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The tragic events at the Boston Marathon serve as a reminder that we should always be prepared to safeguard our family and home during an emergency. The best way to prepare for any emergency is to prepare an emergency supply kit, have a family emergency plan, and keep informed.

The Silicon Valley Association of REALTORS® (SILVAR) shares the following compilation of preparedness and safety tips from the Federal Emergency Management Agency (FEMA) and American Red Cross.

1. Create a household disaster kit. Since electricity, water, gas and telephones may not be working during an emergency, you should be prepared to fend for yourself for at least one week. This kit should hold at least a one-week supply of the following items:
• Drinking water (minimum one gallon per person per day).
• First aid supplies, medications, medical consent forms for dependents spare eyeglasses, and essential hygiene items, such as soap, toothpaste and toilet paper.
• Emergency lighting—light sticks and (or) a working flashlight with extra batteries and light bulbs (hand-powered flashlights are also available).
• Whistle (to alert rescuers to your location).
• A hand-cranked or battery-operated radio (and spare batteries).
• Canned and packaged food, including snack foods high in calories and cooking utensils, including a manual can opener.
• Warm clothing, sturdy shoes, extra socks, blankets, and perhaps even a tent.
• Heavy-duty plastic bags for waste and to serve other uses, such as tarps and rain ponchos.
• Work gloves and protective goggles.
• Pet food and pet restraints.
• Copies of vital documents, such as insurance policies and personal identification.
• Cash in small bills.
• Comfort items, such as games, crayons, writing materials, and teddy bears.
• A pipe wrench to turn off gas or water
NOTE: Replace perishable items like water, food, medications, and batteries on a yearly basis.

2. Have a family emergency plan. Your family may not be together when disaster strikes, so it is important to plan in advance.
• Consider locations you frequent and have a plan for each location.
• Choose an out-of-state friend or relative to call and alert other relatives and friends that you are all right. Be sure every family member knows the phone number and has a cell phone, coins or a prepaid phone card to call the emergency contact.

3. Keep Informed. Subscribe to an alert service. AlertSCC is a free and easy way for anyone who lives or works in Santa Clara County to get emergency warnings sent directly to their cell phone, mobile device, email, or landline. To receive alerts, register with the system at http://www.alertscc.com/.

For more information on emergency preparedness and prevention tips, visit
http://www.ready.gov/today or http://www.redcross.org/prepare/location/home-family.

The Federal Housing Administration (FHA) is raising its mortgage insurance premiums (MIP) and changing MIP cancellation policies. These changes may impact first-time home buyers, but they are needed to mitigate risk and strengthen the solvency of the mortgage insurance fund.

FHA faces financial problems stemming from losses on reverse mortgages and forward loans sustained during the housing crisis and low home values, causing a shortfall in its reserves. There is talk that FHA may need a government bailout of $943 million in tax payer funds.

Traditionally, FHA loans should make up between 10 and 15 percent of the market. In 2012, due to the economic downturn and absence of a robust private lending market, FHA insured over 25 percent of all homes purchased in that year. The National Association of REALTORS® (NAR) says had FHA not stepped in to fill the market void, many families would have been unable to purchase homes, housing values could have dropped an additional 25 percent, and the country would be much further from a recovery.

Facing multibillion dollar losses, FHA has taken a number of steps to shore up funds. Beginning April 1, 2013, FHA’s annual mortgage insurance premium for all new loans that are less than or equal to $625,500 and with a loan-to-value (LTV) ratio greater than 95 percent will be 1.35 percent of the loan amount. The loan to value ratio is calculated as the percentage of the value of the house that is paid for by the loan.

FHA will also require most borrowers to continue paying annual premiums for the life of their mortgage loan. Effective June 3, 2013 FHA will require borrowers who take out a new FHA loan with an LTV ratio of greater than 90 percent to pay the MIP until the end of the mortgage loan term or for the first 30 years, whichever comes first. With an LTV equal to or less than 90 percent, the MIP will be assessed until the end of the mortgage term, or for the first 11 years, whichever occurs first. Previously, once the loan was paid down to 78 percent of the original value of the house or after five years, whichever came later, the borrower would no longer be required to pay the MIP.

FHA insured loan limits are currently calculated at 125 percent of the local area median home price, up to a maximum of $729,750 in highest cost markets like Silicon Valley. The limits are temporary and set to expire at the end of 2013 to 115 percent of local area median home prices with a cap of $625,500. There are discussions in Washington of lowering this amount further, however nothing has been established yet.

