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REALTORS® are concerned about the recent announcement by the U.S. Department of Housing and Urban Development (HUD) that the Federal Housing Administration (FHA) will begin insuring mortgages on certain properties with Property Assessed Clean Energy (PACE) loans. REALTOR® officials say there ought to be more disclosures regarding the risks associated with PACE loans.
A PACE loan allows a homeowner to borrow money to finance energy upgrades. The loan is repaid as a surcharge on the property tax. The PACE loan takes primary position to the mortgage. If the cost of repaying the PACE loan and any mortgages on the property exceeds the home’s purchase price, the seller will be forced to make up the difference.
California Association of REALTORS® President Pat “Ziggy” Zicarelli said in a statement, “Although C.A.R. supports voluntary consumer-friendly energy improvement programs for homeowners, C.A.R. believes that HUD was ill advised to approve placing PACE loans in a senior position to FHA first mortgages. Doing so places FHA homebuyers and taxpayers at risk and does homeowners a disservice by approving a loan product without consumer protections and which is aggressively sold to homeowners who rely on FHA financing for safe and affordable mortgages.”
REALTORS® say PACE loans are unfairly expensive and carry higher interest rates than the first mortgage or a home equity loan. “This loan product has no minimum disclosures, no underwriting of the borrower, no proof that the borrower has the ability to repay, no three-day right to rescind, no marketing limitations, no interest rate or fee caps, no kickback prohibitions; nothing,” added Zicarelli.
The Federal Housing Finance Agency (FHFA) and conservator of Fannie Mae and Freddie Mac prohibits PACE loans to be placed in a senior position to the mortgage. Both the FHA and Fannie Mae currently offer mortgage financing that allows borrowers to finance energy efficiency improvements at lower rates than PACE liens. HUD’s announcement, which is contrary to FHFA’s current policy will only confuse homeowners, homebuyers, REALTORS®, lenders, escrow, title and the housing market overall.
The National Association of REALTORS® also expressed its concern, especially with regard to delinquent foreclosed properties. “A foreclosed property with a PACE loan in the primary position will likely remain on the market longer than it should, further increasing uncertainty in mortgage markets and placing unnecessary pressure on homeowners,” NAR President Tom Salomone said in a statement.
Karen Trolan, president of the Silicon Valley Association of REALTORS®, said, “Now, more than ever, the California legislature must pass AB 2693 (Dababneh), a C.A.R.-sponsored bill that would ensure consumers are aware of the consequences of PACE loans and have the opportunity to rescind after a three-day cooling off period. Current disclosures given to home buyers do not explain the potential consequences of using PACE loans. AB 2693 will require Truth in Lending type disclosures to borrowers.”
Recent news reports about burglaries of vacant homes for sale in the Bay Area are troubling and a good reminder for REALTORS® and their clients to take precautions to prevent this crime from happening to them. Majority of recent burglaries have occurred in homes with “For Sale” signs in the front yard, or homes that are easily identifiable as being vacant. These burglars are taking large appliances, like refrigerators and stoves.
The Silicon Valley Association of REALTORS® shares the following safety tips with homeowners who plan to sell their home or leave their home vacant for an extended time:
- Make your home look occupied. Use automatic timers on lights, a TV and/or radio, and set them to go on and off at different times to make your house appear occupied.
- Install motion detectors on the exterior of your home and garage or shed.
- Keep curtains/blinds closed and lock all doors and windows. Use wooden stakes inside patio door/window frames to prevent them from being opened from the outside.
- Keep your property maintained, grass mowed, and leaves raked. Trim trees and bushes so they can’t conceal burglars.
- Inform the police and trusted neighbors that your house will be vacant for an extended time. Police may be able to patrol your neighborhood periodically and keep an eye on your property. Ask neighbors to keep an eye on the property and call 9-1-1 immediately if they see or hear any suspicious activity.
- Ask a trusted neighbor to pick up flyers or newspapers that may be left on the front porch or driveway. Consider having a neighbor park their vehicle in your driveway while you are gone.
