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After intense pressure from REALTORS® and coalition partners, the Bay Area Air Quality Management District (BAAQMD) has withdrawn a controversial proposal to ban fireplaces at the point of sale.
The ordinance, if adopted by the BAAQMD Board of Directors, would have taken effect November 1, 2016. The original proposal would require anyone selling their home to upgrade all fireplaces to an EPA certified wood burning device, gas or electric, or remove the fireplace entirely. Projects like these can run in the tens of thousands of dollars depending on the nature of the fireplace. Additionally, finding contractors with the skills to do this work could have greatly delayed sales.
Members of the Silicon Valley Association of REALTORS® and staff joined forces with all of the Bay Area REALTOR® Associations, as well as coalition partners, to fight this ordinance. Members spoke out at public hearings; SILVAR President Christopher Isaacson submitted a detailed letter commenting on the onerous nature of the ordinance; and SILVAR members and staff met one-on-one with BAAQMD staff to explain how detrimental this ordinance would be to the housing industry.
BAAQMD recently released a revised proposal which eliminates the point-of-sale requirement. In its place, BAAQMD staff will ask the BAAQMD Board of Directors to approve a mandatory disclosure for all home sales on the dangers of wood-burning smoke. If this disclosure is adopted, it will be incorporated into the PRDS disclosure forms available to members.
Left, the Los Gatos/Saratoga District panel with Sal Covarrubias, Annie Delgado and Cindy Stanford. Right, the Palo Alto District panel with Eric Trailer, Caroline Wolf, Janine Dietiker and Jackie Griffin.
Silicon Valley Association of REALTORS® (SILVAR) Districts are educating members on what they need to know about the new disclosure forms, the result of the new Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure (TRID) rule that goes into effect October 3.
At a July SILVAR Los Gatos/Saratoga District tour meeting, the topic was discussed by a panel with Sal Covarrubias, who is with First American Title Company, and mortgage lenders Annie Delgado and Cindy Stanford, both with Opes Advisors. At the SILVAR Palo Alto August monthly meeting, the panel on TRID included mortgage lenders Eric Trailer, with EverBank and Caroline Wolf, with Princeton Capital, and title company representatives Jackie Griffin, with Old Republic Title Company and Carol Boyden, with Chicago Title Company.
The new rule combines the Good Faith Estimate (GFE) and the initial Truth-in-Lending disclosures into a new form called the Loan Estimate. The new rule also combines HUD-1 and the final Truth-in-Lending disclosures into another new form called the Closing Disclosure.
The good news is it will be easier for buyers to compare the loan estimate with the disclosure, panelists say, but many are concerned that the new rule could delay closings because of timing requirements concerning delivery of the Closing Disclosure. The Closing Disclosure must be delivered and received three days in advance of “consummation” of the loan, which is the day loan documents are signed. If the Closing Disclosure is not received in person, the new rule requires an additional three-day period if it is delivered by mail or electronically. Sunday is not counted; then, add a federal holiday into the mix and the possibility is great that the Closing Disclosure may have to be delivered seven days before consummation.
Also, since compliance with the new rule falls heavily on lenders, it is very likely that lenders will retain tight control over much of the disclosure process. Any last minute changes to the contract, such as seller credits to buyers or removing a loan contingency, could cause the reissuance of a new Closing Disclosure, further delaying the transaction.
The panelists said three changes would definitely require a new 3-day review:
- If the APR (annual percentage rate) increases by more than 1/8 of a percent for fixed-rate loans or 1/4 of a percent for adjustable loans. A decrease in APR will not require a new 3-day review if it is based on changes to interest rate or other fees.
- If a prepayment penalty is added, making it expensive to refinance or sell.
- If the basic loan product changes, such as a switch from fixed rate to adjustable interest rate or to a loan with interest-only payments
Any other changes in the days leading up to closing do not require a new 3-day review, although the lender will still have to provide an updated disclosure.
What can REALTORS® do to avoid pitfalls? Panelists advise:
- Be conservative regarding the timeline. Start the process early. Even if signing is a month away, encourage clients to get the required documents and information to the lender early. Avoid the last-minute scramble. It is critical to get the information sooner than later.
- There needs to be open communication and transparency among all parties – the client, the REALTOR®, the title officer and the lender. Tell your loan officer everything. There should be no surprises.
- Get clients solidified into a loan program as soon as possible. Make sure the financing is in order. Tell the lender about all fees associated with the transaction. Always give updated versions.
- Completeness is critical. Make sure all documents are completely filled out and accurate.
- Educate your consumers, get a commitment, and take control.
The Consumer Financial Protection Bureau (CFPB) today just released a new online toolkit to help real estate professionals understand the new TILA-RESPA Integrated Disclosure (TRID) rule and how to explain those changes to their clients. As part of the CFPB’s larger mortgage initiative campaign called “Know Before You Owe”, the “Real Estate Professional’s Guide” explains the new changes coming to the home buying process on October 3 and offers tools that real estate professionals can provide their clients about the “Know Before You Owe” campaign. Visit http://bit.ly/1IQVfgf
Another source about the October 3 changes to the closing forms and procedures in an hour-long webcast entitled, “The New Closing Rules,” with closing expert Phil Schulman and National Association of REALTORS® Senior Counsel Finley Maxson.
REALTORS® can also visit www.car.org/legal and watch the California Association of REALTORS® Legal Live Webinar entitled “RESPA/TILA Integration Overview.”
On Wednesday, September 23, members of the Silicon Valley Association of REALTORS® (SILVAR) will hold “REALTORS® Honor Veterans,” from 4-8:00 p.m. at the Palo Alto Hills Golf and Country Club, 3000 Alexis Dr, Palo Alto. This event will be an evening of connecting with colleagues, enjoying tasty food, beverages and live music, while bidding on fabulous items at our live and silent auctions. All proceeds from this event will go to the SILVAR Veterans Scholarship Fund
Planning for this event began already in the spring with SILVAR’s Membership Committee, its five Districts and professional Affiliates, the Silicon Valley YPN Chapter and the Charitable Foundation Trust joining together to make this fundraising event a success and an incredibly exciting experience for everyone.
The SILVAR Veterans Scholarship Fund is a new component of the Silicon Valley REALTORS® Charitable Foundation’s focus on education. The scholarship fund will support eligible U.S. veterans and eligible dependents of deceased veterans residing in SILVAR’s traditional service area who wish to further their education. SILVAR’s Charitable Foundation will join in partnership with area schools, like Foothill College, West Valley College, De Anza College, Cañada College and Menlo College.
The scholarship program is SILVAR’s way of supporting our veterans, to thank them for their brave and invaluable service to our country, and to help them be successful. With SILVAR membership support, we will be able to assist our veterans in achieving their education goals.
The Silicon Valley REALTORS® Charitable Foundation focuses on helping others through grants for housing, education and youth. SILVAR members want to make a big difference in people’s lives throughout our SILVAR communities.
For more information about this event and donations for the live and silent auctions and prizes, please contact Lehua Greenman, SILVAR 2015 Membership Chair and Silicon Valley REALTORS® Charitable Foundation Trustee at lgreenman@cbnorcal.com.
Silicon Valley Association of REALTORS® says ... 