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Wednesday, March 3, 2010
Tuesday, March 2, 2010
Understanding HVCC - Pop Quiz Answers
1. False - REALTORS and lenders can talk to appraisers, including requests to consider additional data or to correct errors.
2. False - Lenders may directly retain the services of an independent appraiser.
3. False - Lenders may choose to use a rotating roster of appraisers but are NOT required to do so by Fannie or Freddie.
4. False - The code applies only to 1-4 single family loans sold by Fannie or Freddie and does not apply to FHA, VA or the Federal Home Loan Banks.
5. False - Nothing in HVCC requires a lender to obtain a property valuation or to use a particular methodology.
6. True - If the lender grants permission, a mortgage broker may directly contact a lender-approved AMC that retains the appraiser.
7. False - A mortgage broker may transfer an appraisal if the lender who ordered the original appraisal grants permission.
8. false - A borrower is not required to pay for an appraisal with any one particular form of payment.
9. False - Payment fro an appraisal must be made to the lender or third-party hired by the lender to retain the appraisal services.
How did you do.
Quiz and answers courtesy of "Today's Buyer's Rep" published by REBAC
2. False - Lenders may directly retain the services of an independent appraiser.
3. False - Lenders may choose to use a rotating roster of appraisers but are NOT required to do so by Fannie or Freddie.
4. False - The code applies only to 1-4 single family loans sold by Fannie or Freddie and does not apply to FHA, VA or the Federal Home Loan Banks.
5. False - Nothing in HVCC requires a lender to obtain a property valuation or to use a particular methodology.
6. True - If the lender grants permission, a mortgage broker may directly contact a lender-approved AMC that retains the appraiser.
7. False - A mortgage broker may transfer an appraisal if the lender who ordered the original appraisal grants permission.
8. false - A borrower is not required to pay for an appraisal with any one particular form of payment.
9. False - Payment fro an appraisal must be made to the lender or third-party hired by the lender to retain the appraisal services.
How did you do.
Quiz and answers courtesy of "Today's Buyer's Rep" published by REBAC
Understanding HVCC - Pop Quiz
1. T/F - HVCC prohibits REALTORS and lenders from talking to appraisers.
2. T/F - A lender is required to use an appraiser management company (AMC) to get an appraisal.
3. T/F - Lenders are required to choose appraisers from a rotating roster approved by Fannie or Freddie.
4. T/F - The Code applies to all mortgages that require an appraisal.
5. T/F - HVCC requires an appraisal where a lender was previously under no requirement to obtain one.
6. T/F - A mortgage broker may select the appraiser.
7. T/F - A mortgage broker may not transfer an appraisal from one lender to another.
8. T/F - Borrowers must use a credit card upfront to pay fro an appraisal.
9. T/F - A borrower may pay the appraiser directly.
Answers are coming in a minute....
2. T/F - A lender is required to use an appraiser management company (AMC) to get an appraisal.
3. T/F - Lenders are required to choose appraisers from a rotating roster approved by Fannie or Freddie.
4. T/F - The Code applies to all mortgages that require an appraisal.
5. T/F - HVCC requires an appraisal where a lender was previously under no requirement to obtain one.
6. T/F - A mortgage broker may select the appraiser.
7. T/F - A mortgage broker may not transfer an appraisal from one lender to another.
8. T/F - Borrowers must use a credit card upfront to pay fro an appraisal.
9. T/F - A borrower may pay the appraiser directly.
Answers are coming in a minute....
Monday, March 1, 2010
March Coming In Like a Lamb?
March 1st...60+ degrees...sunny day...
Is that it? Is winter done? Is the spring selling season getting ready to kick off?
Probably not the end of winter...but with the tax credit set to expire in just about 90 days...the spring season is upon us.
More than 550 REALTORS and friends gathered for the annual Circle of Excellence Awards celebration Friday night.
Highlights of the evening included recognizing:
Affiliate of the Year - Karen Beamguard, First American Title
Rookie REALTOR of the Year - Mira Piva, Coey Barton Homes
Broker of the Year - Maurice Clifton, ERA West Wind
Code of Ethics Leadership - Mary Edith Hill, Hill Real Estate Agency
Darlene Manning Humanitarian Award - Carey Farmer, Group One
Distinguished Service Awards - two recipients for 2009
* John Knipe, Knipe Land Company
* Gary Salisbury - Symphony Homes
Honor Society - inducted one new Lifetime Member - Darlene Blakeslee, ERA West Wind
REALTOR of the Year - Cherie Barton, EXIT Realty (formerly Realty Executives of Treasure Valley)
We also recognized the amazing production abilities of almost 200 Circle of Excellence honorees. In the face of one of the most difficult markets ever, these folks found a way to continue to excel.
Saturday's Real Estate Section in the Statesman lists each member inducted into this lofty circle.
We all owe Judy McLaughlin, Darlene Blakeslee (this year's event Chair) and the entire COE Committee a huge "Thank You" for a wonderful evening.
Is that it? Is winter done? Is the spring selling season getting ready to kick off?
Probably not the end of winter...but with the tax credit set to expire in just about 90 days...the spring season is upon us.
More than 550 REALTORS and friends gathered for the annual Circle of Excellence Awards celebration Friday night.
Highlights of the evening included recognizing:
Affiliate of the Year - Karen Beamguard, First American Title
Rookie REALTOR of the Year - Mira Piva, Coey Barton Homes
Broker of the Year - Maurice Clifton, ERA West Wind
Code of Ethics Leadership - Mary Edith Hill, Hill Real Estate Agency
Darlene Manning Humanitarian Award - Carey Farmer, Group One
Distinguished Service Awards - two recipients for 2009
* John Knipe, Knipe Land Company
* Gary Salisbury - Symphony Homes
Honor Society - inducted one new Lifetime Member - Darlene Blakeslee, ERA West Wind
REALTOR of the Year - Cherie Barton, EXIT Realty (formerly Realty Executives of Treasure Valley)
We also recognized the amazing production abilities of almost 200 Circle of Excellence honorees. In the face of one of the most difficult markets ever, these folks found a way to continue to excel.
Saturday's Real Estate Section in the Statesman lists each member inducted into this lofty circle.
We all owe Judy McLaughlin, Darlene Blakeslee (this year's event Chair) and the entire COE Committee a huge "Thank You" for a wonderful evening.
Tuesday, February 23, 2010
Here's Some Really Good News
Origin Energy Limited and Micron Technology have announced a joint venture to develop and produce a photovoltaic solar products.
The joint venture will be located in Micron’s fabrication (fab) plant at company headquarters in Boise as well as its Spec Tech plant in Nampa.
Although specific job creation numbers have not been disclosed, these two empty plants accounted for most of Micron’s manufacturing employment in the Boise Valley.
BVEP’s role in this project was significant. In early 2009, Micron Ventures, an operating unit within the company, joined BVEP’s business attraction team to find a joint venture partner in the solar industry. Visits by BVEP representatives and Micron to solar companies and site consultants who are part of BVEP’s contact network were conducted in Chicago, Illinois; Cleveland, Ohio; Atlanta, Georgia; Dallas, Texas; and Portland, Oregon.
Introducing Micron to these site consultants resulted in discussions with several solar companies. At mid-year, CH2MHill site-consulting group in Portland, one of the original meetings, was hired by Origin Energy to find a site for its U.S. manufacturing operations. CH2MHill contacted Micron and discussions began. Six months later, the joint venture was formed.
Way to go BVEP...
The joint venture will be located in Micron’s fabrication (fab) plant at company headquarters in Boise as well as its Spec Tech plant in Nampa.
Although specific job creation numbers have not been disclosed, these two empty plants accounted for most of Micron’s manufacturing employment in the Boise Valley.
BVEP’s role in this project was significant. In early 2009, Micron Ventures, an operating unit within the company, joined BVEP’s business attraction team to find a joint venture partner in the solar industry. Visits by BVEP representatives and Micron to solar companies and site consultants who are part of BVEP’s contact network were conducted in Chicago, Illinois; Cleveland, Ohio; Atlanta, Georgia; Dallas, Texas; and Portland, Oregon.
Introducing Micron to these site consultants resulted in discussions with several solar companies. At mid-year, CH2MHill site-consulting group in Portland, one of the original meetings, was hired by Origin Energy to find a site for its U.S. manufacturing operations. CH2MHill contacted Micron and discussions began. Six months later, the joint venture was formed.
Way to go BVEP...
ACAR Young Professionals - Meeting on February 24th
The ACAR Young Professionals will be touring the Ground Floor in Meridian.
"The Ground Floor is an essential element to achieve our goal of making Downtown Meridian an attractive placewhere entrepreneurs and residents have a place to live, work and play. Today’s workspaces need to work harder by working smarter – this means turning the traditional real estate model on its head. Entrepreneurs need access to healthy work environments that support a broad range of tasks from head-down focused work to group collaboration and professional meetings - and they need the economic flexibility for space to grow or shrink with the needs of their business"
Find out what all the buzz is about and join us for a tour of this remarkable new adventure. The Ground Floor is located at 136 E Idaho in Meridian.
"The Ground Floor is an essential element to achieve our goal of making Downtown Meridian an attractive placewhere entrepreneurs and residents have a place to live, work and play. Today’s workspaces need to work harder by working smarter – this means turning the traditional real estate model on its head. Entrepreneurs need access to healthy work environments that support a broad range of tasks from head-down focused work to group collaboration and professional meetings - and they need the economic flexibility for space to grow or shrink with the needs of their business"
Find out what all the buzz is about and join us for a tour of this remarkable new adventure. The Ground Floor is located at 136 E Idaho in Meridian.
