, C.A.R. opposes this conference report because it will further delay the housing recovery by inviting bad-faith lawsuits and defaults, and making it difficult for even well qualified borrowers to obtain financing. Financing is already very difficult to get. This conference report will only make a difficult situation worse.

Initially the Attorney General had sponsored a package of bills; the so-called the “Homeowners Bill of Rights.” For procedural reasons, the majority of these bills have been under consideration by a Conference Committee made up of six legislators. REALTORS® had the opportunity to educate these legislators about C.A.R.’s concerns as part of Legislative Day and since then C.A.R. lobbyists have been working directly with the conferees and legislative staff to make them aware of the unintended consequences of some of these proposals. The Conference Committee has now issued its final report and it must be passed by both Houses of the legislature. These votes may occur as early as Monday, July 2nd.

Background

The Attorney General has sponsored a package of bills to place into California law an expanded version of the national settlement between major banks and state attorneys general. The contents of some of these bills have been under consideration by a Conference Committee comprised of six members who have just approved a conference report on a party-line vote. Some provisions will have the unintended effect of drying up mortgage loans for anyone but the most well-qualified borrowers, and increasing the costs of all mortgages.

One provision allows any borrower, no matter what the circumstances, to file a lawsuit. This will encourage opportunistic lawyers to pursue frivolous lawsuits, bringing unnecessary and unjustifiable delays to an already difficult and time consuming process. The language is so vaguely written that the borrower doesn’t even have to show that they have been harmed to file suit and be awarded damages.

One-sided  attorneys fees may still be awarded only to plaintiffs based on the very broad definition of a “prevailing party” in the report. And, of course, if lenders don’t have the remedy of foreclosure to ensure they can recover their security in appropriate situations, they will be less likely to lend, credit will be less available and the housing market recovery will limp along even more slowly.

C.A.R. is OPPOSED to the conference report because:

 

  • The housing market recovery is still fragile. About half of all sales are of distressed properties. By restricting a lender’s ability to foreclose and exposing them to unnecessary liability, this report will dry up inventory, and it will further discourage lending other than to the most highly qualified borrowers. Additionally, these bills will artificially slow down the foreclosure process, keeping properties off the market that are legitimately in foreclosure. Finally, by removing the threat of foreclosure, the bill erodes the incentive for short sales as well.
  • The bill invites bad-faith defaults and lawsuits. By broadly defining under what circumstances a lawsuit can be filed, even those legitimately in foreclosure can “game” the system. Additionally, the bill creates an incentive for plaintiffs’ attorneys to file frivolous lawsuits even if no harm has been done to the borrower. The courts are already overwhelmed. This bill, by inviting frivolous lawsuits puts an additional strain on the already underfunded courts
  • Lending is already tight. Even the most well-qualified borrowers are finding it difficult to obtain financing. By stopping legitimate foreclosures, banks will be forced to further tighten lending standards at the expense of homebuyers.

 

We’re not intimating that everything contained in the bills is bad and we have been supportive of some of the issues. We also have a competing dual-tracking bill in play that we feel is more balanced and less vague. But this is a take-it-or-leave-it kind of bill – you have to eat the whole enchilada and there are no amendments allowed at this point. All the bad will be with us as law along with the few good things it might accomplish. Sound familiar?

This is also what is referred to as a ‘gut & amend’ bill. For 1 1/2 years some bills have been floating around the Legislature knowing full well they weren’t going anywhere. They were being held for just such a vehicle as this to rise from the ashes and require a last minute vote – often with only minutes of notice.

So this bill will pass UNLESS you can convince your Democratic Legislator to vote against it. Otherwise it’s a simple exercise in vote counting (53 – 27) to ascertain that our housing market will take another hit – a victim of increased frivolous lawsuits, further restrictions on foreclosures and tightened lending standards.

So now you know the proverbial ‘other side of the story’ and it’s not pretty. I encourage you to read the bill at  AB 278 and then read the AG’s release below. While the release summarizes a much glossed over purview of the bills, the devil is in the details. So go to work on your Democratic Legislators and let them know how Realtors® feel, and every homeowner and landlord who doesn’t feel like paying the price this bill will cost.

