Federal regulators are close to issuing guidance for banks to use in modifying troubled commercial real estate loans, FDIC Chair Sheila Bair testified before the Senate Banking Subcommittee on Financial Institutions. Workouts for these loans, said Bair, are often in the best interest of all parties involved during tough economic periods. The forthcoming guidance will reflect this, and is intended to give banks resources to restructure weak credit relationships and manage real estate holdings in an organized way. Bair cited commercial real estate loans as “the most prominent area of risk for rising credit losses at FDIC-insured institutions during the next several quarters.”
FHA Announces Flood Zone Requirements for Appraisers
The Federal Housing Administration released Mortgagee Letter 2009-37, which addresses appraiser and mortgagee responsibilities for FHA mortgages in flood zones. Appraisers are required to review the applicable FEMA Flood Insurance Rate Map (FIRM). If the property is in flood zone the appraiser is required to include a flood map with the appraisal report. The appraiser must also enter the FEMA zone designation on the report form and identify the map panel number and map date. The mortgagee letter notes that the final responsibility for determining if a property is located in a Special Flood Hazard Area (SFHA) rests with the originating lender.
Mortgagee Letter 2009-37: Flood Zone Requirements and Responsibilities of FHA Mortgagees and Appraisers >
FHA Announces Appraisal Performance Standards and Sanctions
The Federal Housing Administration (FHA) released Mortgagee Letter 2009-41 on appraiser performance and sanctions. This is largely a reminder of administrative sanctions that FHA may take ranging from a Notice of Deficiency (lowest level sanction) to civil or criminal sanctions (most severe). Appraisers are reminded that they must conform to FHA appraisal requirements and USPAP. An appraisal review is always conducted by the underwriter and compliance monitoring reviews of appraisals are routinely conducted by FHA staff reviewers. Lenders are reminded that they are responsible, with the appraiser, for the quality and accuracy of the appraisal if the lender knew or should have known that there were problems with the appraisal.
Mortgagee Letter 2009-41: Appraisal Performance Standards and Sanctions >
FHA Announces Hope for Homeowners Comprehensive Guidance
On October 20, 2009, the Federal Housing Administration (FHA) released ML 2009-43 providing comprehensive guidance on the Hope for Homeowners Program (H4H). The H4H program allows homeowners of single family, owner-occupied units to refinance into an affordable FHA-insured, 30 year, fixed-rate mortgage and is effective for all endorsements on or before September 30, 2011. Borrowers are eligible if they have not intentionally defaulted on a mortgage or other substantial debt in the last five years and if at least six full payments have been made on a delinquent mortgage. Borrowers must reside in the property securing the refinanced loan and may not have a net worth of more than $1,000,000. Borrowers in bankruptcy are not precluded from participating in the program.
Any type of mortgage is eligible for refinancing under the H4H Program, however, the primary mortgage holder must agree to waive all prepayment and late fees, agree to accept proceeds of H4H mortgage as payment in full, and release any outstanding mortgage liens. The refinance must include an appraisal conducted by an appraiser on the FHA Appraiser Roster and must be conducted using FHA guidelines. The Upfront Mortgage Insurance Premium (UFMIP) is 2.00 percent of the loan amount and the annual premium is .75 percent. The maximum loan-to-value (LTV) ratio on the new H4H mortgage is 105 percent of the current appraised value (excluding UFMIP). For borrowers with a credit score below 500 the maximum LTV is 90 percent of the current appraised value.
Mortgagee Letter 2009-43: Hope for Homeowners Program – Comprehensive Guidance >
ML 2009-43 Exhibit A >
ML 2009-43 Exhibit B >
ML 2009-43 Exhibit C >
ML 2009-43 Exhibit D >
On October 22, 2009, the Department of Housing and Urban Development (HUD) issued twelve new FAQs on reverse mortgages under the new RESPA rule. The new reverse mortgage FAQs are posted on HUD’s website and appear in bold on pages 24-28. In addition, HUD issued FAQ #25 under “GFE General” on p. 9 and FAQ #1 under “GFE-Page2″ on p.20 of HUD’s accumulated FAQs.
HUD’s FAQs >
After a thorough and open process that included several days of candidate interviews and member input, CAAR has determined the best candidates for the REALTOR® Party. Although REALTORS® often vote based on other issues that personally motivate them, these candidates have been determined to be the best on issues important to the real estate industry, including private property rights and housing affordability.
- CAAR Supported 8 candidates so far in 2009 – 3 republicans, 3 democrats and 2 independents.
- CAAR has supported 2 candidates in Albemarle, 2 in Fluvanna, 2 in Charlottesville, and 2 candidates for the VA House of Delegates. We also interviewed two candidates in Greene that declined support.
- CAAR policy is to invite all official candidates for an office to be interviewed prior to making any support decisions. In 2009 we interviewed 14 candidates from 6 different jurisdictions/districts.
Charlottesville
CAAR has supported two candidates running for City Council:
David Norris
Kristin Szakos
- We feel both of these candidates are high caliber individuals that will make excellent city councilors.