- Install an alarm system and/or security cameras.
- Consider renting your home or hiring a house sitter so the house won’t be vacant.
- Know the risks of putting “For Rent” or “For Sale” signs in front of your property.
- Never leave a spare house key under doormats, flowerpots, or other hiding places.
- Don’t place posts on social media informing others that your house is for sale or that you will be away on vacation.
Some sectors of Silicon Valley may be prospering, but there is another side to the valley, that of individuals and families struggling to make ends meet. Their number is rising, according to non-profit agency officials, and striking is these days is more among the needy are younger clients, many of them students.
At last week’s Silicon Valley Association of REALTORS® (SILVAR) Cupertino/Sunnyvale District tour meeting, Marie Bernard, Sunnyvale Community Services (SCS) executive director, said in response to the rising need, SCS has deepened its programs and will be extending services to those in need in the Alviso area.
SCS helps over 7,000 residents in the Sunnyvale area with food, in-kind assistance and financial aid. Bernard said SCS is very focused on the young and seniors – 39 percent of SCS clients are under the age of 18 and 14 percent are seniors.
Every Monday, the agency distributes 30 to 40 pounds of free fresh produce to an estimated 900 families. Clients are able to pick up for additional bags of nutritious food to help stretch their budgets a little further. SCS also provides children school meals throughout the year, including the summer months. In addition to all these, the SCS has a food pantry program, where families can shop once a month for meats, dairy items, canned food, household supplies, paper products, and more.
The nonprofit provides emergency financial assistance to low-income Sunnyvale residents who have been hit with an unexpected expense, like a major car repair, medical bills and other emergencies that can throw them off their budget.
“We help those who are one bill away from being homeless,” said Bernard.
Bernard explained by the time residents come to the SCS for help, they are already strapped with loans. Many are victims of payday lenders who charge interest rates as high as 459 percent on an annual basis, and owe these lenders thousands of dollars.
Kohinoor Chakravarty, director of Development and Communications for West Valley Community Services (WVCS), painted the same sad picture of the plight of the needy when she presented an overview of the agency’s services at the SILVAR district REALTORS® tour meeting last May.
Like SCS, WVCS is a non-profit, community-based agency that provides direct assistance and referral services to needy individuals and families. Clients served by the agency reside in Cupertino, Los Gatos, Monte Sereno, Saratoga, West San Jose and the unincorporated mountain regions.
Chakravarty noted the agency is seeing many students who are homeless and hungry. There are 200 students from De Anza College who are homeless. Their families cannot afford the rising rents in the area and have moved away. The students have chosen to stay so they can finish their studies. Since they cannot afford to rent an apartment, some couch surf; others live in their cars.
“It’s a sad situation,” said Chakravarty. In response to the rising needs of homeless and hungry students, she announced WVCS will be establishing food pantries at the De Anza and West Valley community colleges.
Currently 1,614 individuals are served through the WVCS food pantry and 770,515 pounds of food are distributed to clients. There are 231 individuals enrolled in food stamps, free/reduced lunches and health insurance.
WVCS also provides $100,615 in emergency financial assistance to 69 households. Among the agency’s special programs are its holiday food baskets, which are distributed to 212 needy families; holiday shopping spree serving 593 families; and its Back-to-School event, which helps 120 children shop for clothes for school.
In addition to the opening of the food pantries at the community colleges, the WVCS executive director announced the agency will be starting a mobile care service. With a newly acquired vehicle, the agency will be dropping off basic food and health services to its beneficiaries, since many clients travel two hours to receive the services.
The Silicon Valley Association of REALTORS®’ (SILVAR) fifth Certified International Property Specialist (CIPS) Institute took place this week with 17 students registered. The students, many of whom are SILVAR members, hail from the San Francisco Bay Area. One traveled all the way from Canada. Many are well-traveled and come from different cultural backgrounds. All were eager to learn more about the international real estate market and how to grow their global business.