The tour begins at 11:30! See you there!
The Code of Ethics - Breaking It Down #4
Before we begin our discussion on Article 4, find out what happened in Article 3 here.
Article 4 deals with disclosure and family ties. Families are like fudge - mostly sweet with a few nuts. ~Author Unknown
Article 4 states: REALTORS® shall not acauire an interest in or buy or present offers from themselves, any member of their immediate families, their firms or any member thereof, or any entities in which they have any ownership interest, any real property without making their true position known to the owner or the owner's agent or broker. In selling property they own, or in which they have any interest, REALTORS® shall reveal their ownership or interest in writing to the purchaser or the purchaser's representative.
The only standard of practice underneath Article 4 says that "for the protection of all parties, the disclosures required by Article 4 shall be in writing and provided by REALTORS® prior to the signing of any contract.
For the purposes of the Code of Ethics, the term "Immediate Family" is much broader than your standard (or health insurance) definition.
"As used in the Code of Ethics, the term ‘immediate family’ includes, but is not limited to, the REALTOR® and the REALTOR®’s spouse and their siblings, parents, grandparents, children (by birth or adoption), grandchildren and other descendants."
So this means, if you are representing your brother-in-law, that needs to be disclosed. The language you often see in listings and on contracts is "Agent related to buyer/seller".
If you are representing a company that you also have ownership interests in, that needs to be disclosed. "Agent has ownership interest in buying/selling entity".
It seems so straight forward! So let's examine the following situation:
Buyer X was interested in purchasing a home listed with REALTOR® B but lacked the down payment. REALTOR® B offered to lend Buyer X money for the down payment in return for Buyer X's promissory note secured by a mortgage on the property. The purchase transaction was subsequently completed, though REALTOR® B did not record the promissory note or the mortgage instrument.
Within months, Buyer X returned to REALTOR® B to list the property because Buyer X was unexpectedly being transferred to another state. REALTOR® B listed the property, which was subsequently sold to Purchaser P. The title search conducted by Purchaser P's lender did not disclose the existence of the mortgage held by REALTOR® B since it had not been recorded, nor did REALTOR® B disclose the existence of the mortgage to Purchaser P. The proceeds of the sale enable Buyer X to satisfy the first mortgage on the property, and he and REALTOR® B agreed that he would continue to repay REALTOR® B's loan.
Following the closing, REALTOR® B recorded both the promissory note and the mortgage instrument. When Purchaser P learned of this, he filed an ethics complaint alleging that REALTOR® B had violated Article 4 by selling property in which she had a secured interest without revealing that interest to the purchaser.
... So? What do you think? Did REALTOR® B have an obligation to disclose her financial relationship with the property to Purchaser P?
As always, tell me what you think in the comments!
Susan Hansen
Member Policy
Article 4 deals with disclosure and family ties. Families are like fudge - mostly sweet with a few nuts. ~Author Unknown
Article 4 states: REALTORS® shall not acauire an interest in or buy or present offers from themselves, any member of their immediate families, their firms or any member thereof, or any entities in which they have any ownership interest, any real property without making their true position known to the owner or the owner's agent or broker. In selling property they own, or in which they have any interest, REALTORS® shall reveal their ownership or interest in writing to the purchaser or the purchaser's representative.
The only standard of practice underneath Article 4 says that "for the protection of all parties, the disclosures required by Article 4 shall be in writing and provided by REALTORS® prior to the signing of any contract.
For the purposes of the Code of Ethics, the term "Immediate Family" is much broader than your standard (or health insurance) definition.
"As used in the Code of Ethics, the term ‘immediate family’ includes, but is not limited to, the REALTOR® and the REALTOR®’s spouse and their siblings, parents, grandparents, children (by birth or adoption), grandchildren and other descendants."
So this means, if you are representing your brother-in-law, that needs to be disclosed. The language you often see in listings and on contracts is "Agent related to buyer/seller".
If you are representing a company that you also have ownership interests in, that needs to be disclosed. "Agent has ownership interest in buying/selling entity".
It seems so straight forward! So let's examine the following situation:
Buyer X was interested in purchasing a home listed with REALTOR® B but lacked the down payment. REALTOR® B offered to lend Buyer X money for the down payment in return for Buyer X's promissory note secured by a mortgage on the property. The purchase transaction was subsequently completed, though REALTOR® B did not record the promissory note or the mortgage instrument.
Within months, Buyer X returned to REALTOR® B to list the property because Buyer X was unexpectedly being transferred to another state. REALTOR® B listed the property, which was subsequently sold to Purchaser P. The title search conducted by Purchaser P's lender did not disclose the existence of the mortgage held by REALTOR® B since it had not been recorded, nor did REALTOR® B disclose the existence of the mortgage to Purchaser P. The proceeds of the sale enable Buyer X to satisfy the first mortgage on the property, and he and REALTOR® B agreed that he would continue to repay REALTOR® B's loan.
Following the closing, REALTOR® B recorded both the promissory note and the mortgage instrument. When Purchaser P learned of this, he filed an ethics complaint alleging that REALTOR® B had violated Article 4 by selling property in which she had a secured interest without revealing that interest to the purchaser.
... So? What do you think? Did REALTOR® B have an obligation to disclose her financial relationship with the property to Purchaser P?
As always, tell me what you think in the comments!
Susan Hansen
Member Policy
Wednesday, February 17, 2010
Freebies in Education
Right Tools, Right Now - February 25 Self-Directed IRA Webinar at No Cost
Learn how to tap your market expertise as a real estate practitioner in planning for your retirement. The Right Tools, Right Now initiative is offering a FREE webinar on February 25 explaining the benefits of a self-directed IRA. Visit www.REALTOR.org/RightTools for details. Read more...
http://www.realtor.org/prodser.nsf/RightTools/OnlineTraining?OpenDocument&wt.mc_id=RT1105&WT.mc_id=LS021710&CAT=Educ
Last Call for FREE Education
This is your last chance to access all 7 Webinars (Over a $200 value) from the RU Webinar Sumit for FREE. Thanks to NAR's Right Tools, Right Now initiative you have untill 2/26 to veiw the webinars for FREE. Also Visit the REALTOR® University Webinar Center to see the list of upcoming webinars. For more information¸ visit...
http://www.realtor.org/education/REALTOR_University/RUWebinars?wt.mc_id=ru0022&WT.mc_id=LS021710&CAT=Educ
Accredited Buyer's Representative (ABR®) Course at the 2010 Midyear Legislative Meetings
Attending the 2010 Midyear Legislative Meetings in Washington D.C.? Sign up for the ABR® course offered prior to the meetings and be on your way towards earning your ABR® today! Registration for the ABR® course is available on-line. Read more...
http://www.realtor.org/narlservredirect.nsf/pages/NT000015C2?OpenDocument&WT.mc_id=LS021710&CAT=Educ
RU Blogging for your Business?
On 2/25 Amy Chorew will help you make your blog your social media headquarters and discover which blog platform is right for you. You will gain a clear understanding of how you can use your well strategized blog as a powerful marketing and communication tool to drive business. For more information on this and all the other great upcoming webinars visit REALTOR® University. To register¸ go to...
http://www.realtor.org/narlservredirect.nsf/pages/NT000015BA?OpenDocument&WT.mc_id=LS021710&CAT=Educ
Learn how to tap your market expertise as a real estate practitioner in planning for your retirement. The Right Tools, Right Now initiative is offering a FREE webinar on February 25 explaining the benefits of a self-directed IRA. Visit www.REALTOR.org/RightTools for details. Read more...
http://www.realtor.org/prodser.nsf/RightTools/OnlineTraining?OpenDocument&wt.mc_id=RT1105&WT.mc_id=LS021710&CAT=Educ
Last Call for FREE Education
This is your last chance to access all 7 Webinars (Over a $200 value) from the RU Webinar Sumit for FREE. Thanks to NAR's Right Tools, Right Now initiative you have untill 2/26 to veiw the webinars for FREE. Also Visit the REALTOR® University Webinar Center to see the list of upcoming webinars. For more information¸ visit...
http://www.realtor.org/education/REALTOR_University/RUWebinars?wt.mc_id=ru0022&WT.mc_id=LS021710&CAT=Educ
Accredited Buyer's Representative (ABR®) Course at the 2010 Midyear Legislative Meetings
Attending the 2010 Midyear Legislative Meetings in Washington D.C.? Sign up for the ABR® course offered prior to the meetings and be on your way towards earning your ABR® today! Registration for the ABR® course is available on-line. Read more...
http://www.realtor.org/narlservredirect.nsf/pages/NT000015C2?OpenDocument&WT.mc_id=LS021710&CAT=Educ
RU Blogging for your Business?
On 2/25 Amy Chorew will help you make your blog your social media headquarters and discover which blog platform is right for you. You will gain a clear understanding of how you can use your well strategized blog as a powerful marketing and communication tool to drive business. For more information on this and all the other great upcoming webinars visit REALTOR® University. To register¸ go to...
http://www.realtor.org/narlservredirect.nsf/pages/NT000015BA?OpenDocument&WT.mc_id=LS021710&CAT=Educ
Tuesday, February 16, 2010
The Code of Ethics - Breaking It Down #3
Before we begin on Article 3, find out how the adventure in Article 2 turned out here.
Article 3 is intriguing, especially in these times, because it deals with cooperation and compensation. For the record, cooperation is uniquely different than compensation and Article 3 defines them clearly.
