The group got some big assists from local real estate-related organizations, which donated gift cards to help alleviate some of the travel costs. Additionally, the Greater Baltimore Association sent a care package with games, snacks, Baltimore Orioles sports paraphernalia, and Old Bay seasoning to help make the journey a bit more pleasant.

The group is heading into Indiana as I’m writing this, and they’re expected to arrive sometime either late tonight or early tomorrow morning. Here are some photos of their journey so far.

Getting started...

Welcome to the Badger State!

Hope the bus driver isn't in this photo.

We hope to see you at the Rally to Protect the American Dream tomorrow. If you can’t make it, be sure to attend virtually.

Here’s how the virtual rally works. On Wednesday, May 16, go to www.RealtorRally.org, and add your name to a map of the United States. You’re basically checking in to the virtual rally and letting your colleagues and friends know you’re participating with the 13,000 REALTORS® who will be at the Washington Monument.

On the site you can do a lot of things, including tweeting and adding posts to Facebook. And you can let your senators and your congressperson know that you’re as much a part of the Rally as those who are in Washington in person.

On the day of the Rally, there will be lots to do—videos, pictures, and more.

On the day after the Rally, there will be a fun FanCam image posted. If you’re not familiar with what that is, it’s a wide-angle image that essentially captures every person at a big event like the Super Bowl. Even if there’s 100,000 people at the event, the image captures each one, so on RealtorRally.org you can click on each person to get a snapshot of each one. It’s quite a momento from the event.

We hope to see you at the Rally—in -person if possible but virtually if not. Attending virtually is a great way to show you share your colleagues’ effort to protect home ownership as central to our country’s priorities.

How does the virtual rally work? Watch the 90-second video above to see.

More about the Rally.

Make a REALTOR® Rally poster.

Why the Northern Virginia Association of REALTORS® will be at the Rally in force.

Background on the Rally.

“Tight lending standards remain a problem,” he told the members of the U.S. Senate Banking Committee subcommittee on economic policy, “and we don’t want to give a lender another excuse not to approve a loan.”

The Senate panel was looking at long-term reauthorization and reform of the National Flood Insurance Program. NAR supports reauthorizing federal flood insurance for five years and making reforms that would strengthen the program. As it stands, the program is set to expire at the end of this month, and REALTORS®, when they’re in Washington next week for the Rally to Protect the American Dream and the NAR Midyear Legislative Meetings & Trade Expo, will make the program reauthorization an advocacy priority. Members will be meeting with members of Congress from their state in their annual Hill visits.

Many lawmakers on a bipartisan basis support reauthorization, but extending the program is always a challenge. Congress in the past several years has reauthorized the program in short-term increments, and a couple of times it allowed the program to lapse for a short period. Those lapses, as short as they were, have been very hard on the market. Thousands of transactions couldn’t close—and that’s what President Veissi means when he talks about giving lenders another reason to say no.

And the problem isn’t a coastal issue. As President Veissi says in his testimony, which you can see in the the 3-minute video above, flood plains are everywhere, so the absence of insurance is a nationwide problem.

Read President Veissi’s testimony.

1,300 transactions a day stall with no flood insurance

Issue: Can the federal fair housing law be used to battle local ordinances that might disproportionately hurt minorities?

The Law: The federal Fair Housing Act went into effect in 1968 and was amended in 1988. The law makes it illegal to discriminate in the sale, lease, or rental of housing—or to make housing otherwise unavailable—on the basis of race, color, religion, sex, handicap, familial status, or national origin.

The Case: We looked at Gallagher v. Magner, which I found fascinating because of the way it turned my conception of fair housing law on its head. I have always thought of property owners, managers, and salespeople as the targets of fair housing enforcement. But in this case, it was the property owners making the accusation. A group of owners in St. Paul, Minn.—with portfolios ranging from one property to 40—filed a claim against the city and city employees, including Steve Magner, supervisor of the city’s Department of Neighborhood Housing and Property Improvement. The owners argued that the city’s stepped-up enforcement of housing codes increased their costs in leasing their properties and so disproportionately affected low-income tenants—and minorities in particular—through increased rents. Among the owners’ arguments was that DNHPI’s policies and actions had a disparate impact on protected classes—in other words, the city’s policies and actions had the effect of discriminating.

