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Borrowers who are current on their home loans may be able to refinance for lower interest rates, even if they are seriously upside down. The Federal Housing Finance Agency (FHFA) announced on Monday that it will broaden the scope of the Home Affordable Refinance Program (HARP) by removing the current 125 percent loan-to-value cap for fixed-rate mortgages backed by Fannie Mae and Freddie Mac. Other program enhancements include, among other things, reducing certain fees, eliminating the need for a new property appraisal if the FHFA has a reliable automated valuation model (AVM) estimate, and extending HARP until the end of 2013. New federal guidelines for the HARP changes should be released to mortgage lenders and servicers by November 15.
The basic eligibility requirements for an enhanced HARP loan are as follows:
• Existing mortgage loan must be owned or guaranteed by Fannie Mae or Freddie Mac. Check here here to see whether a borrower has a Fannie Mae or Freddie Mac loan.
• Existing mortgage loan must have been sold to Fannie Mae or Freddie Mac before June 1, 2009.
• Existing mortgage loan cannot have been refinanced under HARP previously (except for Fannie Mae loans refinanced between March and May 2009).
• Current loan-to-value (LTV) ratio must be more than 80 percent.
• Existing mortgage loan must be current, with no late payments in the past six months, and no more than one late payment in the past 12 months.
Late Thursday evening, the Senate voted 60-38 to pass an amendment introduced by Senators Robert Menendez (D-NJ) and Johnny Isakson (R-GA). The amendment would restore the FHA and GSE Loan Limits to the levels prior to September 30.
The amendment is included in the Treasury, Housing and Urban Development Appropriations bill that also passed the Senate. While this is a victory for REALTORS®, this amendment has a long way to go to be approved in the House or during a conference between the House and Senate.
REALTOR® and affiliate members of the Silicon Valley Association of REALTORS® will hold their annual Economic Seminar and General Membership Meeting on Thursday, Nov. 3, from 2 to 5 p.m. at the Computer History Museum, 1401 North Shoreline Blvd. in Mountain View. Dr. Robert Kleinhenz, California Association of REALTORS® Deputy Chief Economist, will be the guest speaker and give members information on “What’s Ahead for Our Real Estate Market.”
Dr. Kleinhenz manages C.A.R.’s research and economics department, which gathers and publishes information on the California housing market, and conducts survey research of consumers and C.A.R. members. He has a Doctorate in Economics from the University of Southern California and regularly speaks to local, state and national audiences.
Silicon Valley REALTORS® are looking forward to having Dr. Kleinhenz highlight national, statewide and local real estate issues that are shaping our market environment today. This is a member only event.
California REALTORS® have a new way to differentiate themselves and show consumers they maintain a high level of knowledge of the home buying and selling process and are bound by a strict code of ethics by using the REALTOR® Badge, a new, free California Association of REALTORS® member benefit introduced by C.A.R.’s subsidiary, Real Estate Business Services® Inc. (REBS®).
The REALTOR® Badge is a personalized widget that verifies a REALTOR®’s license status and displays your REALTOR® information, including office, specialization, and designation information. REALTORS® can display the REALTOR® Badge on their website, blog, and property listing pages.
The REALTOR® Badge is an easy way to add value to your reputation and online presence. Placing the badge on your website gives your current and prospective clients the assurance that you are more than a real estate agent; you are a REALTOR® who subscribes to a strict code of ethics.
“Consumers who are making one of the most important financial decisions in their lives want to know they are working with someone who is knowledgeable about the real estate industry and who follows a strict code of ethics,” said REBS Chairman Robert Bailey. “The REALTOR® Badge instantly identifies a REALTOR® as belonging to an elite group of real estate professionals that consumers can trust. I’ve even included the REALTOR® Badge on my website because I want my clients and prospective clients to be assured they are working with a REALTOR® and to understand what that means,” said Bailey.
The REALTOR® Badge also includes a REALTOR®’s area of expertise, market specialties, and any additional languages the REALTOR® may speak or read. With a link directly to the California Department of Real Estate (DRE), a consumer can verify a REALTOR®’s license status.
Get your REALTOR® Badge at www.realtorbadge.com
Karen Izzo, Nancy Cole, and Diana Crawford shared with members their experiences selling property in the Los Gatos Mountains at a September Los Gatos/Saratoga District tour meeting.
It takes certain types of buyers and agents to take an interest in mountain property. Nancy Cole (Coldwell Banker), Karen Izzo (Sereno Group) and Diana Crawford (Intero Real Estate) are agents who specialize in Los Gatos Mountains property. They wouldn’t have it any other way, they told SILVAR members at a September Los Gatos/Saratoga District tour meeting this month.
