Leasehold Improvements Renewal

Under current law, the cost of making improvements to leased space may be recovered over 15 years, according to the National Association of REALTORS®. This rule will expire as of January 1, 2010, however, unless Congress acts to extend it. If Congress were to fail to extend it, the cost recovery period would revert to 39 years, with the improvements being treated as part of the cost of the underlying real property.

The House of Representatives has passed HR 4213, a bill that extends this and dozens of other expiring provisions on a mostly party-line vote of 241 - 186. The bill is "paid for" by changing the tax treatment of real estate partnership carried interests from capital gains rates (currently 15%) to ordinary income treatment (as high as 39.6%). It is not known when or if the Senate will take up HR 4213 before the new year.

Deduction for Brownfields Clean-up Due to Expire

Under current law, the costs incurred in cleaning up certain types of environmental contamination are deductible in the year they are incurred, according to the National Association of REALTORS®. That rule is due to expire as of January 1, 2010. The House of Representatives has extended this provision for an additional year (along with dozens of other expiring rules) in HR 4213. This bill passed December 9 on a largely party-line vote of 241 - 186. It is not known when or if the Senate will take up this bill.

Treasury Department Announces Program to Streamline Short Sales

On November 30, 2009, the Treasury Department released guidelines and forms for its new Home Affordable Foreclosure Alternatives Program (HAFA). HAFA is component of the Home Affordable Modification Program (HAMP). NAR has been urging the Obama Administration to take action to address the many problems with short sales.

HAFA provides incentives in connection with a short sale or a deed-in-lieu of foreclosure (DIL) used to avoid foreclosure of a loan eligible for modification under the HAMP program. HAFA applies to loans not owned or guaranteed by Fannie Mae or Freddie Mac, which will issue their own versions in the coming weeks. Program features include: pre-approving sales terms before listing the property, prohibiting servicers from requiring reductions in real estate commissions that do not exceed 6 percent, paying incentives, releasing borrowers from future liability for the unpaid portion of the first mortgage debt, and imposing deadlines at each stage.

The program does not take effect until April 5, 2010, but servicers may implement it before then if they meet certain requirements. The program sunsets on December 31, 2012.

More information here.

How walkable is your community? How much value does it add to your home?

The Winter 2010 issue of "On Common Ground" published by the National Association of REALTORS® looks closely at how walkable your neighborhood is. Real close. On Common Ground writes that "more and more buyers are asking for - even demanding - homes in walkable neighborhoods."

In some cities, people "are willing to pay more for a home - or accept less in terms of square footage and amenities - in exchange for proximity to shopping, entertainment, work and school."

Just how walkable is your neighborhood?

Check out WalkScore.com, a free Web site that will take your address - anywhere in the United States - and map it with local amenities to show just how walkable (or not) it is. A score of 49 or less is "Car-Dependent", while a score of 90 or more is a "Walker's Paradise". A survey of 15 markets around the country found that "for each typical metropolitan area, each additional point of Walk Score was associated with a $700- to $3,000-increase in home values."

How walkable is the South Bay? Check out these scores, and then type in your own address:

El Segundo.....91
Carson.....68
Gardena.....91
Harbor City.....74
Hawthorne.....86
Hermosa Beach.....83
Lawndale.....83
Lomita.....75
Manhattan Beach.....82
Redondo Beach.....88
San Pedro.....95
Torrance.....69
Wilmington.....69


(Here's what it means):
90–100 = Walkers' Paradise
70–89 = Very Walkable
50–69 = Somewhat Walkable
25–49 = Car-Dependent
0–24 = Car-Dependent (Driving Only)

Fannie Mae launches new Spanish Web site

Fannie Mae last week launched a Spanish version of its HomePath.com Web site designed to help more potential homeowners who speak Spanish purchase Fannie Mae-owned properties.
The new Spanish Web site mirrors the English version of HomePath.com, featuring an interactive search tool of Fannie Mae-owned properties nationwide, details about HomePath® financing, a mortgage payment calculator, property alerts, and information on foreclosure prevention and the Making Home Affordable program.

For more information about HomePath, visit www.HomePath.com and click "En Español", or for direct access to the Web site in Spanish, visit www.es.HomePath.com.

-- source: California Association of REALTORS®

Case-Shiller index improves for second consecutive quarter

Home prices improved in the third quarter of 2009, posting their second quarter-over-quarter gain in three years, according to the S&P/Case-Shiller U.S. National Home Price Index, released yesterday.