Article 3 states: REALTORS® shall cooperate with other brokers except when cooperation is not in the client's best interest. The obligation to cooperate does not include the obligation to commissions, fees, or to otherwise compensate another broker.
*Note: By becoming participants in the MLS, you have agreed to share data and to compensate cooperating brokers. The requirement to compensate arises from the shared membership in the MLS. MLS is a related, but separate entity from the REALTOR® Associations.
The Standards of Practice under Article 3 state:
*When you represent a seller exclusively, you will decide on the terms to cooperate. This may or may not include an offer to compensate. If you are a buyer's agent, determine the offer compensation prior to accepting the terms of cooperation. (If you submit an offer, you are agreeing to the terms of cooperation).
*UPDATED IN 2010 - To be effective, any change in compensation offered for cooperative services must be communicated to the other REALTOR® prior to the time that REALTOR® submits an offer to purchase/lease the property. (SOP 3-2). This is not a new SOP, but was clarified because the prior language was ambiguous.
*You can still change compensation after an offer has been made, but only through broker-to-broker negotiations.
*You must disclose if you have a variable rate commission. (The total amount of commission paid out is different if the listing agent is also the selling agent). You must disclose a variable rate commission situation as soon as practical to potential cooperating brokers.
*You must disclose the existence of accepted offers, even those with unresolved contigencies, to any broker seeking cooperation.
*When getting information about a property that is listed, you must disclose that you are a REALTOR® and whether your interest is personal or on behalf of a client.
*You will not misrepresent the availability of access to show or inspect a listed property.
*NEW IN 2010 - REALTORS® shall not provide access to listed property on terms other than those established by the owner or the listing broker.
So, with all your new knowledge about Article 3, you can understand why it has been the topic of discussion for much of 2009 and already, much of 2010. Let's test your knowledge with a case study:
REALTOR® A listed Seller S's house and placed the listing in the local association's MLS. Within a matter of days, REALTOR® X procured a full price offer from Buyer B. The offer specified that Buyer B's offer was contingent on the sale of Buyer B's current home. Seller S, anxious to sell, accepted Buyer B's offer but instructed REALTOR® A to continue to marketing the property in hope that an offer that was not contingent on the sale of an existing home would be made.
A week later, REALTOR® A, another cooperating broker working with an out-of-state transferee on a company-paid visit, contacted REALTOR® A to arrange a showing of Seller S's house for Buyer T. REALTOR® A contacted Seller S to advise him of the showing and then called REALTOR® Q to confirm that he and Buyer T could visit the property that evening. REALTOR® A said nothing about the previously accepted purchase offer.
REALTOR® Q showed the property to Buyer T that evening and Buyer T signed a purchase offer for the full listed price. REALTOR® Q left the purchase offer at REALTOR® A's office.
REALTOR® A informed Seller S about this second offer. At Seller S's instruction, Buyer B was informed of the second offer, and Buyer B waived the contingency in his purchase offer. REALTOR® A then informed REALTOR® Q that Seller S and Buyer B intended to close on their contract and the property was not available for purchase by Buyer T.
REALTOR® Q, believing that REALTOR® A's failure to disclose the existence of the accepted offer between Seller S and Buyer B at the time REALTOR® Q contacted REALTOR® A was in violation of Article 3 of the Code of Ethics, as interpreted by Standard of Practice 3-6, filed an ethics complaint with the association of REALTORS®.
At the hearing called to consider the complaint, REALTOR® A defended his actions by noting that while Buyer B's offer had been accepted by Seller S, it had been contingent on the sale of Buyer B's current home. It was possible that Buyer B, if faced with a second offer, could have elected to withdraw from the contract. REALTOR® A argued that continuing to market the peroperty and not making other brokers aware that the property was under contracted promoted his client's best interestes by continuing to attract potential buyers.
So.... What do you think? Did a violation occur? Post in the comments below!
Susan Hansen
Director of Member Policy
Article 3 is intriguing, especially in these times, because it deals with cooperation and compensation. For the record, cooperation is uniquely different than compensation and Article 3 defines them clearly.
Article 3 states: REALTORS® shall cooperate with other brokers except when cooperation is not in the client's best interest. The obligation to cooperate does not include the obligation to commissions, fees, or to otherwise compensate another broker.
*Note: By becoming participants in the MLS, you have agreed to share data and to compensate cooperating brokers. The requirement to compensate arises from the shared membership in the MLS. MLS is a related, but separate entity from the REALTOR® Associations.
The Standards of Practice under Article 3 state:
*When you represent a seller exclusively, you will decide on the terms to cooperate. This may or may not include an offer to compensate. If you are a buyer's agent, determine the offer compensation prior to accepting the terms of cooperation. (If you submit an offer, you are agreeing to the terms of cooperation).
*UPDATED IN 2010 - To be effective, any change in compensation offered for cooperative services must be communicated to the other REALTOR® prior to the time that REALTOR® submits an offer to purchase/lease the property. (SOP 3-2). This is not a new SOP, but was clarified because the prior language was ambiguous.
*You can still change compensation after an offer has been made, but only through broker-to-broker negotiations.
*You must disclose if you have a variable rate commission. (The total amount of commission paid out is different if the listing agent is also the selling agent). You must disclose a variable rate commission situation as soon as practical to potential cooperating brokers.
*You must disclose the existence of accepted offers, even those with unresolved contigencies, to any broker seeking cooperation.
*When getting information about a property that is listed, you must disclose that you are a REALTOR® and whether your interest is personal or on behalf of a client.
*You will not misrepresent the availability of access to show or inspect a listed property.
*NEW IN 2010 - REALTORS® shall not provide access to listed property on terms other than those established by the owner or the listing broker.
So, with all your new knowledge about Article 3, you can understand why it has been the topic of discussion for much of 2009 and already, much of 2010. Let's test your knowledge with a case study:
REALTOR® A listed Seller S's house and placed the listing in the local association's MLS. Within a matter of days, REALTOR® X procured a full price offer from Buyer B. The offer specified that Buyer B's offer was contingent on the sale of Buyer B's current home. Seller S, anxious to sell, accepted Buyer B's offer but instructed REALTOR® A to continue to marketing the property in hope that an offer that was not contingent on the sale of an existing home would be made.
A week later, REALTOR® A, another cooperating broker working with an out-of-state transferee on a company-paid visit, contacted REALTOR® A to arrange a showing of Seller S's house for Buyer T. REALTOR® A contacted Seller S to advise him of the showing and then called REALTOR® Q to confirm that he and Buyer T could visit the property that evening. REALTOR® A said nothing about the previously accepted purchase offer.
REALTOR® Q showed the property to Buyer T that evening and Buyer T signed a purchase offer for the full listed price. REALTOR® Q left the purchase offer at REALTOR® A's office.
REALTOR® A informed Seller S about this second offer. At Seller S's instruction, Buyer B was informed of the second offer, and Buyer B waived the contingency in his purchase offer. REALTOR® A then informed REALTOR® Q that Seller S and Buyer B intended to close on their contract and the property was not available for purchase by Buyer T.
REALTOR® Q, believing that REALTOR® A's failure to disclose the existence of the accepted offer between Seller S and Buyer B at the time REALTOR® Q contacted REALTOR® A was in violation of Article 3 of the Code of Ethics, as interpreted by Standard of Practice 3-6, filed an ethics complaint with the association of REALTORS®.
At the hearing called to consider the complaint, REALTOR® A defended his actions by noting that while Buyer B's offer had been accepted by Seller S, it had been contingent on the sale of Buyer B's current home. It was possible that Buyer B, if faced with a second offer, could have elected to withdraw from the contract. REALTOR® A argued that continuing to market the peroperty and not making other brokers aware that the property was under contracted promoted his client's best interestes by continuing to attract potential buyers.
So.... What do you think? Did a violation occur? Post in the comments below!
Susan Hansen
Director of Member Policy
More Alarmist Nonsense Debunked
Everyone and their brother was forwarding the video last week that claimed FDIC was in cahoots with One West Bank...turns out it was just another urban myth...
FDIC Provides Additional Information on its Loss Share Agreement With OneWest Bank
The producers of this video perpetuate other falsehoods. The FDIC has not requested to borrow money from the Treasury Department. Indeed, we continue to be funded by the banking industry through assessments, not by taxpayers as claimed in the video.
This video has no credibility. Regardless of the personal or professional motivations behind its production, there is always a responsibility to be factually correct and transparent. The FDIC made available a fact sheet on the day that the sale of IndyMac was announced that details the terms of the contract. It's too bad that the creators of this video opted to premise it on falsehoods."
Friday, February 12, 2010
Not a List I'd Like to Be On
U.S. foreclosures declined 10 percent in January compared to December, but were still up 15 percent year over year, foreclosure marketer RealtyTrac reported Thursday.
RealtyTrac CEO James Saccacio predicted an increase on the horizon: “January foreclosure numbers are exhibiting a pattern very similar to a year ago: a double-digit percentage jump in December foreclosure activity followed by a 10 percent drop in January, then a surge in foreclosures over the next few months.”
States with the top 10 foreclosure rates are:
1. Nevada
2. Arizona
3. California
4. Florida
5. Utah
6. Idaho
7. Michigan
8. Illinois
9. Oregon
10. Georgia
Six states account for nearly 60 percent of the national total: California, Florida, Arizona, Illinois and Michigan.