The agents discussed the benefits of living in the Los Gatos Mountains, as well as the intricacies of purchasing property there. As mountain residents themselves, Cole, Izzo and Crawford were quick to list the many benefits of mountain living – fresh clean air, open spaces, larger properties, with proximity to the city and excellent schools.
A longtime Los Gatos Mountains resident, Cole said she continues to be intrigued by the incredible beauty of her surroundings, but she and the other agents noted it takes a certain type of person to gravitate to the surroundings and lifestyle. Cole described the typical mountain property buyer as being more independent, more self-reliant, more entrepreneurial, highly educated and high functioning.
Mountain property buyers want a different lifestyle from that offered in the city. They want to escape the high density of the city and like the solitude, mellower lifestyle in the mountains, said Izzo.
Crawford described mountain residents as more environmentally sensitive than most. They appreciate the supportive, positive subculture that mountain living offers, she said.
There is a demand for mountain property, and these days the market is offering better values and good buys, said Cole. Buyers come from the valley, the San Francisco Bay area; some are transfers from the East Coast, which has many similar properties.
Mountain living does not come without its unique issues. The agents noted real estate transactions involving mountain property are more complicated than typical residential transactions for homes in the city or suburbs. Buyers have to contend with more complicated title reports, plat maps and easements. Then there is the issue of water – private wells, springs, septic tanks, and of course, road maintenance agreements and/or private roads, and homeowner associations (HOAs) in some communities.
It’s worth it, said Crawford, a Los Gatos Mountains resident for more than 25 years. She said she has the best of both worlds and likened it to “going on a retreat every day.”
There’s good news and bad news. First the good news …
On Monday, September 26, the U.S. Senate passed the Continuing Appropriations Act (H.R. 2608), which also includes a provision extending the National Flood Insurance Program (NFIP) until November 18, 2011. Next week, the House is expected to approve this extension and has ensured that there will be no lapse in NFIP authority in the interim.
The National Association of REALTORS® is urging Congress to finish its work on the 5-year reauthorization bill (H.R. 1309) before this latest extension ends, in order to provide certainty and avoid further disruption to real estate markets.
And the bad news …
After an unsuccessful attempt to include an extension of the existing loan limit in the continuing resolution to keep the federal government running, Congress failed to extend the FHA (Federal Housing Administration) and GSE (Government-sponsored Enterprise) mortgage loan limits.
On Oct. 1, the conforming loan limits will decline in 669 counties in 42 states, including San Mateo and Santa Clara counties. The new limits will be equal to 115 percent of the local area median home price (down from 125 percent). The high cost cap will fall from $729,750 to $625,500.
The National Association of REALTORS® will continue to work with Congress to attempt to restore the higher limits as quickly as possible.
Left to right: Jack Walker, Jim Davis, Tara Martin-Milius, Fred Fowler and Bo Chang.
Five of nine candidates vying for seats in the Sunnyvale City Council shared their positions on taxes, housing, energy retrofitting and rent control at yesterday’s Cupertino/Sunnyvale District’s tour meeting. Council seats 4, 5, 6, and 7 will be decided in the November 8 election.
Overall issues that concerned the candidates were the city’s budget, and the planning and development of the downtown area, which they see as a key source of revenue for the city. All of these candidates stated they are against rent control and imposing energy retrofitting at point of sale.
Bo Chang, who is vying for Seat 5, is a REALTOR® and SILVAR member. Having served on the planning commission for the past four years, Chang said bringing downtown to completion is the cornerstone to raising the city’s sales tax revenue. He said raising taxes and imposing fees would be a last resort because this will discourage entrepreneurship. He identified three areas which can economically benefit the city. They include working on fixing the downtown so it can quickly generate sales tax; and the El Camino corridor and Moffett Park, both of which are doing well. Chang would like to see sustainable housing in the center of employment, along transportation corridors and retail services, in order to accommodate residents without transportation. He is for smart growth because smart development is necessary to accommodate residents so they live close to work, which will mitigate the transportation issues. The city also needs to facilitate communication and work with other cities regarding the issue. A longtime resident and having served on the planning commission for the past four years, Chang said he has invested much in the city and would like to continue serving at the council level.
Jim Davis, a recently retired Sunnyvale law enforcement officer, is seeking Seat 6. He is concerned about the city’s finances, especially since it used $13 million of its reserves to balance the budget last year. He said the city did a good job in the past by bringing in businesses, but due to the economic downturn, things changed. The city has not done enough since to bring businesses back. He doesn’t think the city has done much to encourage commercial property owners to improve their property to make the city attractive for businesses. The city needs to invigorate its resources and bring jobs into the community. He said places like Perry Park need redevelopment dollars. He said it depresses him how long the downtown development has been stalled. He believes the city has done a good job keeping the balance but it needs to be aware of where to put new housing. He said it will be a challenge to keep up with the housing balance. He said his 36 years in law enforcement have given him experience dealing in conflict resolution and listening intently. He has followed the city council meetings closely, so if elected, he can hit the ground running.
