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The Obama Administration has announced two initiatives to help homeowners and their families. The Administration is reducing fees for Federal Housing Administration (FHA) borrowers seeking to refinance and providing relief to servicemembers and veterans.
FHA is reducing both the upfront and annual fee for FHA borrowers looking to utilize the streamline refinance to take advantage of historically low interest rates. For loans originated prior to June 1, 2009, the upfront premium is reduced to .01 percent and the annual fee is reduced to .55 percent. The U.S. Department of Housing and Urban Development (HUD) released Mortgagee Letter 12-4, which outlines all the mortgage insurance premium (MIP) changes; increases for new purchase transactions, and decreases for streamline refinances.
The announcement includes several efforts to support servicemembers and veterans who were wrongfully foreclosed upon, wrongfully charged higher interest rates, and who were forced to sell their home for a loss due to a permanent change in service. Foreclosure protections under the Servicemembers Civil Relief Act (SCRA) are being expanded and $10 million will be paid into the Veterans Housing Benefit Program Fund. This relief will be provided by loan servicers Bank of America, JP Morgan Chase, Ally, Citi, and Wells Fargo.
Senator Debbie Stabenow (D-MI) has introduced S. 2144, a bill that would make the mortgage debt forgiveness rules permanent. The rules that currently provide relief for homeowners on short sales, foreclosures or loan modifications expire December 31, 2012. This relief is essential to affected homeowners so they will not have to pay tax on the forgiven debt.
A companion bill in the House will be introduced soon. See additional information here.
The California Association of REALTORS® is OPPOSING SB 1220 (DeSaulnier), which imposes a transfer tax to generate funds for affordable housing.
C.A.R. is opposing SB 1220 because it will add to the cost of buying a home at a time when the housing market is struggling to recover. While C.A.R. is an aggressive advocate for affordable housing, the association believes it sets bad precedent to fund affordable housing by making housing less affordable.
Stay tuned for more information and a potential Red Alert!
On Thursday, SILVAR President Suzanne Yost updated members of the Cupertino/Sunnyvale District on the state of the Association. Yost announced the Association is financially secure (SILVAR hasn’t raised dues since 2002) and stressed that SILVAR highly values its membership.
SILVAR offers many valuable member benefits, including PRDS Forms, a complete line of paper and online forms for residential purchase and sales transactions. PRDS Forms were developed specifically for Silicon Valley’s REALTORS® by Silicon Valley REALTORS® who saw the need. These forms are highly acclaimed and available online free of charge as a SILVAR member benefit.
Yost assured members their dues dollars are very well spent, especially on government affairs. She highly credited SILVAR Government Affairs Director Adam Montgomery for his work in successfully warding off many point of sale and transfer tax proposals that could have hurt homeowners had they passed. A recent example is proposed regulations that would have included sewer lateral inspection and compliance mandates at the transfer of property for homeowners in southern San Mateo County. She added since it is a large association with a strong government affairs staff and many accomplishments, “SILVAR has a footprint” at the local, state and national REALTOR® level.
Yost noted SILVAR’s District Council system is an especially good model that emerged upon the merger of the five boards in 1995. This model provides another level of opportunities for leadership. Having more people “with ears close to the ground” helps ensure that the Association meets the needs of agents working in all five districts.
Members are very lucky to be doing business in Silicon Valley, said Yost. Recent speaking engagements before the New York State Association of REALTORS® and the Michigan State Association of REALTORS® brought home this fact, she said. While REALTORS® everywhere have had to face tough markets during the past three years, Silicon Valley’s housing market is improving due to its location and strong tech and other innovative industries.
SILVAR’s president encourages members to take part in the Association. Join your District Council, get involved in activities at the District and Association level, volunteer for RSVP (REALTOR® Service Volunteer Program) and help others in your community, Yost urged.
“We always want to develop new leaders and give you the opportunity to become leaders,” she stressed.
Yost is excited about a couple of new Association components this year. There is SILVAR’s Young Professional Network (YPN), which welcomes all members – the young, as well as the seasoned professionals. SILVAR is also developing a Global Business Council, an initiative which will have a strong education component to help REALTORS® learn how to effectively work with international buyers. She added that SILVAR highly values its Affiliate members and a group is currently working on written policies and guidelines for Affiliates.
Last, but not least, Yost urged members to continue to stay positive. “The numbers are getting better,” said Yost. “2012 is the year we’ll come out of this. 2012 will be better.”
Wednesday, May 2, is Legislative Day. This is the day REALTORS® from all over California will meet with their elected officials in Sacramento and discuss critical legislation that can affect REALTORS®, homeowners and private property rights. Members of the Silicon Valley Association of REALTORS® will be participating in this annual one-day event in Sacramento.
Once members arrive in Sacramento, they will receive a special briefing from California Association of REALTORS® lobbyists, REALTOR® leadership and honorable guests. A luncheon will follow the briefing. California Governor Jerry Brown has been invited to speak at the event.