RealtyTrac CEO James Saccacio predicted an increase on the horizon: “January foreclosure numbers are exhibiting a pattern very similar to a year ago: a double-digit percentage jump in December foreclosure activity followed by a 10 percent drop in January, then a surge in foreclosures over the next few months.”
States with the top 10 foreclosure rates are:
1. Nevada
2. Arizona
3. California
4. Florida
5. Utah
6. Idaho
7. Michigan
8. Illinois
9. Oregon
10. Georgia
Six states account for nearly 60 percent of the national total: California, Florida, Arizona, Illinois and Michigan.
File this under "Why Didn't I Think of That"
Will Rewarding Borrowers Prevent Defaults?
Will paying underwater borrowers to keep meeting their mortgage obligations prevent them from walking away?
Loan Value Group LLC says it is working with a major mortgage lender to test this theory.
Here’s the plan: The mortgage investor offers a cash reward to borrowers to keep paying. The amount varies by borrower based on income, negative equity, geography, and other risk factors. The more likely a borrower will default, the bigger the carrot.
The borrower can’t collect the payment until the mortgage is paid, although the rewards can be used to help pay off the mortgage if the property is sold.
The plan keeps lenders from having to mark properties to market and take big losses. Frank Pallotta, a founder of Loan Value Group and former executive at Morgan Stanley and Credit Suisse, says the program will pay for itself if only a few borrowers stay put and keep paying.
Source: The Wall Street Journal, Nick Timiaros (02/08/2010)
Will paying underwater borrowers to keep meeting their mortgage obligations prevent them from walking away?
Loan Value Group LLC says it is working with a major mortgage lender to test this theory.
Here’s the plan: The mortgage investor offers a cash reward to borrowers to keep paying. The amount varies by borrower based on income, negative equity, geography, and other risk factors. The more likely a borrower will default, the bigger the carrot.
The borrower can’t collect the payment until the mortgage is paid, although the rewards can be used to help pay off the mortgage if the property is sold.
The plan keeps lenders from having to mark properties to market and take big losses. Frank Pallotta, a founder of Loan Value Group and former executive at Morgan Stanley and Credit Suisse, says the program will pay for itself if only a few borrowers stay put and keep paying.
Source: The Wall Street Journal, Nick Timiaros (02/08/2010)
Thursday, February 11, 2010
Going Boldly Into the New Year
The big question on everyone’s mind, going into January, was: “Would January be a replay of last year; or will we continue our fragile recovery?”
The answer, in a word, “both”.
January sales pushed the 300 unit number and were up 18% compared to January ’09…remembering that January ’09 was one of our worst months in more than a decade.
January ‘10 sales were 25% down from December ’09. Historically, January does lag behind December.
Pending sales in January up were up 25% from December to 766. Is this the result of the Home buyer Tax Credit extension? To some extent… Remember that our affordability is better than ever; mortgage rates are near 30 year lows and our population continues to grow.
Almost half of our sales continue to be in the price range of the First Time Buyer. In January 48% of homes sold were <$160,000.
Median home price increased by 1% compared to December to $169,000. This is the highest our median has been since August ’09. This is like a result of several factors. Inventory continues to shrink. Competition for the lower priced inventory is growing….and there’s that tax credit.
Inventory continues to decline. In January there were 2,991 active listings. This is the lowest it’s been since April of ’06. New inventory coming on is in the prime price.
Half of all homes sold in January were less than $160,000.
We have seen positive developments in the 1st couple of weeks that suggest the Feds are making some moves that may nurse along our recovery.
NAR succeeded in convincing FHA to eliminate what was known as “anti-flipping” rules. Investors no longer have to hold a property for 90 days after closing.
Call it three birds with one stone: The federal government hopes simultaneously to help low-down-payment home buyers, investors who fix up foreclosures, and local communities burdened with too many bank-owned and foreclosed homes -- all with one potentially far-reaching policy change.
The FHA maintained its 90-day anti-flipping rule through much of the last decade. But now it's suspending the policy, at least for the next year.
The objective is to speed sales of renovated houses to first-time buyers and other purchasers. With foreclosures at record levels -- an estimated 2.8 million filings last year alone -- many communities are faced with excesses of bank-owned properties sitting unsold, often in poor repair.
By waiving the 90-day rule, private investors will be more likely to bid on these houses, fix them up and sell them to buyers who will now be able to gain early access to FHA financing, which offers 3.5% down payments.
NAR also just announced a joint effort with the National Community Stabilization Trust to reclaim neighborhoods wracked by high levels of foreclosed and abandoned property, property disinvestment, extremely low prices and low resident confidence.
The National Community Stabilization Trust is a nonprofit organization that facilitates the transfer of foreclosed and abandoned properties from financial institutions nationwide to local housing organizations, and provides access to financing in order to promote productive property reuse and neighborhood stability.
The only “fly” in our ointment is the number of distressed properties. Short sales and foreclosures continue to increase now topping 60%.
There are efforts underway to try to improve the process, but the fact remains, many of our neighbors cannot afford to keep their homes. Without an improvement to our employment picture…things can only get so much better.
The answer, in a word, “both”.
January sales pushed the 300 unit number and were up 18% compared to January ’09…remembering that January ’09 was one of our worst months in more than a decade.
January ‘10 sales were 25% down from December ’09. Historically, January does lag behind December.
Pending sales in January up were up 25% from December to 766. Is this the result of the Home buyer Tax Credit extension? To some extent… Remember that our affordability is better than ever; mortgage rates are near 30 year lows and our population continues to grow.
Almost half of our sales continue to be in the price range of the First Time Buyer. In January 48% of homes sold were <$160,000.
Median home price increased by 1% compared to December to $169,000. This is the highest our median has been since August ’09. This is like a result of several factors. Inventory continues to shrink. Competition for the lower priced inventory is growing….and there’s that tax credit.
Inventory continues to decline. In January there were 2,991 active listings. This is the lowest it’s been since April of ’06. New inventory coming on is in the prime price.
Half of all homes sold in January were less than $160,000.
We have seen positive developments in the 1st couple of weeks that suggest the Feds are making some moves that may nurse along our recovery.
NAR succeeded in convincing FHA to eliminate what was known as “anti-flipping” rules. Investors no longer have to hold a property for 90 days after closing.
Call it three birds with one stone: The federal government hopes simultaneously to help low-down-payment home buyers, investors who fix up foreclosures, and local communities burdened with too many bank-owned and foreclosed homes -- all with one potentially far-reaching policy change.
The FHA maintained its 90-day anti-flipping rule through much of the last decade. But now it's suspending the policy, at least for the next year.
The objective is to speed sales of renovated houses to first-time buyers and other purchasers. With foreclosures at record levels -- an estimated 2.8 million filings last year alone -- many communities are faced with excesses of bank-owned properties sitting unsold, often in poor repair.
By waiving the 90-day rule, private investors will be more likely to bid on these houses, fix them up and sell them to buyers who will now be able to gain early access to FHA financing, which offers 3.5% down payments.
NAR also just announced a joint effort with the National Community Stabilization Trust to reclaim neighborhoods wracked by high levels of foreclosed and abandoned property, property disinvestment, extremely low prices and low resident confidence.
The National Community Stabilization Trust is a nonprofit organization that facilitates the transfer of foreclosed and abandoned properties from financial institutions nationwide to local housing organizations, and provides access to financing in order to promote productive property reuse and neighborhood stability.
The only “fly” in our ointment is the number of distressed properties. Short sales and foreclosures continue to increase now topping 60%.
There are efforts underway to try to improve the process, but the fact remains, many of our neighbors cannot afford to keep their homes. Without an improvement to our employment picture…things can only get so much better.
Monday, February 8, 2010
The Code of Ethics - Breaking It Down #2
Today, we tackle Article 2. For those of you wondering how the last scenario turned out, you can find the answer in the comments here.
Article 2 states: REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. REALTORS® shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to disclose facts which are confidential under the scope of agency or non-agency relationships as defined by state law.
Before we get into interpretation, let's start with a definition. Latent Defects. What are those? Latent defects are hidden flaws, weaknesses, or imperfections that require a thorough inspection to detect.
Knowing that, we move forward to the Standards of Practices (SOPs) to see how we should interpret the article.
SOP 2-1 says that you are only obligated to discover and disclose adverse factors reasonably apparent to someone with expertise in those areas required by their real estate licensing authority. It does not impose the obligation of expertise in other professional or techinical disciplines.
So, if you find that the basement is flooded, we would expect you to reasonably discover that. If there is a leak in the sprinkler system, we would not expect you to find that. If your seller knows about the leak in the sprinkler system, then it is no longer a latent defect (as it is a known defect) and you need to disclose!
This is the article that also addresses the issue of "non-material" factors. Basically, stigmatized property (ie: ghosts, deaths that occurred, etc). The SOP states that anything deemed "non-material" by law or regulation as not being subject to disclosure are considered not "pertinent" for the purposes of Article 2.
Idaho law states: : “No cause of action shall arise against an owner of real property or a representative of the owner for a failure to disclose to the transferee of the real property or a representative of the transferee that the real property was psychologically impacted.”
It goes on to say if “a purchaser who is in the process of making a bona fide offer advises the owner’s representative in writing that knowledge of whether the property may be psychologically impacted is an important factor in the purchaser’s decision to purchase the property, the owner’s representative shall make inquiry of the owner and, with the consent of the owner and subject to and consistent with the applicable laws of privacy, shall report any findings to the purchaser. If the owner refuses disclosure, the owner’s representative shall advise the purchaser or the purchaser’s representative that the information will not be disclosed.”