Jack Walker is also vying for Seat 6. A former Sunnyvale mayor, current board officer of the Sunnyvale Chamber of Commerce and active resident, Walker said the city’s budget and planning issues need to be addressed and he believes he can help. He said the sales tax structure has been primarily retail based. While Moffett Park has been well developed, a drawback is businesses there are service oriented. He is concerned planning decisions are discouraging manufacturing. Walker is against housing in El Camino and said it needs to stay commercial and retail. He believes Sunnyvale is rapidly reaching a turning point where there is no available land for housing. He is concerned about infilling the industrial areas with housing, but some open spaces on the edges of the industrial areas make sense. The city needs to be cautious and make sure density does not compromise existing neighborhoods. He said housing, jobs, revenue, density are all related and intertwined and he feels his past experience as mayor has given him perspective on these issues.
Seeking Seat 7 is Fred Fowler, also a past Sunnyvale mayor, a volunteer with the Sunnyvale Department of Public Safety, and commissioner on the Sunnyvale Housing and Human Services Commission. Since retiring from office, Fowler said he has seen changes in the way the city works and does not feel it is working efficiently. He likes the way Sunnyvale used to be and wants to bring back the best of past practices. Fowler said the city’s revenues are limited and the best thing is to get the downtown working. He said the city’s current tax structure doesn’t make sense because it doesn’t grow with inflation the way the city’s expenses do. He doesn’t believe the city can survive with a sales tax on goods only and would like to explore taxes on the services sector, but lowering rates overall. Fowler believes Sunnyvale needs more housing of all types, especially rental housing. He sees opportunities for more housing in the old ITR zoning areas and would consider rezoning areas with old office buildings and convert them to housing. He said he has the experience, skills and talents available for the city and is ready to get to work.
Tara Martin-Milius is also seeking Seat 7. She has a business in communications and management consulting, chaired the San Miguel Neighbors Association for many years and is a member of the Sunnyvale Arts Commission. Martin-Milius said she wants to represent residents and be their voice in the council. She said the city’s budget has to be fixed. She would love to see the downtown up and going again to enhance the city’s revenue stream. Her priority is to get businesses into Sunnyvale. She said right now property taxes are the biggest line item for city revenue and should not be. She would like to see businesses help feed the city’s income stream. Martin-Milius wants to keep the balance between residential and commercial. She said residents have complained about transition areas to high density. She would like to see mixed use development on transportation corridors like El Camino, but would make sure transition areas work well. The city can’t support itself as a bedroom community; it needs industrial development, she said. With her experience with residents and teaching career, Martin-Milius said she would be able to facilitate council meetings and bring balance to what goes on in the city council.
Last week Gov. Jerry Brown signed AB 771 into law, a bill that prevents home buyers in a common interest development (CID), such as a condominium or townhome, from being charged excess document fees.
Homeowner associations (HOAs) are required to provide specific documents to prospective purchasers of homes in a CID — a form of real estate ownership in which each homeowner has an exclusive interest in a unit and a shared interest in the common area property. In addition to the standard residential property disclosures, purchasers of a unit within a CID must receive basic information about the structure, operation and management of the HOA that operates the CID.
Current law requires that this information come from the HOA and prohibits it from charging fees in excess of what is “reasonable,” not to exceed the actual cost of processing and producing these documents. HOAs generally have provided the documents for approximately $75 to $250. Increasingly, HOAs have been delegating document preparations to third party vendors or contractors who, under a 2007 court decision, are exempt from this fee limitation. This delegation of responsibility by HOAs sometimes resulted in home purchasers being forced to pay additional fees, as much as $1,000, for other documents which were “bundled” with the required documents.
Assembly Bill 771 (Betsy Butler, D-Torrance) addresses this situation by specifying that only fees for the required documents may be charged when such documents are provided, effectively prohibiting any “bundling” of fees for other documents with these fees. The bill also creates a new form detailing which documents are required, and requires the provider to disclose the fees that will be charged for the documents before they are provided. The seller of a CID must complete this form and transmit it to the prospective purchaser along with the required documents. This will eliminate any uncertainty for the prospective purchaser as to exactly which documents are being provided and the precise fees being charged for those documents.
Time is running out on important housing-related issues before Congress. We need REALTORS® to contact their elected representatives in Washington, D.C., today.
Here is what REALTORS® can do:
Reauthorize National Flood Insurance Program (NFIP) to ensure access for millions of Americans to affordable flood insurance which is not available in the private insurance market. The House has passed its bill. Now we need you to urge the Senate to act.