 

 

NEWS RELEASE

June 27, 2012

FOR IMMEDIATE RELEASE
(415) 703-5837

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California Homeowner Bill of Rights Takes Key Step to Passage

SACRAMENTO — Attorney General Kamala D. Harris today announced the passage of two central elements of the California Homeowner Bill of Rights through a special two-house conference committee. The 4 to 1 vote sends the bills to an expected vote next week in both the Assembly and Senate.

The two bills approved by the conference committee are the Foreclosure Reduction Act, which restricts the process of “dual-tracked” foreclosures and the Due Process Rights Act, which guarantees a reliable contact for struggling homeowners to discuss their loan with and which for the first time imposes civil penalties on the practice of fraudulently signing foreclosure documents without verifying their accuracy, a practice commonly known as “robo-signing.” The proposed legislation also includes meaningful enforcement for borrowers whose rights are violated.

The full Homeowner Bill of Rights includes additional provisions to reduce blight, ensure appropriate law enforcement response to mortgage fraud and crime, and protect tenants.  The bills containing these protections are also advancing through the Legislature.

“I am gratified by this vote, which represents one more step toward our goal of achieving a Homeowner Bill of Rights for California,” said Attorney General Harris. “The mortgage and foreclosure crisis in our state demands urgent efforts to help Californians keep their homes. The legislature will now have the opportunity to cast a vote on behalf of California’s struggling homeowners.”

The California Homeowner Bill of Rights was introduced February 29, 2012 at a press conference featuring Assembly Speaker John A. Perez and Senate President pro Tem Darrell Steinberg and bill authors from the Assembly and Senate. The goal of the Homeowner Bill of Rights is to take many of the mortgage reforms extracted from banks in a national mortgage settlement and write them into California law so they could apply to all mortgage-holders in the state.

“The mortgage and foreclosure abuse in California ends here,” said Noreen Evans (D-Santa Rosa), co-chair of the Joint Conference Committee. “This committee has passed historic legislation that codifies the
protections eligible homeowners deserve, while helping to stabilize the foreclosure crisis that has thwarted California’s economic recovery. The Legislature has studied, listened and engaged Californians and
industry to find a solution that is fair and effective to mitigate this crisis. I look forward to the full support of the Legislature and Governor in implementing this package.”

“This bill is the result of a long and difficult process in which we received input from all interested parties; including homeowners and the banks and found that foreclosures benefit no one,” said Assemblymember Mike Eng (D-Alhambra). “We ended such dubious practices as having a bank foreclose while a homeowner is in the process of modifying a loan and cut through confusion by making sure that there is a ‘single point of contact’ with mortgage servicers.  With half a million California homes at risk of foreclosure, this action was urgently needed.”

The California Homeowner Bill of Rights extends Attorney General Harris’ response to the state’s foreclosure and mortgage crisis. Attorney General Harris created a Mortgage Fraud Strike Force in March, 2011 to investigate and prosecute misconduct related to mortgages and foreclosures. In February 2012 Attorney General Harris extracted a commitment from the nation’s five largest banks of an estimated $18 billion for California borrowers.

More details about the California Homeowner Bill of Rights are found on the attached fact sheet.  To learn more about how the bills impact California homeowners, review the slideshow at: www.oag.ca.gov.

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You may view the full account of this posting, including possible attachments, in the News & Alerts section of our website at: http://oag.ca.gov/news/press-releases/california-homeowner-bill-rights-takes-key-step-passage

 

Simpler mortgage rules on the horizon?

Consumer Financial Protection Bureau considers rules to simplify mortgage points and fees
By Ashley Gordon

Rules would bring greater transparency to the mortgage market

WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (CFPB) outlined rules it is considering that would simplify mortgage points and fees and bring greater transparency to the mortgage loan origination market. These rules, which the CFPB expects to propose this summer and finalize by January 2013, would make it easier for consumers to understand mortgage costs and compare loans so they can choose the best deal.

“Mortgages today often come with so many different types of fees and points that it can be hard to compare offers,” said CFPB Director Richard Cordray. “We want to bring greater transparency to the market so consumers can clearly see their options and choose the loan that is right for them.”