The index, which covers all nine U.S. census divisions, recorded an 8.9 percent decline in the third quarter of 2009 compared with the third quarter of 2008, but an improvement over the 14.7 percent decline in the second quarter of the year. The 10-City and 20-City Composites recorded annual declines of 8.5 percent and 9.4 percent, respectively. These two indices generally have seen improvements in their annual rates of return every month since the beginning of the year.

“We have seen broad improvement in home prices for most of the past six months,” said David M. Blitzer, chairman of the Index Committee at Standard & Poor’s. “The U.S. National Composite rose by 3.1 percent in both the second and third quarters of 2009. Both the 10-City and 20-City Composites posted their fifth consecutive monthly increase with September’s report. However, the gains in the most recent month are more modest than during the seasonally strong summer months.”

-- source: California Association of REALTORS®

Quick Federal Tax Credit Update

The U.S. Senate voted today 98-0 to pass the Expanded Homebuyer Tax Credit (within the Unemployment Insurance Bill). It now goes to the House of Representatives. If Democratic leadership places the bill on a fast track for passage on Thursday, it could get to the President on Friday. Watch this space for more updates on this important tax credit!

SBAOR Announces Support for Candidates for Election to Local City Councils

The South Bay Association of REALTORS® today announced its support for a number of candidates running for mayor or city council on November 3, 2009 in three South Bay cities, as indicated below.

“We appreciate the efforts of local citizens who want to give back to their communities by running for office,” said Sheri Fejeran, president of the South Bay Association of REALTORS®. “At the same time, as REALTORS® we are also active in our communities and we want to keep informed of the issues as we vote on November 3.”

Support announced for each South Bay City is as follows:

Hawthorne Mayor:
Larry Guidi

Hawthorne City Council:
Angie Reyes English
Olivia Valentine
Alex Vargas

Hermosa Beach City Council:
Kit Bobko
Howard Fishman
Michael Keegan

Lomita City Council:
Tim King
James Thompson

For more information, go to www.SouthBayAOR.com/governmentaffairs.

South Bay housing prices are up in September; mixed results in the market overall

We just released our September 2009 housing statistics for the South Bay market. In brief: In September 2009 as compared to September 2008, median price is up while the average price is down. Months supply of nventory is way down while average days on market is generally flat. This may suggest a stabilizing lower end of the market even as the higher end is tapering off somewhat. Our full press release is available here. More information in the Daily Breeze, including data from the California Association of REALTORS®, is available here.

Chuck Bookhammer, 61: Former Hawthorne Councilmember and L.A. County Official

With great sadness we note the passing of Chuck Bookhammer, 61, who had a long career in politics and government policy in Los Angeles County and the South Bay for several decades. In addition to his seat on the Hawthorne City Council, he served for many years on the staff of former Los Angeles County Supervisor Yvonne Brathwaite Burke. Following Supervisor Burke's retirement in 2008, Chuck started working in government affairs at the Los Angeles County Board of Realtors. Our condolences go out to Chuck's family as well as to his former and current colleagues in and around the South Bay.

Help Plan the Future of the Harbor Subdivision

You are invited to attend a project update on the Harbor Subdivision Transit Corridor Alternatives Analysis (AA). In April and May 2009, Metro held public meetings to obtain your feedback on the four project alternatives to be carried forward through the duration of the study. Based on comments received at those meetings as well as more detailed technical analysis, Metro has completed the AA and will present the results at a series of community meetings this fall

Learn more about the project and share your comments with us at one of the following meetings:

October 19, 2009, 11am-1pm
Metropolitan Water District, Room 2-145
700 N Alameda St
Los Angeles , CA

October 19, 2009, 6-8pm
Lawndale Community Center Annex
14616 ½ Grevillea Av
Lawndale , CA

October 20, 2009, 6-8pm
Carson Community Center
801 E Carson St
Carson , CA

October 21, 2009, 6-8pm
Jackie Robinson Academy Auditorium
2750 Pine Av
Long Beach , CA

October 22, 2009, 6-8pm
Hyde Park-Miriam Matthews Library
2205 Florence Av
Los Angeles , CA

Meeting Agenda:
Open House: 30 minutes
Project Update Presentation: 30 minutes
Question and Answer Session: 60 minutes

Content presented at each meeting will be identical, so please attend at the time and location most convenient for you. For more information, call 213.922.4004 or visit metro.net/harborsubdivision.

How has the First-time Home Buyer Tax Credit Impacted Nationwide?