Albemarle
In Albemarle County, CAAR has support:
Duane Snow in the Sam Miller District
- CAAR believes Mr. Snow’s long-time community presence and solid support of business and private property rights makes him an ideal candidate for Supervisor.
Rodney Thomas in the Rio District
- CAAR believes Mr. Thomas was the strongest candidate on three key issues: personal property rights, economic development, and real estate taxes.
Fluvanna
In Fluvanna, CAAR is supporting two challengers:
Shaun Kenny in the Columbia District
Keith Smith in the Cunningham District
- CAAR believes both of these candidates will bring needed change to the Board of Supervisors in Fluvanna. Both have strong resumes as pro business leaders and both are strong private property rights advocates.
Va House of Delegates
CAAR has supported 2 Candidates for the House of Delegates:
David Toscano, 57th District
Rob Bell, 58th District
- Both of these incumbents have a strong history of working with CAAR and VAR to support key objectives in the General Assembly.
There are more than 16 million renter households in the U.S. with enough income to buy a home at the national median price, far more than in 2000, before the housing boom, says NAR Chief Economist Lawrence Yun. This large number of renters with the financial wherewithal to buy is one indication of the pent-up demand in the housing market that can be tapped if Congress extends the home buyer tax credit. It’s also an indication that the tax credit won’t just be attracting households that would buy anyway. Hear Yun’s remarks on market conditions and the tax credit in an audio podcast.
2009 After 3 Quarters
Published by the Charlottesville Area Association of REALTORS®
Home sales, compared to 2008, showed improvement in the 3rd Quarter. At mid-year, sales were down 28%, but after the first 9 months of the year, sales are only 19% below the 2008 levels. In the third quarter, sales (845) were only down 6.2% from the same period in 2008 (901). This is the smallest year over year decline we have seen in several quarters in the Charlottesville area. July and August monthly sales were very close to 2008 levels, but September fell back a bit.
As reported in the CAAR Mid-Year Market Report, significantly lower home prices (down 20% or more) are driving the pick-up in sales. In addition, the $8,000 tax credit for first time buyers has supercharged the sale of starter homes (below $300,000). 65% of home sales in the third quarter were in this starter home category, which is consistent with the overall trend for the entire year. The surge in first-time buyers is also a national trend.
Link to full report
Following a lengthy delay, the Department of Defense and Army Corps of Engineers last week published the final rules for the Homeowners Assistance Program, as it applies to Members of the Armed Forces permanently reassigned during the mortgage crisis. The American Recovery and Reinvestment Act (ARRA), passed in February, provided new relief for active duty military personnel who have been permanently relocated, and face or have faced a loss on the sale of their home. The program applies to those who purchased their property before July 1, 2006, and their reassignment was ordered at least 50 miles away, between 1 February 2006 and 30 September 2012. The property has to have served as the primary residence, and the recipient must not have received HAP aid previously. For full information and an application, visit the DoD HAP website.
For full information and an application, visit the DoD HAP website. >
Mike Harvey, President of the Thomas Jefferson Partnership for Economic Development gave an outstanding presentation to the members of the Charlottesville Area Association of Realtors yesterday. His presentation offered antidotal and factual evidence of Charlottesville underemployment and racial disparity issues. The audio Podcast an PowerPoint are linked below. This is a message that everyone in the area should hear - especially policy makers.
Podcast of 10/1/09 presentation to CAAR
PowerPoint of 10/1/09 presentation to CAAR
The Federal Reserve has clarified, at NAR’s request, that prepayment restrictions under the Truth in Lending Act (TILA) that take effect tomorrow, Oct. 1, don’t apply to higher-priced FHA loans. Lenders were concerned that the restrictions would apply to the interest that FHA borrowers pay after paying off their loan. (In a practice NAR has long opposed, FHA borrowers must pay a full month’s interest even in cases in which the borrower pays off the loan prior to the end of the month.) Lenders were concerned the Fed rule would classify this interest pay-off as a prepayment penalty and expose them to liability, but the Fed, in its clarification, makes clear that the interest payments are not considered a prepayment penalty.
Existing-home sales in August gave back some of their strong gain in July but remain above year-ago levels, NAR says. Single-family, townhome, condominium, and co-op sales declined 2.7 percent to a seasonally adjusted annual rate of 5.10 million units in August from a pace of 5.24 million in July, but remain 3.4 percent above the 4.93 million-unit level in August 2008. In the previous four months, sales had risen 15.2 percent. “Home sales retrenched from a very strong improvement in July but continue to be much higher than before the stimulus,” says NAR Chief Economist Lawrence Yun. “The first-time buyer tax credit is having the intended impact of bringing buyers into the market, allowing them to take advantage of very favorable affordability conditions. Some of the give-back in closed sales appears to result from rising numbers of contracts entering the system, with some fallouts and a backlog contributing to a longer closing process, but the decline demonstrates we can’t take a housing rebound for granted.” Watch and link to Yun’s press conference announcing the latest EHS numbers.