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?

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/.

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.

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..>

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. 

Posted: 14 Jul 2011 06:45 AM PDT

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.

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…

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.

But a couple of things have changed. This year many of the dropped assessments will go to commercial properties, which are continuing to lag residential properties. When I spoke with Larry earlier this year he was hopeful there would not be a need for further reductions this year after taking property values for the county back to roughly 2002 levels last year. Indeed as we have seen from my reports, residential values have remained virtually flatlined through the past 24 months after dropping over 50% in the previous 18 months. Assessed property values for the county for 2011 will be just over $200 billion, down over 16% from their peak of $243 billion in 2008.

This will be felt next year by the county as well as our cities, who are struggling to keep services afloat. Property taxes are the single largest source of operating funds for our cities and county and a substantial and real drop as we have experienced puts a real crimp in budgets, especially following the recent state decisions to further plunder city coffers of redevelopment funds, vehicle license fees and some of the basic operating funds cities have always counted on to get by. For the county it will mean a drop of nearly $5 million in property tax revenue from their earlier estimate of $266 million, a reduction of nearly 1% from their current budget of $582 million.

A second major change from Ward’s office is in the way the changes will be reported to property owners. Every year along about this time people got used to seeing a little postcard in their mailbox telling them what next years assessed value on their home would be. This year that’s not happening. In an effort to shave $200,000 from his budget, Ward will be posting the new assessments on-line on July 15. You can review your property tax assessment at www.riversideacr.com. If you don’t have internet access, well then you’re probably not reading this but in case you know somebody who may not browse, they can obtain a written assessment by calling 951-955-6200. They could also write to

Assessor, County Clerk, Recorder Larry Ward
P.O.B. 12004
Riverside CA  92502-2204

One final change tis year. If you think your assessed value should be higher or lower, it might cost you to find out. There has been debate among the County Supervisors to charge a fee to challenge your assessment. Should your challenge prevail and the property re-assessed, the fee would be refunded. But if the initial assessment stands then you will forfeit that fee. This has been proposed for two reasons – first as a cost measure to help defray some of the expense of researching individual properties after the process has already been done. Second, to minimize the rash of frivolous filings that occurs every year without foundation. Appears the only time people want their home to be worth less than it actually is is for tax purposes. And while this is understandable, your ‘gut feel’ of what your home is hopefully worth for tax purposes costs the county a lot of money to show you otherwise and that is being addressed by the new fee structure. If  you purchased your home after January 1, 1999, chances are Larry’s got you covered. He’s been one of the most aggressive and accurate Recorders in the state as far as making sure you aren’t over taxed.

But a question was raised from an audience member during the Q & A referring to a ‘disconnect’ between the board and the members. Now keep in mind I sat on the board for 12 years, chaired it three times and have sat in the back of the room as an observer the past 2 years. Never have I seen a board more connected to the members. Everybody on our board is a practicing Realtor®. They come from big franchise offices and one man brokerages. There are salespersons and brokers. There are people that work hard to do 5 deals a year and others who do 80 or more. There are people with lending and appraisal experience, men and women, young and not-so-young – in short, a board that mirrors our membership pretty well.

This board is also very engaged. There have been times in the past where board members were just padding a resume but todays board members sit on a variety of committees, several are traveling directors to our state association, some travel to national association meetings, others are involved in our regional and state mls, some are members of our fraud task force and some have stepped in from our future leadership pool, the Young Professionals Network, to become leaders today.

How do you even intimate these people are ‘disconnected’ from our members? They represent the very best of our members. And the people running for the positions represent a continuation of that excellence – it is insulting to them and to the current board to say they’re disconnected.

But then I had to step back and consider the source. Not everyone out there is connected, that’s obvious. The person calling for more transparency in board meetings is obviously not aware that board meetings are open to everyone to attend and that minutes are subsequently posted to the association website. In spite of repeated efforts to inform them, they’re disconnected from the bigger picture.