The Department of Housing & Urban Development (HUD), which enforces the Fair Housing Act, has long held that disparate income claims are “cognizable” (meaning: they can be tried in court), but circuit courts have been split on whether these claims apply and how they should be analyzed by the courts. That’s because while some federal laws—such as those that bar employment discrimination—contain language that explicitly allows disparate impact claims, the Fair Housing Act does not.

The Decision: A District Court dismissed the Gallagher suit, but the Federal Circuit Court of Appeals (Eighth Circuit) reversed the lower court on the claim of disparate impact. Since then, in a 2011 decision involving a redevelopment plan in New Jersey, the Third Circuit Court has joined the Eighth Circuit in affirming disparate impact’s applicability to fair housing law (Mt. Holly Gardens Citizens in Action, Inc. v. Township of Mount Holly).

In November 2011, the Supreme Court agreed to hear arguments in the Gallagher case. However, in February 2012, the parties withdrew the motion, leaving unsettled the question of whether disparate impact applies to fair housing law.

Why It’s Significant for Real Estate Professionals: The Gallagher case doesn’t directly affect real estate brokerage. However, it’s of interest to landlords and those who are planning redevelopment projects that may disproportionately affect protected classes under the Fair Housing Act.

What Else Do You Need to Know About Fair Housing? Sellers, buyers, landlords, tenants, and real estate professionals all have rights and responsibilities under the Fair Housing Act. And NAR’s Code of Ethics goes one step beyond the federal law, prohibiting REALTORS^® from discriminating on the basis of sexual orientation. State or local laws may prohibit discrimination based on additional classes not covered by federal law.

For a primer on fair housing law, visit What Everyone Should Know About Equal Opportunity Housing.

Then, test your knowledge by taking REALTOR^® Magazine’s Fair Housing Quiz.

Next Week: What rights do property owners have to challenge Environmental Protection Agency determinations?

Additional Resources:

At REALTOR.org: Law & Ethics

At REALTOR.org: Legal case summaries

At REALTOR® Magazine Online: Law & Ethics

Infographic: 23 Federal Laws that Apply to Real Estate

REALTOR® Trademark: “Make Our Marks Remarkable” video (under 3 min.)

Now, several years later, the NYSAR Foundation has helped more than 70 households become first-time buyers, and that has increased business for the association’s members.

What’s more, the Foundation did it in a way that maximizes the use of every dollar in assistance that it receives. As NYSAR CEO Duncan MacKenzie says, “For every dollar that we get in, we put a dollar back out, and we think that’s a proper way to do it.”

If you’re interested in creating a first-time buyer program in your local area or state, I’m sure the folks at the NYSAR Foundation would be happy to share with you how their program works. You can also get some ideas in the 3-minute video above. There, Foundation leaders talk about why they started the Foundation, some of the program’s operational details, and how REALTORS® in the state like the program. (They like it a lot.)

NAR’s a program partner, too. It contributed $130,000 in funds that NYSAR is using to provide some of the closing cost help. The funds came through NAR’s Ira Gribin Workforce Housing Grants program. Those grants have ended, but NAR still offers funding through its Housing Opportunity Program, which is a competitive grant program that NAR makes available every year.

You can learn more about applying for that money by sending an e-mail to Wendy Penn of NAR at wpenn@realtors.org. It’s a program for state or local associations, so the application has to come from your association.

Other associations have used NAR HOP grants in their programs. Here are videos on how the Fredericksburg, Va., Springfield, Mass., and Charlotte, N.C., associations of REALTORS® structured their programs:

Charlotte, N.C.

Springfield, Mass.

Fredericksburg, Va.

