Lucrative Fees May Deter Efforts To Alter Loans
Many mortgage companies are reluctant to help strapped homeowners
By Peter S. Goodman
updated 3:30 a.m. MT, Thurs., July 30, 2009
This week, the Obama administration summoned mortgage company executives to Washington to demand they move faster to lower payments for homeowners sliding toward foreclosure. Treasury officials called on the companies to hire and train more people quickly to field applications for relief.
But industry insiders and legal experts say the limited capacity of mortgage companies is not the primary factor impeding the government’s $75 billion program to prevent foreclosures. Instead, it is that many mortgage companies are reluctant to give strapped homeowners a break because the companies collect lucrative fees on delinquent loans.
Even when borrowers stop paying, mortgage companies that service the loans collect fees out of the proceeds when homes are ultimately sold in foreclosure. So the longer borrowers remain delinquent, the greater the opportunities for these mortgage companies to extract revenue — fees for insurance, appraisals, title searches and legal services.
Read the rest of the story at MSNBC.
Thursday, July 30, 2009
Monday, July 27, 2009
Fed Proposes Changes to Truth in Lending Act
On July 23, 2009, the Federal Reserve Board (the Fed) proposed changes to its Truth in Lending Act (TILA) regulations designed to improve consumer disclosures received in connection with mortgages and home equity lines of credit (HELOC).
The changes are based on consumer testing conducted by the Fed and are designed to enhance the ability of consumers to shop for and understand the cost of mortgages and HELOCS.
The Fed announced it would work with the U.S. Department of Housing and Urban Development (HUD) to make disclosures under TILA complementary with the disclosures required by the Real Estate Settlement Procedures Act (RESPA).
The Fed is considering developing a combined disclosure form that meets the requirements of both TILA and RESPA.
NAR has urged the Fed and HUD to develop a single disclosure form. The proposal also prevents mortgage loan originators from steering consumers to more expensive loans by prohibiting payments to mortgage brokers or loan officers based on the interest rate or other loan terms.
The public comment period will end 120 days after publication of the proposals in the Federal Register (expected soon).Federal Reserve Board Press Release (7/23/09), including numerous links to more detailed information >Contacts: Jeff Lischer, 202-383-1117 Contacts: Tony Hutchinson, 202-383-1120
The changes are based on consumer testing conducted by the Fed and are designed to enhance the ability of consumers to shop for and understand the cost of mortgages and HELOCS.
The Fed announced it would work with the U.S. Department of Housing and Urban Development (HUD) to make disclosures under TILA complementary with the disclosures required by the Real Estate Settlement Procedures Act (RESPA).
The Fed is considering developing a combined disclosure form that meets the requirements of both TILA and RESPA.
NAR has urged the Fed and HUD to develop a single disclosure form. The proposal also prevents mortgage loan originators from steering consumers to more expensive loans by prohibiting payments to mortgage brokers or loan officers based on the interest rate or other loan terms.
The public comment period will end 120 days after publication of the proposals in the Federal Register (expected soon).Federal Reserve Board Press Release (7/23/09), including numerous links to more detailed information >Contacts: Jeff Lischer, 202-383-1117 Contacts: Tony Hutchinson, 202-383-1120
Friday, July 24, 2009
New Guidance on Home Valuation Code of Conduct
The Federal Housing Finance Agency, and Fannie Mae, both Freddie Mac and Fannie Mae this week issued new guidance to all lenders on the Home Valuation Code of Conduct.
The alert clarifies two very important points that we raised in our meetings with
officials. First, it states that lenders should use appraisers who have
clear experience in the geographic area. Second, it clarifies that appraisers are
not prohibited from talking to real estate agents.
http://www.fhfa.gov/webfiles/14611/hvcc_NOTICE_7_22_09F.pdf
In addition to this guidance, both Fannie Mae and Freddie Mac recently posted
extensive Qs and As on their respective web sites, based on information that NAR
provided when the code was first adopted in May.
https://www.efanniemae.com/sf/guides/ssg/relatedsellinginfo/appcode/pdf/hvccfaqs.pdf
http://www.freddiemac.com/singlefamily/hvcc_faq.html
We have posted links to all of this information at www.Realtor.org/HVCC.
Although this is certainly a step in the right direction, more still needs to be done
to address problems with the HVCC. NAR will continue to push for a moratorium
on the Code, and continue to meet with industry partners and officials to
convey our concerns.
