Archive for March, 2010

New short sales rules go into effect April 5: NAR has the 411

The federal government’s standardized rules and forms for short sales take effect April 5. On that date, the servicing arms of lenders who are participating in the government’s loan modification program, known as HAMP, have to participate in the standardized short sale procedures, because those procedures are considered a subset of the modification program.

Learn about the rules, including changes announced just two weeks ago, in a 14-minute video walk-through from NAR.

Want more? An hour-long webinar from NAR is also available.

Theismann completes VAR’s REal Show

You remember Joe Theismann as the number one NFL quarterback of the 1980′s. But the two-time Pro Bowl player and most productive Washington Redskins quarterback ever has shown tenacity both on and off the field. On November 19, 1985, the star suffered a compound leg fracture that shattered both his career and boyhood dream. But he refused to let it be the end of his success.

Joe helped lead the Washington Redskins to victory in Super Bowl XVII. At the REal Show, VAR’s Convention & Expo (October 1-3 at the Virginia Beach Convention Center), you can learn tips from Joe that will help lead you to victory in a changing real estate market.

Get fired up by Theismann’s The Challenge of Change and learn how at age 35, Joe managed to remake his personal life and professional career. Discover how a positive mindset can guarantee your success even when a changing housing market threatens to upset your goals.

Governor Bob McDonnell today will sign into law five measures that provide capital gains tax breaks for tech entrepreneurs and make it easier for out-of-state businesses to be temporarily licensed in Virginia. One of the bills will offer as much as $22 million in grants for the Center for Innovative Technology in Herndon, Va.

The bills are part of a broader economic recovery plan that the governor expects will create nearly 30,000 new jobs and $311 million in revenue for the Commonwealth.

Homeowners stand to benefit from an improved job market, as any recovery in home values will likely keep pace with employment statistics.

Read more:

McDonnell rolls out economic development package (The Examiner)

A new look at housing affordability in Virginia

H+T mapThe Center for Neighborhood Technology has released its Housing and Transportation Affordability Index, which factors in the cost of transportation when calculating the cost of living in greater metropolitan areas.

Traditionally, a home is considered affordable if the yearly mortgage payments are about 30% of the homeowner’s annual salary. The H+T (Housing + Transportation) Affordability Index suggests that a more realistic measure would factor in transportation costs. Using their model, a home would be considered affordable if the mortgage payments plus transportation costs (car, fuel, public tranportation, etc.) come to about 45% percent of the homeowner’s annual income.

Virginians living in the close-in suburbs largely fare well, according to the CNT model. Roanoke boasts combined housing and transportation costs of just 44% of the area median income (AMI), Charlottesville 43%, and Lynchburg 49%. The Richmond metro area generally falls into the affordable range at 39% of AMI, with the exception of some outlying parts of the surrounding counties. Most of the Hampton Roads is considered less affordable, with housing and transportation taking up more than half of the AMI, with Norfolk the exception at 42%. 

The Northern Virginia area is more affordable according the the H+T model. For example, transportation costs in Alexandria come to about 15% of the local median income.

Wondering how your home stacks up? Homeowners in the Washington metro area can put their addresses into this calculator to find out or read the Washington fact sheet at the Center for Neighborhood Technology.

Check out other regions on this interactive map.

Good news for unemployed homeowners struggling to pay the mortgage

The Obama administration  on Friday will announce changes to its Home Affordable Modification Program (HAMP) that will provide financial aid for unemployed homeowners with emphasis on writing down the principal of troubled loans.

With the jobless rate still near 10%, more homeowners are falling behind on payments and risk falling into deliquency. The new measures would help by giving unemployed homeowners three months of forbearance, giving them much-needed breathing room. Reducing the principal of the loan, rather than simply reducing the mortgage interest rate, will also be considered.

Keeping people in their homes, and holding down foreclosures, is key to helping the housing market recover.

Read more at CNBC….

Vicki Cox Golder, the 2010 NAR President, circulated this memo to association leaders yesterday indicating that the homebuyer tax credit will probably come to an end when the current deadline of April 30 rolls around.

As you know the deadline for the Homebuyer Tax Credit is fast approaching.  Buyers must have a contract in place by April 30, 2010 with a closing date no later than June 30, 2010 to claim the credit. We expect that REALTORS® will be asking you what NAR is doing to extend the tax credit.  NAR has had extensive discussions with our congressional allies and concluded that an additional extension of the tax credit is unlikely.  While lawmakers recognize that the tax credit helped stabilize the market, it appears that much of the benefit has been realized.   NAR is now focused on working with our REALTOR® Party champions to improve the availability of financing, which continues to be an issue.  Specifically, we are working with Congress to strengthen FHA and to help develop a new business model for the secondary mortgage market giants Fannie Mae and Freddie Mac.

If you ask me, that’s a perfect reason to hold an open house (or several!) on April 10-11 during Nationwide Open House Weekend. It’s timed strategically to give buyers enough time to shop over that weekend and negotiate a contract before the April 30, 2010 deadline.

