By Brian Summerfield, Online Editor, REALTOR® Magazine
When the Bourbon royals took over France again after the violent revolutions and Napoleonic wars that spanned more than two decades through the late 18th and early 19th centuries, the famous French diplomat Talleyrand supposedly said they had “learned nothing and forgotten nothing.” In other words, they immediately resumed the behaviors that had led to those national catastrophes in the first place.
Unfortunately, Talleyrand’s quip may apply to the United States during the Great Recession that started in late 2007. In remarks this morning at a 30 Under 30 event held in NAR’s Chicago office, Bethany McLean, co-author of the best-selling All the Devils Are Here, said the response to the financial crisis shows how much we — politicians, business leaders, regulators, and the public — haven’t learned. The book, written with New York Times columnist Joe Nocera, is a riveting account of the financial innovations and regulatory decisions that led to the near collapse of the world economy in the fall of 2008. McLean is a contributing editor with Vanity Fair, a columnist for Slate, and a frequent guest on Bloomberg news.
Part of the problem with bringing about real change is the complexity of the crisis. “What makes the narrative unsatisfying is that there’s not one simple explanation for it,” she said. Continue reading »
By Robert Freedman, Senior Editor, REALTOR® Magazine
The country’s newest banking regulator is trying to make it easy for practitioners and consumers to comment on a mortgage disclosure form. That’s a break from the past.
The new Consumer Financial Protection Bureau (CFPB) seems to be taking a different approach to its business as a regulator than the way regulators have traditionally done things. The agency was created as part of the massive Wall Street reform bill enacted into law last year to serve as a consumer watchdog of financial services companies. Although the agency has been in the works for a while, the mortgage debacle was the impetus for getting it off the drawing board and into the federal government as a functioning agency.
Of immediate importance to real estate, the agency assumes oversight of the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA), and the reason it seems to be doing things differently is the way it’s handling one of its first real estate-related tasks: consolidating the Good Faith Estimate (GFE) and the TILA disclosure form into a single, simplified form.
Since it was enacted into law in 1974, RESPA has been a function of the U.S. Department of Housing and Urban Development and the TILA disclosure form (which is mainly about disclosing in plain language how much your loan will actually cost you over the life of its term) has been a function of the Federal Reserve. Members of Congress over the years have instructed HUD and the Fed to get together and coordinate with one another on their forms and rules, but the agencies have had mixed success in doing that. NAR has commented over the years that HUD’s efforts and the Fed’s efforts have not always synced up well.
At least on that basis, having RESPA and TILA under one roof promises to address the issue of coordination. Of course, the jury remains out whether the substantive actions of the agency make sense from the perspective of the real estate industry. Only time will tell on that. Continue reading »
By Katherine Tarbox, Senior Editor, REALTOR® Magazine
Have you ever stood in line at Starbucks and thought about striking up a conversation with the person standing next to you, but then decided against it? Approaching strangers is weird, you may have thought, and they probably don’t need a real estate agent anyway.
But they might be considering buying or selling a house, and even if they aren’t, that doesn’t mean you can’t somehow benefit from the experience of meeting them, says David Topus, sales expert and president of communications consultancy Topus.
Two weeks ago, I met with Topus at the Starbucks on Michigan Avenue in Chicago. Topus has a strong background in sales, having worked for years at The Wall Street Journal and other publications before founding his own business, which serves many Fortune 500 companies. He says that you can meet anyone, anytime, and this belief has led him to strike up conversations that resulted in hundreds of thousands of dollars of new business for him.
Topus says that we have to keep the following points in mind when it comes to meeting new people: Continue reading »
Editor’s note: This post packages together six write-ups from REALTOR® Magazine Online on legislative and regulatory matters of interest to real estate professionals from the 2011 REALTORS® Midyear Legislative Meetings & Trade Expo, which took place in Washington, D.C., May 10-14.
- REALTORS® Fight Back Against Home Ownership Attacks
Changes to Secondary Mortgage Market Must be Gradual
U.S. in Same Debt Class as Greece?
The Impact of Dodd Frank on Real Estate
Tax Reform Goes ‘Back to the Future’
Navigating Life on MARS
REALTORS® Fight Back Against Home Ownership Attacks
Originally published May 11, 2011
A wide range of issues that risk putting homeownership out of reach for all but a narrow slice of households in the U.S. are coming to a head.
That’s the big picture that members of Congress must see as REALTORS® flood Capitol Hill for meetings with their senators and representatives this week, NAR’s chief lobbyist Jerry Giovaniello told REALTORS® attending the 2011 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington.
Among the high-profile issues that lawmakers are starting to talk about: Reforming secondary mortgage market companies Fannie Mae and Freddie Mac and deciding whether the mortgage interest deduction should be curbed, perhaps starting with second homes. But these are just the tip of the iceberg, Giovaniello told hundreds of REALTORS® at the Federal Issues Update Wednesday morning.
