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The proposed fiscal year 2013 budget for the U.S. Department of Housing and Urban Development (HUD) includes information on upcoming premium increases for the Federal Housing Administration (FHA). Due to a provision in the Temporary Payroll Tax bill from late last year, FHA is required to implement a 10 basis point increase to annual premiums for all new FHA loans. In addition, FHA intends to increase premiums on “jumbo” loans (those over $625,500) by 25 basis points (for a total of 35 basis points on those loans).
In order to protect the financial stability of the program, FHA also says it may implement additional premium increases. The budget likewise states that FHA is reducing permitted seller concessions from 6 percent to 3 percent or $6,000, whichever is higher. A proposed rule regarding this is expected later in the month.
The budget revealed that for FY2012 (the current budget year), FHA’s re-estimates of revenues showed that FHA would actually need (for the first time in its history) a subsidy from the federal government of $688 million. Although it now will not request that money because it received more than $1 billion from the settlement with the banks over robo-signing, there will be intense pressure from Congress to re-evaluate FHA and its fiscal position.
For the last several years, FHA has had sufficient reserves to cover claims and losses, but its excess reserves have fallen far below the mandated 2 percent level. It now appears that for the current year, FHA’s losses exceeded its profits, requiring this additional money. The good news is the budget request anticipates the FHA fund will return to full solvency and mandated reserve levels by 2015.
The budget also included premium increases for FHA multifamily loans (221 (d)(4)) by 20 basis points. This won’t apply to loans with Section 8, low-income housing tax credits, or risk-sharing.
Last, the budget cuts contract renewal funding for Section 8 project-based projects. As has been done in the past, FHA will only partially fund renewals of these contracts, and owners expect there to be significant delays in Housing Assistance Payments (HAPs). These funding cuts will need to be approved by Congress.
The fiscal 2013 budget proposal President Barack Obama released this week includes proposals to trim the mortgage interest deduction (MID) and other itemized deductions for wealthier households. As in the previous three years, the proposal is expected to attract little support in Congress.
The proposed budget would reduce the value of itemized deductions to 28 percent for married couples with incomes over $250,000 and individuals with income over $200,000. Currently, depending on the tax bracket these households are in, the value of their deductions could be as high as 33 or 35 percent.
The proposal has never attracted sufficient support from either party, and National Association of REALTORS® President Moe Veissi in a statement yesterday said NAR would strongly oppose this or any proposal that would limit MID and other itemized deductions.
“The mortgage interest deduction is vital to the stability of the American housing market and economy,” Veissi said. “We urge the president and Congress to do no harm” to today’s fragile economic recovery. “The nation’s homeowners already pay 80 to 90 percent of U.S. federal income taxes. Raising taxes on them, now or in the future, could critically erode home values at all price levels.”
The budget request also includes a previously rejected proposal to tax the carried interest of general partners in investment partnerships, including real estate partnerships, as ordinary income rather than as capital gains, which is taxed at 15 percent. If taxed as ordinary income, it could be taxed at a higher rate, depending on the taxpayer’s tax bracket.
Analysts have said that this provision is mainly aimed at general partners of hedge funds, but general partners in real estate partnerships could get caught in it unintentionally. NAR in the past has opposed the tax change.
Overall, the budget request, which is just the opening step in a long process in which Congress will develop a budget for passage, envisions fiscal year 2013 spending of about $3.8 trillion. Of that amount, several hundred billion would be new spending for infrastructure, research and development, and other priorities of the administration. The budget envisions cutting about half a trillion dollars from the defense budget, and another roughly half a trillion dollars through tax law changes, including the NAR-opposed curbs to the value of MID for upper-income households. More savings would come from allowing tax cuts enacted during President George W. Bush’s administration to expire for all households, except those earning less than $250,000.
In all, the administration is saying it would cut the deficit by about $3 trillion over 10 years, plus another trillion dollars from legislation Congress passed in August of last year as part of the budget deal to raise the debt ceiling cap.