The National Association of Realtors® has two surveys that measure the share of first-time home buyers in the market. The Home Buyer and Seller Survey is a robust survey of about 10,000 buyers conducted annually. The 2009 survey will be available in November, but preliminary data is available.

In October 2008, NAR expanded a survey of Realtor® members, the Realtors® Confidence Index, to ask about firsttime sales. Both the Realtors® Confidence Index and the Home Buyer and Seller survey indicate a 6 – 6.5 percent increase in the share of first‐time home buyers in the market when the six months following the tax credit enactment is compared with the six months prior. The Realtors® Confidence Index shows first‐time sales increasing from 33 to 39 percent of sales. Preliminary data from the 2009 Home Buyer and Seller survey shows first‐time sales increasing from 45.1 to 51.5 percent of sales. The Home Buyer and Seller survey has shown that first‐time buyer sales are consistently near the 40 percent mark through the years. However, long‐term trends are not always the best guide.

Given that tight credit markets and poor job conditions have dominated markets this year, one could expect that the share of first‐time buyers would have been much lower than 40 percent without the help of the tax credit. Seasonally adjusted home sales were 4.79 million in the six months prior to the stimulus package. By contrast, they are forecast to be 4.97 million in 2009. Multiplying the change in market share by the annual sales rate and forecast annual sales, we see an extra 357,000 to 398,000 annual first‐time sales in 2009.

Because the tax credit is currently legislated to apply only to the first 11 months of the year, the expected increase in sales as a result of the tax credit is 327,000 to 365,000. This increase is greater than was anticipated when projections were made when the credit was adopted in early 2009.

How has the First-time Home Buyer Tax Credit Impacted California?

In California, the home buyer tax credit has brought in an additional 33,000 buyers into the market and 227,600 first‐time buyers will be able to take advantage of the tax credit. Detailed, state‐by‐state information is not available on first‐time buyers, but using national information from the 2009 Home Buyer and Seller Survey available in preliminary format, we can estimate the impact in a state.

According to NAR, California existing home sales in the second half of 2008 were 530,800 at a seasonally adjusted annual rate. In the first half of 2009 they were 492,400. If sales continue this trajectory—as they are expected to do nationally—they could reach 523,800 for the year in California in 2009. If the share of first time home buyers in the market is similar to the national share, first time buyers will have purchased 212,320 homes at a seasonally adjusted annual rate in the second half of 2008 and will purchase 231,428 for the year 2009.

Because the tax credit is only in effect for 11 months out of the year, the estimated impact of the credit is an increase of 33,000 first‐time buyers. 227,600 first‐time buyers in the state of California are expected to be able to take advantage of the credit.

Transfer Tax Bill Stalled

C.A.R. opposed AB 827 (Yamada). AB 827 would permit counties to impose a recording "tax" up to $3 per property-related document to fund archival services. While this amount may seem small, it is only the beginning of what it is anticipated to be a growing trend of taxing property-related services to fund all manner of local government expenditures. C.A.R. is troubled that sponsors of this legislation are attempting to circumvent local voters by calling this proposal a “fee,” rather than what it really is – a tax. After a recent C.A.R. Red Alert, this week AB 827 was placed on the Inactive File by its author.

Bills to Expand Government Agency Powers Stopped

C.A.R. opposed two bills that relate to the powers of the California Coastal Commission which oversees development of coastal properties. These are not just bills about the beach - the coastal commission would have extended its control over much of the population centers of California, and the bills would set dangerous precedents for state government agencies that may affect you in the future.

Both AB 226 and AB 291, not having the support necessary to pass, were placed on the Inactive File by their authors and can be voted on next year -- stay tuned.

C.A.R. opposed AB 226 (Ruskin) which proposes to expand the California Coastal Commission’s enforcement authority by allowing the Commission to impose its own civil penalties rather than pursuing fines and penalties through the courts. AB 226 would give the Commission the power to be judge, jury and executioner thereby limiting due process.

C.A.R. also opposed AB 291 (Saldaña) which would allow Commission staff to halt permit application processing for violations that have no relationship between the application and the existing violation on the parcel in question.

Study finds walkable neighborhoods command price premiums

A new study says that homes located in more walkable neighborhoods command a price premium over similar homes in less walkable areas.

The study, “Walking the Walk: How Walkability Raises Home Values in U.S. Cities” was commissioned by CEOs for Cities and conducted by Joe Cortright using data from Walk Score and ZipRealty.

