You are currently browsing the daily archive for May 13, 2011.

This week REALTORS® from across the nation convened in our nation’s capitol for the National Association of REALTORS® Mid-year Business meetings and visits with members of Congress. SILVAR members joined their fellow REALTORS® in Washington, D.C. to take part in NAR business meetings and personally meet with their representatives in Congress.

Along with members from the San Mateo, Santa Clara, Santa Cruz County Associations of REALTORS®, SILVAR members met with both U.S. Representatives Anna Eshoo and Mike Honda during the meetings. The SILVAR delegation included SILVAR President Gene Lentz, President-elect Suzanne Yost, Region 13 Caucus Chair Jim Hamilton, NAR Directors David Barca, Jeff Barnett, Judy Ellis, Susan Tilling, C.A.R. Directors John Tripp, Aaron Wheeler, and Federal Political Coordinator and SILVAR PAC Trustee Carole Feldstein. 

In meetings with members of Congress, REALTORS® focused on five core issues important to homeowners and the housing industry. Below are the issues that were brought to the attention of our legislators.

The Future of the Secondary Mortgage Market
The GSEs, though they have been in conservatorship for almost three years, remain critical to ensuring mortgage market liquidity. Currently, estimates of GSE loan volume range as high as two-thirds of mortgage loans. There is currently a push in Congress to eliminate the GSEs. Without a viable replacement for their secondary mortgage market mission, it will mean severely restricted mortgage capital and higher costs for qualified, creditworthy borrowers. The reduction in mortgage liquidity will exacerbate downward pressure on home prices ultimately reducing the home values for existing homeowners.

REALTORS® urged that the federal government must have a continued key role in the secondary mortgage market in order to ensure that there is capital for mortgage lending in all mortgage markets under all market conditions. California’s jumbo market over the last four years has demonstrated that a purely private market is incapable of meeting all the needs of home buyers and supplying a stable flow of capital. Reform of the secondary mortgage market, in particular Fannie Mae and Freddie Mac, should be comprehensive and undertaken methodically.

Access to Affordable Mortgage Products
The current loan limits for high-cost areas are set to expire on September 30, 2011. Reverting to the statutory limits will create a decline in liquidity and hurt our nation’s economic recovery. Many argue that the loan limit increases help only higher cost areas, but this is not the case. Reverting to the statutory limits will reduce limits in 619 counties and 41 states and the District of Columbia. The average decline in loan limits will be more than $58,000.

The Dodd-Frank Act requires mortgage securitizers to retain 5 percent of the risk unless the mortgage is a qualified residential mortgage (QRM). The proposed rule issued by six federal regulators would require families to make a 20 percent down payment and meet other stringent requirements. The QRM definition is extraordinarily important because it will determine the types of mortgages that will generally be available for borrowers for the foreseeable future. Weak underwriting and toxic mortgages are the main cause of mortgage defaults, not well-underwritten mortgages with affordable down payments.

REALTORS® urged their members of Congress to oppose any decrease to FHA and GSE loan limits. Maintaining the conforming loan limit calculation and caps in high-cost areas would allow the local economic climate of each high-cost state to dictate the necessity of an increase in its conforming loan limit. Maintaining the current conforming loan limits in high-cost areas would also give everyone equal access to the secondary market.

REALTORS® also asked that members of Congress submit comments to the six regulators during the comment period and voice concern that the proposed Qualified Residential Mortgage (QRM) rule would deny otherwise creditworthy Americans affordable financing while further concentrating the lending industry in the mega-banks that are already “too big to fail.”

Preserving Home Ownership Tax Benefits
In December 2010, the President’s National Commission on Fiscal Responsibility and Reform (best known as the Deficit Commission) issued a report identifying tax and spending changes designed to significantly reduce the deficit over the next decade. That Commission recommended different tax options. At least three different approaches were included:

  • Eliminate all “tax expenditures” (deductions, exclusions, credits).
  • Eliminate the mortgage interest deduction (MID) for second homes and reduce the amount of allowable mortgage debt from $1 million to $500,000.
  • Convert the deduction to a 12 percent tax credit.

Since the report was issued, REALTORS® have aggressively reminded Congress that any change to the tax rules that apply to home ownership would disrupt the market and cause home values to further decline. Both Rep. Eshoo and Rep. Honda were thanked for co-sponsoring H.Res. 25, which supports the existing the mortgage interest deduction.

REALTORS® expressed any change to the MID or other home ownership provisions will slow the housing recovery. Tax rates have a way of creeping up over time. Since 1986, when the rate was 28 percent, the top rate has been as high as 39.6 percent and is presently 35 percent. Reducing, eliminating or otherwise changing the value of the mortgage interest deduction will cause the value of housing to drop even more, perhaps by as much as 15 percent in some markets. This decline would be in addition to the 30 percent decline that some markets have experienced.

Short Sales
Too often, short sales are still a story of delay and unrealistic lender views of current home values, resulting in the potential buyer canceling the contract and the property going into foreclosure. Even if successful, the process usually takes many months and countless hours and often requires re-marketing because buyers lose patience and terminate the contract. Streamlining short sales will reduce the amount of time it takes to sell the property, improve the likelihood the transaction will close, and reduce the number of foreclosures. This will benefit lenders, sellers, buyers, and communities.