Basically, the seller does not have to disclose anything about a "psychologically impacted" property if they don't want to. However, if they decide to disclose information, it must be a full disclosure.
So to sum up Article 2, it's all about DISCLOSURE. So let's test your knowledge:
Mrs. A, a retired college professor, came to the office of REALTOR® B, a cooperating broker, in search of a large house in which she could occupy a small apartment, using the remainder of the building to operate a residential club for graduate students. What she had in mind was a deluxe "rooming house" in which the tenants would have use of a parlor, dining room, kitchen, and laundry. She felt confident, from previous experience in the community, that she could obtain from 10 to 16 "roomers", and indicated that she would be guided in her charges to the tenants by the amount of mortgage payments she would have to make.
Most of the large houses on the market were inadequate. Finally, REALTOR® B located a massive old mansion listed with REALTOR® C that appealed to Buyer A. After repeated visits to the house, and after discussing financing with a local lending institution, Buyer A said she was interested in the house if it could accommodate as many as 11 tenants. REALTOR® B accompanied her for another inspection to check on this point.
By planning double occupancy of the large bedrooms, she found she could accommodate eight roomers. In addition, there were three small rooms upstairs that had been used for storage which REALTOR® B suggested might make acceptable single rooms. Buyer A agreed and the sale was made.
Two months later, the buyer filed a complaint with the local Board, charging REALTOR® B with failing to disclose pertinent facts. The complaint alleged that REALTOR® B knew the buyer was taking on a substantial obligation with the expectation of housing 11 persons in the structure; that REALTOR® B had suggested that three rooms might make acceptable single rooms; and that she had been subsequently advised by the building department that these rooms could not be used as dwelling rooms since the windows were too small to meet code requirements. She had been advised that it would cost $1,480 to replace the windows. She charged REALTOR® B with negligence in not advising her of this deficiency. After reviewing the complaint, the Grievance Committee referred it for hearing to before a Hearing Panel of the Professional Standards Committee.
At the hearing, REALTOR® B acknowledged the facts set out in Buyer A's complaint, but advised that the complaint did not state all of the relevant facts. With respect to the house in question, as with many other houses shown to Buyer A, he had made a special check at city hall as to zoning regulations to be sure that the kind of occupancy intended by the buyer would be lawful; that the buyer's specifications were unusual and that in attempting to meet them, he had devoted an unusual amount of time and effort to help her realize her objective; and that he had acted in good faith and had not deliberately failed to disclose any pertinent fact but had, in fact, urged the buyer to consult with an engineer to check with the zoning authorities prior to making an offer to ensure that the property could be utilized as a residential club.
So, what do you think? Did REALTOR® B meet his obligations? Did he do his due diligence? Should he have known that the windows wouldn't meet code? You tell me - in the comments!
Susan Hansen
Member Policy
Article 2 states: REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. REALTORS® shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to disclose facts which are confidential under the scope of agency or non-agency relationships as defined by state law.
Before we get into interpretation, let's start with a definition. Latent Defects. What are those? Latent defects are hidden flaws, weaknesses, or imperfections that require a thorough inspection to detect.
Knowing that, we move forward to the Standards of Practices (SOPs) to see how we should interpret the article.
SOP 2-1 says that you are only obligated to discover and disclose adverse factors reasonably apparent to someone with expertise in those areas required by their real estate licensing authority. It does not impose the obligation of expertise in other professional or techinical disciplines.
So, if you find that the basement is flooded, we would expect you to reasonably discover that. If there is a leak in the sprinkler system, we would not expect you to find that. If your seller knows about the leak in the sprinkler system, then it is no longer a latent defect (as it is a known defect) and you need to disclose!
This is the article that also addresses the issue of "non-material" factors. Basically, stigmatized property (ie: ghosts, deaths that occurred, etc). The SOP states that anything deemed "non-material" by law or regulation as not being subject to disclosure are considered not "pertinent" for the purposes of Article 2.
Idaho law states: : “No cause of action shall arise against an owner of real property or a representative of the owner for a failure to disclose to the transferee of the real property or a representative of the transferee that the real property was psychologically impacted.”
It goes on to say if “a purchaser who is in the process of making a bona fide offer advises the owner’s representative in writing that knowledge of whether the property may be psychologically impacted is an important factor in the purchaser’s decision to purchase the property, the owner’s representative shall make inquiry of the owner and, with the consent of the owner and subject to and consistent with the applicable laws of privacy, shall report any findings to the purchaser. If the owner refuses disclosure, the owner’s representative shall advise the purchaser or the purchaser’s representative that the information will not be disclosed.”
Basically, the seller does not have to disclose anything about a "psychologically impacted" property if they don't want to. However, if they decide to disclose information, it must be a full disclosure.
So to sum up Article 2, it's all about DISCLOSURE. So let's test your knowledge:
Mrs. A, a retired college professor, came to the office of REALTOR® B, a cooperating broker, in search of a large house in which she could occupy a small apartment, using the remainder of the building to operate a residential club for graduate students. What she had in mind was a deluxe "rooming house" in which the tenants would have use of a parlor, dining room, kitchen, and laundry. She felt confident, from previous experience in the community, that she could obtain from 10 to 16 "roomers", and indicated that she would be guided in her charges to the tenants by the amount of mortgage payments she would have to make.
Most of the large houses on the market were inadequate. Finally, REALTOR® B located a massive old mansion listed with REALTOR® C that appealed to Buyer A. After repeated visits to the house, and after discussing financing with a local lending institution, Buyer A said she was interested in the house if it could accommodate as many as 11 tenants. REALTOR® B accompanied her for another inspection to check on this point.
By planning double occupancy of the large bedrooms, she found she could accommodate eight roomers. In addition, there were three small rooms upstairs that had been used for storage which REALTOR® B suggested might make acceptable single rooms. Buyer A agreed and the sale was made.
Two months later, the buyer filed a complaint with the local Board, charging REALTOR® B with failing to disclose pertinent facts. The complaint alleged that REALTOR® B knew the buyer was taking on a substantial obligation with the expectation of housing 11 persons in the structure; that REALTOR® B had suggested that three rooms might make acceptable single rooms; and that she had been subsequently advised by the building department that these rooms could not be used as dwelling rooms since the windows were too small to meet code requirements. She had been advised that it would cost $1,480 to replace the windows. She charged REALTOR® B with negligence in not advising her of this deficiency. After reviewing the complaint, the Grievance Committee referred it for hearing to before a Hearing Panel of the Professional Standards Committee.
At the hearing, REALTOR® B acknowledged the facts set out in Buyer A's complaint, but advised that the complaint did not state all of the relevant facts. With respect to the house in question, as with many other houses shown to Buyer A, he had made a special check at city hall as to zoning regulations to be sure that the kind of occupancy intended by the buyer would be lawful; that the buyer's specifications were unusual and that in attempting to meet them, he had devoted an unusual amount of time and effort to help her realize her objective; and that he had acted in good faith and had not deliberately failed to disclose any pertinent fact but had, in fact, urged the buyer to consult with an engineer to check with the zoning authorities prior to making an offer to ensure that the property could be utilized as a residential club.
So, what do you think? Did REALTOR® B meet his obligations? Did he do his due diligence? Should he have known that the windows wouldn't meet code? You tell me - in the comments!
Susan Hansen
Member Policy
Friday, February 5, 2010
The F-35 Story
One of Idaho's most significant prospective economic development projects - potentially securing 3,000 jobs - is nearing a decision and we need your help.
The U.S. Air Force has short-listed both Mountain Home Air Force Base and Boise's Gowen Field as possible locations for the F-35 fighter aircraft. These new missions would secure operations at these bases for the next 50 years. This is no small matter, as these two military installations together provide more than $1.0 billion to the Idaho economy each year. If our bases are not chosen, their current missions could face phasing out in coming years, putting jobs and economic benefits at risk.
Here is how you can help: A series of environmental scoping meetings (in an open house format) will be held throughout February. We ask that you attend the most convenient one to learn more about the missions. Comment cards will be available so you can express your support. A schedule of these meetings is attached.
Idaho's bases have already made the short list for these new operations; please help us pass this next critical hurdle.
More information on Idaho's quest for F-35 missions can be found at www.idahof35.com when that site launches on Feb. 5.
The U.S. Air Force has short-listed both Mountain Home Air Force Base and Boise's Gowen Field as possible locations for the F-35 fighter aircraft. These new missions would secure operations at these bases for the next 50 years. This is no small matter, as these two military installations together provide more than $1.0 billion to the Idaho economy each year. If our bases are not chosen, their current missions could face phasing out in coming years, putting jobs and economic benefits at risk.
Here is how you can help: A series of environmental scoping meetings (in an open house format) will be held throughout February. We ask that you attend the most convenient one to learn more about the missions. Comment cards will be available so you can express your support. A schedule of these meetings is attached.
Idaho's bases have already made the short list for these new operations; please help us pass this next critical hurdle.
More information on Idaho's quest for F-35 missions can be found at www.idahof35.com
NAR Legislative Priorities
NAR 2010 Legislative Priorities The NAR Leadership Team has approved the top 10 list of priorities for this year. This list was developed during the NAR Policy Town Hall Meeting last week. To see the priorities, please visit the REALTOR® Action Center:
http://www.realtoractioncenter.com/realtor-party/documents/2010-Policy-Town-Hall-Top-10-Issues.pdf
http://www.realtoractioncenter.com/realtor-party/documents/2010-Policy-Town-Hall-Top-10-Issues.pdf
Wednesday, February 3, 2010
Brochure Available on Federal Short-Sale Effort
NAR has issued a brochure to help members understand the federal program for helping troubled home owners undertake a short sale rather than lose their home to foreclosure.