The alert clarifies two very important points that we raised in our meetings with
officials. First, it states that lenders should use appraisers who have
clear experience in the geographic area. Second, it clarifies that appraisers are
not prohibited from talking to real estate agents.
http://www.fhfa.gov/webfiles/14611/hvcc_NOTICE_7_22_09F.pdf
In addition to this guidance, both Fannie Mae and Freddie Mac recently posted
extensive Qs and As on their respective web sites, based on information that NAR
provided when the code was first adopted in May.
https://www.efanniemae.com/sf/guides/ssg/relatedsellinginfo/appcode/pdf/hvccfaqs.pdf
http://www.freddiemac.com/singlefamily/hvcc_faq.html
We have posted links to all of this information at www.Realtor.org/HVCC.
Although this is certainly a step in the right direction, more still needs to be done
to address problems with the HVCC. NAR will continue to push for a moratorium
on the Code, and continue to meet with industry partners and officials to
convey our concerns.
Thursday, July 23, 2009
More on the Power of Social Media
Quick fable: Prior to a trip to Nebraska, Dave Carroll checked his $3500 Taylor guitar with United Airlines. (If you've been online at all recently, you know where this is going.) The guitar suffered serious damage, and Carroll spent months pursuing the issue via the usual channels of complaint—to no avail.
So, what'd he do? He created that cool song and video you've no doubt enjoyed on YouTube. The video, "United Breaks Guitars," generated millions of views in just a few days. Crazier still, on the first day it went live, 950 additional complaints and comments were lobbed in United's general direction, according to Ben Kunz of Thought Gadgets. The video has also gotten play on CNN, the Chicago Sun-Times, Motley Fool and myriad other blogs and online pubs. (The video-viewer count is now well past 3 million.) Ouch.
The bad news: United was apparently painfully slow about responding to the incident. The airline did offer to pay for the broken guitar after Carroll's video went viral, but he declined the money, suggesting United give it to charity. The airline then announced via Twitter that it was donating $3,000 to the Thelonius Monk Institute of Jazz.
The good news: Taylor Guitars, by contrast, seized the moment. The company posted a response to the debacle on its website, providing helpful tips on flying with a guitar. Taylor's chill founder, Bob Taylor, can also be seen discussing the situation on YouTube.
The Po!nt: And the moral of our story? Stay and play, every day. Keep track of customer conversations—and quickly respond! Sure, people love to complain, but you know what they love even more? Just being acknowledged. Pluck those heartstrings!
So, what'd he do? He created that cool song and video you've no doubt enjoyed on YouTube. The video, "United Breaks Guitars," generated millions of views in just a few days. Crazier still, on the first day it went live, 950 additional complaints and comments were lobbed in United's general direction, according to Ben Kunz of Thought Gadgets. The video has also gotten play on CNN, the Chicago Sun-Times, Motley Fool and myriad other blogs and online pubs. (The video-viewer count is now well past 3 million.) Ouch.
The bad news: United was apparently painfully slow about responding to the incident. The airline did offer to pay for the broken guitar after Carroll's video went viral, but he declined the money, suggesting United give it to charity. The airline then announced via Twitter that it was donating $3,000 to the Thelonius Monk Institute of Jazz.
The good news: Taylor Guitars, by contrast, seized the moment. The company posted a response to the debacle on its website, providing helpful tips on flying with a guitar. Taylor's chill founder, Bob Taylor, can also be seen discussing the situation on YouTube.
The Po!nt: And the moral of our story? Stay and play, every day. Keep track of customer conversations—and quickly respond! Sure, people love to complain, but you know what they love even more? Just being acknowledged. Pluck those heartstrings!
Wednesday, July 22, 2009
REALTOR.com Comes to Boise!
Realtor.com is coming to Boise!
Max Pigman,Vice President and National Speaker of REALTOR.com®, is on a Real Estate speaking tour to over 200 cities. He has the latest news to share from what he has learned from his tour and the NAR.Learn important new content at:
City: Boise, ID
Date: Tuesday, July 28, 2009
Time: 9:00 am - 1:00 pm
Location: Hilton Garden Inn Boise Spectrum
FEATURED TOPICS:
**National Association of REALTORS® statistics show how buyers are choosing their agents and what buyers want from YOU.
**Learn what marketing tools are best suited to reach the indecisive buyer waiting out the market
**Review and take home examples of online ads that are getting up to 10 times as many calls and clicks as conventional ads.
