By NAR 2013 President Gary Thomas
As Bob Hope said, “a bank is a place that will lend you money if you can prove that you don’t need it.”
All kidding aside, we understand banks play a vital role in the housing market. And just as banks are important, so is protecting the interests of consumers.
In 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). It established a new government agency, called the Consumer Financial Protection Bureau (CFPB). The purpose of the CFPB is to supervise banks, credit unions and other financial companies and enforce the federal consumer financial laws.
According to the CFPB, their mission is “to make markets for consumer financial products and services work for Americans — whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products.”
Because of their important role, NAR maintains an ongoing dialogue with the Bureau. Recently, NAR organized a mortgage roundtable with Iowa REALTORS®, CFPB Director Richard Cordray, NAR staff, and other industry partners. The meeting went very well and demonstrates the importance of presenting the REALTOR® perspective on lending issues to the CFPB. It also shows our members the value of NAR and our ongoing partnerships with federal agencies.
Last March, the CFPB held a field hearing in Iowa on their release of an expanded version of its consumer complaint database, including complaints on obtaining a mortgage, loan modification, or short sale. We welcome the database as a good start in addressing some of the difficulties facing consumers, and our REALTOR® members will appreciate that a light is being shined on deficient banking practices.
Let me mention that CFPB Director Cordray spoke at the May Midyear Legislative Meetings & Trade Expo in Washington, DC. We were interested to hear his perspective on how best to protect consumers.
Here at NAR, our goals are to increase mortgage liquidity and help consumers make better decisions about which mortgage is right for them. This will allow the real estate market to continue improving, help lift the country’s economic markets, and ensure that the dream of homeownership remains within reach for the majority of Americans.
By NAR 2013 First Vice President Chris Polychron
I was just chatting with Elizabeth Mendenhall, 2012 Chair of the Strategic Planning Committee. She let me know that NAR is looking for the next big idea. Do you have any crazy ideas for NAR? Or one that is new, different and unique? If so, the Strategic Planning Committee needs your help.
Get out your cell phone and film a 10-15 second video. State your name, where you are from, and “My crazy idea for NAR is….”
You can be as outrageous as you like, as long as it’s a real idea. If you need inspiration check out this video: http://youtu.be/8rwsuXHA7RA
Please email your videos video to firstname.lastname@example.org by April 30th. If your idea is creative or interesting, you may be featured in a video presented at the May meetings in Washington, DC.
Did you know that 45% of recent buyers used open houses to find their home? NAR encourages REALTORS® to participate in the upcoming Nationwide Open House Weekend, April 20-21, when REALTORS® will hold open houses in neighborhoods coast to coast. President Gary Thomas shares more about the Nationwide Open House Weekend in the video below, and talks about the buyers who are most likely to use open houses in their search for home.
By NAR 2013 President Gary Thomas
On April 15th, it’s a good time to remember something Will Rogers once said. He noted that, “the difference between death and taxes is death doesn’t get worse every time Congress meets.”
As the U.S. Congress considers action on comprehensive tax reform, you can be sure that NAR is doing its best to protect the many long-standing tax incentives to home and property ownership.
These include the following:
- mortgage interest deduction
- capital gains exclusion on the sale of a principal residence
- deduction for mortgage insurance premiums on private mortgage insurance and FHA-backed insurance
- state and local property tax deduction
- carried interest on commercial real estate
We’re going to have to stay on top of the action. These are complicated issues that will not be settled with a direct up or down vote that affects only real estate. They may easily be tucked into the language on a larger bill, and things may move very fast when the time comes.
Right now, we’re in the early stages of what we expect will be a long process. The House Ways & Means Committee and the Senate Finance Committee are holding ongoing meetings on the issues. As REALTORS®, we have a seat at the table and are sharing our views.
We tell members of Congress and staff how necessary these incentives are for rebuilding the national economy. Since we’re in the midst of a fragile recovery, additional housing taxes would crush the real estate market just as it is poised to help lift us out of the economic doldrums.
Our goal is to see that the tax code will continue to reflect the fundamental American value that homeownership helps build financial stability. Not only is this the right policy for housing, it’s also the best for families, for communities and the entire country.
Our government tax policy should encourage homeownership while giving more Americans a chance for their little piece of heaven. Support NAR and keep real estate tax incentives alive!