The Home Affordable Foreclosure Alternatives program takes effect on or before April 5 and includes uniform procedures, standard forms, and deadlines for lenders.
Fannie Mae and Freddie Mac are developing their own standards based on the federal program. More resources, including a video on the federal short-sale effort, are online. For more contact Jeff Lischer, jlischer@realtors.org, 202/383-1117.
The Home Affordable Foreclosure Alternatives program takes effect on or before April 5 and includes uniform procedures, standard forms, and deadlines for lenders.
Fannie Mae and Freddie Mac are developing their own standards based on the federal program. More resources, including a video on the federal short-sale effort, are online. For more contact Jeff Lischer, jlischer@realtors.org, 202/383-1117.
Monday, February 1, 2010
The Code of Ethics - Breaking It Down
I had the extreme privilege to teach an ethics class last Friday and one of the students had a great suggestion. To help keep the Code of Ethics at the forefront of your mind, we need to keep posting about it.
I thought I had been, but the message isn't making it out there. I've decided that I am going do a weekly series - One article every week. (For those of you actually familiar with the code, that means 17 weeks of fun!)
Best to begin at the beginning (profound, I know). So here we go - Article 1.
Article 1 states: When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge to protect and promote the best interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, REALTORS® remain obligated to treat all parties honestly.
So, what does that actually mean? The standards of practice below the article attempt to explain.
- You are obligated to uphold the Code of Ethics
- Code of Ethics applies no matter where and how you are conducting business
- Do not mislead people about the value of a property
- Dual agency is okay so long as all parties involved truly understand what that means and implies
- Present offers objectively and as soon as you can
- You must submit all offers - verbal and written - even after you have an accepted offer. Doesn't mean you have to continue to market the property.
- Keep confidential information to yourself - even after the termination of the relationship - unless you are court ordered to disclose or if your client plans to commit a crime
- Competently manage clients' property and protect it against reasonably foreseeable losses
- Fill your client in about your office policy regarding cooperation and compensation
- Let clients know that the existence, terms or conditions of their offer may not be confidential unless the parties agree otherwise.
- Your fees for doing a valuation cannot be dependent upon the amount of the valuation
- If your seller permits it, you will tell other potential buyers about the existence of other offers. If the buyer's agent asks, you must tell them the source of the other offer (you, your office, other brokerage).
Okay, so those are the basics. Now let's test your knowledge... Let me give you a hypothethical...
Client A, an army officer, was transferred to a new duty station and listed his home for sale with REALTOR® B as the exclusive agent. He moved to his new station with the understanding that REALTOR® B would obtain a buyer as soon as possible. After six weeks, during which no word had come from REALTOR® B, the client made a weekend visit back to his former community to inspect his property. He learned that REALTOR® B had advertised the house: "Vacant - Owner transferred" and found an "open" sign in the yard. Client A found that REALTOR® B never had a representative at the property but continually kept an "open" sign in the yard. Client A discovered that the key was kept in a combination lockbox and when REALTOR® B received calls from potential purchasers about the property, he simply gave callers the address, advised that the key was in the lockbox, gave them the combination, and told them to look through the house by themselves and to call him back if they needed other information or wanted to make an offer.
Client A filed a complaint with the Board of REALTORS® detailing these facts and charging REALTOR® B with failure to protect and promote the a client's interes by leaving Client A's property open to vandalism, and by not making appropriate efforts to obtain a buyer.
REALTOR® B's defense during the hearing was that his advertising of the property was evidence of his efforts to sell it. He stated, without being specific, that leaving keys to vacant listed property in lockboxes and advising callers to inspect property on their own was "common local practice".
So what do you think? Did he violate the Code of Ethics? Weigh in!
Posted by Susan Hansen - ACAR Director of Member Policy
I thought I had been, but the message isn't making it out there. I've decided that I am going do a weekly series - One article every week. (For those of you actually familiar with the code, that means 17 weeks of fun!)
Best to begin at the beginning (profound, I know). So here we go - Article 1.
Article 1 states: When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge to protect and promote the best interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, REALTORS® remain obligated to treat all parties honestly.
So, what does that actually mean? The standards of practice below the article attempt to explain.
- You are obligated to uphold the Code of Ethics
- Code of Ethics applies no matter where and how you are conducting business
- Do not mislead people about the value of a property
- Dual agency is okay so long as all parties involved truly understand what that means and implies
- Present offers objectively and as soon as you can
- You must submit all offers - verbal and written - even after you have an accepted offer. Doesn't mean you have to continue to market the property.
- Keep confidential information to yourself - even after the termination of the relationship - unless you are court ordered to disclose or if your client plans to commit a crime
- Competently manage clients' property and protect it against reasonably foreseeable losses
- Fill your client in about your office policy regarding cooperation and compensation
- Let clients know that the existence, terms or conditions of their offer may not be confidential unless the parties agree otherwise.
- Your fees for doing a valuation cannot be dependent upon the amount of the valuation
- If your seller permits it, you will tell other potential buyers about the existence of other offers. If the buyer's agent asks, you must tell them the source of the other offer (you, your office, other brokerage).
Okay, so those are the basics. Now let's test your knowledge... Let me give you a hypothethical...
Client A, an army officer, was transferred to a new duty station and listed his home for sale with REALTOR® B as the exclusive agent. He moved to his new station with the understanding that REALTOR® B would obtain a buyer as soon as possible. After six weeks, during which no word had come from REALTOR® B, the client made a weekend visit back to his former community to inspect his property. He learned that REALTOR® B had advertised the house: "Vacant - Owner transferred" and found an "open" sign in the yard. Client A found that REALTOR® B never had a representative at the property but continually kept an "open" sign in the yard. Client A discovered that the key was kept in a combination lockbox and when REALTOR® B received calls from potential purchasers about the property, he simply gave callers the address, advised that the key was in the lockbox, gave them the combination, and told them to look through the house by themselves and to call him back if they needed other information or wanted to make an offer.
Client A filed a complaint with the Board of REALTORS® detailing these facts and charging REALTOR® B with failure to protect and promote the a client's interes by leaving Client A's property open to vandalism, and by not making appropriate efforts to obtain a buyer.
REALTOR® B's defense during the hearing was that his advertising of the property was evidence of his efforts to sell it. He stated, without being specific, that leaving keys to vacant listed property in lockboxes and advising callers to inspect property on their own was "common local practice".
So what do you think? Did he violate the Code of Ethics? Weigh in!
Posted by Susan Hansen - ACAR Director of Member Policy
Friday, January 22, 2010
Thursday, January 21, 2010
FHA Changes Announced
In October 2009, FHA announced that its capital reserve fund had fallen below the congressionally mandated level of 2 percent. The drop in capital reserves has led Congress and the Administration to call for changes to strengthen FHA.
On January 20, 2010, FHA announced major changes to ensure its long-term financial soundness. FHA is trying to balance three fundamental objectives: 1) financial soundness of the FHA insurance fund – ensuring that its capital ratio returns above 2 percent, 2) fulfilling its mission of serving borrowers not adequately served by the private sector and 3) facilitating the recovery of the housing industry and the over-all economy.
NAR has met with the Commissioner on several occasions to discuss the state of the housing market and to underscore FHA’s invaluable role. By all accounts the new changes are a victory for home buyers. FHA has carefully balanced the need to make financial reforms with the need to keep FHA available to a large segment of consumers. This is evident by retaining the 3.5 percent minimum down payment requirement and allowing the up-front mortgage insurance premium to be financed.
FHA announced changes in the following areas:
· The upfront mortgage insurance premium (UFMIP) will increase to 2.25 percent up from 1.75 percent. Contrary to reports, FHA will continue to allow the financing of the UFMIP.
· Borrowers with a credit score below 580 will be required to have at least a 10 percent down payment. The minimum down payment will remain at 3.5 percent for all other borrowers.
· FHA will seek legislative authority to increase the annual premium (currently capped at .55 percent). Over time, increasing the annual premium may allow FHA to reduce the up-front premium.
· Seller concessions will be reduced to 3 percent from 6 percent.
FHA will make the following lender enforcement changes:
· FHA will implement credit watch terminations at lender underwriting.
· Public reporting of lender performance through scorecard system will be implemented.
· FHA will implement, through notice and comment, indemnification against lenders. Indemnification will be expanded beyond fraud and misrepresentation.
· FHA will seek legislative authority to enforce indemnifications against direct endorsed (DE) lenders.
· FHA will seek legislative authority to sanction lenders nationwide based on performance of local branch.
· FHA is an integral part to the continued recovery of the real estate industry and the overall economy. NAR will continue to work with FHA, the Administration, and the Congress to ensure FHA can fulfill its mission while providing for the safety and soundness of the insurance fund. NAR is committed to assisting FHA as they balance risk management with creating homeownership opportunities across the country.
On January 20, 2010, FHA announced major changes to ensure its long-term financial soundness. FHA is trying to balance three fundamental objectives: 1) financial soundness of the FHA insurance fund – ensuring that its capital ratio returns above 2 percent, 2) fulfilling its mission of serving borrowers not adequately served by the private sector and 3) facilitating the recovery of the housing industry and the over-all economy.