The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) places certain restrictions on the points and fees offered with most mortgages. The CFPB is considering proposals that would:

  • Require an Interest-Rate Reduction When Consumers Elect to Pay Discount Points: Discount points are a fee, expressed as a percentage of the loan amount, to be paid by the consumer to the creditor at the time of loan origination in return for a lower interest rate. Discount points can benefit consumers by allowing them to reduce their monthly loan payments. The CFPB is considering proposals to require that any discount point must be “bona fide,” which means that consumers must receive at least a certain minimum reduction of the interest rate in return for paying the point.
  • Require Lenders to Offer Consumers a No-Discount-Point Loan Option: It is often difficult for consumers to compare loan offers that have different combinations of points, fees, and interest rates. Under the proposal under consideration, consumers must also be offered a no-discount-point loan. This would enable the homebuyer to better compare competing offers from different lenders.
  • Ban Origination Charges that Vary with the Size of the Loan: Brokerage firms and creditors would no longer be allowed to charge origination fees that vary with the size of the loan. These “origination points” are easily confused with discount points. Instead, under the rules the CFPB is considering, brokerage firms and creditors would be allowed to charge only flat origination fees.

In addition to regulating origination points and fees, the proposals the CFPB is considering would also address mortgage loan originators’ qualifications and compensation. Mortgage loan originators, who take mortgage loan applications from consumers seeking to buy a home or refinance a mortgage, include mortgage brokers and loan officers. The rules the CFPB is considering would:

  • Set Qualification and Screening Standards: Under state law and the federal Secure and Fair Enforcement Act, loan originators currently have to meet different sets of standards, depending on whether they work for a bank, thrift, mortgage brokerage, or nonprofit organization. The CFPB is considering rules to implement Dodd-Frank requirements that all loan originators be qualified. The proposal would help level the playing field for different types of loan originators so consumers could be confident that originators are ethical and knowledgeable:

-Character and Fitness Requirements: All loan originators would be subject to the same standards for character, fitness,
and financial responsibility;
-Criminal Background Checks: Loan originationators would be screened for felony convictions; and
-Training Requirements: Loan originators would be required to undertake training to ensure they have the knowledge
necessary for the types of loans they originate.

  • Prohibit Paying Steering Incentives to Mortgage Loan Originators: In 2010, the Federal Reserve Board issued a rule that prohibits loan originators from directing consumers into higher priced loans because they could earn more money. The Dodd-Frank Act requires the CFPB to issue rules as well. The proposals the CFPB is considering would reaffirm the Board’s rule, which bans the practice of varying loan originator compensation based on interest rates or certain other loan terms. The CFPB’s proposal would also clarify certain issues in the existing rule that have created industry confusion.

The proposals that the CFPB is considering are designed to preserve consumers’ choices while increasing transparency. In developing a formal proposal, the CFPB plans to engage with consumers and industry, including a Small Business Review Panel that will meet with a group of representatives of the small financial services providers that would be directly affected by the proposals under consideration. The documents that the CFPB will be sharing with these small providers include an overview of the proposals under consideration and a list of questions for input. The small provider representatives will provide feedback to the panel on the proposals the CFPB is considering and suggest alternatives. The Panel will issue a report summarizing this feedback, which the CFPB will consider when formulating the proposed rules.

A “fact sheet” summarizing the Panel process can be found here: http://files.consumerfinance.gov/f/201205_CFPB_public_factsheet-small-business-review-panel-process.pdf

An overview of the rules under consideration can be found here: http://files.consumerfinance.gov/f/201205_cfpb_MLO_SBREFA_Outline_of_Proposals.pdf

A list of questions for the Panel’s input can be found here: http://files.consumerfinance.gov/f/201205_cfpb_MLO_SERs_Questions.pdf

The public can email the CFPB their comments and feedback atMortgageLoanOrigination@cfpb.gov.

The CFPB plans to publish a Notice of Proposed Rulemaking this summer, which will be followed by a formal public comment period. The rules will be finalized by January 21, 2013.

SRCAR Endorses Kevin Jeffries for Supervisor Seat.

Two Influential Realtor Associations Endorse Jeffries
First and Only Candidate Ever Endorsed by Both Local Associations


(Riverside, CA) – Kevin Jeffries announced today that his campaign for Riverside County Supervisor (1st District) has received a pair of important endorsements from both the Southwest Riverside County Association of REALTORS and the Inland Valleys Association of REALTORS.

Both Associations advance the American dream of home ownership for families while promoting and maintaining high standards of conduct for local real estate professionals.

“Kevin Jeffries has been an unwavering advocate of home ownership for Riverside County families. Kevin has worked at both the state and local level to help keep fees and taxes low for homeowners” said Joe McGowan, Chairman of the Southwest Riverside County Association of Realtors.