SILVAR’s Cupertino/Sunnyvale District raised $1,100 at its annual Valentine Charity Auction yesterday. Mark Burns served as auctioneer. Burns and auction organizer Carolyn Miller enticed members to bid generously on numerous items, including a twosome round of golf, dinner reservations, plush stuffed animals, chocolates, clothing and accessories, and gift certificates.
This year’s event was well-attended. Scott Fleming, a new SILVAR affiliate, won the big auction item. For his top bid of $350, he received two tickets to a San Jose Sharks game. The tickets were generously donated by Mark Burns, Chris Shupp, Miranda Jung, Kyle Chuang and Richard Miller.
The District thanks everyone who supported the auction. Auction proceeds go to a number of charitable projects the District supports.
“Thank you to all who participated,” said Miller, who has been in charge of the annual auction for the past four years.
Miller also conveyed a special thanks to the affiliates for their strong support and cooperation. “You are again commended on your wonderful cooperation in this event. The participation and support you give to our district is over the top!” added Miller.
Silicon Valley Association of REALTORS®’ (SILVAR) REALTOR® Service Volunteer Program (RSVP) will take place May 7 -11 this year. Volunteers are needed for this special community outreach program, which is dedicated to helping seniors in the communities where SILVAR members work and live.
This year, each district has set aside special days in the week of May 7 – 11 to help seniors in their community:
Cupertino/Sunnyvale District: Wednesday, May 9
Los Altos/Mountain View District: Wednesday, May 9
Los Gatos/Saratoga District: Thursday, May 10
Menlo Park/Atherton District: Wednesday, Thursday, May 9-10
Palo Alto District: Wednesday, Thursday, May 9-10
RSVP is a worthwhile project, and SILVAR REALTORS® and affiliates are encouraged to volunteer their time and skills to help the elderly and the homebound in their respective communities. During RSVP week, REALTORS® and affiliates visit the homes of seniors who are physically and financially challenged and provide free assistance with household tasks like replacing light bulbs, changing furnace filters, washing windows, turning over mattresses, changing smoke detector batteries and other similar household tasks.
RSVP has expanded on the Peninsula and in the South Bay, with volunteers from the Santa Clara County Association of REALTORS® and the Santa Cruz County Association of REALTORS® joining SILVAR and the SAMCAR (San Mateo County Association of REALTORS®) members in this outreach project. The program now serves seniors and the homebound living as far north as Daly City and as far south as Santa Cruz.
“We are really proud that every year our members have stepped up to help the seniors in their community. Last year, a total of 247 volunteers from SILVAR helped 146 seniors in the association’s five districts. This year we hope to significantly increase the number of our REALTOR® and affiliate volunteers,” said Eileen Giorgi, SILVAR’s RSVP Committee Chair.
Volunteer now by clicking on the link below, completing the volunteer application and faxing it to SILVAR at (408) 200-0101. You may also call SILVAR at (408) 200-0100 and ask that an application be mailed to you.
The deadline to volunteer is Saturday, March 31.
RSVP VOLUNTEER APPLICATION
Deadline for seniors to apply for this free service is Thursday, March 15.
RSVP SENIOR APPLICATION
For questions about RSVP, please contact SILVAR at (408) 200-0100.
SILVAR past president and PRDS President Mark Burns, Charitable Foundation trustee Carolyn Miller and WVCS executive director Naomi Nakano-Matsumoto display the big check $2,000 to West Valley Community Services (WVCS).
This week, the Silicon Valley REALTORS® Charitable Foundation presented $2,000 to West Valley Community Services, a private non-profit, community-based agency that provides direct assistance and referral services to over 6,000 individuals and families annually in the communities of Cupertino, Los Gatos, Monte Sereno, Saratoga, West San Jose and the unincorporated mountain regions.
Receiving the check from Charitable Foundation Trustee Carolyn Miller, Naiomi Nakano-Matsumoto, executive director of West Valley Community Services (WVCS), thanked SILVAR members. She said the 2011 Homeless Point in Time survey has indicated an estimated 7,042 individuals are experiencing homelessness in Santa Clara County each night. While there are some signs the economy is improving, it doesn’t appear that way for some individuals and families, according to Nakano-Matsumoto.
