Short Sales Help in Plain Language

By Robert Freedman, Senior Editor, REALTOR® Magazine

Since the beginning of the short-sale problem, NAR members have been seeking plain-language, common-sense tips for dealing with these difficult transactions. We tried to help fill the information gap earlier this year with two free webinars, one in March and one in May, with Scott Thompson, a short-sale specialist who shared his ideas in a way that seemed to resonate with our members. The last time I checked, just under 39,000 of you either attended, viewed, or downloaded the two webinars. They were also incorporated into NAR’s new Short Sales and Foreclosures Resource Certification (SFR) curriculum.

The tips Thomson shared still apply today because he talks about industry best practices that remain constant. But the short-sale environment is nevertheless evolving, so we’re hosting a third webinar, called Today’s Changing Short-Sale Environment, and you might consider spending an hour to attend it on Dec. 10 if you’re looking for more help with these transactions. It’s at 3 p.m. Eastern Time. What has changed? First, lenders have been refining their processes for the past year and a half, so we need to know how their processes are different today. Ideally, we would talk to all the major lenders but that’s not practical. So, we’re doing the next best thing. We’re having Dave Sunlin of Bank of America Home Loans, a sponsor of several of our webinars, talk to us about what his company is doing on short sales. Dave is senior vice president at the lender and in putting together the Webinar we learned that BofA is rolling out a technology platform for short sales. Read more

A Quiet NAR Success on Its Calls for Action

By Robert Freedman, Senior Editor, REALTOR® Magazine

There are many reasons for the success of NAR’s most recent Call for Action, to which more than 18 percent of NAR members—a record— responded.

First and foremost is the compelling subject of the CFA: getting the home buyer tax credit extended and expanded. As NAR Chief Ecionomist Lawrence Yun has been saying for weeks, residential home prices are stabilizing and are on the cusp of heading up—the all-important precursor to restored confidence in homeownership. We’re relying on that improved confidence to boost sales, tighten inventories, and restore healthy credit markets.

Given that, letting the credit expire on Nov. 30 could have stopped sales momentum dead in its tracks.

It was also huge that Congress added the $6,500 credit for repeat buyers, because throughout 2009 much of the sales weight has been carried by first-time buyers. For market stability, repeat buyers needed to get off the fence and Congress saw that. Read more

Buyer Reps: Helping Everyone Win in a Short Sale

By Robert Freedman, Senior Editor, REALTOR® Magazine

There’s a temptation among buyers hoping to land a good deal with a short sale to avoid committing themselves with money and effort until the seller’s lender gives its OK, but that’s a sure-fire way to ensure the deal won’t close, short-sales trainer Lynn Madison said Sunday at the 2009 REALTORS® Conference & Expo.

Lenders are too backlogged and have too much to lose to consider offers whose buyers haven’t provided earnest money, had an inspection conducted, or applied for financing, said Madison, who help devise and also teaches classes for NAR’s new Short Sales and Foreclosures Certification Program (SFR).

Doing all of these things—along with submitting a reasonable offer—can improve your client’s chances greatly. This is not the time to low-ball on a property whose value has already deeply plunged, she said. Read more

Listing Videos: They’re That Easy

By Robert Freedman, Senior Editor, REALTOR® Magazine

Making informative and even entertaining videos of your listings seems like a complicated undertaking involving a professional camera, lights, editing equipment, and a lot of knowledge of how all that equipment works, but in fact you can be uploading videos tomorrow without too much trouble.

I’ll be talking about this at 1 p.m. today at the NAR Expo booth at the 2009 REALTORS® Conference & Expo in San Diego. Maybe you won’t be posting videos tomorrow when you’re back at the office but you’ll certainly see that it’s pretty easy to do. Read more

Middle-Market Is Next Home Segment to Improve

By Robert Freedman, Senior Editor, REALTOR® Magazine

Executives from some of the largest brokerages in the country expect to see their sales grow 6-8 percent in 2010 and home prices to start heading up about 3 percent, REALTORS® heard in a state of the real estate industry discussion Saturday at the 2009 NAR Conference & Expo.