“Kevin has not only worked to help jump-start our distressed housing market by proposing tax breaks for first time homebuyers, he has also been an unwavering advocate for private property rights” said Steve Manos, President of the Inland Valleys Association of REALTORS located in Riverside.

“Like thousands of Riverside County families, Riverside County Realtors have been living with the meltdown of our economy and the housing market. They know I’m going to be fighting to turn our local economy around and that affordable housing is a key part of our future recovery,” said Jeffries.

As an advocate on behalf of Riverside County homeowners and families since his 1990 election to a local water district, Jeffries was often a leading voice to oppose water and sewer rate increases, as well as the placement of unfair water “standby” taxes on homeowner property tax bills. Jeffries also led efforts at the State Capitol to provide first time homebuyers with tax breaks. Today Jeffries is currently leading an effort to repeal a soon to be implemented $150 special state fire prevention tax on nearly 800,000 homeowners across the state and portions of Riverside County.

This announcement comes just weeks after the Riverside County Farm Bureau announced their endorsement of Jeffries for Supervisor, according to Stacy Nicola with the Jeffries campaign.

 

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CAR Opposes SB 1220 Transfer Tax

C.A.R. Opposes Transfer Tax Legislation
C.A.R. is opposing SB 1220 (DeSaulnier), which imposes a transfer tax to generate funds for affordable housing. C.A.R. is opposing SB 1220 because it will add to the cost of buying a home at a time when the housing market is struggling to recover. C.A.R. is an aggressive advocate for affordable housing, but believes it is bad policy to fund affordable housing by making housing less affordable and to fund affordable housing at the expense of homebuyers.
Sen. DeSaulnier has introduced SB 1220 to permanently fund an affordable housing trust fund. Unfortunately, SB 1220 creates a real estate transfer tax of $75 per document to fund this program. In virtually all transactions, a minimum of three documents are recorded – the grant deed, the release and reconveyance, and a trust deed. SB 1220 will create a minimum $225 transfer tax, and the amount could be even higher, depending on the total number of documents recorded.
C.A.R. believes it is unfair and unwise to target one group (homebuyers) to pay for affordable housing, which is an issue of broad social concern. C.A.R. is also troubled that SB 1220 increases the already-substantial cost of buying a home.
While C.A.R. adamantly supports the creation of homeownership opportunities, SB 1220 is clearly not the way to achieve this goal.

SB 1220 is expected to have a hearing in the Senate in April.
For more information, see C.A.R.’s web site: http://www.car.org/governmentaffairs/getinvolved/sb1220opposetransfertax/

LAPD Warning Against Hiring Unmanned Aircraft Operators for Aerial Photos

Los Angeles authorities have asked C.A.R. to communicate this warning to REALTORS® who hire unmanned aircraft operators to take aerial photographs for marketing high-end properties. Using these devices (also known as drones) for flight in the air with no onboard pilot may violate, among other things, the Federal Aviation Administration’s (FAA) policy on unmanned aircrafts, and Los Angeles’s local ordinance requiring permits for filming commercial motion pictures and still photographs.
The Los Angeles Police Department’s (LAPD) investigation has apparently revealed that aerial photos where unmanned aircraft were observed have appeared on certain real estate sales websites. According to FilmL.A., the LAPD Air Division has issued this warning as it intends to prosecute violators in the near future. FilmL.A. is a public benefit company created by the City and County of Los Angeles to manage film permit activity and related issues.
Under the Federal Aviation Administration (FAA)’s current policy, no one can operate an unmanned aircraft in the National Airspace System without specific authority. Operators who wish to fly an unmanned aircraft for civil use must obtain an FAA experimental airworthiness certificate, which will not be issued to an unmanned aircraft used for compensation or hire. Although the FAA allows hobbyists to fly model airplanes for recreational purposes under specific guidelines, that authority does not extend to operators flying unmanned aircraft for business purposes. More information is available from the U.S. Department of Transportation’s Notice on Unmanned Aircraft Operations and the FAA’s policy.

NAR Survey – What are we wiling to give up?