The courses were once again taught by 2012 and 2009 National Association of REALTORS® International Instructor of the Year David Wyant, assisted by his wife, Patsy. The Wyants travel around the country and the world teaching the CIPS courses. This is their fifth trip to Cupertino. Each time they come, they remark about Silicon Valley’s growth.
Wyant also noted, “Silicon Valley REALTORS® are among the most intelligent in the nation.”
The CIPS Institute provides training in international business issues, including currency conversion, cultural awareness, legal and tax requirements, ownership and transaction principles of international real estate, and specifics about the real estate markets in Europe, the Americas, and Asia. The week-long CIPS Institute includes two required core courses and three elective courses. Students must pass a multiple-choice exam at the end of each course.
Upon completing the required five courses and fulfilling other necessary requirements, graduates of this year’s CIPS Institute can receive their CIPS designation and have the opportunity to be recognized at the 2016 NAR REALTORS® Conference and Expo, which will be held in Orlando, Fl. on November 4-7.
Thank you to this year’s CIPS Sponsors of the Day, who provided breakfast and lunch each day. They are Amy Ku, VP Mortgage Sales Manager for Northern California with HSBC Bank; Janet Case, CEO of Proxio; Anita Rodal, international liaison with AFEX (Associated Foreign Exchange) and president of SBPI Services, Inc.; Darrell Monda, owner of TourFactory Bay Area; and Larry Tringali, owner of Property Inspection Service.
Last chance to register or audit a class!
SILVAR’s 5th Certified International Property Specialist Institute (CIPS) is on June 20-24. If you would like to learn how to expand your global real estate business and earn the National Association of REALTORS® (NAR) CIPS designation, enroll in the CIPS Institute. Classes start next week, so you need to register right away. Cost for the entire CIPS Institute, which includes five courses, is $450 for the paperless option $500 for the paper version, which includes a manual for each of the five courses for both members and nonmembers. Regular price is $600.
Members may enroll online at ims.silvar.org. Non-members and those who want the paperless option may register by calling SILVAR at (408) 200-0100. Breakfast and lunch are provided and included in the cost, thanks to our generous sponsors Darrell Monda of TourFactory; Larry Tringali of Property Inspection Service; Anita Rodal, international liaison with AFEX (Associated Foreign Exchange) and president of SBPI Services, Inc.; Janet Case, CEO of Proxio; and Suzette Reboton of HSBC.
If you are a CIPS designee, you can audit a course for $20 for paperless and $30 for the paper option. Cost also includes breakfast and lunch. There are always new developments taking place in real estate markets around the world. Every two to three years CIPS courses are revised with updated statistics and relevant information. The most recent courses updated are Global Real Estate: Local Markets (May 2016) and Global Real Estate: Transactions Tools (May 2016). Instructor David Wyant, who will be teaching the courses again this year, also regularly furnishes students with information on the latest developments in international real estate.
If you would like to audit a CIPS course, please contact SILVAR Public Affairs and Communications Director Rose Meily at (408) 200-0109 or email rmeily@silvar.org.
The CIPS Institute provides training in international business issues, including currency conversion, cultural awareness, legal and tax requirements, ownership and transaction principles of international real estate, and specifics about the real estate markets in Europe, the Americas, and Asia. Members using Proxio, which is a SILVAR benefit, may find the CIPS courses very useful in advancing their global real estate business. See registration form and class schedule below.
CIPS SCHEDULE AND REGISTRATION FORM
About 50 SILVAR members joined over 2,000 California REALTORS® in Sacramento on Wednesday for the annual California Association of REALTORS® (C.A.R.) Legislative Day, the one day each year that the state’s REALTORS® meet with their legislators and discuss real estate-related policies and issues.
California Governor Jerry Brown spoke to California REALTORS® at the Sacramento Convention Center during the C.A.R. morning briefing. Brown said the economy has its cycles and at present the state’s economy is doing well, thanks to the business sector.
“California is the land of sunshine and smart people. That’s why people want to be here. Silicon Valley has the smartest people in the world,” declared the Governor.
Brown told REALTORS® to stay the course, stating, “REALTORS® are the backbone of what California looks like, of what California is.”