Another member bemoaned the lack of ‘outreach’ to get members to attend the Tuesday morning marketing meetings. This has been an ongoing  issue over the years as people tend to come to the meetings when times are tough but don’t attend when times are good. But even during the best of times attendance seldom exceeds 1% or 2% of our members plus a healthy dose of affiliates. Again, some members are disconnected. They think the entire association revolves around these Tuesday morning meetings simply because that’s the one thing THEY attend. As one director pointed out, an email goes out every week reminding members of the meeting – they can either choose to attend or not. Apparently of our 3,500 members, about 3,440 regularly choose ‘not’. Yet amazingly enough many of those people are very successful without attending the meetings. Not a lack of outreach, simply a matter of choice and priority.

Some pointed to a lack of Broker involvement or commitment to force their agents to attend these meetings. We have a very robust Broker community that take a very active role in our association. We hold regular meetings with them to provide information and solicit their input and these meetings are very well attended. Right now we are involved in an ongoing efforts to get a majority of our Brokers signed onto the Broker Involvement Program through CAR & NAR. The BIP has been shown to increase the response rate for calls to action by anywhere from 2 – 3 times. That’s critical for our state and federal legislative programs – far more critical at this juncture than pressuring these Brokers to force their agents to attend a Tuesday morning  meeting. Not only that, most Brokers have their own weekly marketing meetings and if they’re going to have their agents kill a morning a week, they would just as soon it be at their own office meeting. Their choice, not the association’s position to badger them.

Unfortunately, as all people running for office, our candidates treated all these questions with a gravitas often undeserved. Sometimes the premise behind a question is invalid and it’s OK to point that out. And as much as we’ve been told over the years “there are no stupid questions”, we all know better, don’t we? In any group there’s bound to be at least one asking stupid questions repeatedly. Yet our candidates, to their credit, dealt with each question, often according it way more legitimacy than it deserved. A couple even twisted themselves into corners on what they would do if elected trying to address every realm of some obscure question. Welcome to the world of politics.

Ah well, bless the candidates for stepping up. Three of them will go on to represent our members very effectively and develop that special connection. The ones not elected will still continue to contribute as they have over the years which brought them to this position today. Yesterday they staked out their positions and answered questions for an hour – all for the benefit of 5, count ‘em, 5, people who had not yet voted. They treated it like it really made a difference – because it does. If you don’t like it, get involved yourself. It’s easy. All you have to do is step out from the back of the room lobbing vollies and move to the front of the room fielding them.

If you find the type is a bit small for your viewing pleasure, simply click on the title to go to a full size version on Slideshare.com.

“The Right of property is the guardian of every other Right, and to deprive the people of this, is to deprive them of their Liberty.” – Arthur Lee

Anyway, for those of you opposed to an additional $40 hit on your dues, it appears your voices have been heard, Now you just need to make sure your local association and your NAR Directors are aware of your feelings.

From NAR President Ron Phipps:

To:        Local Board and State Association Presidents

This letter constitutes the official notice required by Article II, Section 10 of the Bylaws of the NATIONAL ASSOCIATION OF REALTORS® of a proposal to eliminate a previously approved membership assessment.

In May of 2010 the NAR Board of Directors approved an assessment of $35 per member for 2011-2013 to be used to continue the Public Awareness Campaign during those years.  The Finance Committee has now offered two alternative proposals regarding funding for the REALTOR® Party Political Survival Initiative.  One proposal eliminates the Public Awareness Campaign $35 Assessment for 2012 and 2013.  That proposal also increases NAR dues by $35 per year to fund the REALTOR® Party Political Survival Initiative.

The other proposal offered by the Finance Committee is being recommended by the NAR Executive Committee.  That proposal would increase NAR Dues by $40 per year to fund the REALTOR® Party Political Survival Initiative.  The Public Awareness Campaign $35 Assessment would remain in effect during 2012 and 2013.

Dues, membership assessments and amendments to membership assessments for the National Association are adopted by the Board of Directors of the National Association.  These issues will be coming before the Board of Directors at its meeting on May 14, 2011.

Sincerely,

Ron Phipps
2011 NAR President

The current continuing resolution (CR) providing funding for government operations is set to expire on April 8, 2011. If legislation providing for funding is not signed into law to extend funding after April 8, the federal government could shut down. This means many, but not all, government programs, including some that impact federal housing and mortgage programs, could grind to a halt as early as April 9, 2011. While the true impact of a shutdown is unclear until it actually begins below is a synopsis of how federal housing programs will likely operate in the event of a shutdown. The Office of Management and Budget (OMB) requires each agency to have contingency plans in place and reportedly has instructed agencies to not provide specific information on impacted operations.

