Fannie & Freddie incentives for buyers & agents.

Fannie Offers Incentives for HomePath Properties
On April 11, 2011, Fannie Mae announced new buyer and selling agent incentives in connection with the sale of Fannie Mae-owned properties (HomePath properties).
A buyer of a HomePath property to be used as the buyer’s primary residence can receive up to 3.5% of the final sales price to be used toward closing costs.
A selling agent bonus is available in four states—California, Washington, Arizona, and Texas. In these four states, a bonus is being offered to selling agents who represent a buyer who will use the property as a primary residence. For properties in California and Washington, the selling agent bonus is $1,000. For properties in Arizona and Texas, the bonus is $500.
To qualify for either incentive, the buyer and, for properties in one of the four states, the selling agent must meet certain requirements, including the following. The buyer and selling agent incentive must be requested at the initial offer submission. The initial offer must be submitted on or after April 11, 2011, and the property sale must close on or before June 30, 2011. The buyer must use the property as a primary residence (auction, pool and investor sales are excluded). Check the HomePath website for more details. If you have questions, please CONTACT Jeff Lischer at 202-383-1117 or with any questions.

Realtors® Oppose High Down Payment Requirement for Qualified Residential Mortgage Exemption

Washington, March 29, 2011

High down payment requirements being proposed by federal regulatory agencies as part of the upcoming rulemaking under the Dodd-Frank Wall Street Reform and Consumer Protection Act will unnecessarily burden homebuyers and significantly impede the economic and housing recovery, according to the National Association of Realtors®.

Six agencies, including the Department of Housing and Urban Development, Federal Deposit Insurance Corp., Federal Housing Finance Agency, Federal Reserve, Office of the Comptroller of the Currency, and the U.S. Securities and Exchange Commission, are developing a proposed risk retention regulation under the Dodd-Frank Act that requires lenders that securitize mortgage loans to retain 5 percent of the credit risk unless the mortgage is a qualified residential mortgage (QRM); FHA and VA mortgages would also be exempted. The purpose is to create strong incentives for responsible lending and borrowing.

“As the leading advocate for home ownership NAR supports a reasonable and affordable cash investment requirement coupled with quality credit standards, strong documentation and sound underwriting,” said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “A narrow definition of QRM, with an unnecessarily high down payment requirement, will increase the cost and reduce the availability of mortgage credit, significantly delaying a housing recovery.”

NAR believes that Congress intended to create a broad QRM exemption from the 5 percent risk retention requirement to include a wide variety of traditionally safe, well-underwritten products. Congress chose not to include a high down payment among the criteria it specified in the Dodd-Frank Act to guide the regulators in defining a QRM. Strong evidence shows that responsible lending standards and ensuring a borrower’s ability to repay have the greatest impact on reducing lender risk.

“We need to strike a balance between reducing investor risk and providing affordable mortgage credit. Better underwriting and credit quality standards have greatly reduced risk. Adding unnecessarily high minimum down payment requirements will only exclude hundreds of thousands of buyers from home ownership, despite their creditworthiness and proven ability to afford the monthly payment, because of the dramatic increase in the wealth required to purchase a home,” said Phipps.

The definition of QRM is important because it will determine the types of mortgages that will generally be available to borrowers in the future. Borrowers with less than 20 percent down could be forced to pay higher fees and interest rates, up to 3 percentage points more, for safe loans that otherwise do not meet too narrow QRM criteria.

NAR is concerned that a narrowly defined QRM will also require severe tightening of FHA eligibility requirements and higher FHA premiums to prevent huge increases in its already robust share of the market, adding additional roadblocks to sustainable home ownership.

“Saving the necessary down payment has always been the principal obstacle to buyers seeking to purchase their first home. Proposals requiring high down payments will only drive more borrowers to FHA, increase costs for borrowers by raising interest rates and fees, and effectively price many eligible borrowers out of the housing market,” said Phipps. “We strongly urge the regulators to consider the negative consequences of setting onerous limits on the availability of credit.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

Redevelopment Agencies are wrong places to cut

I’ve been writing about this since Gov. Brown stated his intent to do away with local redevelopment agencies and distribute the money from local agencies to hi8s statewide projects. Sure there are some cities around the state that either aren’t using the funds or are misusing the funds but many are not and they have done a world of good. Look at downtown Temecula. Look at the Gaslamp in San Diego. Without redevelopment, the Gaslamp would still be the slum it was not that long ago.

An article appeared in today’s Californian that adds the housing element to the mix. Redevlopment has provided over 91,000 affordable housing units since 1995. For every 100 units created, 125 local jobs are created and 32 permanent jobs. Some in Sacramento just don’t get it – they are actively trying to kill what’s left of the housing industry not understanding that housing speeds an economic recovery, housing is a jobs engine which our state desperately needs.

Click here to view the forum post: Wrong places to cut.

Keep Your Home California – Good News for some CA homeowners.

Keep Your Home California Program

The U.S. Treasury Department has approved CalHFA’s plan to use nearly $2 billion in federal funding to help California families struggling to pay their mortgages.

The Keep Your Home California programs are focused on assisting low and moderate income families stay in their homes, when possible, and leveraging additional contributions from mortgage servicers.