At a joint luncheon with members of the San Mateo County Association of REALTORS® and Santa Clara County Association of REALTORS®, Los Angeles Times Sacramento Bureau Chief John Myers analyzed the state’s political landscape. He indicated California has “places of great success and places of great struggle,” a dichotomy between urban versus rural, haves versus have nots, the highly employed places versus low employed.
Myers said it will be interesting to see how the state plans to implement the $15 minimum wage; how the state will expand the family leave law; and what arises from discussions on affordable housing. Other fundamental issues looming over California are education, transportation and water.
According to Myers, this year’s state elections may be the last chance to bring new blood to the state legislature, since new legislators will be serving 12-year terms due to the passage of Proposition 28. Myers also warned REALTORS® to expect a longer and confusing U.S. Senate ballot for the June 7 primary because of how the names of the 34 candidates seeking to replace retiring Senator Barbara Boxer are laid out on the ballot. Choose only one candidate. Selecting two or more candidates would disqualify your vote.
After the luncheon, SILVAR members met with Senators Jim Beall and Jerry Hill, and Assembly members Rich Gordon and Evan Low. Members asked their support on the following bills:
SUPPORT C.A.R.-sponsored bill AB 2693 (Dababneh) – PACE Loan Disclosure, which seeks to change the super-priority status of PACE loans and to require disclosures to consumers before they obtain such a loan. A PACE loan allows a homeowner to borrow money to finance energy upgrades. The loan is then repaid as a surcharge on the property tax. The PACE loan takes primary position to the mortgage. If a homeowner takes out a PACE loan they may have difficulty refinancing or selling their home if the new mortgage holder, like Federal Housing Finance Agency (FHFA), does not allow for PACE loans. If the cost of repaying the PACE loan and any mortgages on the property exceeds the purchase price of the home, the seller will be forced to make up the difference. This will prevent some homeowners from selling when they need or want to. Current disclosures given to homebuyers do not explain the potential consequences of using PACE loans. AB 2693 will require Truth in Lending type disclosures to borrowers.
SUPPORT C.A.R.-sponsored bill AB 2760 (Mathis) – Support Animal Regulations seeks to distinguish between a medically necessary companion or support animal and other animals kept as pets. C.A.R. wants to clarify current law to allow legitimate support animals to share rental housing and to allow landlords to avoid unnecessary litigation. Service animals, as defined under federal law, are animals individually trained to do work or perform tasks for the benefit of an individual, like guide dogs and signal dogs. Companion animals simply provide comfort to an individual. They are not afforded the same protections under the ADA or California State Law as service animals, even though they are kept as the result of a mental health professional’s prescription, causing confusion for housing providers. The vagueness in state law allows individuals without a legitimate need to claim a status for pets that is not deserved. AB 2760 will allow tenants to keep a support animal on the property provided that the tenant has a prescription validating the need for the support animal from a California-licensed mental health professional. They must also comply with all federal, state and local requirements, such as vaccination or sterilization mandates.
OPPOSE SB 1053 (Leno) – Sec. 8 Housing Mandate, which seeks to expand protected classes under the Fair Employment and Housing Act to include those who receive government rental subsidies. SB 1053 forces residential rental property owners to participate in the federal and local government’s voluntary Section 8 housing program. Section 8 was always intended to be a voluntary program. By forcing property owners to accept tenants with housing vouchers or other subsidies, SB 1053 forces landlords to participate in Section 8 without regard to the property owner’s specific circumstances. It forces landlords to endure administrative burdens and increased costs due to delays that result from understaffed housing authorities and requires landlords to accept objectionable and burdensome lease terms. Under HUD rules, housing authorities must use a HUD formula to determine an “acceptable” rental rate.
With improved snow pack and reservoir levels, California water providers want the state to reduce or eliminate emergency drought measures imposed last year. Some experts caution abandoning conservation measures would be a bad move. They say although El Niño brought heavy rains to California this winter, it’s not enough for the state to recover from four dry years.