**See the latest PDAs, microcomputers and digital cameras - plus learn which technology works best for online real estate
For more information and how to register, click here
Max Pigman,Vice President and National Speaker of REALTOR.com®, is on a Real Estate speaking tour to over 200 cities. He has the latest news to share from what he has learned from his tour and the NAR.Learn important new content at:
City: Boise, ID
Date: Tuesday, July 28, 2009
Time: 9:00 am - 1:00 pm
Location: Hilton Garden Inn Boise Spectrum
FEATURED TOPICS:
**National Association of REALTORS® statistics show how buyers are choosing their agents and what buyers want from YOU.
**Learn what marketing tools are best suited to reach the indecisive buyer waiting out the market
**Review and take home examples of online ads that are getting up to 10 times as many calls and clicks as conventional ads.
**See the latest PDAs, microcomputers and digital cameras - plus learn which technology works best for online real estate
For more information and how to register, click here
Friday, July 10, 2009
How is Real Estate Like Bicycle Racing?
As you know we're well into the 2009 Tour de France.
Lance Armstrong, trying for an unprecedented eith victory currently sits in third place; eight seconds behind the leader.
I read this Twitter post from him this morning as he got ready to ride Stage 7; which includes one of the highest finishes in history at almost 7,000 ft.
Lance wrote: "First mtn stage today. It's for real now. Long day (224 kms) and summit finish. Pedaling for keeps".
I struck me that this is a great way for us to approach our real estate market. Things are getting better, but there's lots of hard work ahead.
Like Lance and the other 200 riders in the race...we too are pedaling for keeps.
Lance Armstrong, trying for an unprecedented eith victory currently sits in third place; eight seconds behind the leader.
I read this Twitter post from him this morning as he got ready to ride Stage 7; which includes one of the highest finishes in history at almost 7,000 ft.
Lance wrote: "First mtn stage today. It's for real now. Long day (224 kms) and summit finish. Pedaling for keeps".
I struck me that this is a great way for us to approach our real estate market. Things are getting better, but there's lots of hard work ahead.
Like Lance and the other 200 riders in the race...we too are pedaling for keeps.
Thursday, July 9, 2009
Fox News Headlines Positive Real Estate Market
Be sure to check out the Fox News story from Thursday night about a positive June real estate market...continuing a trend that's been showing slow but steady improvement since January.
Thanks to Eric Jensen for getting one of his clients (who turned out to be a great spokesperson with a good understanding of what's going on) to go on air with Dan Hamilton with only 30 minutes notice...all this while Eric was participating in the Membership Committee meeting at ACAR planning the big Member Appreciation event coming up on July 30.
Here's the link to the story.
The full text Press Release will go out tomorrow morning at 9:00 am and will be posted here and on the ACAR Website under the tab "ACAR News".
Note: At this point we have not concluded that the First Time Home Buyer Tax Credit will not be renewed in 2010. We do know that Congress has postponed any further discussion about extending and expanding the Tax Credit until after they finish working on the health care issue. NAR believes this won't be until October. We also know that the longer it is delayed, the less chance it will be acted on in time to help our buyer clients. Earlier this week NAR sent out a bulletin essentially saying "don't count on it be there in 2010". Watch your email for NAR Call's to Action on this critical key to our continued recovery.
Thanks to Eric Jensen for getting one of his clients (who turned out to be a great spokesperson with a good understanding of what's going on) to go on air with Dan Hamilton with only 30 minutes notice...all this while Eric was participating in the Membership Committee meeting at ACAR planning the big Member Appreciation event coming up on July 30.
Here's the link to the story.
The full text Press Release will go out tomorrow morning at 9:00 am and will be posted here and on the ACAR Website under the tab "ACAR News".
Note: At this point we have not concluded that the First Time Home Buyer Tax Credit will not be renewed in 2010. We do know that Congress has postponed any further discussion about extending and expanding the Tax Credit until after they finish working on the health care issue. NAR believes this won't be until October. We also know that the longer it is delayed, the less chance it will be acted on in time to help our buyer clients. Earlier this week NAR sent out a bulletin essentially saying "don't count on it be there in 2010". Watch your email for NAR Call's to Action on this critical key to our continued recovery.