Federal Housing Administration

FHA cannot offer endorsements for any new loans in the Single Family Program and cannot make commitments in the Multi-family Program in the event of a shutdown. FHA will maintain operational activities including paying claims and collecting premiums. Management & Marketing (M&M) Contractors managing the REO portfolio can continue to operate.

VA Loan Guaranty Program

Lenders may continue to process and guaranty mortgages through the Loan Guaranty program in the event of a government shutdown.

Internal Revenue Service (IRS)

Should the federal government shut down, the IRS cannot process federal income tax returns or issue refunds (but it can deposit tax payments). Consumers who were expecting to use their tax returns as part of the down payment for a home purchase will temporarily not have access to these refunds.

Flood Insurance

The Federal Emergency Management Agency (FEMA) confirmed that the National Flood Insurance Program (NFIP) will not be impacted by a government shutdown.

Rural Housing Programs

For the US Department of Agriculture programs, essential personnel working during a shutdown do not include field office staff who typically issue conditional commitments, loan note guarantees, and modification approvals. Thus, lender will not receive approvals during the shutdown. If the lender has already received a conditional commitment from the Rural Development office, then the lender may proceed to close those loans during the shutdown. A conditional commitment, which is good for 90 days, is given to a lender once a USDA Underwriter approves the loan. If a commitment was already issued, the funds were already set aside and the lender may close the loan at its leisure. If Rural Development has not issued a conditional commitment, the lender must wait until funding legislation is enacted before closing a loan.

Government Sponsored Enterprises

Fannie Mae and Freddie Mac will continue operating normally, as will their regulator, the Federal Housing Finance Agency.

Treasury

No official word as of yet, but the Making Home Affordable program, including HAMP and HAFA, may not be affected as the program is funded through the Emergency Economic Stabilization Act which is mandatory spending not discretionary.

Background Information on Government Shutdown

HJ Res. 48 extends the Continuing Appropriations Act, 2011 (Public Law 112-6) to April 8, 2011. If another continuing resolution (CR) or budget is not signed into law, the federal government could shut down on April 9, 2011. This requires the furlough of non-emergency personnel and the curtailment of federal agency activities. Federal contractors cannot be paid. Programs funded by annual appropriations are directly impacted though programs funded by laws other than appropriations (such as Social Security) may also be impacted. The last government shutdown occurred during fiscal year (FY) 1996 and lasted 21 days, from December 16, 1995 through January 6, 1996.

The Anti-Deficiency Act is the primary law preventing government activity when no budget or CR is enacted. The act, found in 31 U.S.C., prohibits:

• Making or authorizing an expenditure from, or creating or authorizing an obligation under, any appropriation or fund in excess of the amount available in the appropriation or fund unless authorized by law.
• Involving the government in any obligation to pay money before funds have been appropriated, unless otherwise allowed by law.
• Accepting voluntary services for the United States, or employing personal services not authorized by law, except in cases of emergency involving the safety of human life or the protection of property.
• Making obligations or expenditures in excess of an apportionment or reapportionment, or in excess of the amount permitted by agency regulations

Basically, the government may not make payments or commitments unless there is enough money in the bank. According to the US Office of Personnel Management, an agency must shut down activities not excepted by the US Office of Management and Budget (OMB) when it no longer has the funds to operate. OPM recommends that agencies:

1. communicate with employees and representatives about a potential shutdown;
2. prepare draft furlough notices;
3. determine which positions are excepted from the furlough according to OMB guidance.

Federal agencies have been required to complete contingency plans since 1980. OMB has three different bulletins that agencies may reference in the development of their shutdown plans. Plans must include, among other things, estimated time to complete a shutdown and the number of employees to be excepted. The President, Members of Congress, presidential appointees, certain legislative branch employees, and federal excepted employees are not subject to the furlough.