Nakano-Matsumoto said the Charitable Foundation grant will support the WVCS Comprehensive Emergency Assistance Program (CEAP), a program which provides one-time financial assistance to prevent homelessness, hunger and utility disconnection for individuals and families experiencing unexpected financial setbacks.
WVCS also has the Haven to Home program, which provides supportive services and stable housing to homeless individuals and families; 30 homeless persons have been moved to permanent housing. The WVCS Transitional Housing Program houses 12 homeless men and six single mothers with a child. The program provides them with skills so they can secure permanent housing, find and maintain employment, and enhance income opportunity. WVCS likewise owns and operates Vista Village Apartments Complex, a permanent housing for low-income households.
Nakano-Matsumoto said the agency is in great need of volunteers to pick up, carry, as well as distribute food to the homeless. She added that they are short on food items. She said Second Harvest Food Bank, one of the groups with whom WVCS partners, is low on food items, so the agency has had to seek other partnerships to support its food program.
“It is such a rewarding feeling for all of our District members to be able to share with others in and around our local community. Naomi always fills us in as to where the money will be going. . . .always to great causes. We are so happy we’re able to send consistent contributions to this worthy cause,” Miller, who also serves as SILVAR’s 2012 president-elect.
Last week a listing in Willow Glen was robbed of all staging furniture in the middle of the night. A few weeks ago REALTOR® Magazine reported that the Pacific West Association of REALTORS®, based in Anaheim, Calif., issued a warning to its members to be on alert after a real estate agent and a potential home buyer were robbed at gunpoint by two men during an open house.
REALTORS® are targets of crime because their work exposes them to many unfamiliar people. According to the Bureau of Labor and Statistics, since the foreclosure crisis began in 2008, more real estate professionals have been attacked and even killed while on the job.
The 2011 Realtor Safety Report, a study conducted by AgBeat, Moby and S.A.F.E. (Safety Awareness Firearms Education), indicates the past year saw a rise in crime against REALTORS®, marked by an increase in robberies, sexual assaults and even murders. In most cases, assaults against REALTORS® took place when the victim was alone. The most common guise for getting an agent alone was requesting a tour or meeting the agent in a vacant home.
It is always good for REALTORS® to regularly visit the National Association of REALTORS® REALTOR® Safety website at www.REALTOR.org/Safety and review safety tips. Below are some safety tips to keep in mind.
Showing Properties the Safe Way
• Be sure to use the lockbox property-key procedure that has been established to improve real estate agent safety. A reliable, secure lockbox system ensures keys don’t fall into the wrong hands.
• Show properties before dark. If you are going to be working after hours, advise your associate or first-line supervisor of your schedule. If you must show a property after dark, turn on all lights as you go through, and don’t lower any shades or draw curtains or blinds.
• Try and call the office once an hour to let people know where you are.
• If you think it may be some time before a property sells (and you may, therefore, be showing it often), get acquainted with a few of the immediate neighbors. You will feel better knowing they know your vehicle, and they will feel better about the stranger (you) who frequently visits their neighborhood.
• Prepare a scenario so that you can leave, or encourage someone who makes you uncomfortable to leave. Examples: Your cell phone or beeper went off and you have to call your office; you left some important information in your car; or another agent with buyers is on his way.
• When showing a property, always leave the front door unlocked for a quick exit while you and the client are inside. As you enter each room, stand near the door.
• Lock your purse in the car trunk before you arrive. Carry only non-valuable business items (except for your cell phone), and do not wear expensive jewelry or watches, or appear to be carrying large sums of money.
• Park at the curb in front of the property rather than in the driveway. You will attract much more attention running and screaming to the curb area. It is much easier to escape in your vehicle if you don’t have to back out of a driveway. Also, if you are parked in a driveway, another vehicle could purposefully or accidentally trap you.
(Sources: Louisiana REALTORS® Association; Washington Real Estate Safety Council; City of Albuquerque, NM; Nevada County Association of REALTORS®; City of Mesa, AZ)
Silicon Valley Association of REALTORS® says ... 