Primary objectives for the Keep Your Home California programs include:

  • Preserving homeownership for low and moderate income homeowners in California by reducing the number of delinquencies and preventing avoidable foreclosures
  • Assisting in the stabilization of California communities

Each of the Keep Your Home California programs is designed to address one or more aspects of the current housing crisis by doing the following:

  • Helping low and moderate income homeowners retain their homes if they either have suffered a financial hardship such as unemployment, have experienced a change in household circumstance such as death, illness or disability, or are subject to a recent or upcoming increase in their monthly mortgage payment and are at risk of default because of this economic hardship when coupled with a severe decline in their home’s value.
  • Creating a simple, effective way to get federal funds to assist low and moderate income homeowners who meet one or all of the objective criteria described above. Speed of delivery will be balanced with fulfillment of the specific program’s mission and purpose.
  • Creating programs that have an immediate, direct economic and social impact on low and moderate income homeowners and their neighborhoods.

News from FHA on flipping and condos

Good news if you have clients who are FHA borrowers.  The FHA has extended its temporary waiver of its “anti-flipping rule.”  The original waiver, which was passed as the direct result of C.A.R.’s leadership efforts, was set to expire at the end of last month, but now will be extended through the remainder of 2011.  The ruling allows investors who acquire foreclosed properties at below-market value to be exempted from waiting the customary 90 days before reselling them.  The 90-day waiting period originally was put in place to protect FHA borrowers against predatory practices of flipping where properties were quickly resold at inflated prices to unsuspecting borrowers.  First-time buyers have responded overwhelmingly to the opportunity to buy “move-in ready” renovated homes with low down payments, prompting the extension.

If you work with condominium buyers, you’ll want to know if the condominiums in your area are approved and eligible for an FHA loan.  C.A.R.’s subsidiary, REBS®, has introduced Clarus FHA Approval™ Eligibility Check, which offers a unique searchable database that will allow you to quickly determine FHA loan eligibility via a simple property address search.  Using this service, you and your FHA clients can avoid failed transactions and non-recoverable costs due to undetermined FHA loan eligibility status.  C.A.R. has negotiated special discounts for its members.

You’ll also want to let the condominium associations in your area know that HUD now requires that an entire condominium development be preapproved before an FHA loan may be granted.  FHA loans currently represent almost half of all new mortgages nationwide, and failure for a development to be preapproved to be eligible for FHA loans will almost certainly impact the marketability and value of the development.  Clarus FHA Approval™ also offers Approval Services to assist condominiums in seeking HUD approval.  Discounts are available to condominium associations referred by a C.A.R. member.  For more information about both Clarus FHA Approval™ services.

NAR Pres. Elect Moe Veissi Talks Turkey at CAR Mid-Winter

Take-aways from our recent California Association of Realtors Mid-winter meetings.

From NAR President-elect Moe Veissi –

Six of the past eight recessions have ended due to increasing strength in the housing market. The other two were due to wars. That seems like an easy choice. We need to get behind housing. This battle against housing is counterproductive and the attack on the mortgage interest deduction is an attack on one of the basic foundations of the American Dream.

Similarly we should seek to preserve the basics of the GSE’s.They can certainly be improved upon but their services are vital to home buyers. They provide a foundation and critical financial instruments that allow many people to buy homes that otherwise would not be able to. Keep in mind that during the height of the meltdown, Fannie and Freddie had take-back rates of about 3 1/2% while at the same time banks like B of A and Wells were taking back 15% to 18%.

You hear people today who don’t know the history, who don’t know any better – oh, Canada doesn’t have a 30 year fixed mortgage and their housing market is great. Oh, Europe doesn’t have a Fannie/Freddie and their market is great. The fact is, their markets don’t compare with ours. Never have. Nobody does it like us. These other countries are trying to figure out how to do it like we do and we’re trying to figure out how to kill our system and adopt the systems others are trying to get rid of. So why would we try to emulate markets with which we have nothing in common? Why would we destroy 100 years of success to become more like an inferior market? It just doesn’t make sense.

These are not short term problems we are dealing with and they will keep rearing their heads. We have saddled ourselves with tremendous debt so attacks on basic and short term sources of tax revenue will be ongoing. Don’t believe them when they tell you – oh, we aren’t going to take it all away. Just this little bit. Yeah, just that little bit this time. Then  a little more, then a little more, you know how that works.

Realtors just don’t realize the power we have in our communities and our country. But we’ve got to stand up and be counted if we want to be heard. We need to present Congress with 1/2 million Realtor calls on issues instead of 100,000. When we can consistently deliver 1/2 million member voices or more to our Congressional leaders, they will know we mean business.

New Appraisal Rules Frustrating Homebuyers

Read the full article here… Have Down Payment but Stuck In Appraisal Hell.

…Four months later, the Stiners and their buyer both gave up. Together, they were out $1,600 for seven appraisals. “As a result, we are now renting our home out, and renting the home we wanted to buy,” says Beth. “We were frustrated and we weren’t going to keep doling out cash for new appraisals. It felt like a game.”…

NAR message to Congress about MID


  • Repealing the Mortgage Interest Deduction (MID) is a form of tax increase.