Even if the state and cities relax water restrictions, we should not ease up on water conservation measures, according to Rebecca Jepsen, a University of California Cooperative Extension (UCCE) Master Gardener who writes a monthly gardening column in the San Jose Mercury News.
Jepsen, who is also a REALTOR® with Alain Pinel Realtors, is passionate about saving water. “We all need to continue cutting back on water usage,” she recently told members of the Silicon Valley Association of REALTORS®.
According to Jepsen, as of 2014, California needed 11 trillion gallons of rain to recover – that’s 17 million Olympic-sized swimming pools. From June through February, California residents were able to cut water usage 23.9 percent compared to their 2013 usage, almost reaching Gov. Jerry Brown’s target of 25 percent. The state is currently at about 80 percent of normal.
The State Water Resources Control Board is scheduled to meet next month and will possibly ease rules for Northern California, which received much of the winter’s rainfall. Southern California wasn’t quite as lucky and has experienced less rain and hotter, drier temperatures.
Jepsen said dropping water conservation measures altogether would be unwise. She explained 50 percent of water goes to the environment – to streams, rivers and wetlands. The remaining 50 percent is controlled – 80 percent is devoted to agriculture, which is needed to grow food, and 20 percent to municipal/residential use, of which 50 percent goes to outdoor irrigation.
Outdoor usage of water is an area residents need to improve upon. According to the UCCE Master Gardener, a typical turf lawn uses 57 inches of water per year. She suggests removing or replacing turf lawns with eco-lawns, meadow lawns, sedges and herbs. Use thyme and manzanita as groundcover. These lawn options save water and are attractive, she said.
Jepsen shared the following outdoor water-saving tips with REALTORS® to share with their clients: 1. Don’t run irrigation systems during the middle of the day. The best time to water is between 5-8 a.m.
- Use efficient low-flow irrigation and check for leaks. Leaky irrigation systems can waste 6,000 gallons a month. Invest in a SmartController, which doesn’t run when it rains and runs more frequently during hot, dry spells.
- Remove overgrown, tired, inappropriate plants.
- Apply 2-3 inches of compost and mulch around plants and trees to retain water and feed the soil.
- Water just enough to keep plants healthy. Jepsen noted contrary to what some people think, lawns and outdoor plants do not need to be watered as often or as much.
Jepsen also encourages families to grow their own food. “You’ll have food at your table and it’s a relaxing. Grow what you want to eat and share with your neighbors,” said Jepsen.
$500 for paper option, $450 for paperless option through June!
If you haven’t had the opportunity to take the Certified International Property Specialist (CIPS) Institute at the Silicon Valley Association of REALTORS®, now is a good time to do so. SILVAR is offering its 5th CIPS Institute on June 20-24 for all members and non-members at a discount price through June. The five-day CIPS Institute costs $500 for the paper version, which includes a manual for each of the five courses offered, and $450 for the paperless option. Regular price for the CIPS Institute is $600.
The CIPS Institute provides training in international business issues, including currency conversion, cultural awareness, legal and tax requirements, ownership and transaction principles of international real estate, and specifics about the real estate markets in Europe, the Americas, and Asia.
The week-long CIPS Institute, taught by National Association of REALTORS® (NAR) 2012 and 2009 International Instructor David Wyant includes two required core courses and three elective courses. Students must pass a multiple-choice exam at the end of each course. Upon completing the CIPS Institute, REALTORS® will fulfill the classroom requirements needed to earn the NAR CIPS Designation.
Members may enroll online at ims.silvar.org. Non-members may register by calling SILVAR at (408) 200-0100. The discount price includes a continental breakfast and lunch provided by our sponsors Darrell Monda – TourFactory, Larry Tringali – Property Inspection Service and Anita Rodal – AFEX (Associated Foreign Exchange) and SBPI Services, Inc.
Limited sponsorships for the CIPS Institute are still available. Each sponsor is given the opportunity to speak about their product or service on an assigned day. For more information on the CIPS Institute and sponsorships, contact SILVAR Public Affairs & Communications Director Rose Meily at rmeily@silvar.org, or call (408) 200-0109.