NAR has met with the Commissioner on several occasions to discuss the state of the housing market and to underscore FHA’s invaluable role. By all accounts the new changes are a victory for home buyers. FHA has carefully balanced the need to make financial reforms with the need to keep FHA available to a large segment of consumers. This is evident by retaining the 3.5 percent minimum down payment requirement and allowing the up-front mortgage insurance premium to be financed.
FHA announced changes in the following areas:
· The upfront mortgage insurance premium (UFMIP) will increase to 2.25 percent up from 1.75 percent. Contrary to reports, FHA will continue to allow the financing of the UFMIP.
· Borrowers with a credit score below 580 will be required to have at least a 10 percent down payment. The minimum down payment will remain at 3.5 percent for all other borrowers.
· FHA will seek legislative authority to increase the annual premium (currently capped at .55 percent). Over time, increasing the annual premium may allow FHA to reduce the up-front premium.
· Seller concessions will be reduced to 3 percent from 6 percent.
FHA will make the following lender enforcement changes:
· FHA will implement credit watch terminations at lender underwriting.
· Public reporting of lender performance through scorecard system will be implemented.
· FHA will implement, through notice and comment, indemnification against lenders. Indemnification will be expanded beyond fraud and misrepresentation.
· FHA will seek legislative authority to enforce indemnifications against direct endorsed (DE) lenders.
· FHA will seek legislative authority to sanction lenders nationwide based on performance of local branch.
· FHA is an integral part to the continued recovery of the real estate industry and the overall economy. NAR will continue to work with FHA, the Administration, and the Congress to ensure FHA can fulfill its mission while providing for the safety and soundness of the insurance fund. NAR is committed to assisting FHA as they balance risk management with creating homeownership opportunities across the country.
Monday, January 18, 2010
What's Next for the Treasure Valley Real Estate Market
NAR just released their 3rd qtr numbers for our area. True...the third qtr was a long time ago, but there's still real value in the "Local Trend" data attached to the report.
Its interesting to overlay sales and price trends from the 3rd qtr to the actual of what happened in the fourth:
"Prices are down and continue to weaken" - but, we had a strong rebound in median driven by shrinking inventory and a continuation of the tax credit
"Sales growth has improved substantially form a year ago" - and continued through year end
"Employment continues to decline and could impact demand in some areas" - recent good news from Micron
Mortgage Payment to Income - "Historically strong and an improvement over 2nd qtr
"Local affordability has improved and is below historical average"
Read the entire report
Its interesting to overlay sales and price trends from the 3rd qtr to the actual of what happened in the fourth:
"Prices are down and continue to weaken" - but, we had a strong rebound in median driven by shrinking inventory and a continuation of the tax credit
"Sales growth has improved substantially form a year ago" - and continued through year end
"Employment continues to decline and could impact demand in some areas" - recent good news from Micron
Mortgage Payment to Income - "Historically strong and an improvement over 2nd qtr
"Local affordability has improved and is below historical average"
Read the entire report
Friday, January 15, 2010
FHA Will Announce Changes Next Week
In October 2009, FHA announced that its capital reserve fund had fallen below the congressionally mandated level of 2 percent. The drop in capital reserves has led Congress and the Administration to call for changes to strengthen FHA.
The week of January 18, 2010, FHA will announce major changes to ensure its long-term financial soundness. FHA is trying to balance three fundamental objectives: 1) financial soundness – ensuring that its capital ratio returns above 2 percent, 2) fulfilling its mission of serving borrowers not adequately served by the private sector and 3) facilitating the recovery of the housing industry and the over-all economy.
NAR has met with the Commissioner on several occasions to discuss the state of the housing market and to underscore FHA’s invaluable role. In looking for solutions to FHA’s financial concerns, replenishing the insurance fund and lowering loan-to-value ratios have the most significant impact on the FHA’s actuarial soundness. We expect changes in the following areas:
Improve FHA loan quality:
Increasing “upfront cash” that a borrower has to bring to the table by:
Eliminating the ability to finance the upfront premium
Increase the cash investment required above 3.5 percent by:
o Reduce seller concessions from 6 percent to as low as 3 percent
o Impose a minimum FICO score
Down payment requirement will remain at 3.5 percent
Impose a loan-to-value (LTV) maximum ratio by FICO score
Increase the Mortgage Insurance Premiums:
FHA can increase the MIP as follows:
Up-front premium may be raised to 2-2.25 percent, up from 1.75 percent
Higher premiums may be introduced for certain FHA products (such as refinance transactions)
FHA Lender Eligibility Changes
FHA is requiring significant changes for lenders. Many changes recommended were published as a proposed rule on lender eligibility changes in late November. Final rule has not yet been published. There are several proposed changes for FHA lenders:
Elimination of loan correspondent approval process
Increase net worth requirements of lenders to $2.5 million over the next 3 years
Lenders will be required to have a net worth of $1 million within one year, of which 20 percent must be liquid assets
Implementation of Credit Watch for underwriting lenders to monitor defaults and claims
Codification of Mortgagee Letter 2009-31, which places additional requirements on FHA lenders
Risk Management Improvements
FHA will be overhauling its approach to risk management throughout 2010. FHA will likely begin targeting early payment defaults for reviews and loans that result in claims in the first couple of years.
Risk Management Improvements (Continued) This change will likely increase indemnification requests since FHA will be targeting their reviews on early payment defaults (i.e. loans with potential problems).
FHA will be highlighting “poor performing” lenders more prominently on their website and in press releases. This started in January when FHA and the HUD Inspector General announced subpoenas to 15 mortgage companies demanding data and documentation on failed loans.
The Commissioner has frequently discussed the development of a Lender Scorecard, which is expected in the near future.
FHA Budget Proposals (Requires Legislation) As part of the Administration’s FY 2011 budget proposal there will be several FHA legislative initiatives. They could include:
Increase the current cap for annual premiums, currently at .55 percent (FHA has said that raising the annual premium is the “most effective means of raising capital for the fund w/ least impact per borrower”)
Obtain a legislative change to Credit Watch to facilitate the suspension of an FHA lender’s entire operation not just individual branches
Increased accountability of FHA lenders for fraud or misrepresentation
These changes will require congressional action, the timetable for enacting and implementing any legislation is subject to the Congressional schedule.
Conclusion
FHA will be transformed over the next few years. The changes outlined above are the beginning of the process with additional changes expected during the tenure of FHA Commissioner Dave Stevens. Going forward, FHA will continually evaluate programmatic changes and will likely withdraw them when the capital ratio returns above 2 percent. However, it is unlikely FHA will relax risk management and lender monitoring enhancements.
http://www.realtor.org/government_affairs/fha_resources
The week of January 18, 2010, FHA will announce major changes to ensure its long-term financial soundness. FHA is trying to balance three fundamental objectives: 1) financial soundness – ensuring that its capital ratio returns above 2 percent, 2) fulfilling its mission of serving borrowers not adequately served by the private sector and 3) facilitating the recovery of the housing industry and the over-all economy.
NAR has met with the Commissioner on several occasions to discuss the state of the housing market and to underscore FHA’s invaluable role. In looking for solutions to FHA’s financial concerns, replenishing the insurance fund and lowering loan-to-value ratios have the most significant impact on the FHA’s actuarial soundness. We expect changes in the following areas:
Improve FHA loan quality:
Increasing “upfront cash” that a borrower has to bring to the table by:
Eliminating the ability to finance the upfront premium
Increase the cash investment required above 3.5 percent by:
o Reduce seller concessions from 6 percent to as low as 3 percent
o Impose a minimum FICO score
Down payment requirement will remain at 3.5 percent
Impose a loan-to-value (LTV) maximum ratio by FICO score
Increase the Mortgage Insurance Premiums:
FHA can increase the MIP as follows:
Up-front premium may be raised to 2-2.25 percent, up from 1.75 percent
Higher premiums may be introduced for certain FHA products (such as refinance transactions)
FHA Lender Eligibility Changes
FHA is requiring significant changes for lenders. Many changes recommended were published as a proposed rule on lender eligibility changes in late November. Final rule has not yet been published. There are several proposed changes for FHA lenders:
Elimination of loan correspondent approval process
Increase net worth requirements of lenders to $2.5 million over the next 3 years
Lenders will be required to have a net worth of $1 million within one year, of which 20 percent must be liquid assets
Implementation of Credit Watch for underwriting lenders to monitor defaults and claims
Codification of Mortgagee Letter 2009-31, which places additional requirements on FHA lenders
Risk Management Improvements
FHA will be overhauling its approach to risk management throughout 2010. FHA will likely begin targeting early payment defaults for reviews and loans that result in claims in the first couple of years.
Risk Management Improvements (Continued) This change will likely increase indemnification requests since FHA will be targeting their reviews on early payment defaults (i.e. loans with potential problems).
FHA will be highlighting “poor performing” lenders more prominently on their website and in press releases. This started in January when FHA and the HUD Inspector General announced subpoenas to 15 mortgage companies demanding data and documentation on failed loans.
The Commissioner has frequently discussed the development of a Lender Scorecard, which is expected in the near future.
FHA Budget Proposals (Requires Legislation) As part of the Administration’s FY 2011 budget proposal there will be several FHA legislative initiatives. They could include:
Increase the current cap for annual premiums, currently at .55 percent (FHA has said that raising the annual premium is the “most effective means of raising capital for the fund w/ least impact per borrower”)
Obtain a legislative change to Credit Watch to facilitate the suspension of an FHA lender’s entire operation not just individual branches
Increased accountability of FHA lenders for fraud or misrepresentation
These changes will require congressional action, the timetable for enacting and implementing any legislation is subject to the Congressional schedule.