The Commonwealth Institute for Fiscal Analysis says that Virginia’s new two-year budget will result in the loss of 37,000 jobs — bad news for the housing recovery, which is already being held back by high unemployment. Experts say that the housing market won’t rebound until the job market improves.

Read more:

Real Estate Board considers social media marketing regs; VAR is there

Guest post by Matthew Rathbun:

The Real Estate Board’s Regulatory Review Committee met last week to discuss how Virginia’s real estate regulations affect agents’ and brokers’ use of online media to advertise.  When I learned of this meeting, my first thought was ‘How does one create regulations to protect consumers from the media that the consumer is still creating?’. 

As one of a few instructors teaching risk management classes for technology, most of my experience has been convincing Brokers that they shouldn’t be afraid of these tools.  If you can’t trust your agents enough to use online tools, you most likely shouldn’t be trusting them off-line either. Over the years, I also learned that some of Virginia’s online advertising regulations are outdated and that better guidance is needed.

I worked with VAR members Jim Duncan and Nathan Hughes as well VAR staff members Blake Hegeman (Associate Counsel) and Ben Martin (VP for Marketing & Communications) to take a look at the current regs and come up with recommendations. 

Even on the ride to the meeting Ben, Jim and I were on the phone discussing regulations that could be better defined to safeguard consumers.  I knew this was a critically important meeting: The Real Estate Board would consider laws to defend consumers against misuse of tools that haven’t even been created yet.

On the day of the meeting, I worried about what policy or regulations may be changed.  I didn’t actually know any of the Regulatory Review Committee members and how familiar they were with online marketing. But as the meeting started, it was clear that the committee members had done research and were open to hearing about new ideas.  Even better, they understood that some regulations were already outdated. 

As Blake and the committee engaged in ideas about new media, I found they were very welcoming and I’m thankful that they allowed me to participate. 

I was impressed with how prepared Blake was and how open the Committee was to hearing from him.  The Committee praised VAR for being proactive in educating members about technology and it’s application to real estate.  I’m sure that this was just the first of many meetings on this topic, but the Committee did consider some promising revisions.  I want to be clear that these are only preliminary ideas and after the Board decides on the regulatory changes, they could take 18 months or more to go into effect.

Below is just a sampling of some of the ideas that were discussed:

  • Instead of defining all the different types of media, the term “electronic media” was made a consideration, which would encompass all online and mobile media that would be used for engaging or working with potential or current clients.
  • The consideration was made to eliminate the requirement to show the last date of update to advertising, as most systems don’t support this and it may be detrimental to the Seller.  Keeping information accurate and truthful should provided the desired protection of the consumer.
  • All marketing and online media should be available for Broker review.  (This is important as some agents who are using Facebook, etc… to engage clients, are blocking their Brokers.)
  • One of the considerations was the way that required brokerage disclosures should occur.  Currently agents must disclose Brokerage Name, City and State of main office and their license status.  The suggestions varied but included a requirement for the agent to list their license number on all online web pages where disclosures exist so that anyone could go to the DPOR webpage and search by license to find the agent’s brokerage.  Additionally a link to the Broker’s web site or a phone number to the main office should be available.  This makes it pretty easy to just hyperlink the Brokerage name to the company and meet this recommended regulatory change.
  • Because many of the online tools allow for very little room to make all the required disclosures, a link from profile pages, going to the agent or Brokerage webpage may be a future requirement.  This “One Click Away” rule is currently applied to banner ads, but needs to be expanded to other electronic media. 

Where Do We Go From Here?

Just a reminder that these were only a sampling of ideas that were discussed and that this meeting was only the beginning of process.  From the time that the Real Estate Board proposes new regulations, it can take 18 months for them to become effective.  As the Committee considers changes to the rules affecting online advertising, what recommendations do you have?

(photo credit)

Bank of America takes bold principal forgiveness step

Right behind yesterday’s story that the Federal government is pursuing steps to induce more banks to lower the principal balance on mortgages for underwater homeowners, the Wall Street Journal reports that Bank of America is going to begin doing just that:

Bank of America Corp. said it would offer more borrowers reductions in their mortgage-loan balances in the latest twist on efforts to avert foreclosures.

The plan is the mortgage industry’s boldest move yet to address the plight of the millions of U.S. homeowners who are “underwater,” owing more than the current values of their homes…. Reductions of as much as 30% in loan principal will be offered to struggling borrowers…

Hat tip to Kathy Dipp for pointing us to the story.

Virginia offers rebates for energy-efficient upgrades

$10 million is available to help Virginia homeowners and small businesses cut their energy costs and implement renewable-energy systems. The money can be used to offset the expense of energy-saving upgrades to heating and air conditioning, home insulation, windows, and the like. Funds are also available to encourage the purchase of wind and solar energy devices.

Read more in the Richmond Times-Dispatch or get full details on the program from the Virginia Division of Energy.