Key findings include:

• In 13 out of 15 metro areas (sales data provided by ZipRealty), higher levels of walkability were directly linked to higher home values.
• In the typical metropolitan area, a one point increase in Walk Score was associated with an increase in value ranging from $500 to $3,000. Gains were larger in denser, urban areas and smaller in less dense markets.
• In the typical areas studied, the premium commanded for neighborhoods with above-average Walk Scores ranged from $4,000 to $34,000.

More info here

HUD posts FAQ on new RESPA rule

The U.S. Dept. of Housing and Urban Development recently released a frequently asked questions (FAQs) concerning implementation of the new Real Estate Settlement Procedures Act (RESPA) rule, according to the California Association of REALTORS®. The FAQs were compiled from questions raised within the industry since the publication of the rule.

Some of the topics covered include requirements and delivery of the Good Faith Estimate, the HUD-1 Settlement Statement, and specific information about completion of the GFE and HUD-1 forms.

"If we learned anything from the current crisis, it's that it is hard for borrowers to make responsible decisions if they don't have all the necessary information," said U.S. Department of Housing and Urban Development Assistant Secretary for Housing-Federal Housing Commissioner David Stevens. "I believe these changes will take away much of the uncertainty borrowers have about the accuracy of disclosures."

California Coastal Commission may be given excessive judiciary powers

Two bills under consideration in the California Senate, AB 226 (Ruskin) and AB 291 (Saldana), give the California Coastal Commission judicial powers and gives Commission staff new, unprecedented authority to stop permit applications.

AB 226 would greatly expand the Coastal Commission’s enforcement authority by allowing the Commission to act as both prosecutor and judge and impose civil penalties and allow the Commission to retain the penalties it assesses to augment its own budget. Currently, civil penalties are imposed by the Attorney General’s office on behalf of the Coastal Commission. Meanwhile, AB 291 would allow the staff of the Coastal Commission to halt processing of a permit application if the Commission staff asserts that any violation exists on any property for which a permit is filed.

Staff discretion does not equal due process. Under AB 291, the executive director of the Coastal Commission has sole discretion to completely halt an application for a coastal development permit without any basis other than an assertion of a violation, which may not be related to the permit application. The Commission, not its staff, is the decision-making body, and it should remain that way.

The Coastal Commission already has the necessary tools by which to enforce the Coastal Act. Besides, the Attorney General has been effective at collecting civil penalties for the Coastal Commission through the judicial system, collecting millions of dollars in fines and penalties over the years.

FHA Clarifies Position on HVCC

National Mortgage News recently reported that, according to the National Association of Mortgage Brokers (NAMB), the Federal Housing Administration (FHA) will not implement the Home Valuation Code of Conduct (HVCC) for its mortgage insurance programs. According to the article, FHA Commissioner David H. Stevens met with a delegation from NAMB and discussed a variety of topics. After talking with HUD, NAR believes it is clear that FHA supports much of what the Code has accomplished. FHA is currently reviewing its appraisal policies and may adopt changes that take HVCC into account.

NAR's HVCC Web page >
Federal Housing Administration >

Green Building Code Effective This Month

The state's green building code, the first of its kind in the nation, took effect August 1, the California Building Standards Commission has announced. This new code standardizes practices for reducing the environmental impact of buildings in a variety of ways. It encourages the use of renewable, recyclable, and recycled material in the building process. It also encourages the reduction of a building’s potable water use by 20 percent, and it establishes a two tiered 15 or 30 percent energy savings above current levels for all buildings through a combination of more efficient appliances and windows, better insulation, and other performance enhancing measures.

Application of the code is currently voluntary. It was adopted last year as a step toward mandatory green building standards, which Gov. Arnold Schwarzenegger has called for by 2010.

For more info:
http://www.documents.dgs.ca.gov/bsc/2009/part11_2008_calgreen_code.pdf

Independent Contractor Withholding Not in California State Budget

The governor and legislative leaders reached agreement this week to bridge the $26.3 billion state budget gap, which was approved by both houses of the legislature on Friday. The agreement does NOT include the 3 percent independent contractor withholding proposal. C.A.R. aggressively opposed this over withholding scheme. The agreement includes about $15.5 billion in state budget cuts, as well as $1.2 billion in cuts to prisons, and another $4.7 billion in cuts to, and borrowing from, local governments.

Join Assemblymember Warren Furutani for Coffee and Conversation

Assemblymember Warren T. Furutani invites you to bring your ideas, questions and concerns about legislative issues over a cup of complimentary coffee!