In Silicon Valley, where home prices are some of the highest in the nation, many buyers are borrowing at the top of the FHA limits. The MIP can amount to hundreds of dollars each month, in addition to their regular mortgage payment. For instance, buyers with a $600,000 FHA-backed mortgage who put 8 percent down will pay at the 1.35 percent rate, which comes out to well over $600 per month in mortgage premiums. Whereas previously, this additional payment would have been eliminated once the LTV ratio hit 78 percent or five years, whichever was later, now this payment will be assessed for the life of the loan.

FHA also will require lenders to manually underwrite loans for which borrowers have a credit score below 620 and a total debt-to-income (DTI) ratio greater than 43 percent. Also announced, but not yet approved, is a proposal by FHA to increase the minimum down payment requirement for mortgages with original principal balances above $625,500 from 3.5 to 5 percent.

A higher down payment requirement could impact millions of first-time home buyers. Many first-time home buyers rely on FHA-insured loans because they can require a down payment as low as 3.5 percent. In 2012, more than four out of every 10 first-time buyers purchased their homes with an FHA-insured mortgage. It remains to be seen whether these numbers will go down with the new higher rates and requirement that mortgage insurance be paid for the life of the loan.

NAR supports legislation that strengthens FHA’s fiscal solvency and that balances the need to protect the fund from tax payer risk with the need to continue providing access to safe and affordable mortgage financing. While these changes may be necessary in the short-term to help stabilize the FHA fund, NAR’s position is that higher fees make it difficult for first-time buyers to purchase a home, as well as repeat buyers who are relocating from less expensive to higher cost areas. NAR has encouraged FHA to reconsider the need for these changes when the fund returns to full capitalization.

April 2013 marks the 45th anniversary of the 1968 landmark Fair Housing Act, which strives to to ensure equal housing opportunity for all. Each year REALTORS® join the U.S. Department of Housing and Urban Development (HUD), the California Department of Fair Employment and Housing, and rest of the nation in recognizing April as Fair Housing Month.

REALTORS® play a vital role in ensuring fair housing for all and strive to make homeownership accessible to everyone. The National Association of REALTORS® (NAR) works to help create an environment where everyone can choose where they want to live and not be discriminated against as they seek to achieve the American dream of homeownership.

Carolyn Miller, president of the Silicon Valley Association of REALTORS®, whose members are also members of NAR, says REALTORS® abide by a Code of Ethics that states REALTORS® shall not deny equal professional services and shall not be a party to any plan or agreement to discriminate against any person for reasons of race, color, religion, sex, handicap, familial status, national origin, or sexual orientation.

“REALTORS® want all buyers and sellers to enjoy the benefits of a housing market free from discrimination,” says Miller.

On April 26, SILVAR is promoting Fair Housing Month by offering At Home With Diversity®, a course that teaches REALTORS® and other business professionals how to work effectively within a multicultural market. The full-day course addresses topics like diversity, fair housing and business planning development. For more information about At Home With Diversity®, call SILVAR at (408) 200-0100.

“Knowing how to work effectively with diverse populations can help you build business success in today’s multicultural real estate market,” adds Miller.

Under the law, a home seller or landlord cannot discriminate in the sale, rental and financing of property on the basis of race, color, religion, sex, handicap, familial status, or national origin. They cannot instruct their real estate agent to convey any limitations in a sale or rental.

Buyers or renters have the right to expect housing will be available to them without discrimination, including:
• housing in their price range made available without discrimination.
• equal professional service.
• the opportunity to consider a broad range of housing choices.
• no discriminatory limitations on communities or locations of housing.
• no discrimination in the financing, appraising, or insuring of housing.
• reasonable accommodations in rules, practices and procedures for persons with disabilities.
• non-discriminatory terms and conditions for the sale, rental, financing, or insuring of a dwelling.
• freedom from harassment or intimidation for exercising their fair housing rights.

Buyers or renters who believe they have experienced discrimination may file a complaint with the California Department of Fair Employment and Housing within one year of the alleged discrimination.

HUD recently launched a new mobile application for iPhone and iPad that provides the public information about their housing rights and responsibilities. The app also provides information about the fair housing complaint process, and allows the public to access HUD’s toll-free discrimination hotline and link to HUD’s fair housing website: http://www.hud.gov/fairhousing

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