Conclusion
FHA will be transformed over the next few years. The changes outlined above are the beginning of the process with additional changes expected during the tenure of FHA Commissioner Dave Stevens. Going forward, FHA will continually evaluate programmatic changes and will likely withdraw them when the capital ratio returns above 2 percent. However, it is unlikely FHA will relax risk management and lender monitoring enhancements.
http://www.realtor.org/government_affairs/fha_resources
Monday, January 11, 2010
ACAR Legislative Lobby
Today the Idaho Legislature convenes for the 2010 legislative session. Governor Otter presented his State of the State speech which outlined a no-growth budget for next year, the same revenue figure as last year calling for no salary increases for state employees; and spending all but $32.8 million of the state’s reserve funds by the end of fiscal year 2011.
The theme of the legislature will be the budget. With a major budget shortfall sales tax exemptions are looked to for sources of revenue, and we will defend your hard earned commissions vigorously. We will also face new fees that ultimately increase the cost of housing at a time when costs have become much more affordable. We will face new regulations that harm future development. We will promote issues that benefit the economy of the state and attract new business to Idaho in the future.
One of the primary roles of the REALTOR® Associations is to protect the real estate industry from undue burden and further issues important to REALTORS®. As one of the most prominent lobbyist organizations in Idaho and the country, we work against poorly designed small business and real estate issues and legislation and create new laws to promote quality of life and the industry.
Special thanks to all of you who invested in RPAC during the dues renewals, the money is critical in keeping our voice strong. We will be at the Capitol to ensure the voice of the real estate industry is heard.
The theme of the legislature will be the budget. With a major budget shortfall sales tax exemptions are looked to for sources of revenue, and we will defend your hard earned commissions vigorously. We will also face new fees that ultimately increase the cost of housing at a time when costs have become much more affordable. We will face new regulations that harm future development. We will promote issues that benefit the economy of the state and attract new business to Idaho in the future.
One of the primary roles of the REALTOR® Associations is to protect the real estate industry from undue burden and further issues important to REALTORS®. As one of the most prominent lobbyist organizations in Idaho and the country, we work against poorly designed small business and real estate issues and legislation and create new laws to promote quality of life and the industry.
Special thanks to all of you who invested in RPAC during the dues renewals, the money is critical in keeping our voice strong. We will be at the Capitol to ensure the voice of the real estate industry is heard.
December...at Last
To paraphrase Mark Twain…“December. This is one of the peculiarly dangerous months to speculate in housing in. The others are July, January, September, April, November, May, March, June, October, August, and February.”
Last week we read from NAR that pending homes sales were slowing. It was with some trepidation that I opened the IMLS Stats page this morning…boy was I relieved.
December sales were up 24% compared to December ’08. Total sales for 2009 were 5,558 compared to 5,144 in ’08. Overall we increased sales by 8% year-over-year.
Total homes sold in December were 378; compared to 277 in December ‘08. What a difference 12 months and a Home Buyer Tax Credit makes!
Typically sales in December lessen as the year nears end. The volatility in the housing market for the last four years makes it hard to “average the change from November to December. In December ’08, we exceeded November (but November was our worst ever month). In ’07 the December sales were off 23% from November. In ’06 the change was -10%.
December '09 sales were 32% down from October.
Pending sales in December were off only 7% from November. Not the big dip experienced nationally.
First time home buyers continue to drive our market. The announcement of the Tax Credit extension and its expansion to include current homeowners should enable us to continue to move in the positive direction. 48% of homes sold in November were <$160,000. At the same time, inventory in this price range is the lowest it’s been all year.
Median home price jumped up 4% from November to $165,000. For all of 2008, median dropped 9% (comparing January to December).
Inventory fell 6% from November to 3,428 units.
On the less positive side... distressed properties continue to hurt our friends and family. Among all active listings, 49% are either short sales, in foreclosure or REO's. 54% of all November sales were also distressed. As of today, 63% of all pending sales are also distressed.
It wouldn’t be an overstatement to say that without the Home Buyer Tax credit, we wouldn’t be where we are today. And, where we are is in a “very fragile” recovery. This morning’s business report said that our unemployment went up slightly in December; and that thousands more Idahoans had stopped looking for work.
We continue to see “suggestions” that employment in the Valley might be getting incrementally better. Small to medium size employers are making the news for their successes. Our own Micron appears to have reversed the slide they’ve endured over the last 20 months.
No matter the anecdotes, we need our elected officials to work more closely with our Boise Valley Economic Partnership to find creative incentives to bring more jobs to our Valley.
Last week we read from NAR that pending homes sales were slowing. It was with some trepidation that I opened the IMLS Stats page this morning…boy was I relieved.
December sales were up 24% compared to December ’08. Total sales for 2009 were 5,558 compared to 5,144 in ’08. Overall we increased sales by 8% year-over-year.
Total homes sold in December were 378; compared to 277 in December ‘08. What a difference 12 months and a Home Buyer Tax Credit makes!
Typically sales in December lessen as the year nears end. The volatility in the housing market for the last four years makes it hard to “average the change from November to December. In December ’08, we exceeded November (but November was our worst ever month). In ’07 the December sales were off 23% from November. In ’06 the change was -10%.
December '09 sales were 32% down from October.
Pending sales in December were off only 7% from November. Not the big dip experienced nationally.
First time home buyers continue to drive our market. The announcement of the Tax Credit extension and its expansion to include current homeowners should enable us to continue to move in the positive direction. 48% of homes sold in November were <$160,000. At the same time, inventory in this price range is the lowest it’s been all year.
Median home price jumped up 4% from November to $165,000. For all of 2008, median dropped 9% (comparing January to December).
Inventory fell 6% from November to 3,428 units.
On the less positive side... distressed properties continue to hurt our friends and family. Among all active listings, 49% are either short sales, in foreclosure or REO's. 54% of all November sales were also distressed. As of today, 63% of all pending sales are also distressed.
It wouldn’t be an overstatement to say that without the Home Buyer Tax credit, we wouldn’t be where we are today. And, where we are is in a “very fragile” recovery. This morning’s business report said that our unemployment went up slightly in December; and that thousands more Idahoans had stopped looking for work.
We continue to see “suggestions” that employment in the Valley might be getting incrementally better. Small to medium size employers are making the news for their successes. Our own Micron appears to have reversed the slide they’ve endured over the last 20 months.
No matter the anecdotes, we need our elected officials to work more closely with our Boise Valley Economic Partnership to find creative incentives to bring more jobs to our Valley.
Thursday, January 7, 2010
Quenching the Thirst for Knowledge
The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn. --Alvin Toffler
As we begin preparations for 201o, the ACAR Education Committee began with the question: What do our members need to know to be more professional and better able to do their jobs?
This is not an easy question and there is no "right" answer. Education is critical to success in this industry as rules, regulations, and even the market change at a head spinning rate. If you can't keep up, you'll be left behind.
So, we began our discussion... what is the path most likely to lead to success? Is it knowledge on short sales? Is it knowledge about the basics of real estate? Is it about getting back to the service side of the industry?
We wanted to ask you, our members, what education do you want most? What can we do to start you on the path?
Drop us a line and let us know... you can comment below or email me.
Susan Hansen
Staff Liaison for the ACAR Education Committee
As we begin preparations for 201o, the ACAR Education Committee began with the question: What do our members need to know to be more professional and better able to do their jobs?
This is not an easy question and there is no "right" answer. Education is critical to success in this industry as rules, regulations, and even the market change at a head spinning rate. If you can't keep up, you'll be left behind.
So, we began our discussion... what is the path most likely to lead to success? Is it knowledge on short sales? Is it knowledge about the basics of real estate? Is it about getting back to the service side of the industry?
We wanted to ask you, our members, what education do you want most? What can we do to start you on the path?
Drop us a line and let us know... you can comment below or email me.
Susan Hansen
Staff Liaison for the ACAR Education Committee
Monday, January 4, 2010
U.S. Loan Program May Have Made Things Worse
Experts: $75 billion effort to fight foreclosures has hurt some homeowners
by: Peter S. Goodman
New York Times
Jan. 1, 2010
The Obama administration's $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts now contend it has done more harm than good.
Since President Obama announced the program in February, it has lowered mortgage payments on a trial basis for hundreds of thousands of people but has largely failed to provide permanent relief. Critics increasingly argue that the program "Making Home Affordable", has raised false hopes among people who simply cannot afford their homes.
As a result, desperate homeowners have sent payments to banks in an often-futile efforts to keep their homes, which come see as wasting dollars they could have saved in preparation for moving to cheaper rental residences. Some borrowers have seen their credit tarnished while falsely assuming that loan modifications involved no negative reports to credit agencies.
Read the rest of the article
by: Peter S. Goodman
New York Times
Jan. 1, 2010
The Obama administration's $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts now contend it has done more harm than good.
Since President Obama announced the program in February, it has lowered mortgage payments on a trial basis for hundreds of thousands of people but has largely failed to provide permanent relief. Critics increasingly argue that the program "Making Home Affordable", has raised false hopes among people who simply cannot afford their homes.
As a result, desperate homeowners have sent payments to banks in an often-futile efforts to keep their homes, which come see as wasting dollars they could have saved in preparation for moving to cheaper rental residences. Some borrowers have seen their credit tarnished while falsely assuming that loan modifications involved no negative reports to credit agencies.
Read the rest of the article
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