Saturday, August 159:30 a.m. - 11 a.m.
Boys & Girls Club of the South Bay
1220 W. 256th Street
Harbor City/Harbor Gateway

Stop by for a cup of coffee!

For more information, or to RSVPplease call (562) 989-2919 or click here.

NAR Responds to FHFA Guidance on HVCC

On August 4, 2009, NAR President Charles McMillan sent a letter to Federal Housing Finance Agency (FHFA) Director James Lockhart addressing the agency's recent guidance on the Home Valuation Code of Conduct (HVCC). The Guidance states that HVCC should mitigate controversy by increasing protection for appraisers. In the letter, Mr. McMillan applauds FHFA for its efforts to address misinformation surround the Code but disagrees that the HVCC is appropriately dealing with the controversy surrounding the appraisal process.

NAR cites survey data that seems to indicate that the Code is creating negative unintended consequences. "According to a survey of our members, 76 percent of respondents said the length of time to obtain a completed appraisal report increased after May 1, 2009. More than one third of REALTORS® have lost at least one sale because of a delay in the appraisal process. At the same time, respondents who identified themselves as appraisers said their time frame to submit an appraisal report has decreased and half of these respondents say this impacts the quality of the appraisal report." At the same time, the cost to the consumer is increasing.

NAR Letter to FHFA on HVCC Clarification
FHFA Guidance on HVCC
NAR's HVCC Web Page

Reg Z and You: Revised TILA Disclosure Requirements Take Effect on July 30, 2009

Lenders will be subject to new disclosure requirements for mortgage loans under the Federal Reserve Board Truth in Lending Regulation (Reg Z). The new requirements apply to loan applications filed on or after July 30, 2009 (about two months earlier than originally planned). The new rules are complex and compliance will be a challenge for lenders. REALTORS® will want to learn the basics so they can advise clients of potential delays and the new procedures. Here are key highlights of the changes:

* The new requirements apply to all mortgages secured by a borrower's home, including primary and second homes and refinancings. Investor loans continue to be exempt.
* Lenders must give good faith estimates of mortgage loan costs within 3 business days after the consumer applies for a loan (early disclosure). The lender may not collect any fees before the disclosure is provided, except for a reasonable fee for obtaining a credit report.

• The closing may not take place until expiration of a 7 day waiting period after the consumer receives the early disclosure.
• Consumers may shorten or waive the 3-day and/or 7-day waiting periods for a "bona fide personal financial emergency," but only after receiving an accurate TILA disclosure. In the final rule's preamble, the Fed stated that it "believes waivers should not be used routinely to expedite consummation for reasons of convenience." The Fed decided not to insulate lenders from liaibility even where a consumer modifies or waives the waiting periods.
• If the annual percentage rate (APR) changes by more than 0.125 percent, the lender must provide a corrected disclosure to the borrower and wait an additional 3 business days before closing the loan. The APR includes not only the interest rate on the loan but certain other costs related to settlement, so it will be important for any fees that affect the APR to be as accurate as possible, as early as possible, to minimize the need for a corrected TILA disclosure.

Federal Reserve Board Final Rule and Staff Commentary (Federal Register, May 19, 2009)

August Health Insurance Reform Under Review Over August Break

Despite pressure from Senate leadership and the White House to move a bill prior to recessing on August 7th, Finance Committee leaders, Chairman Max Baucus and Ranking Minority Member Charles Grassley, continued to work methodically with a bipartisan group of four other Senate Finance Committee members on efforts to create a compromise bill that could successfully make it's way through the Senate. Unless unforeseen developments occur, the group of six and committee staff will continue to work through the August recess with a committee markup planned for September.

NAR continues to meet with House and Senate offices and committee staff on the various components of the reform proposals. Staff continue to analyze the mammoth bills and consult with the members of NAR's Business Issues Committee and Federal Tax Policy Committee for specific policy input. NAR has not taken a position on any of the health reform bills at this time.

Concerned with the cost of the bill and provisions that would create an optional public insurance program, the committee's moderate Blue Dog members had earlier indicated their plans to oppose the bill unless amended to address their concerns. Changes sought included cutting the cost of the bill by $100 billion by restructuring the bill's tax credits for individuals, increasing the threshold for small businesses that would be exempted from the bill's employer mandate requirements and postponing any floor consideration of the bill until after the August recess.