At yesterday’s Silicon Valley Association of REALTORS® (SILVAR) Cupertino/Sunnyvale District tour meeting, Carol Burnett, vice president and managing broker of Alain Pinel Realtors Saratoga, warned members about hackers who have been breaking into email accounts of buyers and real estate agents in order to get information about upcoming real estate transactions. She said the National Association of REALTORS® (NAR) has urged all REALTORS®, their clients and other real estate professionals to be on high alert for these email and money wiring scams, also known as mortgage phishing scams.
Scammers are hacking into email accounts and using information about a real estate transaction to trick people, often home buyers, into a fraudulent wire transfer. The hacker sends a bogus email, which appears to be legitimate, informing the buyer that there has been a last minute change to the wiring instructions. The email instructs the buyer to wire closing costs to a different account, which is actually the scammer’s account. If the buyer takes the bait, they could lose all that money in a matter of minutes.
Burnett said a similar scam happened to an agent in their office and their client, a first-time home buyer. The buyer received a phone call from someone claiming to be a representative of the title company who told the buyer to wire the closings costs of $500,000 to a different account. When the scam was discovered, all parties were immediately contacted, including the FBI. The buyer was able to recover most of the money, but not all. Not all buyers are as lucky, said Burnett.
Online scams targeting REALTORS® and their clients are on the rise. Burnett has learned other agents and clients in the Bay Area have been victims of these mortgage phishing scams. One victim lost close to a million dollars.
“This is really an important, serious matter. You have got to be careful,” Burnett told members.
Burnett shared the following tips to avoid being a victim of these mortgage phishing scams for REALTORS® and their clients.
• Never send any wiring information in an email.
• Always introduce the title company representative to your client.
• Put the phone number and other contact information of another party directly into your phone. Do not take it off an email that has been sent to you.
• Do not wire money until you get the okay from the title company.
• If you are instructed to wire money to a bank outside California, don’t. All banks have offices in the state.
See more Prevention and Damage Control Tips from NAR.
Seniors and the homebound residing on the Peninsula and in the South Bay may request free assistance with household tasks through the REALTOR® Service Volunteer Program (RSVP) during the week of May 2-6. RSVP is offered each year in the month of May by REALTOR® and affiliate members from the Silicon Valley Association of REALTORS® (SILVAR) and neighboring REALTOR® associations to qualified seniors who cannot perform certain household tasks due to physical or financial constraints. The deadline for seniors to apply for this free assistance is April 8.
“RSVP is our way of thanking our seniors for all they have done for our communities,” said Eileen Giorgi, SILVAR’s RSVP Committee chair. “Through the RSVP program, REALTORS® and affiliates can make the difference between a senior remaining independent as a homeowner or renter, or having to give up that independence to some form of caregiving and dependence on strangers,”
During RSVP Week teams of REALTORS® and affiliates (professionals who provide industry-related services) will visit senior households and perform various cleaning and maintenance tasks free of charge. Seniors can request to have light bulbs replaced, furnace filters changed, windows cleaned, mattresses turned, new smoke detector batteries installed, and other light housekeeping tasks.
The annual community service program was started by members of SILVAR in 2001, and adopted as an official association community outreach project the following year. The program has since expanded to neighboring REALTOR® associations. Last year 130 volunteers from SILVAR assisted 97 senior households in the Menlo Park/Atherton, Palo Alto, Los Altos/Mountain View, Cupertino/Sunnyvale and Los Gatos/Saratoga communities.
Seniors residing in the communities of Atherton, Menlo Park, East Palo Alto, Palo Alto, Woodside, Portola Valley, Los Altos, Los Altos Hills, Mountain View, Cupertino, Sunnyvale, Santa Clara, Campbell, Saratoga, Monte Sereno and Los Gatos may apply for this free service by contacting the Silicon Valley Association of REALTORS® at (408) 200-0100 for information and an application. Seniors may also visit www.silvar.org to download an application and submit to SILVAR before the April 8 deadline.
Silicon Valley Association of REALTORS® says ... 