Some 8,000 REALTORS® are in Washington, D.C., this week and meetings with their members of Congress are a central part of why they’re here.
Among the threats to home ownership for the broad middle class are rising fees and tightening standards for FHA and conventional financing, a looming decrease in high-cost loan limits for FHA and conventional mortgages, a proposal to require a high minimum down payment for “safe” conventional loans, overly rigid FHA condominium financing rules, and a looming expiration of federal flood insurance.
The Question Lawmakers Need to Hear
“This is a perfect storm,” Giovaniello said. “There are 83 new members of Congress.” For these and other members who might not see how all of the different issues knit together, “you need to get back to the original attack on home ownership. The question is whether only a certain class of households will be able to become home owners in this country.”
The proposal for a high down payment is of particular importance, because if the proposal stands, it would lead to further consolidation in the mortgage lending industry, leading to just a few financial institutions in the industry, Giovaniello said. These big lenders are already too big to fail, in the same way that Fannie Mae and Freddie Mac were considered too big to fail. That led to hundreds of billions in bailout funds after the mortgage meltdown.
The high down payment proposal is in a recommended rule by banking regulators that would define a safe conventional mortgage as that with at least 20 percent down, and other tight underwriting requirements. If loans don’t meet that definition, lenders would have to retain 5 percent of the value of the loans on their books, a requirement that would lead to far higher interest rates, knocking out much of the broad middle class of home buyers.
By Brian Summerfield, Online Editor, REALTOR® Magazine
Since the announcement of the REALTOR® Party Political Survival Initiative (or RPPSI, if you’re into unwieldy acronyms), the association, the magazine, and the REALTOR® Action Center have received quite a bit of feedback.
NAR Leadership has stood solidly behind the timing, scope, and level of funding proposed for the initiative, which was developed by a group of members appointed by 2010 NAR President Vicki Cox Golder. At the Board of Directors Meeting Saturday, the NAR directors voted overwhelmingly to approve the program and to fund it with a dues increase. Here’s why.
Q: Why now?
A: Not surprisingly, this is a complaint we’ve seen a lot. We’ve been in a rough patch for a while. Why are you doing this now, when REALTORS® can barely afford it? Believe us, we know. Whether it’s from NAR or other organizations’ research, anecdotal feedback from members, or headlines in major media outlets, there has been no shortage of bad news for real estate these past few years. This decision, however, is not driven at all by economic circumstances, but rather by the fact that we’re in a political “perfect storm, as 2003 NAR President Cathy Whatley termed it. Specifically, the Supreme Court’s Citizens United v. Federal Election Commission ruling changed the game. Continue reading »
By Brian Summerfield, Online Editor, REALTOR® Magazine
Do you often find yourself saying that the future, in the words of legendary New York Yankees manager Yogi Berra, ain’t what it used to be? Have you lowered your expectations of yourself and your business because of the economy, the government, or some other abstraction? Are you unwilling or afraid to take risks or explore new ways of doing things?
Individuals and organizations don’t have much to look forward to if they can’t break out of that mentality, said Doreen Lecheler of corporate consultancy VisionLinked. In an address this afternoon to a roomful of REALTORS® in a Leadership Express session at the Midyear Legislative Meetings , Lecheler explained how to identify this mindset:
- There’s plenty of talk about problems and roadblocks, but little about opportunities. Continue reading »
By Stacey Moncrieff, Editor in Chief, REALTOR® Magazine
I had an opportunity Thursday to spend some time at a symposium and reception Thursday, where REALTORS® attending the Midyear Legislative Meetings were celebrating the work of the 2011 HOPE Award winners.
The Home Ownership Participation for Everyone (HOPE) Awards is a national industry awards program that recognizes individuals and organizations that are working to increase and sustain minority home ownership, revitalize communities, and expand affordable housing opportunities.
Winners are named in seven categories, including education, financing, and brokerage. But at the symposium, the 2011 winners agreed that education was the common thread among all the winners. As the housing crisis has unfolded, I’ve seen a lot of news stories focused on the disproportionate impact on minorities.
That’s why I was struck by the work of the HOPE winner in the education category, the Center for Homeownership, in Winston-Salem, N.C. According to Center Director Phyllis Caldwell, the center has seen an overall foreclosure rate of less than 2 percent. “Education is absolutely the key,” Caldwell told me at the reception. Continue reading »
Talk about the ultimate Washington celebrity sightings! OK, so they’re cardboard cutouts. But that didn’t stop REALTORS® from lining up Thursday to have their photos taken with President Barack Obama and former Alaska Governor Sarah Palin. It was all good fun—for the benefit of the REALTORS® Political Action Committee.