Visit www.realtor.org/healthreform

SBAOR Member Sandi Pfister joins NAR Leadership Academy 2010

We are pleased to announced that REALTOR® and SBAOR member Sandi Pfister has been selected to join top REALTORS® around the country at the NAR 2010 Leadership Academy. The participants were chosen by a committee of peers based on an application that included their thoughtful consideration on trends and issues facing the industry as well as their leadership goals.

The first meeting of the Academy is during the Leadership Summit in Chicago this August - from there they will begin the process of expanding their leadership skills and knowledge of how NAR works. Read more about the program here.

Additional HVCC Guidance Released by FHFA, GSEs Called Good First Step by NAR

On July 22, 2009, the Federal Housing Finance Agency (FHFA) released a notice on the Home Valuation Code of Conduct (HVCC). The purpose of the notice is to clarify some misconceptions around the HVCC. The notice stressed that the Code provides for communications with appraisers about errors, additional needed information and unprofessional conduct. At the same time, Fannie Mae and Freddie Mac updated their Frequently Asked Questions for HVCC.

NAR President Charles McMillan said the FHFA notice and updated FAQs by Fannie Mae and Freddie Mac are a good first step in addressing concerns with the HVCC but more needs to be done. Mr. McMillan said "our members were experiencing delayed and lost sales because of poor appraisals conducted often by inexperienced appraisers who were not familiar with the area." NAR continues to call for an 18-month moratorium to further address the unintended consequences of the HVCC.

NAR's HVCC Page

NAR Submits Letter to SBA Administrator Requesting SBA Eligibility for Real Estate Agents

On July 24, 2009 NAR sent a letter to SBA Administrator Karen G. Mills requesting that any restrictions be removed to real estate agent eligibility for SBA loans. The letter from NAR President Charles McMillan states that current SBA treatment of agent eligibility is unclear and amendments to regulations should be made to clarify that real estate agents are eligible for SBA loans.

NAR Letter to SBA Administrator

Healthcare, REALTORS® and You

Healthcare is heating up with both the House and Senate making moves on this massive undertaking. On July 14, HR 3200, America’s Affordable Health Choices Act, was introduced in the House. This historic legislation which covers a wide swath of health care reforms, programming and spending, has been referred to a number of House Committees for consideration. NAR is monitoring the legislation’s progress very closely. The Ways and Means Committee passed the bill on July 17, with all Republicans and three Democrats opposing. This vote signals the potential close vote when the legislation moves to the full House.

Meanwhile, the Senate Health, Education, Labor and Pensions (HELP) Committee passed its version of healthcare legislation on July 15, on a party line vote. The Senate Finance Committee is expected to introduce their version of a healthcare bill this week, with consideration to follow shortly after.

NAR’s policy staff is currently reviewing the 1,000-plus pages of HR 3200 and is drafting a fact sheet for members. There’s a lot out there right now about healthcare, and many different positions and commentary. Visit www.realtor.org/healthreform for more information.

Bill Seeks to Suspend Appraisal Code

U.S. Reps. Travis Childers (D-Miss.) and Gary Miller (R-Calif.) have teamed up to champion a bill that would put a moratorium on the new Home Mortgage Valuation Code of Conduct.

HVCC is an agreement between Fannie Mae, Freddie Mac, and the New York State Attorney General that went into effect earlier this year with the aim of improving the accuracy of appraisals, although it's come under criticism in the real estate industry for causing its own problems.

Although the agreement involves the New York AG, it's being applied nationwide to all the mortgages handled by Fannie Mae and Freddie Mac.

The bipartisan legislation directs the Federal Housing Finance Agency, which is the conservator of the two secondary mortgage market companies, to suspend the code for 18 months.

Among other things, the code has been criticized by the National Association of Mortgage Brokers for delaying residential property closings and costing its members business at a critical time. Group members also are up in arms about having to pay high fees to appraisal management firms.

Source: American Banker, 06/30/09

Failed Projects Turned Into Affordable Housing

Expensive cities like New York and Seattle are trying to find ways to change failed luxury projects into affordable housing for families with moderate incomes.

Seattle has a measure on the ballot in the next election that would create a fund to buy market-rate real estate developments. New York is studying a plan to subsidize unsold or half-built apartments to make them affordable for families earning between $55,000 and $158,000,

Cities need affordable housing for teachers, police, and firefighters, says Alan Berube, research director of the Brookings Institution's metropolitan policy program.