Without reauthorization, the National Flood Insurance Program (NFIP) will expire on September 30, 2011. Today, 5.6 million property owners rely on the program in 21,000 communities where flood insurance is required for federally related mortgages. Both consumers and your fellow REALTORS® are counting on your to help get this bill passed.
Tell Congress to Reauthorize the National Flood Insurance Program
Make permanent the current loan limits for FHA, Freddie Mac and Fannie Mae to ensure the affordability of mortgage credit for hundreds of thousands of responsible and credit-worthy American families.
The cost of a mortgage could rise significantly if loan limits are reduced. If this happens, many of your clients run the risk of being priced out of the American Dream of home ownership. This could hold back the housing recovery. The new loan limits show that more than 669 counties in 42 states and the territories would be negatively impacted by the loan limit change.
Take Action to Ensure Your Clients Have Access to Affordable Mortgages
The business of real estate puts REALTORS® in potentially hazardous situations because a significant part of their work involves meeting with strangers. Every year, real estate agents around the country are threatened, robbed, physically or sexually assaulted while fulfilling the everyday requirements of their jobs. Some even lose their lives.
According to the Bureau of Labor and Statistics, the real estate, rental and leasing occupation has seen an average of 75 deaths a year from 2003 to 2009. There don’t appear to be solid statistics on the number of agents who were victims of specific crimes like sexual assault, non-fatal shootings, beatings, stabbings, robbery and carjacking. The latest highly publicized tragic incidents happened in February 2011. According to news reports, a real estate agent in Ottumwa, Iowa, was assaulted and tied up when she arrived at a home for a scheduled showing appointment. Her attackers then robbed the home. Two months later, in West Des Moines, a 27-year-old agent was fatally shot while working at a model home.
REALTORS® can make adjustments to the way they do business and avoid violent crimes by practicing these general REALTOR® Safety Tips from the National Association of REALTORS® and other sources, so you can avoid being a victim:
- Always meet a client for the first time in the office. Introduce him or her to coworkers and make it clear that they know you are taking him out of the office. Try to take separate cars but if that is not possible you will have slightly more control if you drive. Also, do not meet a client at the property, particularly if he is calling on a yard sign. He will already have had a chance to note if the property is vacant. Don’t identify a property as vacant to a caller, on an ad or sign.
- Get a license plate number and leave it at the front desk. Just explain that it is office policy; a customer who means no harm won’t mind. Leave an itinerary for your house tour with someone in your office.
- Agents are vulnerable when they are walking back to and from their car before or after an open house. Park where you cannot get blocked in. Take a few minutes to make sure you have a clear line of sight to your vehicle. Can you see the front door? Are there trees or shrubbery within 10 feet that can serve as a hiding place? When getting out of the car, keep looking around. When you get to the front door, turn around and walk back — are there places where someone could surprise you?
- The No. 1 place where agents are attacked during an open house is the front door, partly because lockboxes take time to open. If you are alone, turn your back against a wall to avoid being attacked from behind. If you can, work in teams. Sign up your affiliates, such as a home inspector or title officer, to sit the open house with you.
- Never go into certain rooms. When showing visitors around, never go into rooms with no escape routes. These include walk-in closets, bathrooms and laundry rooms, among others. Instead, direct visitors to those rooms.
- Establish your escape routes. Walk around the house and notice how to get in and out of rooms. If there is a fence in the backyard with a gate, unlock the gate for easy exit. As another escape route, open the garage door but lock the door leading to the inside from the garage. Direct clients to the front door with signs.
- Set up for safety. Hang decorative bells behind every outside door that you have unlocked. These will alert you whenever someone enters the house. Carry only what you need — purses go in the trunk of your car before you leave your house, not when you arrive at the open house. Do not bring your laptop to an open house. Not only can it be easily stolen, but signing on to someone’s unsecured wireless network can open you up to identity theft.
- Always carry a cell phone where it is easily accessible (not in the purse you left in the car). Make sure emergency numbers are programmed into the speed dial.
- When showing property to strangers, follow rather than lead them through the house. Don’t let them get between you and the door. Never, ever turn your back on a prospect. If a man says, “Ladies first,” to a female agent, the agent should say something like, “You are such a gentleman, thank you. But I really want you to see this home, and if I can direct you where to go, I think you’ll gain a further appreciation for this home.”
- Go with your gut. If something doesn’t feel right, if anything raises the hair on the back of your neck, escape the situation immediately. Until you really know a customer, remain vigilant regardless of the gender, appearance, dress, or charm.
For more safety tips, visit NAR’s REALTOR® Safety Web site at www.REALTOR.org/Safety.
Silicon Valley Association of REALTORS® says ... 