Don’t know if you all got this yesterday from NAR 2012 President Moe Veissi. NAR is doing a survey and would like your opinion regarding our federal policy agenda for the 2012. The survey touches on numerous policy areas from housing to healthcare, GSE’s to foreclosures. If you haven’t received it yet, take a minute to follow this link and give your opinion. It takes less than 5 minutes and you will be some of the few (probably) who bother to respond and make your voice heard.

http://www.zoomerang.com/Survey/WEB22E47V5J5E6″

Here’s the final question. I’d be interested to hear what you all think about this. It goes back to the root issue we all face that is the stumbling block for many of our legislators – how do you feel about putting your own issues on the table? We’re quick to encourage cuts to other areas of ‘obvious waste’ – but what about those issues that are near and dear to us?

Which of these statements most closely reflects your opinion on NAR response?

* When it comes to changes in tax deductions, real estate tax preferences and federal spending, we must all share in the sacrifice to reduce our national debt (including reducing or eliminating some real estate related deductions) to assure the future health of our nation.

OR…

* Existing real estate related federal tax deductions and preferences, including mortgage interest deduction and the $250,000/$500,000 capital gains exclusion, should be preserved in their current form despite concerns about federal deficits and national debt.

We’re having some fun now, eh?

I Survived Real Estate 2011

For the past four years Bruce Norris, founder of The Norris Group has presented a forum entitled ‘I Survived Real Estate (2011)’ at the Richard Nixon Library. The event, attracting more than 400 real estate and investment leaders from California and beyond, is both an informational evening with panels discussing real estate trends, as well as a fund raiser for The Susan G. Komen Foundation. As a fundraiser the event has been singularly successful, raising over $250,000 for breast cancer research during the past four years. This year’s event was especially poignant as Bruce lost his own wife to the disease earlier this year after a courageous seven year battle.

Norris has over 30 years of real estate experience and more than 2,000 real estate transactions as a buyer, seller, builder and capitol partner. He is an award winning author, hosts a weekly radio program, is a frequent speaker throughout the state and is the founder of The Norris Group, one of the premier real estate investment resources in California. The ‘I Survived Real Estate’ event brings together a number of industry leaders to discuss their often disparate views of the housing industry and answer questions posed by Norris.

This year’s panel included Fannie Mae Chief Economist Doug Duncan, Foreclosure Radar President Sean O’Toole, National Association of Realtors First Vice President Gary Thomas, Chair-elect of the Mortgage Bankers Association Debra Still, President-elect of the Appraisal Institute Sara Stephens and iTulip Founder Eric Janszen.

Duncan, recently named one of the nation’s top four most accurate economists by the Wall Street Journal, discussed the future of his organization in light of President Obama’s call to eliminate Fannie Mae and Freddie Mac within the decade. Duncan believes this will be a positive step forward as a way to minimize the government’s role in the housing industry and promote private industry’s participation in the market.

This has been a very controversial position as Fannie, Freddie and the FHA, currently underwrite more than 90% of mortgage loans on the market today. Many would argue that there would not be a mortgage market without them. Duncan acknowledged the validity of this claim but offered that the gradual phase-out as called for by the administration will allow alternative financing methods to be developed and that negative impact to the market would be minimal.

Thomas, in line to be the President of the National Association of Realtors in 2013 indicated the industry is very concerned with the plan, or lack there-of. “Without Fannie & Freddie in place there would not have been a mortgage written since 2007,” according to Thomas. “Private lenders are risk averse right now as a result of getting burned by their own exotic inventions during the early part of the decade and stepped away from the market at a time we needed them most. NAR will work very aggressively to make sure whatever programs remain in place are in the best interest of the American consumer.”

The panel also addressed concerns over the massive bail-outs orchestrated by the federal government and their impact on the economy. Janszen, a long-time financial and economic market analyst, added ‘there is really no consensus on the efficacy of the programs’, noting that many believed the programs were little more than ‘print and pray’ exercises with our money. Duncan and Still took some exception to that characterization pointing out that at the very least the programs helped stabilize a rapidly declining market and that much of what was loaned to banks as ‘bail-out’ has been repaid with interest.

Legislation and the global economy figured prominently in the evening’s discussion with Duncan concluding that ‘the likelihood of Greece defaulting on its obligations today is 100%.’ “It’s not a matter of ‘if’ they will default, it’s simply a matter of ‘when’. The only questions is will it be done in an orderly manner which will allow the European economy to hit the bump and continue on, or if it’s done chaotically which will likely result in another worldwide recession.”