But did you know there’s also a business-boosting side to the Home Ownership Matters campaign?

For the last 18 months, NAR has been commissioning research and compiling articles, studies, and other material that show just how valuable home ownership is to our country, both financially and in terms of household, neighborhood, community, and national stability.

All these resources add up to a library of information that you can use to be the go-to person for your customers and clients who are concerned about what impact Washington actions will have on their home or on home ownership in general.

By sharing with households research showing just how valuable home ownership is, you’re helping them take their future into their own hands. And you can expect that to translate into an appreciation for all the information you provide and for all that you do.

The 4-minute video above with REALTOR® Magazine Online Editor Brian Summerfield will give you a sense of just how much information is available for you to share with your customers and clients.

Home Ownership Matters research.

Home Ownership Matters materials.

If you’re applying for a loan, what determines whether or not you can repay that loan?

That’s what a federal regulator is trying to determine right now, and based on a proposed rule they’ve written, they’re thinking about setting standards that NAR and other industry groups—and consumer groups, too—think will make it hard for even creditworthy households to get a home loan.

The regulator is the new Consumer Financial Protection Bureau and the rule it’s writing is called the qualified mortgage (QM) rule. CFPB is trying to define the way banks measure a loan applicant’s ability to repay a loan: what the applicant’s monthly debt-to-income ratio is, what the monthly mortgage payment would be, what the applicant’s credit history is, and so on.

NAR and some 40 partners in a coalition sent CFPB a letter not long ago saying “ability to repay” should be defined in broad terms, otherwise lenders’ ability to make loans to all but the most creditworthy households would be constrained.

It’s like last year’s battle over the proposed QRM rule all over again.

If you remember the QRM rule, it was supposed to set its own underwriting standards, although with applicability limited to loans that are included in securities and sold to investors. If the loan met the QRM standard, lenders can sell 100 percent of the loan to investors. If the loan didn’t meet the standard, lenders can still make the loan but they have to retain 5 percent of the loan amount on their books. That means these non-QRM loans would be expensive for borrowers, adding to the cost of buying a house and blocking some households from buying.

NAR and other groups, inluding consumers groups, built such a strong case against the proposal (in part because it considered requiring a strict downpayment requirement) that regulators have shelved the rule while they weigh all the input they received.

Here we are a year later and CFPB is writing the QM rule, which is a more general ability-to-repay rule that applies to all mortgages, securitized as well as non-securitized loans, and once again regulators are weighing a narrow definition that could include overly prescriptive standards that would make it hard for lenders to make any loans except to the most creditworthy borrowers.

Will CFPB go down the same road as the Federal Reserve and other regulators that drafted the proposed QRM rule? Let’s hope not.

But there’s another concern with the QM rule, and it has to do with the legal standard that lenders will have to meet if a loan goes bad.

CFPB is weighing whether to hold lenders to what’s known as a rebuttable presumption standard of legal culpability or give them a “safe harbor” under which they can protect themselves from lawsuits of questionable merit by borrowers who default on their mortgage.

“Rebuttable presumption” and “safe harbor” are legalistic terms, but underlying them are simple concepts. If CFPB decides to use a rebuttable presumption standard, any borrower who defauts on his loan and believes the lender didn’t technically meet the ability-to-repay standard can bring an action against the lender. Even if the lender were to prevail against the action, it still has to defend itself, which is costly, time-consuming, and resource intensive. Multiply that by the number of actions taken against it and you can see that lenders might just throw up their hands and refrain from making any loans except to the safest, most creditworthy borrowers.

The safe harbor approach, which NAR and its coalition partners support, is far less likely to lead to a retreat from the market by lenders, because it saves them from having to defend against each and every defaulting borrower as long as the loans it makes follow the ability-to-repay standard. Borrowers who default can still sue but the case can be immediately dispensed with if the lender has met the safe harbor. At the same time, you can expect the loans to be relatively safe, because they would have been underwritten using the federal standard.

