HUD Secretary Shaun Donovan made an appearance at the National Association of REALTORS® Midyear Legislative Meetings on Wednesday to laud the work of his agency in promoting housing policies and programs that acknowledge the equal rights of gay and lesbian Americans. The agency makes clear that sexual orientation is no barrier to accessing any HUD programs, he said.
“We have a broad requirement that housing opportunities should be available to all persons regardless of sexual orientation,” said Donovan, who spoke to members gathered for a reception of the National Association of Gay & Lesbian Real Estate Professionals (NAGLREP).
But Donovan noted that there is still a long way to go on the civil rights issue that has rapidly been gaining ground in recent months and years. Noting President Obama’s strong support of marriage equality and recent same-sex marriage cases brought to the U.S. Supreme Court, Donovan added, “There is still an urgent need for legal protections based on sexual orientation.” The 45-year Fair Housing Act does not include sexual orientation as a protected class.
NAGLREP Founder and CEO Jeff Berger said he was delighted by Donovan’s appearance at the meeting and his commitment to ending discrimination in housing faced by the LGBT community. The movement clearly has momentum, he said.
Berger cited the group’s drive, working with Wisconsin REALTORS®, to get sexual orientation included as protected classes in the NAR Code of Ethics. That change was approved by NAR’s board of directors at the Midyear Meetings in 2010. Now, an effort is underway to add Code of Ethics protection based on gender orientation. The proposal will be voted on by the NAR Delegate Body at its meeting in November. Berger also hopes to get NAR to include LGBT data in future versions of its Profile of Home Buyers and Sellers and Member Profile. “It will give REALTORS® a truer picture of who is in their markets if lesbians and gays and same-sex couples were acknowledged,” Berger said.
If there was one major takeaway from the National Crime Prevention Council’s 2013 Mortgage Fraud Virtual Conference, it was this: The mortgage market, while no longer a wicked stepchild of the housing crisis, must still be carefully monitored. Though its tantrum-throwing days may be over, the $1.1 trillion government loan industry has the potential to cause serious economic damage should fraudulent mortgage activity persist unchecked.
“What is old is new again,” says Michael Stolworthy, Director of Fraud Prevention for the U.S. Department of Housing and Urban Development. “We’re starting to see some disturbing trends. The same old type of mortgage cases are coming up.”
False statements on loan applications, inflated appraisals, and loan modification schemes are just some of the ways fraud is reappearing in the mortgage market. And with government loans on the rise—the number of mortgages insured by the Federal Housing Administration has nearly doubled since 2006—the potential for mortgage fraud increases, especially among applicants in shaky financial condition.
“Back during the mortgage boom, people who had taken out second and third mortgages were living the champagne lifestyle on a beer budget,” says Robert Simken, a former real estate practitioner turned police officer in Eustis, Fla. “Now, those same people are living in homes that are underwater and willing to do just about anything to get out of their bind.”
Problems arise when that “anything” includes turning to loan counselors, lenders, and alleged real estate professionals who make promises they never plan to keep. “If an opportunity comes along that seems too good to be true and the little hairs on your neck stick up and say ‘danger,’ don’t just ignore them,” Simken warns.
Through public outreach campaigns and educational seminars, organizations like the National Crime Prevention Council stress the importance of using an accredited real estate professional when contemplating any property transaction. “Half the people haven’t checked the qualifications of the individual helping them buy a home,” says Ann Harkins, CEO and President of NCPC.
Simkens agrees that home owners should seek advice from a noted professional. “You don’t go to the butcher for brain surgery and you don’t go to a brain surgeon for chopped meat,” he says. “It’s important to find an expert and not just someone who shows up and can recite the jargon.” Continue reading »
Foreclosures, minimum wage, and Generation Y were among the varied issues discussed at last week’s Workforce Housing Forum. But the theme of REALTOR® advocacy for affordable housing for working Americans permeated nearly every speech, panel, and breakout session.
Every meeting room, hall, and ballroom at this National Association of REALTORS® event echoed the call to real estate professionals in attendance: We need your voice.
NAR President Moe Veissi started the day’s events acknowledging that, while REALTORS® understand the value of the American Dream, they need to communicate it in different ways.
“There’s another part of this that we don’t pronounce as much as we should,” Veissi said. “You’ve got to tell them that there’s more than an economic benefit to owning a home… the people who live in that home are healthier.”
Illinois Housing Development Authority Executive Director Mary Kenney encouraged forum attendees to help shift the way the public discusses new housing solutions for the nation’s workers.
“Together, we are changing the dialogue from affordable housing to maintaining a competitive workforce,” she said. “We need to work together to help educate our legislators about the needs of our communities.” Continue reading »
By Kelly Killian, Manager of Editorial Development, REALTOR.org
NAR received the following e-mail last week from a Washington-state REALTOR®, and it served as a thoughtful and important reminder of why we — and all of you — do what we do:
I had a thought … I know for many years we had to fight to keep banks out of real estate and we, as an organization, spent a lot of money to hold them off. Given the events of the last five years, the mess with the mortgage companies and banks going out of business, I have tried to imagine if there weren’t any REALTORS® to fight that battle, how much worst this last 3-4 years could have been. I wanted to thank you for the work you do for our members and the spirit in which you do it for Americans and the fight for homeownership. I, for one, am proud to be a REALTOR® and gladly pay my dues to keep us all at work.
Indeed, working with Congress to keep banks out of the real-estate brokerage business, is just one of the very important policy accomplishments NAR and the many REALTOR® advocates and volunteers have achieved on behalf of all of our nearly 1.1 million members — and their clients.