O’Toole, whose Foreclosure Radar website is considered to be the pinnacle of information on future trends in the distressed property market, drew some of the evening’s loudest applause when he called on banks to step up their efforts to take back properties and clear out the backlog. “Is it fair for you and I to keep making payments on our home, whether underwater or not, when the family next door can live there without making a payment for a year or two or three? And, face it, many of them just made bad decisions and should not have been in those homes to begin with. They knew it, their lenders knew it and now we all know it but the problem keeps dragging on. Until that backlog of non-performing loans is cleared off the books, banks can’t move forward. And until we get all these homes back into the hands of real home-owners or investors and renters, the market cannot stabilize.”

For more information on The Norris Group and to hear the more than 7 hours of interviews and commentary by this year’s panel, please visit http://www.thenorrisgroup.com/.

NAR: New FTC Rules May Impact Brokerages

New FTC Rule May Impact Brokerages

The Federal Trade Commission (“FTC”) has recently issued its Mortgage Acts and Practices – Advertising, or “MAP”, rule (“Rule”). The Rule imposes requirements on those that provide information about mortgage credit products to consumers by prohibiting misrepresentations during these communications and also imposing recordkeeping requirements. The Rule will impact real estate professionals that provide this information to consumers, such as giving a consumer a lender’s rate sheet. The Rule takes effect on August 19, 2011.

Click here to read the Rule’s text and accompanying commentary.

Background

The FTC published an Advance Notice of Proposed Rulemaking in 2009, and issued a proposed rule relating to unfair or deceptive acts and practices that may occur with regard to mortgage advertising in September 2010. NAR filed a comment letter seeking an exemption for real estate professionals from the Rule- click here to read NAR’s comment letter.

The Rule is intended to regulate unfair or deceptive practices in the advertising of mortgage products, and covers all entities involved in the process such as mortgage brokers, lenders, and home builders. The Rule will also cover real estate professionals when they are providing information about a mortgage credit product to a consumer, as outlined in this article.

Rulemaking authority for the Rule has now transferred to the Consumer Financial Protect Bureau (“CFPB”). Enforcement authority for the Rule rests with the CFPB, FTC, and state attorneys general.

Rule’s Requirements

The Rule prohibits misrepresentations in a commercial communication about any term of a mortgage credit product. A “commercial communication” is broadly defined within the Rule, covering both oral and written statements designed to “create an interest in purchasing goods or services”, which in this case would be a mortgage credit product. A “mortgage credit product” is “any form of credit” that is offered to a consumer and secured by the consumer’s dwelling. The Rule’s coverage will include information about all mortgage terms and the Rule contains an extensive list of possible mortgage terms, including interest rates, products sold in conjunction with a mortgage such as credit insurance, amount of taxes, variability of interest rates, and prepayment penalties.

Application of Rule to Real Estate Professionals

The Rule will apply when a real estate professional provides information about a specific mortgage product to a consumer. An example would be providing a consumer with rate sheets containing the current interest rate from a lender or providing a consumer with applications or other information for a specific mortgage product. All statements about the terms of a mortgage will be covered by the Rule, and will need to be retained for two years. In addition, the statements should have the disclaimer language discussed in this article in order to protect against later misrepresentation claims.

The FTC has stated in its comments that the Rule does not apply to purely informational communications not designed to cause the purchase of a good or service because these are not commercial communications. So, providing a consumer general information about market rates for different types of mortgages products will likely not be subject to the Rule because these are not related to a specific mortgage product. However, providing a consumer with the daily rates from a specific lender would trigger compliance with the rule. Similarly, going through the prequalification process with a consumer in order to determine the range of properties that a consumer may be eligible to purchase won’t require compliance with the Rule; however, providing a consumer with the documentation needed to apply for a preapproval from a lender for a mortgage loan will be covered by the Rule.

Disclaimer or Qualifying Statement

In the preamble to the final Rule, the FTC notes that a disclaimer provided with a covered statement “may correct a misleading impression, but only if it is sufficiently clear and prominent to convey the qualifying information effectively”. Therefore, real estate professionals should always include a disclaimer when providing information to consumers about the terms of a mortgage credit product, as a properly crafted disclaimer can protect against later misrepresentation claims.

The disclaimer will need to be prominent, as the FTC notes in its comments that disclaimers in small type placed at the bottom of a document will not protect against misrepresentation claims. The disclaimer text should be separated from the other text in the covered statement, as language buried within the text may not be effective to protect against misrepresentation claims. Click here for a model disclaimer.