There’s more to these issues, and any time you try to write about legalistic issues in non-legal terms, you run the risk of over-simplifying, so you can read the proposed rule for yourself.

The bottom line has to do with what makes sense for the market. If we want lenders to make safe loans to more than just the most creditworthy borrowers, then CFPB should write a QM rule that broadly defines the ability to repay and that provides a legal safe harbor for lenders. A rule that narrowly defines the ability to repay and that gives defaulting borrowers too-easy legal standing to sue reopens last year’s QRM debate.

The 2-minute clip above is extracted from a video on the QM rule. It looks at the differences between the safe harbor and rebuttable presumption legal standard that’s of concern.

More on QM, including the full video in which the clip is taken.

Here’s a look at the first case, plus additional commentary and resources. The usual warning applies:  Brokers and salespeople who have questions about how or whether these laws or cases apply to their situation should seek the counsel of a qualified attorney.

Issue: Does the RESPA prohibition on unearned fees apply to transaction fees?

The Law: One year before the Home Mortgage Disclosure Act, three years before the Community Reinvestment Act, and 38 years before the Consumer Financial Protection Bureau, there was RESPA. RESPA—the Real Estate Settlement Procedures Act—was passed in 1974 to prevent kickbacks in the provision of settlement services, and it has been a source of angst and debate among real estate, title, and mortgage professionals ever since. One contentious provision, Sec. 8(b), prohibits settlement service providers from imposing so called “unearned fees” on borrowers. Seems simple enough. Not really.

The Case: We looked at Freeman v. Quicken Loans, in which a group of Louisiana borrowers, led by Tammy Foret Freeman, charged Quicken with violating RESPA’s prohibition on unearned fees. Quicken argued that the fee in question, discount points paid to reduce the mortgage interest rate, was standard practice across the industry. Quicken prevailed in District Court and the Federal Circuit Court of Appeals, but the plaintiffs appealed to the U.S. Supreme Court.

The Supreme Court heard arguments in February. The plaintiffs claimed that although they paid the fees they did not receive a reduced interest rate, and thus the fees were “unearned.” Quicken argued that Sec. 8(b) applies only to fees that are split with other parties to the transaction. Because the points weren’t split, Quicken said, there was no violation. Here’s the Sec. 8(b) language:

“No person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed.”

The Decision: The Supreme Court heard arguments in February and is expected, but not guaranteed, to make a decision by the end of June. Circuit courts have been split on the issue of splitting (no pun intended). But HUD has been unequivocal: It issued a policy statement back in 2001 saying if fees exceed the reasonable value of goods provided or services performed—whether or not there’s a split—they violate Sec. 8(b).

The Supreme Court decision should settle once and for all whether splitting fees is required for a Sec. 8(b) violation to occur.

Why It’s Significant for Real Estate Professionals: In another recent case, Busby v. JRHBW Realty Inc. d/b/a Realty South, an Alabama Court ruled that the brokerage’s $149 administrative fee was an unearned fee and, therefore, in violation of RESPA. The fee was not split.

Many real estate companies charge administrative fees, often known as transaction fees. NAR has long held that these fees do not violate RESPA because (1) they aren’t split with other settlement service provider as stipulated in Sec. 8(b), (2) such fees are a part of the total compensation a consumer agrees to pay for many various services provided by a broker, and (3) RESPA was never intended to regulate what brokerages may charge their customers.

Companies that charge such fees, NAR has said, should be prepared to show that the fees are for services that are “actual, necessary, and distinct” from other services or goods provided by the broker and match the value of those services. (See “Real Estate Transaction Fees,” by Phillip L. Schulman)

After the Busby case, many real estate brokers restructured their compensation, combining any administrative fees into the percentage or flat fee commission and listing the combined amount on Line 700 of the HUD-1. HUD has issued an informal letter endorsing the approach but warning that, if the full commission (including the fee) isn’t spelled out in the listing or buyers broker agreement, then the fee may be subject to review under Sec. 8(b) of RESPA.