Recently, NAR outlined some 50 key legislative and policy accomplishments in 2010 — just a portion of the work conducted on behalf of REALTORS® last year. Among the efforts that served to protect REALTORS®’ business interests, sustain residential and commercial housing opportunities, and eliminate barriers to credit were extending the closing-date requirement for the home buyer tax credit, ensuring the continued funding of the National Flood Insurance Program, and securing RESPA guidance from HUD.
And the work continues in 2011, with our efforts toward secondary-mortgage market reform, preserving the mortgage-interest deduction, and much more.
By Robert Freedman, Senior Editor, REALTOR® Magazine
The fiscal year 2012 budget that the Obama administration released yesterday would pare back most housing and community development programs, including jobs-rich community development block grants, implement a planned hike in the annual FHA mortgage insurance premium, and even take a third stab at a twice-rejected proposal to trim the value of itemized deductions, including the mortgage interest deduction, available to upper-income households.
These are all important matters that will bear watching as lawmakers take up their budget resolution and decide which proposals to keep and which ones to scrap or modify. But one thing the budget doesn’t do is propose reducing the value of MID by changing it into a credit. That change to MID was one of the recommendations of the president’s bipartisan deficit reduction commission, which released its final report in December.
In fact, the deficit commission very much got short shrift in the budget proposal. Its signature recommendations, including scaling back entitlements by raising the age of Social Security beneficiaries, among other things, were left out, leaving those high-profile decisions for another day.
To be sure, the president’s budget wields a sharp knife when it comes to cuts. It proposes cuts to 200 programs, including the majority of the programs administered by the U.S. Department of Housing and Urban Development, which saw its budget cut by almost 3 percent. Most of the budget savings across the spectrum of government programs come from a five-year freeze on discretionary domestic spending (largely everything except military and entitlements), which is estimated to produce $400 million in savings. Continue reading »
By Robert Freedman, senior editor, REALTOR® Magazine
As I write this, U.S. Treasury Secretary Timothy Geithner is in Washington at the Treasury building discussing with a group of academics and business leaders what the home mortgage finance system should look like after the federal government decides what to do with Fannie Mae and Freddie Mac. The discussion is a first step in the federal government’s congressionally mandated release of a GSE overhaul plan by January 2011.
After about an hour’s discussion, the dominant thread is about retaining FHA to ensure finance availability for lower- and moderate-income households and re-shaping Fannie and Freddie into something that backstops losses after private insurers take their lumps.
At least for the near term, most of the participants seem to agree, some form of government backstopping of the mortgage market is necessary, but it won’t be under the terms that we’ve grown familiar with. Rather, the guarantee would be absolutely explicit, not implicit like we saw with Fannie and Freddie, and, in the view of some, would take the form of a limited, maybe even catastrophic-type, backstopping in which the private sector takes first-risk position.
The government-backed secondary market companies would adjust underwriting and terms to provide counter-cyclical restraints (tightening standards as appreciation rises too far from historical norms) and ensure without question that they would have the reserves to meet their commitments to investors should loans go bad. In a pure market, that would mean costs would rise far too high for most borrowers to afford financing, but with the government’s support, costs would be brought down to a level appropriate for the great middle of the market. FHA would be retained to play its role making safe, affordable financing available to lower- and moderate-income borrowers.
Happy New Year, everyone!
As usual, we’re ringing in the new year with a lot of unfinished business (health care reform, financial institution reform, and so on). One thing that was finally settled, however – after years of debate — was the federal government’s changes to the Good Faith Estimate and HUD-1.
Not so fast. It’s hard to find people in the real estate business, particularly mortgage brokers, who are happy with the changes. Wes Cordeau of Houston wrote to me in response to an article in REALTOR® Magazine:
“Unfortunately, the new GFE does not address two points of major importance: 1) How much to close and 2) How much is the monthly payment? In fact, the new GFE addresses closing costs in such a way as to confuse the borrower immensely, because it addresses the costs as ‘Total Settlement Charges” and does not include some important offsets, yet makes us include items that are historically paid by the seller. On page 1, it addresses the monthly payment in two sections–one concerning only principle, interest, and mortgage insurance and the other addressing only payment of escrows for taxes and property insurance. This is more confusing to the consumer! Everyone in this business understands that taxes, insurance, and HOA fees can can add hundreds to the monthly payment, yet they’re not addressed clearly in the GFE.
The fact that a three-page document has 42 pages of explanatory handouts and 51 pages of FAQs (four per page) tells me that this is the most ill-designed form I have ever seen!”
Although I haven’t experienced the forms as a consumer, having listened to Phil Schulman’s 90-minute explanation at NAR in San Diego (worth the time; you can access it at REALTOR.org’s RESPA page), I agree with Wes that the “simplified” forms raises as many questions as answers. Yes, the language is generally more clear, but I wish HUD had done some focus groups with consumers and real estate practitioners before they gave the forms the green light.
What do you think? Are the new GFE and HUD-1 an improvement over what we had before? Or are they going to cause new problems and delays at the closing table? What changes would you recommend?
Note: REALTOR® Magazine on Jan. 13 completed a video walk-through of the new GFE and HUD-1. Watch the how-to video to get a better understanding of how the forms are to be filled out.
By Laura Melcher, Manager, Editorial Development, REALTOR.org
NAR’s Tuesday announcement of the HUD-FHA plan to monetize the tax credit generated much excitement among Midyear conference attendees, while also raising questions from those eager to help their clients take advantage of the program. Many have wondered whether the plan has been formally approved, and if so, when they will learn more details.
By Brian Summerfield, Online Editor, Realtor® Magazine
At the morning session of the Real Estate Summit at the 2009 NAR Midyear Meetings, comments about improving short sales and foreclosures and driving a turnaround in the housing market and the economy generally with home buyer tax credits drew the biggest applause. Continue reading »