REALTORS® support H.R. 1498 to require servicers to decide whether to approve a short sale within 45 days of completion of the short sale request. A hearing on H.R.1498 will shine a light on the short sales issue and identify ways to make short sales work better. Delays in approving requests for a short sale remain a significant impediment to this foreclosure avoidance option. Banks are losing more than they have to because they lose much more when selling homes after foreclosure than they would if they approved reasonable short sales.

Affordable and Available Property Insurance
Floods claimed more lives and property than any other natural disaster in the U.S. over the last century. Unable to ignore the rising cost to taxpayers of disaster payments for uninsured properties or the lack of a private market for flood insurance, Congress created the NFIP in 1968. Today, 5.6 million property owners rely on the program in 21,000 communities where flood insurance is required for federally related mortgages. Since September 2008, Congress has approved nine NFIP extensions and allowed five lapses. During the June 2010 lapse, 47,000 home sales were delayed or cancelled, according to NAR survey data. Real estate markets require certainty to make the long-term investments that are vital to the U.S. economic recovery.

REALTORS® urged Congress to reauthorize the National Flood Insurance Program (NFIP) for at least five years and end the uncertainty of extensions and shutdowns. NAR supports provisions of H.R.1300 (Biggert, R-IL) to reauthorize NFIP through 2016 but oppose its privatization pilot program which would reduce the program’s risk pool and long-term viability. NAR opposed H.R. 435 (Miller, R-MI) to sunset the NFIP by 2013 and authorize interstate compacts.

Next week (May 16-20) is SILVAR’s annual RSVP (REALTOR® Service Volunteer Program), when REALTORS® and affiliates from SILVAR assist seniors and the homebound with household tasks, like washing windows, installing smoke detector batteries, flipping mattresses, light vacuuming, dusting, replacing light bulbs, changing furnace filters and trimming bushes.

This year, each district has scheduled a certain day(s) when volunteers will work in senior homes:

CUPERTINO/SUNNYVALE DISTRICT
RSVP Day: Wednesday, May 18
District RSVP Chair: Sue Bose
For more information, email suebose@yahoo.com or call (408) 835-3330

LOS ALTOS/MOUNTAIN VIEW DISTRICT
RSVP Day: Wednesday, May 18
District RSVP Co-chairs: Susan O’Brien and David Kim
For more information, email sobrien@interorealestate.com or davidkim@interorealestate.com, or call (650) 947-2900

LOS GATOS/SARATOGA DISTRICT
RSVP Day: Thursday, May 19
District RSVP Chair: Rick White
For more information, email rick@serenogroup.com or call (408) 335-1400

MENLO PARK/ATHERTON DISTRICT
RSVP Day: Thursday, May 19
District RSVP Chair: Chris Isaacson
For more information, email christopher.isaacson@cbnorcal.com or call (650) 851-2666

PALO ALTO DISTRICT
RSVP Day: Wednesday and Thursday, May 18-19
District RSVP Chair: Jeff Beltramo
For more information, email jbeltramo@cbnorcal.com, or call (650) 325-6161

The Cupertino First-time Home Buyer Seminar held last Saturday was well-attended.

The City of Cupertino and SILVAR’s Equal Opportunity Committee partnered to present a First-Time Home Buyer Seminar at the Cupertino Community Hall last Saturday. SILVAR members served as panelists in discussions focusing on credit information and tips for first-time home buyers. A third segment of the seminar was presented by The Housing Trust of Santa Clara County.

Presenting advice on credit, Richard Miller (Proficio Mortgage Ventures), Kenneth Chan (HSBC), and Jimmy Kang (Bank of America) stressed now, more than ever, your FICO score is very important. Miller recommended that potential buyers check their FICO score at least once a year to make sure their credit report is accurate; six credit cards are ideal; and make sure debt on each credit card is no more than 30 percent of the allowed credit. Chan informed international buyers of requirements for buying property here in the U.S. Kang talked about the different loans available for buyers.

A panel of REALTORS® with Chris Alston (Keller Williams Realty), Nina Daruwalla (Coldwell Banker), Grace Keng (Re/Max Real Estate Services), and Moise Nahouraii (Referral Realty) informed prospective home buyers that these days, in addition to having a good credit rating and history, they need to get pre-approved by a lender before they start looking at homes or contacting a real estate professional. They differentiated between a REALTOR® and a real estate agent, stressing REALTORS® pledge to abide by a Code of Ethics. They reminded buyers there is no “perfect home,” but with the help of a REALTOR® who is knowledgeable and employing good negotiating strategies, one can find the best property for the best value and clinch the deal.

Dan Lachman, program manager of The Housing Trust of Santa Clara County, then shared information on programs that provide financial assistance to first-time homebuyers, including the Closing Cost Assistance Program (CCAP), the Mortgage Assistance Program (MAP) and Equity Share Co-Investment (ESCO).

“Almost 80 percent of all home searches today begin on the Internet. With just a few clicks of the mouse, home buyers can search through hundreds of online listings, view virtual tours of neighborhoods and homes,” said Tess, Crescini, chair of SILVAR’s Equal Opportunity Committee. “Many prospective home buyers don’t realize a lot of preparation is needed before their search. We hope we were able to educate them about these important steps, so their home buying experience can be successful.”

Crescini moderated the SILVAR panels, along with Sue Bose, who is also a member of the committee. The weekend seminar was held in observance of Affordable Housing Week. Also represented at the event were credit counselors from SurePath, West Valley Community Services, Neighborhood Housing Services Silicon Valley, Project Sentinel and Habitat for Humanity.

See article and more photos on here.

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