Note that the disclaimer should be tailored to the type of information that you are providing to a client. If you are providing other services beyond transmitting basic mortgage information, you will need to tailor your disclaimer to cover those services.

Recordkeeping Requirements

If a real estate professional is subject to the Rule, the real estate professional is required to keep all covered commercial communications for 2 years from the date that the communication was made to the consumer. In order to comply with this section, the real estate professional should put all covered statements into writing and include the statements in each consumer’s file (paper or electronic) with the brokerage. This record retention system should become part of the brokerage’s overall record retention program.

Gov. signs Realtor Bill for short sale relief.

New law gives added protection to short-sale hopefuls On Friday, Gov. Jerry Brown signed Senate Bill 458 (Corbett) into law.  The new law, which contained an urgency clause and became effective upon signing, protects homeowners pursuing short sales by barring first and secondary lien holders from going after sellers for money owed after the short sales close.

Making sense of the story

*     A short sale – a transaction in which the homeowner sells the property for less than is owed on the mortgage – must be approved by the lien holder or lien holders, if there is more than one.

*     Under previous law (SB 931 of 2010), a first mortgage holder could accept an agreed-upon short-sale payment as full payment for the outstanding balance of the loan, but the rule did not apply to junior lien holders. SB 458 extends the protections of SB 931 to junior liens.

*     The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) sponsored the bill and urged lawmakers to pass this much-needed legislation.

*     “The signing of this bill is a victory for California homeowners who have been forced to short sell their home, only to find that the lender will pursue them after the short sale closes and demand an additional payment to subsidize the difference,” said C.A.R. President Beth L. Peerce.  “SB 458 brings closure and certainty to the short-sale process and ensures that once a lender has agreed to accept a short-sale payment on a property, all lienholders – those in first position and in junior positions – will consider the outstanding balance as paid in full, and the homeowner will not be held responsible for any additional payments on the property.”

Read the full story <http://www2.realtoractioncenter.com/site/R?i=Y7pJy-rwyTJMoTmgvOXhDA..>

Take Action Now!

This week Congress will be debating amendments that will dramatically impact our business here in California – either extending or expiring the current conforming loan limits. Current loan limits are $729,000 max for conforming, with our area being closer to $625,000. If these expire our next max would be back to $425,000. Now  $425,000 may sound like a  pretty fair loan limit. Folks across the mid-west could buy three median price homes for that amount. But that’s part of what got us into trouble out here to begin with – our median price in Southwest California, as well as much of the state, was well over $500,000 for several years. But if you wanted to buy a median price home, you were forced into a non-conforming or jumbo loan. FHA loans fell to less than 3% of the market in 2006. So people started looking for alternatives to traditional financing. 

Viola – sub-prime, Alt-A, exotics. 

You’ve probably already heard that B of A is already operating under the new/old loan limits assuming that Congress will let them expire. This means larger, more costly jumbos are back in place for many buyers. You think our move-up and upper end market is dead now? Just wait. 

So please take a moment to respond to this Call to Action. This week the Senate will be considering an amendment to the Military Construction Appropriations Bill (don’t ask), to maintain the current loan limits for another year. Both CAR and NAR support this effort. This Call to Action urges our Senators to work to maintain the current loan limits to help fan the flames of the recovery they so desperately need. 

Please help us ensure that your clients have access to affordable mortgages. 

cta

Homeownership Matters NAR Bus Tour Continues

On the Road Again, Posted by Vince

Posted: 14 Jul 2011 06:45 AM PDT

VinceMaltaDo you hear the engine revving? The NAR Home Ownership Matters Bus Tour is taking off for Atlanta this weekend to kick off the second leg of our bus tour. From Atlanta, we’ll travel the U.S. discussing the value of home ownership with the media, REALTORS® and consumers until we roll into the Annual Conference in Anaheim, November 11 – 14th.

I can’t express to you enough how vital it is that we continue to sound the message that Home Ownership Matters “to people, to communities and to America.” I’ve been working in real estate for over 25 years. Never have I seen the confluence of challenges that REALTORS® have faced in the last three years.

Our clients are having a hard time getting loans. Lenders aren’t giving us a yay or nay on a short sale. The National Flood Insurance Program is set to expire on September 30th. That’s going to start holding up closings this month (so please answer the Call for Action!).