When the Supreme Court hands down its decision on Quicken, NAR will issue additional guidance to brokers at REALTOR.org.

What Else Do You Need to Know About RESPA? The law covers a wide range of topics related to the provision of settlement services, including promotional and educational activities; payment for goods and services provided; and affiliated business arrangements, such as partnerships between real estate brokerages and mortgage brokerages. For a terrific summary, see “Following RESPA Rules” in the Association Executive section of REALTOR.org. (You’ll need your REALTOR.org login.)

Then, test your knowledge by taking REALTOR® Magazine’s RESPA quiz.

Next Week: Can the federal Fair Housing Law be used to battle local ordinances that might disproportionately hurt minorities?

Additional Resources:

Newsletter covering recent legal decisions: Letter of the Law

At REALTOR.org: Legal case summaries

REALTOR® Trademark: “Make Our Marks Remarkable” video (under 3 min.)

At REALTOR Magazine Online: Law & Ethics:

Infographic: 23 Federal Laws that Apply to Real Estate

“There are more signs than there were a year ago that housing isn’t getting any worse,” the paper says, “and that it may slowly be getting better.”

But how slowly? The Journal says prices nationally are still falling. It cites February data from CoreLogic that prices fell 2 percent from a year earlier. Recent Case-Shiller data also show prices continuing to fall. NAR data, which draws directly from MLS data, differs from these two data sets. In February it showed prices with a slight, 0.3 percent gain, and in March with a more substantial 2.5 percent gain. These figures take into account distressed sales, which comprise about a third of all existing-home sales today and have a dampening effect on prices, so price gains would be higher if these sales were taken out of the data.

Time will tell which data set is more accurate. Several months will need to go by before we can look back and see what’s actually happening today with prices, but in any case, NAR Chief Economist Lawrence Yun is optimistic about what the market will look like later this year.

First, distressed homes are getting snapped up by bargain hunters, both investors and owner -occupants. That softens the impact that banks’ shadow inventory will have on markets in the months ahead as more properties are released. Second, inventory levels are down to six months, which historically has been the level at which prices stabilize.

To be sure, inventories have been down to six months only for a short amount of time, so it’s too soon to say there’s a trend here. But if inventories stay down at this level for several more months, the stage could be set for better news on prices.

One point made by the Journal that is certainly the case is the continuing trouble borrowers are having getting loans. As the paper says, banks are maintaining tight credit standards in part because of their concerns that Fannie Mae and other secondary market entities will make them buy back any loans that go bad. So, their standards are ratcheted up, and that’s causing even creditworthy borrowers headaches.

It’s safe to say that, until the difficulty of getting financing eases back to a more normal level, even today’s brightening picture can’t be taken for granted, and the Journal’s concerns about a prolonged stay at the bottom could prove true.

Bender’s own artwork will be on display at his open house in Philadelphia

By Wendy Cole, Managing Editor, REALTOR® Magazine

Is it an art show or an open house?  Brett Bender, a sales associate with Prudential Fox and Roach in Philadelphia, has decided that his listing for a 4,000 sq ft. single-family home in the City of Brotherly Love can do double-duty. Bender, who is also an artist, is taking advantage of the big marketing push behind the REALTOR® Nationwide Open House this weekend, April 28 and 29, to “stage the walls”  of the unfurnished home with dozens of his journal drawings and paintings. He’s using Facebook to spread the word about the art reception he’s holding in the house on Sunday, and hopes the event will generate buzz for both the property and his evocative creative work.

REALTORS® and real estate associations across the country and worldwide hold thousands of open houses in their communities as part of the event, which is intended to give a boost to the spring buying season.  Practitioners should keep in mind that nearly half of  all home buyers visit open houses during their home search, according to the 2011 Profile of Home Buyers and Sellers survey conducted by the National Association of REALTORS®. And the extra atttention this weekend, along with  record home affordability, could well bring a notable foot traffic boost to homes on the market.

What other distinctive ideas are you incorporating into open houses this weekend?