After lunch, SILVAR members will have meetings with all of the legislators in Silicon Valley, including Senators Elaine Alquist, Sam Blakeslee and Joe Simitian, and Assembly members Jim Beall, Paul Fong, and Rich Gordon. At these meetings, our REALTORS® will have the opportunity to discuss important real estate issues, such as private property rights, legal reforms and housing opportunity policies.
SILVAR REALTORS® who plan to attend Legislative Day should register for the event by calling SILVAR at (408) 200-0100, or sign up online at ims.silvar.org no later than Monday, April 23. See flyer for cost and more details.
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 2012 President Suzanne Yost stressed the importance, value and benefits of being a SILVAR member at the association’s Menlo Park/District meeting this week. She reminded everyone of SILVAR’s mission statement:
“The Silicon Valley Association of REALTORS® is dedicated to being a leader in the real estate industry by promoting the highest ethical standards of real estate practice, representing the interests of property owners, and providing exceptional service to its membership.”
Membership at SILVAR, the California Association of REALTORS® and National Association of REALTORS® allows REALTORS® to have great opportunities at the local, state and national level. The associations’ lobbying efforts allow members to stay on top of what’s happening at the local, state and national level even before others know about it, said Yost.
Yost said SILVAR has been successful largely due to its district council model, which enables each district to retain its individuality, serve members’ needs and their respective communities.
SILVAR is financially secure, with 4,000 primary members. Thanks to sound fiscal management, the Association has not had to increase dues since 2002, and continues to provide important benefits to members. Some of the many benefits include PRDS Forms, education courses, tour sheets, political advocacy, the weekly newsletter and monthly newspaper, lockbox and keys.
Yost encouraged members to take advantage of volunteer opportunities by participating in district events and programs. “One of the values of being a SILVAR member is getting involved,” said Yost. “We get more out of it than we give.”
She also stressed the importance of each member abiding by the Code of Ethics, which is what differentiates REALTORS® from real estate agents. SILVAR takes the grievance process seriously, she said. Complaints are professionally handled by SILVAR’s Grievance and Professional Standards committees.
It’s a good time to be a REALTOR® and a SILVAR member. Yost has good feelings about 2012. “I feel we’re coming out of a tunnel, and things will be better. It truly is a year of possibilities,” said Yost.
Lawmakers are expected to turn their attention to reforming the secondary mortgage market this spring, although passage of legislation may not take place till 2013. National Association of REALTORS® Government Affairs discusses some key issues that are expected to be discussed this spring and what prospects of reform look like in this 6-minute video.
At the helm of the Silicon Valley Association of REALTORS® this year is Suzanne Yost, a REALTOR® who is passionate about organized real estate and highly values professional standards and the REALTOR® Code of Ethics.
Yost has been actively involved in organized real estate long before becoming a SILVAR member in 2009. Yost was named REALTOR® of the Year in 2006 by the Santa Cruz Association of REALTORS® and Salesperson of the Year in 1982 by San Luis Obispo Board of REALTORS®.
Involvement in organized real estate provides opportunities for REALTORS®, including the tools they need to succeed in business, says Yost. Associations provide education courses to sharpen a REALTOR®’s knowledge and skills, networking opportunities, and valuable information they need to know to assist their clients in making a decision that’s right for them.
Yost said SILVAR’s Government Affairs staff, the local government committees and Political Action Committee have been successful in warding off proposals that would hurt REALTORS® and homeowners, like business license taxes, transfer taxes, time of sale restrictions, sign ordinances, rent control, zoning, to name a few.
Yost is a graduate of California Polytechnic State University, San Luis Obispo, and Santa Clara University School of Law. She is a broker associate with Alain Pinel Realtors in Los Gatos. She is also a trainer for new agents and a statewide instructor of real estate continuing education classes.
Yost has served as a California Association of REALTORS® Director and as member and chair of a number of NAR and C.A.R. committees. At SILVAR, she chaired the Professional Standards Committee in 2009, joined the Board of Directors in 2010, and co-chaired the Bay Area REALTOR® Leadership Academy (BARLA) in 2011.
In the 32 years she has been practicing real estate, Yost has witnessed three housing market downturns. She is certain the market will come out of this one. “This downturn is lasting longer than the others, but the market will bounce back again. I’m already seeing positive things happening,” says Yost.
Yost advises fellow REALTORS® to “stay positive, get back to basics, and get involved.”
As members take advantage of the opportunities SILVAR offers, they also can give back to the Association and their community. Most of all, Yost wants all members to adhere to the REALTOR® Code of Ethics, because “it’s what defines a REALTORS® and sets us apart from other licensees.”
There are unlimited possibilities in real estate, says Yost. This is her theme for 2012: A Year of Possibilities. She wants SILVAR’s members to take hold of these possibilities and run with them.
Silicon Valley Association of REALTORS® says ... 