The challenges are plentiful. One way to ensure that we get the help we need to create a safe, well-functioning, healthy real estate market is to start talking. That’s why the Home Ownership Matters bus tour is designed to talk to local leaders, prospective home buyers and the media about how best to protect our industry so all responsible Americans have the opportunity to buy into the dream of home ownership.

During the last leg of the bus tour in March, we reached 27.3 million consumers through media coverage. That would have cost us $3.95 million if we had to pay for it.

Thousands of consumers came out to our bus tour events to learn more about the value of home ownership. We saw a 350 percent increase in weekly visits on our Home Ownership Matters Facebook page. Five thousand additional people visited HouseLogic.com. Two thousand members attended REALTOR® Town Halls and bus tour events in 13 states.

I can’t wait to see the progress we’ll make on this leg of the tour this summer and fall. We’ll be in Atlanta on July 16, at Atlantic Station from 11 a.m. to 3 p.m. Please come out and visit with us. Tell your clients to come out as well. They just might leave with a Lowe’s gift card in hand.

Check Realtor.org/BusTour for more information and future bus tour stops.

The future of our industry rests in our hands. I’m glad we’re getting back on the road to start talking! – Vince Malta, 2011 NAR Vice President and Liaison to Government Affairs

Help Extend the National Flood Insurance Program

 

I hope that you’ve all taken a minute to respond to the latest call-for-action from NAR. (That goes double for those who are always complaining that NAR doesn’t do anything for you.)

A bill, H.R. 1309, is being debated in Congress right now that would re-authorize, reform, and extend the National Flood Insurance Program for 5 years.

The NAR Land Use Committee, has been working on getting this bill in place for years – it’s been a top priority. Finally we have a bill that will truly make a difference if passed, or the NFIP program will sunset on September 30 of this year.

If that happens, it would be catastrophic for many areas, coastal regions, mid-west areas prone to flooding, etc. This program is the ONLY SOURCE of flood damage protection for 5.6 million home and business owners today, not to mention the millions of affiliated jobs like builders, remodelers, movers, mortgage lenders, insurance agents, real estate professionals and more. In the last 3 years alone there have been 9 stopgap extensions and 5 shutdowns. Just last year a shutdown of just a few weeks resulted in more than 47,000 home sales delayed or canceled – in a market that is way down to begin with.

Do we need MORE uncertainty from our leaders on this issue? We actually have a chance to provide some long term stability to at least one segment of our market, let’s not blow it. Take a minute – click on the page below and lend your voice to the chorus.

1.1 million strong. Very little we can’t do if we put our minds and hearts to it.

Thank you.

Corona Sign Ordinance.

Corona Sign Ordinance

I know it’s not you but… we have been notified by the TIGAR association in Corona that their city people are having sign ordinance problems – and it’s all the dastardly OUT OF AREA AGENTS that are gumming  up the works. So a copy of their sign ordinance is attached for your viewing pleasure.

If you list properties in Corona, or hold open houses there, you need to be aware of the rules. They’re actually not bad and have mostly to do with sign size and hours &  areas of placement. Otherwise they reserve the right to pick up your signage and, if it doesn’t stop there, they could rescind the whole ordinance and you’d get NO (0) signs.

So play along. I know, it’s not you.

Here’s the ordinance…

Lenders prepare for lower loan limits; stop accepting certain applications


In anticipation of the expiration of current loan limits on Sept. 30, 2011, Bank of America has decided to stop accepting conventional and government applications for loan amounts that will exceed the permanent loan amounts.  The deadline to submit loan applications was July 1.

According to an email from Bank of America, conventional loans that exceed the permanent loan limits will now be required to use non-conforming programs.

Barring Congressional action, the maximum FHA, Fannie Mae, and Freddie Mac conforming loan limit will decline to $625,500 beginning Oct. 1, 2011, from the current $729,750 limit, though the majority of counties will fall far below the $625,500 maximum.  The conforming loan limit determines the maximum size of a mortgage that FHA, Fannie Mae, and Freddie Mac government-sponsored enterprises (GSEs) can buy or guarantee.  Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan and require a higher down payment, increasing the monthly payment and negatively impacting housing affordability for California home buyers.

Again, barring congressional action (heh), conforming loan limits in Southwest California will likely revert to about $425,000. Not that big a deal right now but in a couple years we’ll be priced out of the market again and looking for alternatives. How do you think Subprime and Alt-A loans got so popular out here? Couldn’t get a conforming loan for a median price home.