Source: USA Today, 07/01/2009

NAR Creates Flyer Using the First-Time Home Buyer Tax Credit with FHA Loans

NAR has received many inquiries from our members regarding how first-time homebuyers can use the tax credit with Federal Housing Administration (FHA) loans. NAR created a flyer to help members understand how the tax credit can be used in their respective state.

The flyer identifies how to use the tax credit in one of the 11 states where housing finance agencies offer a product that monetizes the tax credit for FHA loans. It also provides some guidance for all other states where such programs do not currently exist.

NAR's FHA and the First Time Homebuyer Tax Credit Flyer

In Depth: 2009 First-Time Home Buyer Tax Credit

National Health Care Reform Debate Begins in Earnest

Building off of two years of formal hearings and discussions, the health care reform debate has begun in earnest in Washington, D.C. Congress has set an aggressive timeline for debate with the goal of delivering a final bill to President Obama by October 15.

Five committees - Senate Health, Education, Labor and Pensions, Senate Finance, House Energy and Commerce, House Education and Labor and House Ways and Means - are involved in drafting health reform legislation. In the Senate, two bills, introduced by HELP Committee Chairman, Edward Kennedy (D-MA), and Finance Chairman, Max Baucus (D-MT) respectively, will be considered and then conferenced into one bill that will be put before the full Senate. In the House, the process will be more simple as the three chairs of the respective committees, Henry Waxman (D-CA), George Miller (D-CA) and Charles Rangel (D-NY), plan to introduce a single joint measure.

As outlined, all three bills would provide the self-employed, small employers and those without employer-provided insurance with access to an Exchange that would offer an array of private insurance products that are governed by a uniform national set of rating and underwriting rules. Insurance products offered through an Exchange would available to all eligible applicants regardless of their health history, be guaranteed to be renewed, and would not contain any pre-existing condition exclusions.

In addition, premiums would be set on the basis of a limited number of factors - type of policy, geographic location and age - that would not include health status or claims history. By establishing new rating rules, standardizing administrative functions and creating larger pools of insureds, proponents of the bills believe that premiums will be reduced

NAR has already submitted comments to the Senate HELP Committee on the Kennedy measure and will comment on each of the other proposals as they are released. While much remains to be determined and all proposals will be much amended, many of the elements of the NAR-supported Small Business Health Options Program Act (SHOP) have been, or are expected to be, incorporated into the drafts.

Freddie Mac modifies Relief Refinance Mortgage program

Freddie Mac recently announced several changes to its refinance offering under its Relief Refinance Mortgage program, designed to assist borrowers who are current on their mortgage payments but would benefit from refinancing into mortgages with terms that better position them for long-term homeownership.

Borrowers now will be able to refinance a Freddie Mac-owned or guaranteed mortgage with any lender affiliated with Freddie Mac, rather than the lender currently servicing their mortgage. Freddie Mac also is increasing the amount of closing costs that can be rolled into the new refinance mortgage.

Borrowers can continue to work with their existing servicer to refinance their mortgage; in most cases the current servicer will not have to re-underwrite the borrower. Freddie Mac will allow the lesser of 4 percent of the new refinance mortgage amount or $5,000 of closing costs, financing costs, and prepaids/escrows to be rolled into the new refinance mortgage. Freddie Mac’s standard postsettlement delivery fees, up to a maximum of 2 percent, will apply to the Relief Refinance Program.

More info here.

Counties Absorbing Huge Cuts in Property Tax Revenue

The Los Angeles County assessor's office announced that it has reduced assessments for 333,000 county homeowners, leading property tax revenue to drop for the first time in recent years. As a result, the county expects to lose about $440 million in property tax revenue, a 1% decrease that county officials had anticipated.

Orange County officials also expect about a 1% decrease, with about a third of the 300,000 homes reviewed receiving reductions, according to Shaw Lin, the assessor's management services manager.

Neighboring counties hard hit by the housing slump face far steeper decreases in property assessments. In Ventura County, officials said property tax revenue is expected to drop 5%; in San Bernardino County, nearly 8%; and in Riverside County, up to 11%.

Riverside County officials described the drop in property tax revenue as the largest in 20 years, spurred by building booms that went bust in places such as Murrieta, Menifee and Desert Hot Springs.

More info here.

Get Your $8,000 HUD Tax Credit Now

Qualified, first-time home buyers using a Federal Housing Administration (FHA)-insured mortgage now can apply the $8,000 federal tax credit toward their down payments, the U.S. Dept. of Housing and Urban Development (HUD) recently announced.