Wednesday, July 8, 2009
New Lender Disclosure Rules Take Effect on July 30
On July 30, 2008, the Federal Reserve Board published a final rule amending Regulation Z, implementing the Truth in Lending Act (TILA) and the Home Ownership and Equity Protection Act (HOEPA).
These require creditors to give consumers transaction-specific cost disclosures within three days of application for home mortgage loans. The disclosures must be provided before the consumer pays any fee, other than a fee for obtaining the consumer’s credit history.
Also on July 30, 2008, the Congress enacted the Housing and Economic Recovery Act of 2008, which included amendments to TILA, known as the Mortgage Disclosure Improvement Act of 2008 (MDIA).
Among other things, the MDIA requires a seven day waiting period between the time when disclosures are given and consummation of the mortgage transaction.
If the annual percentage rate provided in the good faith estimates changes beyond a specified tolerance for accuracy, creditors must provide corrected disclosures, which the consumer must receive on or before the third business day before closing.
The new requirements apply to loan applications filed on or after July 30.
REALTORS® will want to learn the basics of these new rules so they can advise clients on the new procedures, which are complex and expected to be a challenge for lenders.
Lenders in Boise are still scrambling to get practical explanations and procedures to meet the July 30 deadline.
ACAR is committed to providing the most current information about how to operate in this new lending environment....Stay tuned.
These require creditors to give consumers transaction-specific cost disclosures within three days of application for home mortgage loans. The disclosures must be provided before the consumer pays any fee, other than a fee for obtaining the consumer’s credit history.
Also on July 30, 2008, the Congress enacted the Housing and Economic Recovery Act of 2008, which included amendments to TILA, known as the Mortgage Disclosure Improvement Act of 2008 (MDIA).
Among other things, the MDIA requires a seven day waiting period between the time when disclosures are given and consummation of the mortgage transaction.
If the annual percentage rate provided in the good faith estimates changes beyond a specified tolerance for accuracy, creditors must provide corrected disclosures, which the consumer must receive on or before the third business day before closing.
The new requirements apply to loan applications filed on or after July 30.
REALTORS® will want to learn the basics of these new rules so they can advise clients on the new procedures, which are complex and expected to be a challenge for lenders.
Lenders in Boise are still scrambling to get practical explanations and procedures to meet the July 30 deadline.
ACAR is committed to providing the most current information about how to operate in this new lending environment....Stay tuned.
Tuesday, July 7, 2009
June Numbers - Something to Crow About
June numbers just came in (thanks to Jere Webb for his insightful work)...
Sales - Hold on to your hat. We're up 36% from last month and up 6% for this month last year. That's the first time current year sales have exceeded the same month last year in 10 months! The increase of June over May is largest in 10 years.
Pending Sales - Up almost 40% over last month. Still almost all in resales; not new construction.
REO/Short Sales - Short sales made up 15% of all sales in June; down 3% from our peak in March of 18%. REO's were 18% of June sales; down from 34% in February. Total "distressed" sales in June were 33% of all sales. Distressed in Feb. was 48% of total; March was 45%; April was 44%.
Median Price - up 3% from May to $176,000. Down 16% from June '08.
Inventory - Down 17% from '08. We are now below 8 months of inventory for the first time since I've been here. Remember we define "market equilibrium" as having 6 months of inventory. Our high was 16.7 months of inventory in Jan. '09.
ACAR will be sending a full media release tomorrow morning. With a little bit of luck, and our TV friends on Facebook and Twitter, we should get some good coverage tomorrow night.
Sales - Hold on to your hat. We're up 36% from last month and up 6% for this month last year. That's the first time current year sales have exceeded the same month last year in 10 months! The increase of June over May is largest in 10 years.
Pending Sales - Up almost 40% over last month. Still almost all in resales; not new construction.
REO/Short Sales - Short sales made up 15% of all sales in June; down 3% from our peak in March of 18%. REO's were 18% of June sales; down from 34% in February. Total "distressed" sales in June were 33% of all sales. Distressed in Feb. was 48% of total; March was 45%; April was 44%.
Median Price - up 3% from May to $176,000. Down 16% from June '08.
Inventory - Down 17% from '08. We are now below 8 months of inventory for the first time since I've been here. Remember we define "market equilibrium" as having 6 months of inventory. Our high was 16.7 months of inventory in Jan. '09.
ACAR will be sending a full media release tomorrow morning. With a little bit of luck, and our TV friends on Facebook and Twitter, we should get some good coverage tomorrow night.