  • Families with children would bear more than half of the total increase.
  • IRS data show that taxpayers in the 35 – 45 age group take the largest MID on average compared to any other age group of taxpayers

  • First time home buyers would be hurt the most if the MID is curtailed.
  • Current data from the IRS show that 65% of the taxpayers who have claimed the MID made less than $100,000.

  • The housing market has not emerged from the crisis that began in 2007.
The 1.1 million members of the National Association of REALTORS® strongly oppose proposals to reduce the mortgage interest  deduction (MID). Hard-working American families’ budgets are already stressed. Reducing or eliminating the mortgage interest deduction would pull even more money directly out of their wallets. If this crucial deduction is eliminated or reduced, home values will further erode. That’s something America simply can’t afford in this unstable housing market.


The Facts Speak for Themselves.

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White House Housing Conference debates 'value of homeownership'.

I suspect many of you have been following the blowback from the White House Conference on Housing held earlier this week. I haven’t had an opportunity to talk with former CAR President Vince Malta, who was NAR’s rep at the event, nor have I seen any quotes from him in the press. Most of the quotes seem to be from Mark Zandi and his comments about how ‘we can’t afford housing subsidies any longer’. Hmmmm, I don’t recall Zandi mentioning that the last time he addressed an NAR crowd. Could it be he modifies his comments and his beliefs depending on the audience? Pro-housing when you’re in front of Realtors but pro-tax when you’re invited to sit on an Obama panel? I guess that’s how you keep getting  invited back.

But as Dr. Alan Greenspan told us at the NAR conference a couple years back, you’ve got to pay attention to the ‘first rule of economists. For every economist there is an equal and opposite economist. Rule #2 – they’re both wrong’. Zandi’s just the one getting quoted today.

But the more serious underlying tone of the seminar is that for the first time in 70 years, housing is on the table – especially the heretofore sacrosanct mortgage interest deduction. Panelists questioned the ‘value of home ownership’ and floated the theory that the government ‘spent’ $230 Billion to promote home ownership last year, the biggest chunk – $80 Billion – on the mortgage interest deduction. And they’re just not sure what return that’s producing for the government.

Excuse me? They’re spending $80 Billion on the mortgage interest deduction? That’s a bald faced LIE! They don’t ‘spend’ a nickel on the MID. The fact is for them, it’s simply a missed opportunity to tax us on yet another area of our lives. And since when was the purpose of homeownership  to provide a revenue generating tool for the government?

Let’s take their argument one step further – is the $80 Billion they claim they’re spending on homeowners really going to make a dent in the national debt, which is approaching $10 Trillion dollars? Is it Mark? So it’s OK to continue to funds all the pork and earmarks, bridges to nowhere, the arts, auto bail-outs, bank bail-outs, welfare for illegals, a trillion dollar healthcare bill, Fannie & Freddie not to menton the lifetime benefits accorded those who serve in Congress. But that $80 Billion a year for MID is breaking us? Is that really the best you can come up with?

And remember, it’s not $80 Billion they’re spending – it’s $80 Billion of OUR OWN MONEY they’re letting us keep.

And why did they seem to focus on the $80 Billion in MID and ignore the remaining $150 Billion spent on housing stimulus last year including the first time homebuyer tax credit? Maybe it’s because the tax credit was backed by this administration so they didn’t want to bite the hand that invited them to the conference.

But probably it’s because of a theory floated by another administration sycophant claiming that studies show the MID primarily benefits the wealthy. People making less than $40,000/year only benefit $91 while those making $250,000 benefit $5,459. Look out people, here’s another salvo at those damn ‘wealthy’ people. We need to redistribute that wealth.  Somehow we need to level the playing field so that people who work hard and do well get dinged more, or maybe they need to subsidize bigger houses for the people making less so those people can get bigger tax write-offs. It’s a shame to waste $80 billion on homeowners when you so many more undeserving groups you could fritter it away on.

Regardless of his fallacious math, the bottom-line is he has just redefined ANYBODY who owns a home as wealthy because they are getting benefits from the federal government that non-homeowners aren’t. So if you’re one of the people only benefitting $91/year, don’t get too smug because according to these folks you’re wealthy too and you won’t escape the axe.

That’s just wrong. Never mind we’re not collecting welfare or food stamps or ADC  or all the other give-aways our government has devised. The paltry $80 Billion ‘spent’ on homeowners is simply not providing a big enough ‘return’ to the government, according to these flacks.

I’m sick of this. I’m sick of paying ever increasing taxes so the unmotivated and unproductive can maintain a lifestyle. I’m sick of this talk of re-distributing the wealth. I’m sick of the constant attacks by this administration on the hard-working, productive members of this country. I’m sick of attacks on real estate and private property rights and on people who have been fortunate or industrious enough to own a home or several homes or invest in real estate. Mostly I’m sick of sycophants who, when faced with a problem, point the finger at every aspect of our society except toward the one segment where the blame truly rests – our country has a huge freakin’ spending problem and we can no longer afford OUR GOVERNMENT.

Well, that’s just my opinion – I could be wrong.