By Gary Thomas, 2013 NAR President
REALTOR® University is one of finest examples of the innovative thinking NAR is doing to meet the needs of REALTORS® in a rapidly changing industry.
REALTOR® University fosters lifelong learning. It is the only institution of higher education focused exclusively on real estate. Entirely online, REALTOR® University is geared toward busy schedules of REALTORS®.
As REALTOR® University begins the second year offering its Master of Real Estate degree program, it is well on its way to meeting its goal of creating the highest standard of professionalism and competency in the real estate industry. Find out more about getting your degree from REALTOR University in my video below.
By NAR 2013 Vice President Leslie Rouda Smith
Before the year 1500, real estate transactions were sealed by “livery of seisin”—the ceremony surrounding conveyance of a property. Closing the deal required the physical transfer of a piece of ground, twig, key, or other symbol on the premises in the presence of witnesses.
Following that custom, paper became the modus operandi and the wet ink signature has been the standard for more than 500 years.
That is until now—the era of technology—when electronic signatures promise easier, speedier, safer transactions for REALTORS® and consumers.
Congress tried to help this along by passing the ESIGN Act of 2000. Its purpose was to support and promote electronic commerce through the use of electronic records and signatures by ensuring the validity and legality of contracts entered into electronically, while preserving consumer protection laws.
Since then, electronic signatures have become much more widely accepted by most financial and lending institutions. E-vendor DocuSign reports 65,000 new users per day (not just in real estate) and expects that number to be one per second by the end of the year. ZipLogix is reporting a 102 percent increase in 2012.
Yet, despite huge growth, many REALTORS® continue to experience problems submitting forms with electronic signatures to servicers of Fannie Mae and Freddie Mac loans, particularly relating to short sales and Real Estate Owned, or REO, properties.
In markets where distressed properties are emerging as the dominant share of the market, completing a transaction under threat of possible default or foreclosure is not unusual. In these instances, the speed and flexibility provided by electronic documents is critical.
I recently took part in a summit, hosted by NAR in Washington, DC, to examine obstacles to increased acceptance of electronic signatures. The meeting brought representatives from government, banking, lending, real estate, and electronic signature providers together for an open discussion.
It was a great opportunity to exchange ideas, and our goals moving forward are twofold. One is to enact government policies that will facilitate implementation of the ESIGN Act. The other is to continue the dialog among all sectors to promote examples of best practices and find additional strategies for eliminating obstacles to full acceptance of E-signatures.
In addition to hosting the summit, NAR has also requested the Acting Director of the Federal Housing Finance Agency, Ed DeMarco to clarify and align Fannie Mae and Freddie Mac’s policies on the broad acceptance of electronic signatures.
The ability to reduce records and documents to digital form and transfer them electronically, when coupled with the Internet, is transforming the commercial world in general, including the real estate world. Not only have electronic sources provided better data faster, but they are an indicator of the need to reduce all documents to digital form.
We believe that, if done correctly, E-signatures can do more than ease transactions. They also offer greater protection against fraud than traditional wet ink signatures.
We’ve come a long way from exchanging dirt and twigs. There is no doubt that electronic signatures are the wave of the future. Catch the wave!
By NAR 2013 Vice President Bill Brown
“Whatever the cost of our libraries, the price is cheap compared to that of an ignorant nation.” That sentiment from Walter Cronkite is being tested as the cost of an education soars ever higher.
The College Board Advocacy & Policy Center’s Trends in College Pricing 2012 report found that overall the average cost of tuition and fees has risen for both public and private schools by over 4 percent, reaching up to $60,000 per year.
A college education helps people get better jobs and gives them a leg up in climbing the economic ladder. But with the high cost of a college education these days, many students have to take out loans to afford tuition.
The result is that students are piling up debt. The New York Federal Reserve reports that total U.S. student debt has almost tripled over the past eight years to reach a total of $966 billion.
The overall number of borrowers past due on their student loan payments has also grown, from less than 10 percent in 2004 to 17 percent in 2012.
The Consumer Financial Protection Bureau (CFPB) raised the issue of whether this debt will have a domino effect on the economy. Their concern is that young people are using a larger portion of their paycheck to pay off debt than for other purposes. This could keep them out of the economy, particularly the housing market.