Sources

House Resolution 3082, “An Act making appropriations for military construction, the Department of Veterans Affairs, and related agencies for the fiscal year ending September 30, 2010, and for other purposes.”
http://www.gpo.gov/fdsys/pkg/BILLS-111hr3082eas2/pdf/BILLS-111hr3082eas2.pdf

Antideficiency Act Background. US Government Accountability Office.
http://gao.gov/ada/antideficiency.htm

Guidance and Information on Furloughs. US Office of Personnel Management.
http://www.opm.gov/furlough/furlough.asp

Posted: 30 Mar 2011 07:18 AM PDT

High down payment requirements being proposed by federal regulatory agencies as part of the upcoming rulemaking under the Dodd-Frank Wall Street Reform and Consumer Protection Act will unnecessarily burden homebuyers and significantly impede the economic and housing recovery, according to the National Association of Realtors®.

Six agencies, including the Department of Housing and Urban Development, Federal Deposit Insurance Corp., Federal Housing Finance Agency, Federal Reserve, Office of the Comptroller of the Currency, and the U.S. Securities and Exchange Commission, are developing a proposed risk retention regulation under the Dodd-Frank Act that requires lenders that securitize mortgage loans to retain 5 percent of the credit risk unless the mortgage is a qualified residential mortgage (QRM); FHA and VA mortgages would also be exempted. The purpose is to create strong incentives for responsible lending and borrowing.

“As the leading advocate for home ownership NAR supports a reasonable and affordable cash investment requirement coupled with quality credit standards, strong documentation and sound underwriting,” said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “A narrow definition of QRM, with an unnecessarily high down payment requirement, will increase the cost and reduce the availability of mortgage credit, significantly delaying a housing recovery.”

NAR believes that Congress intended to create a broad QRM exemption from the 5 percent risk retention requirement to include a wide variety of traditionally safe, well-underwritten products. Congress chose not to include a high down payment among the criteria it specified in the Dodd-Frank Act to guide the regulators in defining a QRM. Strong evidence shows that responsible lending standards and ensuring a borrower’s ability to repay have the greatest impact on reducing lender risk.

“We need to strike a balance between reducing investor risk and providing affordable mortgage credit. Better underwriting and credit quality standards have greatly reduced risk. Adding unnecessarily high minimum down payment requirements will only exclude hundreds of thousands of buyers from home ownership, despite their creditworthiness and proven ability to afford the monthly payment, because of the dramatic increase in the wealth required to purchase a home,” said Phipps.

The definition of QRM is important because it will determine the types of mortgages that will generally be available to borrowers in the future. Borrowers with less than 20 percent down could be forced to pay higher fees and interest rates, up to 3 percentage points more, for safe loans that otherwise do not meet too narrow QRM criteria.

NAR is concerned that a narrowly defined QRM will also require severe tightening of FHA eligibility requirements and higher FHA premiums to prevent huge increases in its already robust share of the market, adding additional roadblocks to sustainable home ownership.

“Saving the necessary down payment has always been the principal obstacle to buyers seeking to purchase their first home. Proposals requiring high down payments will only drive more borrowers to FHA, increase costs for borrowers by raising interest rates and fees, and effectively price many eligible borrowers out of the housing market,” said Phipps. “We strongly urge the regulators to consider the negative consequences of setting onerous limits on the availability of credit.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

That will have no impact whatsoever on quarry opponents who argue that the blasting will disrupt the area, reduce property values, contribute to earthquakes, and produce clouds of deadly silica dust that will entomb our region. To say it’s been an impassioned argument over the past few years would be an understatement. Sadly, it has pitted neighbor against neighbor, city against county and logic against emotion more than once. The Letters to the Editor section of the local paper would dry up if not for the continual missives pro & con on this single subject.

I posted information on this two years ago after our Directors had visited another quarry site and the SDSU Preserve area adjacent to where the new quarry would be located. The Southwest Riverside County Association of Realtors® has not taken a position on the quarry project but has attempted to bring accurate information to our members so they have some background should they choose to make their own informed decision. You can get that background here:

Liberty Quarry & Private Property Rights

SDSU Showcases the Santa Margarita Watershed

Public hearings have been scheduled for the project on April 26 and May 3 at Rancho Community Church (31300 Rancho Community Way) in Temecula starting at 4 pm.

The report is available for your perusal at: Liberty Quarry Final EIR

Few will actually read it, everybody will be quoting the ‘facts’ as they interpret them. And no matter which side prevails in the County’s final decision, we may be assured this will tie up the courts for several more years. Some people have more solid granite between their ears than would be mined from the Liberty Quarry in the next 75 years.

Attack!