John L. Scott Real Estate chairman and CEO J. Lennox Scott said expansion of the tax credit to include repeat buyers will help boost middle-market sales next year, although mortgage financing above the $417,000 non-jumbo conforming loan limit will remain a challenge. “The repeat tax credit will at least start a conversation about buying” among existing home owners, Scott said. Read more

HVCC: Bad Code or Badly Implemented Code?

By Robert Freedman, senior editor, REALTOR® Magazine

The Home Valuation Code of Conduct is getting a bad rap for causing what real estate professionals say is a rise in inaccurate appraisals, Alfred Pollard told a packed room of REALTORS® Friday in a risk management-regulatory issues joint forum at the 2009 NAR Conference & Expo in San Diego.

Pollard, the general counsel for the Federal Housing Finance Agency (FHFA), said HVCC was released at a time when the economy was in a massive contraction—what he called a systemic event—and that this broader picture has to be taken into consideration when talking about valuation trends. “Concerns [over valuations] might not be 100-percent tied to this code,” he said.

FHFA oversees Fannie Mae and Freddie Mac, which earlier this year adopted HVCC and applied it nationwide in an agreement with the New York attorney general. HVCC expires in late 2010 but the two secondary mortgage market companies can retain all or parts of HVCC going forward.

Nor is it fair to rap all appraisal management companies (AMCs) for handing out valuation assignments to inexperienced or out-of-market appraisers who are willing to work for reduced fees, Mark Johnson, COO of LSI, a big AMC, said at the forum.

Any AMC that lets appraisers work outside their area of geographic competency is violating appraisal standards under USPAP and they should be reported, he said. “I do believe there have been some bad actors,” he said. Read more

RPR and HouseLogic: Projects of Striking Scale

By Robert Freedman, Senior Editor, REALTOR® Magazine

So many announcements are made at NAR’s annual meeting that it’s easy to lose sight of just how trend-shifting some of them are. At the opening forum of the 2009 REALTORS® Conference & Expo in San Diego yesterday, NAR CEO Dale Stinton made back-to-back introductions of two initiatives that stand to define how you’ll do business in the years ahead.

The first is the REALTORS® Property Resource, something NAR leaders first started discussing several years ago then gave the go-ahead about two years ago as part of NAR’s massive Second Century Initiatives.

When it launches in the second quarter of 2010, it will be a database of 147 million parcels of real estate accessible to all REALTORS®. For each parcel you’ll have quantitative data—size, assessment, and so on—plus qualitative data: comments from you and your colleagues on what’s really key about the property.

Any database that has 147 million of anything is a massive resource; when the data consists of the amount and quality of the information that Stinton describes, you really get a sense of its scale. It will put an unprecedented amount of informaton at your fingertips, making you a go-to resource for your customers that would have simply been impossible years ago. If you think about it, it’s exactly the kind of thing that associations should be doing for their members: pooling their resources to undertake massive projects that shift the long-term competitive landscape in their favor. Read more

What Will NAR’s Political Strength Be in 5 Years?

By Robert Freedman, Senior Editor, REALTOR® Magazine

Heather Smith knows how to get young professionals engaged in our political process. She founded an initiative called Young Voter Strategies as a way to reinvigorate our democracy by making clear to young people the importance of their political involvement. One outcome of that, arguably, is the success of Barack Obama’s presidential candidacy. Whatever your views of his politics, his camapign was built on a massive influx of young Americans who had little or no involvement in politics before. That can only be healthy for a democracy, regardless of where you fall on the political spectrum. She’s now head of an initiative called Rock the Vote. You might have heard of that: It works through rock acts like the Fall Out Boy and entertainers like Zach Braff to reach out to young adults about voting.