Currently, borrowers applying for a FHA-insured mortgage are required to issue minimum down payments of 3.5 percent. Buyers still must come up with the mandatory 3.5 percent down payment, but the tax credit now can be used as an additional down payment, or for other closing costs, which can help lower principal balances and monthly payments. The home buyer may access their tax credit through participating FHA approved lenders (a small fee will likely be assessed) or a participating non-profit. This may be done through either the purchasing of the home buyer’s tax credit or through a bridge loan.

While HUD allows for state Housing Finance Agencies to offer the tax credit up front to the home buyer, CalHFA like other state programs is experiencing a shortage of capital and is unlikely to offer such a program.

More info here.

California Foreclosure Prevention Act Goes Into Effect June 15th

On February 20, 2009, Governor Schwarzenegger signed ABX2 7 and SBX2 7, the "California Foreclosure Prevention Act" which modifies the foreclosure process to provide additional time for borrowers to work out loan modifications while providing an exemption for mortgage loan servicers that have implemented a comprehensive loan modification program. Civil Code Section 2923.52 requires an additional 90-day period beyond the period already provided before a Notice of Sale can be given in order to allow all parties to pursue a loan modification to prevent foreclosure of loans meeting certain criteria identified in that section.

A mortgage loan servicer who has implemented a comprehensive loan modification program may file an application for exemption from the provisions of Civil Code Section 2923.52. Approval of this application provides the mortgage loan servicer an exemption from the additional 90-day period before filing the Notice of Sale when foreclosing on real property as designated by this Section.

Below is a timeline for the adoption of regulations under this new law. The new law will be operative 14 days after the issuance of regulations. As set forth in this timeline, the anticipated operative date of the law is June 15, 2009.

The Application for Order of Exemption from Civil Code Sction 2923.52(a) California Foreclosure Prevention Act is available on the DOC website.

Real estate licensees may file this application with the DRE at the following address:

Foreclosure Exemptions - Department of Real Estate

P.O. Box 187007

Sacramento, CA 95818-7007

Applications may also be submitted by e-mail to foreclosures@dre.ca.gov.

On June 15, 2009, the law will become operative.

find the article at: http://www.car.org/tools/smart/new/foreclosurepreventionca/

NAR Jumps Head First into the Healthcare Debate

With nearly one-third of REALTORS® lacking ANY health insurance and hundreds of thousands more struggling to pay ever increasing premiums, health reform is an issue of critical importance to our membership.

The goal of the National Association of REALTORS® is to work in partnership with state and local associations in order to create access to affordable health coverage for the self-employed, independent contractors and small businesses. This month, members will be asked to send questions related to health care to NAR. Additional resources will be posted on REALTOR.ORG/healthcare starting Monday, June 15. Watch this space for future developments on this critical issue that impacts our members and their families.

New State Senator is sworn into office; upcoming special election to fill Assembly seat

SBAOR congratulates former Assemblymember and now newly-elected State Senator Curren Price (D-26) who was just sworn into office this week. A special election will soon be called to fill his empty seat in Assembly District 51, which includes Gardena, Hawthorne, Inglewood, and Lawndale.

U.S. Regulator: Be Wary of Reverse Mortgages

Some industry analysts, including U.S. bank regulator John Dugan believe that reverse mortgages could be the next subprime mortgage product to gain traction. Dugan says that while reverse mortgages can be beneficial, they also share some of the characteristics of the riskiest types of subprime mortgages.

Although the majority of reverse mortgages is insured by the Federal Housing Administration and poses limited credit risk, a different class of reverse mortgages is becoming popular--“proprietary” products--which offer less consumer protection.

To protect consumers, regulators are crafting guidelines and Dugan is recommending that regulators be more vigilant about misleading marketing and cracking down on lenders who try to bundle a reverse mortgage with other financial products, such as an annuity or life insurance product.

To read the full story, please click here.

Source: CNN and the California Association of REALTORS®

FHA Cracks Down on Mortgage Brokers

The Federal Housing Administration is tightening its review of mortgage professionals that are allowed to originate loans.

The Department of Housing and Urban Development requires brokers who originate FHA loans to obtain approval through the agency. People convicted of making fraudulent loans will be barred from the program. Previously, companies were penalized, but individual employees were not.

Richard L. Tracy Jr., a board member of the Connecticut Society of Mortgage Brokers and an FHA-approved lender, says the changes “will go a long way toward getting out the marginal players.”

Source: The New York Times, Bob Tedeschi (06/05/2009) and the National Association of REALTORS®