Kermit should have said... "It's Easy Being Green"
Thousands of members have already taken advantage of the Right Tools, Right Now initiative. Click here to find out what some have to say.
As part of NAR's Right Tools, Right Now initiative, NAR members can download these great resources to provide consumers with the most cost-effective ways to go green and save money.
NAR’s Green REsource Council ‘Eco Family Guide'
Help clients and prospects take action in their everyday lives to reduce their carbon footprint while saving money, energy and the environment.
Order your copy now at NO COST.
Energy Savers: Tips on Saving Energy & Money at Home
Get the latest information on using energy-saving, efficient technologies to power a home.
Order your copy now at NO COST.
"Selling Green" Pocket Card
Learn how to benefit from consumers’ preferences for energy efficient products and services.
Order your copy now at NO COST.
Visit Right Tools, Right Now homepage to see all NO CHARGE and AT-COST products and resources that are part of NAR’s Right Tools, Right Now initiative. Listings are updated monthly, so check back often!
If you don’t know your login, click here or call NAR's Information Central at 1-800-874-6500.
If you haven’t downloaded an eProduct before, click here to find out how, or call NAR's Information Central at 1-800-874-6500.
As part of NAR's Right Tools, Right Now initiative, NAR members can download these great resources to provide consumers with the most cost-effective ways to go green and save money.
NAR’s Green REsource Council ‘Eco Family Guide'
Help clients and prospects take action in their everyday lives to reduce their carbon footprint while saving money, energy and the environment.
Order your copy now at NO COST.
Energy Savers: Tips on Saving Energy & Money at Home
Get the latest information on using energy-saving, efficient technologies to power a home.
Order your copy now at NO COST.
"Selling Green" Pocket Card
Learn how to benefit from consumers’ preferences for energy efficient products and services.
Order your copy now at NO COST.
Visit Right Tools, Right Now homepage to see all NO CHARGE and AT-COST products and resources that are part of NAR’s Right Tools, Right Now initiative. Listings are updated monthly, so check back often!
If you don’t know your login, click here or call NAR's Information Central at 1-800-874-6500.
If you haven’t downloaded an eProduct before, click here to find out how, or call NAR's Information Central at 1-800-874-6500.
Monday, July 6, 2009
Legal Issues facing Real Estate Professionals
Just out from NAR...
The National Association of REALTORS® has conducted a survey of the current legal environment faced by real estate professionals. NAR undertakes this comprehensive research project, or "Scan," every two years. It analyzes current legal liability issues and identifies emerging legal and risk issues. The Scan is based on surveys of key people in the real-estate industry, as well as data obtained from case law and statutory research.
This report discusses developments in several major-topic areas, including the legal research and the survey results, emerging trends, and the need for training. The results of the legal research and the survey data are set forth in the tables in Appendix 1. Lists of the cases, statutes, and regulations, organized by issue, are provided in Appendices 2 and 3. The research technique is described in Appendix 4. This last Appendix describes the scope of the project, and how the legal-research and survey data were collected.
Agency issues are the top area of concern for real estate professionals, along with RESPA and Property Condition Disclosure. These issues, along with As-Is Clauses and Commission Disputes, seem to be particularly important in the current down market, where many licensees may be unsure of how to handle the unique challenges being presented. Other issues emerging from the current economy include wage-and-hour claims and potential liability for "mortgage rescue" scams.
The National Association of REALTORS® has conducted a survey of the current legal environment faced by real estate professionals. NAR undertakes this comprehensive research project, or "Scan," every two years. It analyzes current legal liability issues and identifies emerging legal and risk issues. The Scan is based on surveys of key people in the real-estate industry, as well as data obtained from case law and statutory research.
This report discusses developments in several major-topic areas, including the legal research and the survey results, emerging trends, and the need for training. The results of the legal research and the survey data are set forth in the tables in Appendix 1. Lists of the cases, statutes, and regulations, organized by issue, are provided in Appendices 2 and 3. The research technique is described in Appendix 4. This last Appendix describes the scope of the project, and how the legal-research and survey data were collected.
Agency issues are the top area of concern for real estate professionals, along with RESPA and Property Condition Disclosure. These issues, along with As-Is Clauses and Commission Disputes, seem to be particularly important in the current down market, where many licensees may be unsure of how to handle the unique challenges being presented. Other issues emerging from the current economy include wage-and-hour claims and potential liability for "mortgage rescue" scams.
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