I mention Smith because she’s one of the speakers at a forum called Rock the REALTOR® at the 2009 REALTORS® Conference & Expo on Friday that touches on an important topic for the health of real estate in the years ahead: getting today’s young real estate professionals to take an interest in the politics of real estate.

What are the politics of real estate? Getting the home buyer tax credit extended and expanded is a good example. If you don’t follow the day-to-day machinations of the legislative process—hopefully you’re too busy cultivating customers and closing deals to do that—it might seem like there was little controversy behind the effort to get the credit extension passed (which happened last week). After all, the Senate passed the credit without a single “no” vote. But in fact passage of that law was in some sense years in the making. That’s because it’s taken years for NAR (and other real estate associations, for that matter) to develop the ability to energize its members on behalf of what’s best for real estate.

You should know that NAR broke all records on its Call for Action to extend and expand the tax credit. I don’t have the latest figure, but the last time I checked NAR had an 18 percent response rate. Compare that to just two years ago, when the typical response rate was 3 percent. That kind of turnout is crucial, because lawmakers respond when thousands of real estate professionals in their district or state contact them about an issue. Read more

FHA Eases Concentration, Other Condo Rules

By Robert Freedman, Senior Editor, REALTOR® Magazine

In an effort to give condo lending a boost, FHA yesterday released a mortgagee letter (2009-46 A) that lets lenders make loans to condo buyers even if it means 100 percent of the project units would have FHA financing.

That’s a level of market exposure far above what FHA is allowing in its baseline rules (which you’ll find in another mortgagee letter: 2009-46 B), which limit FHA concentration to no more than 30 percent of units.

FHA is also easing its 50-percent owner-occupancy requirement—long an industry concern—by allowing lenders to exclude foreclosed properties in their calculation. That could go a long way in helping buyers in the hardest-hit areas tap FHA financing because it means none of a project’s distressed units count against the owner-occupancy limit.

The agency’s also allowing lenders to make spot loan approvals until February 1, 2010. If you’re not familiar with spot approval, it’s an authority given to lenders to finance one unit in a project that hasn’t yet been approved by FHA for financing.

These and a few other changes that reflect a realistic assessment of today’s market conditions take effect Dec. 7 and they last, with the exception of the spot approvals, until the end of 2010.

If you’re going to San Diego for the 2009 REALTORS® Conference & Expo this week, make it a point to hear FHA Commissioner David Stevens in the An Hour with the FHA Commissioner session. Read more

New Financial Regulator Would Impact You

By Robert Freedman, Senior Editor, REALTOR® Magazine

But not in the way you might think.

A new financial regulator is in the works but it’s one of those developments that’s easily lost in the news while other federal initiatives command the headlines.

The Consumer Financial Protection Agency (CFPA), which passed the House Financial Services Committee just a few weeks ago, would represent a sweeping change in the way financial services companies are regulated. Right now, our alphabet soup of federal banking regulators—OCC, FDIC, NCUA, and so on—have two missions: 1) to oversee the safety and soundness of financial services companies, and 2) to protect consumers.

The logic behind CFPA is to split off the consumer-protection side of the regulators’ portfolio so they can focus on bank safety and soundness. The new agency would focus on consumer protection.

What’s key for real estate professionals is that CFPA will focus only on financial services companies. That seems obvious, but it wasn’t always this way. As the language was originally drafted, any number of professional services that handle money in some way would have fallen under the definition of financial services. Thus, real estate professionals, who handle earnest-money deposits among other things, could have been subject to regulation under CFPA.

The fact that the House Financial Services Committee makes clear in its bill that real estate brokers and sales associates aren’t regulated under CFPA is an advocacy victory for REALTORS®, who, through NAR, let lawmakers know that the original draft would lead to unforseen consequences if it wasn’t changed. It was.

You should be aware that CFPA could still touch the real estate transaction in several ways, though. Read more

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