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Represent Investors and Become One Yourself

Real Estate Investing is a new course that will teach REALTORS® how to work with investors as they set their goals, plan, evaluate, and acquire properties, as well as manage them. REALTORS® will also learn how to become real estate investors themselves.

One of the priorities of National Association of REALTORS® (NAR) President Bill Brown is to help REALTORS® prepare for retirement by providing education on becoming a real estate investor, not just helping others invest in real estate. While REALTORS® are busy helping homebuyers achieve their dream of homeownership, they themselves lack retirement assets. “Too many REALTORS® don’t have the assets to retire,” according to Brown said at the 2016 Leadership Summit in Chicago. Brown wants members to make sure they can take care of themselves when they retire.

Real Estate Investing will be offered at SILVAR on Tuesday, September 19, from 8:30 a.m. to 5 p.m., with NAR 2012 and 2009 Instructor of the Year David Wyant. SILVAR is co-sponsoring this course with the West San Gabriel Valley Association of REALTORS®. Cost is $110 for members and $125 for non-members. Register at ims.silvar.org, or call SILVAR at (408) 200-0100.

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The current continuing resolution providing funding for government operations is set to expire today. If legislation to extend funding is not signed into law after today, the federal government could shut down. This means many, but not all government programs, including some that impact federal housing and mortgage programs, could grind to a halt as early as tomorrow, April 9. While the true impact of a shutdown is unclear until it actually begins, below is a synopsis of how federal housing programs will likely operate in the event of a shutdown.

The Office of Management and Budget requires each agency to have contingency plans in place and reportedly has instructed agencies to not provide specific information on impacted operations.

Federal Housing Administration
FHA cannot offer endorsements for any new loans in the Single Family Program and cannot make commitments in the Multi-Family Program in the event of a shutdown. FHA will maintain operational activities, including paying claims and collecting premiums. Management & Marketing Contractors managing the REO portfolio can continue to operate.

VA Loan Guaranty Program
Lenders may continue to process and guarantee mortgages through the Loan Guaranty program in the event of a government shutdown.

Internal Revenue Service
Should the federal government shut down, the IRS cannot process federal income tax returns or issue refunds (but it can deposit tax payments). Consumers who were expecting to use their tax returns as part of the down payment for a home purchase will temporarily not have access to these refunds.

Flood Insurance
The Federal Emergency Management Agency confirmed that the National Flood Insurance Program will not be impacted by a government shutdown.

Rural Housing Programs
For U.S. Department of Agriculture programs, essential personnel working during a shutdown do not include field office staff who typically issue conditional commitments, loan note guarantees and modification approvals. Thus, lenders will not receive approvals during the shutdown. If the lender has already received a conditional commitment from the Rural Development office, then the lender may proceed to close those loans during the shutdown. A conditional commitment, which is good for 90 days, is given to a lender once a USDA underwriter approves the loan. If a commitment was already issued, the funds were already set aside, the lender may close the loan at his leisure. If Rural Development has not issued a conditional commitment, the lender must wait until funding legislation is enacted before closing a loan.

Government Sponsored Enterprises
Fannie Mae and Freddie Mac will continue operating normally, as will their regulator, the Federal Housing Finance Agency.

Treasury
No official word as of yet, but the Making Home Affordable program, including HAMP (Home Affordable Modification Program) and HAFA (Home Affordable Foreclosure Alternatives), may not be affected because the program is funded through the Emergency Economic Stabilization Act, which is mandatory spending, not discretionary.

For more information, visit www.realtor.org.

In a span of one week, two top officials have told Silicon Valley REALTORS® that, at least for the Bay Area, particularly the Silicon Valley region, the worst for home sales is over, that there are better days ahead. However both of these officials said a full recovery will take time.

At a general membership meeting of the Silicon Valley Association of REALTORS®, National Association of REALTORS® Chief Economist and Senior Vice President of Research Dr. Lawrence Yun told REALTORS® “the worst in (home) sales is clearly over. … Even in the worst market, the bleeding has stopped.”

Dr. Yun at the SILVAR general membership meeting.

Yun said, particularly in the San Francisco –San Jose area, the bottom has already occurred and prices are beginning to firm up.

California’s housing market recovery started even before the home buyer tax credit, according to the national economist. “California’s housing market correction was short, sharp and fast,” Yun said.

The key test will be this winter. “If this winter’s sales match up with other winter home sales, I would say that would be a very positive sign,” Yun said. “Let’s give it time.”

In the meantime, Yun said those with strong credit who can buy, should buy, while mortgage interest rates are still at a 50-year low.

“I don’t expect rates to remain low. They may increase next year,” Yun said. “If you’re willing to stay well within a budget and are comfortable with it, at a 4.4 mortgage interest rate you’re protected under inflation.”

Check out Yun’s PowerPoint presentation here.

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California Department of Real Estate Commissioner Jeff Davi spoke at a SILVAR District tour meeting in Los Gatos last week and said much of the same thing. He told REALTORS® that “there are better days ahead.”

Davi marveled at the vast improvement in housing affordability and historically low interest rates.  “I promise you this, rates are not going to stay at 3 or 3.5 percent fixed. The affordability index is fabulous. Buyers are now better off. They have great opportunities in this market,” Davi said.

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Left to right: SILVAR President-elect Gene Lentz, DRE Commissioner Jeff Davi, Board Director Suzanne Yost, Los Gatos/Saratoga District Chair Bill Rehbock and C.A.R. Past President Jim Hamilton.

 

So, what’s holding back a full recovery?

Yun said the unemployment rate has stopped rising dramatically, but it is still high, and while we are seeing some job creation, it’s not coming quick enough and not large in numbers. Corporate profits are rising, but business spending is down. Businesses continue to hesitate because they’re uncertain about how they will be impacted by health care legislation, the recently passed financial regulatory bill and potential taxes. Right now, they realize they can still make a profit with fewer employees.

“We need job creation. If business spending increases, the economy would be more robust,” Yun said.

Pay attention to foreclosure numbers, as these numbers will signal what’s ahead, Davi said. In 2006, there were 12,000 foreclosures. In 2008, there were 240,000 foreclosures. Last year, the number of foreclosures slightly fell to 200,000 – still a lot, but a good sign, nevertheless. Foreclosures need to get back to the 2006 level, Davi said.

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