FHA Commissioner Stevens to Kick off Webinar Series with NAR

On March 29, 2010, the NATIONAL ASSOCIATION OF REALTORS^® (NAR) will hold the first in a series of webinars with the U.S. Department of Housing and Urban Development (HUD). Federal Housing Administration (FHA) Commissioner David H. Stevens will be the speaker for the webinar, which will be held from 3:00 p.m. - 4:00 p.m.  Future topics will include 1) RESPA and the HUD-1, 2) Credit Policy Enhancements, 3) Loss Mitigation, 4) Permitted Fees for Real Estate Agents, 5) Mortgage Fraud, and 6) FHA Single Family Trends. NAR will announce dates for these webinars and the registration process shortly.  For more details, visit www.REALTOR.org. 

 

NJAR^® Unveils Legal Database for Members

Risk reduction in the real estate industry is critical to the way in which REALTORS^® conduct business. NJAR^® has created a searchable legal database that allows members to reference summaries of various New Jersey real estate brokerage cases and their decisions in order to help manage risks while conducting business. This valuable member benefit is accessible at http://www.njar.com/risk_management/legal. To search the database, you can enter your search criteria or leave the criteria blank and the summaries of published New Jersey brokerage cases will appear.

 

HUD General Counsel Posts Letter on Administrative Fees

In response to a June 2008 joint letter from the NATIONAL ASSOCIATION OF REALTORS^® (NAR) and Washington Real Estate Settlement Procedures Act (RESPA) attorney Jay Varon, General Counsel for the Department of Housing and Urban Development (HUD), Helen R. Kanovski, provided informal answers to questions regarding what are often referred to as administrative fees charged to consumers in real estate transactions. The January 22, 2010 letter discusses the ways to account for charges and circumstances where charges are appropriate or less appropriate. The letter notes that all charges to sellers and buyers must be disclosed on line 700 of the HUD-1 and that RESPA does not prescribe how an agent or broker determines the charge, noting it could be a flat fee, percentage, or combination of both.

RESPA attorney Phil Schulman has written an article explaining how HUD's guidance affects REALTORS^®. You can also find more updates on RESPA on REALTOR.org.

 

 

IRS to Step Up Audits of Independent Contractor Status

The Internal Revenue Service (IRS) has announced that it will expand its audits of small businesses during 2010. The purpose of the audits is to assess compliance with the payroll tax requirements that fall on employers and employees and also self-employment payroll tax rules that fall on independent contractors.

The IRS is assessing compliance; it is not targeting any particular industry. These expanded audits provide a useful reminder to broker/owners to assure that they have current documents setting out the required information. Occasionally broker/owners who have been lax in their record keeping with respect to these written agreements have incurred significant penalties.

 

 

Lead Paint Renovation Rule Effective April 22

The EPA's Renovation Repair and Painting Rule establishing several new lead-based paint safety practices will be effective beginning Monday, April 22, 2010. The NATIONAL ASSOCIATION OF REALTORS^® (NAR) has posted a guide to describe these practices, as well as what steps real estate agents, brokers, and property managers need to take to comply with the new procedures. View the guide here.

 

 

NAR Issues Brochure Explaining the New Short Sales Program (HAFA)

The NATIONAL ASSOCIATION OF REALTORS^® (NAR) has issued a new brochure to help members understand the new Home Affordable Foreclosure Avoidance Program (HAFA) that takes effect on or before April 5, 2010. The purpose of the program is to help homeowners, who are unable to retain their homes under the Home Affordable Modification Program, avoid foreclosure through a short sale or a deed in lieu of foreclosure. HAFA includes uniform procedures, standards forms, and deadlines. Information about short sales, including HAFA, is available on www.realtor.org/shortsales.

 

 

NAR to Revitalize Neighborhoods Wracked by Foreclosures

The NATIONAL ASSOCIATION OF REALTORS^® (NAR) has joined forces with the National Community Stabilization Trust to help rebuild American communities devastated by the foreclosure crisis. The collaboration will bring REALTORS^® and the more than 1,400 state and local REALTOR^® associations into a side-by-side relationship with leading national nonprofits, as well as with state and local leaders, to develop comprehensive and targeted plans to rebuild communities. The partnership was made possible by the new federal Neighborhood Stabilization Program, which provides $6 billion to reclaim neighborhoods wracked by high levels of foreclosed and abandoned property, property disinvestment, extremely low prices and low resident confidence.

Toolkits, information on NAR training and other education materials are now available on http://www.realtor.org/foreclosure.

 

 

FED and FTC Jointly Issue Final Rules on Risk-Based Pricing Under FACT Act

On January 15, 2010, the Federal Reserve Board (FED) and the Federal Trade Commission (FTC) jointly issued new final rules to implement risk-based pricing provisions required under the Fair and Accurate Credit Transaction Act (FACT Act). The final rules "generally require a 'creditor' to provide a risk-based pricing notice to a consumer when the creditor uses a consumer report to grant or extend credit to the consumer on material terms that are materially less favorable than the most favorable terms available to a substantial proportion of consumers from or through that creditor." The new rules are effective on January 1, 2011. For more information, read the rule in its entirety.

 

 

Freddie Addresses REALTOR^® Communication with Appraisers

In a January 14, 2010 letter to the NATIONAL ASSOCIATION OF REALTORS^® (NAR), Freddie Mac Executive Vice President and Chief Credit Officer Raymond Romano reiterated that REALTORS^® are permitted to communicate with appraisers. According to Freddie Mac, information provided by the REALTOR^® must be verified by a non-interested third party but this may include MLS data or local tax data.

Romano also addressed NAR's concern about appraisers lacking geographic competency. The letter emphasizes Freddie Mac's Seller Servicer Guide, Chapter 44. The Guide reminds sellers to be "particularly attentive to selecting an appraiser who is knowledgeable of the subject area when ordering appraisals." The letter also states that all appraisers are bound by the Uniform Standards of Professional Appraisal Practice (USPAP), which includes geographic competency. Mr. Romano states that USPAP and the Freddie Mac Seller Guides apply to all appraisers, including those engaged by appraisal management companies.

 

 

VA Announces RESPA Impact Details, HAMP Program Details

On January 7, 2010, VA released Circular 26-10-01 describing the impact of new Real Estate Settlement Procedures Act (RESPA) rule on fees and charges for VA loans. The circular provides guidance on permissible and impermissible fees for VA home loans. In addition, new required documentation is announced for lenders along with the elimination of a previously required disclosure statement.

The next day, the U.S. Department of Veterans Affairs (VA) released Circular 26-10-2, which provides instructions for modifying VA loans through the Making Home Affordable Program. The two main features are the Home Affordable Refinance Program (HARP) and the Home Affordable Modification Program (HAMP).  For more information on either circular, visit the VA website.

 

 

HUD Takes Action to Speed Resale of Foreclosed Properties to New Owners

On January 15, 2010, Department of Housing and Urban Development (HUD) Secretary Shaun Donovan announced a temporary policy that will expand access to Federal Housing Administration (FHA) mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration commitment to addressing foreclosure.

With certain exceptions, the FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties. The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will also allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

The waiver will took effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. For the details of this new temporary policy, visit the HUD website.