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The PRDS Forms Committee has a revised Supplemental Seller’s Checklist (“SSC”). The revisions are intended to make the form more user-friendly and to assist sellers in making a full and complete disclosure of those material facts impacting the value or desirability of a property. These latest revisions make the form much easier for sellers to understand and use.

SILVAR will be offering a course soon on these revisions and disclosure issues that relate to both the SSC and the Transfer Disclosure Statement (“TDS”). In the meantime, SILVAR REALTOR® members can check out the August 2012 issue of the Silicon Valley REALTOR®, SILVAR’s monthly newspaper, which includes a detailed explanation of the revisions provided by SILVAR board attorney and PRDS Forms Committee member Dave Hamerslough.

PRDS Forms is an extensive line of paper and online forms for residential purchase and sales transactions. These forms are available online free of charge as a member benefit to all SILVAR (Silicon Valley Association of REALTORS®) and SAMCAR (San Mateo County Association of REALTORS®) REALTOR® members. The online version of the forms is an extremely robust and intuitive platform that is far easier to use than other platforms. Created by REALTORS® for REALTORS®, these forms are highly acclaimed, and have been heavily used for over 25 years by listing agents from leading offices in Silicon Valley and the San Francisco Peninsula.

The Standard Forms Committee, which is composed of 25 members from SILVAR and SAMCAR, meets every other week and works very hard to make sure all forms are current and reflective of local practice. The revised PRDS Supplemental Seller’s Checklist is a product of the committee’s work and efforts to continually get educated about recent laws passed and requirements in surrounding areas, take the information and input it into the forms.

REALTOR® members may access the new PRDS SCC form online free of charge by visiting prdsforms.com.

The Silicon Valley Association of REALTORS® would like to pass this warning from the National Association of REALTORS® (NAR). NAR is alerting members about a website of suspicious origin, which is misusing the REALTOR® trademark in what seems to be an attempt to get money from real estate practitioners.

The site, Realtor-complaints.com, supposedly publishes consumer complaints about real estate agents. However, an investigation by the New Jersey Association of REALTORS® showed a string of complaints against its members, all using similar phrasing, which leads to suspicion that the complaints are not legitimate. Moreover, when agents who have been the subject of a complaint attempt to make contact, the site offers them the “opportunity” to pay to have the complaint and have their name removed from the site.

NAR legal staff checked the WHOIS record for the site and discovered it is hosted on servers located in the Seychelles. NAR found that the site was recorded as having been initially registered on January 1, 2013, making the site’s claim of having been around since 2002 very suspect.

NAR has received a number of calls from members who have been informed via email that their name is listed at the site. NAR attorneys are investigating and, if necessary, will take steps to have the site shut down.

 

 

Last Thursday, the Consumer Financial Protection Bureau (CFPB) released the “qualified mortgage” rule setting guidelines to ensure that home loans will be given only to qualified borrowers who can repay them, thus protecting consumers from predatory lending. Lenders who follow these rules in making a loan will be protected from liability.

While the QRM (qualified residential mortgage) overseen by the Federal Reserve has not yet been announced, the National Association of REALTORS® applauds the CFPB for creating a broadly defined Qualified Mortgage rule that establishes strong consumer protections while ensuring continued access to safe, affordable mortgage credit.

Under the new guidelines, which take effect on January 2014, lenders must obtain and verify an applicant’s financial information, including employment status, income, assets, debts, and credit history. Borrowers must have enough income or assets to repay the loans. Interest-only and undocumented income mortgages, including loans in excess of 30 years or in which the principal increases over time, will no longer be allowed.

Under the “ability to repay” rule set by the new guidelines, lenders will be required to look at a borrower’s ability to repay over the long term by looking at a borrower’s current income and assets, employment status, credit history, the mortgage monthly payment, other payments like property taxes and other debt obligations. A borrower’s total debt obligations, including the mortgage and other loan obligations is limited to 43 percent of the borrower’s monthly income.

There is no minimum down payment requirement for qualified mortgages. Earlier proposals of a down payment of as much as 20 percent in order to qualify for a mortgage raised concerns that such a requirement would disqualify potential borrowers from owning a home.

Banks are not required to follow either the QM or QRM rules; however, they probably will. By following the QM guidelines, lenders get a measure of protection from litigation. By following the QRM guidelines not yet announced, banks will be able to sell their loans to Fannie Mae and Freddie Mac.

NAR urges regulators to mirror the forthcoming Qualified Residential Mortgage rule after the QM rule to ensure affordable credit remains available to qualified borrowers.

SEE NAR’S SUMMARY OF THE QUALIFIED MORTGAGE (QM) RULE

In order to conform state law to the federal law that recently passed extending mortgage debt forgiveness, the California Association of REALTORS® (C.A.R.) is sponsoring Senate Bill 30, so California homeowners on the brink of foreclosure can get much-needed debt relief.

One of the major successes Congress reached in the “fiscal cliff” negotiations was the extension of the Mortgage Forgiveness Debt Relief Act for another year. The measure will continue to exempt from taxation mortgage debt that is forgiven when homeowners and their mortgage lenders negotiate a short sale, loan modification (including any principal reduction) or foreclosure.

While debt relief has been extended at the federal level, the state exemption expired at the end of 2012, so forgiven mortgage debt is considered taxable state income for now. SB 30 (Calderon, D-Montebello) will extend the sunset date in California law to January 1, 2014. Upon its passage, the measure will be retroactive to January 1, 2013.

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