While approximately 85 percent of student loans are backed by the federal government, the rest are held by private lenders. Now, there is an issue with these private loans. The Fed’s report says the growth in student debt is caused by a combination of more students attending college, more parents taking out loans for their children’s education and a lack of available options for discharging the debt.
While government student loans have options for modifying the loans, (i.e., deferment or making payments a percentage of income) private loans do not. According to the CFPB, they’ve heard from thousands of private student loan borrowers who are willing to make good on their debt, but are seeking a more affordable payment.
The CFPB has issued a “Request for Information” to gather feedback from borrowers, lenders, schools and everyone with a stake in the success of the lending market. As REALTORS®, you’re on the front lines of this issue and will be impacted by whatever the CFPB’s decides.
Please share your stories with us about how student loan debt is impacting sales in your area and, in particular, the impact on individuals. We want to hear from you.
By NAR 2013 President Gary Thomas
The Internet has changed everything, and home sales are certainly no exception. A recent joint study by the National Association of REALTORS® and Google finds that real estate searches on Google.com have grown 253 percent over the past four years.
The report, The Digital House Hunt: Consumer and Market Trends in Real Estate, examines the connection between consumer Internet use and online home search and shopping patterns. Google wanted to work with us, using NAR’s custom research and leveraging it against Google’s proprietary and third-party research. The results reveal some interesting consumer trends.
While REALTORS® may not be surprised by these results, it’s important for us to be aware of any and all consumer trends. That way, we can reach home buyers where they are—online. We can do this through paid searches, relevant websites, video environments and mobile applications.
We’ve found that buyers use specific online tools at different points during their home search process. They tend to rely on search engines and general websites at the beginning of the search, then maps in the middle, and mobile applications toward the end.
Indeed, 48 percent of people who used a mobile device in their home search used the device to get directions to homes for sale, and 45 percent used it to request more information about specific home features or real estate services.
According to the 2012 NAR Profile of Home Buyers and Sellers, multiple listing service websites and REALTOR.com were the top two websites used in recent home searches. Realtor.com, NAR’s official property listing website, attracts an average of more than 20 million unique visitors per month. Mirroring the Google/NAR study, search activity on REALTOR.com has picked up 31 percent between March and October of this year.
This trend bodes well for the year ahead. It shows that more people are regaining confidence to invest in their future though homeownership. And rather than replacing real estate agents, the Internet is actually helping connect home buyers and REALTORS® in new ways.
So come see me on Facebook, and check out the new NAR Leadership page. Try it, you’ll “like” it.
By 2013 NAR President Gary Thomas
This time of year is very busy…work projects, gift shopping, holiday parties. It all seems to pile up, and most of us don’t need more to do. Even so, please let me put just one more thing on your Christmas list.
If you haven’t done so already, you have until December 31 to complete ethics training. As you probably know, REALTORS® are required to complete not less than two and one half hours of ethics instruction within a four-year cycle. This training must meet specific learning objectives and criteria established by the NATIONAL ASSOCIATION of REALTORS®.
The year 2013 marks the centennial of the Code of Ethics and Standards of Practice of the NATIONAL ASSOCIATION OF REALTORS®. The first Code was written before license laws and most other regulations governing real estate existed. It was one of the first times that codifications of ethical duties were adopted by any business group.
Modeled on ethical codes of physicians, engineers and lawyers, the Code was the precursor to state license laws. It was seen as a declaration of the industry’s principles and beliefs. Establishing ethical standards for real estate practitioners was the spark that led to organizing the National Association of REALTORS®.
Today, the Code is a living document that today undergoes annual review and revision to ensure it stays relevant.
Because it embodies the “Golden Rule,” the Code has been called a “golden thread,” uniting those devoted to raising the standards of professionalism and service in real estate.
It does this in a number of ways. One is by ensuring that consumers are served by requiring REALTORS® to cooperate with each other in furthering clients’ best interests. Other ways the Code unites REALTORS® is by demanding respect for others’ exclusive relationships with clients and keeping disputes between members “in the family” by requiring REALTORS® to arbitrate—and many associations require members to mediate. The Code is enforced at the local level through knowledgeable peer panels.
So don’t wait. December 31, 2012, is the deadline for all REALTORS® to complete NAR Code of Ethics training this cycle to maintain their membership. Training may be completed through local REALTOR® associations or through another method such as home study, correspondence, classroom courses or online courses. An online training course at REALTOR.org fulfills the requirement and is free of charge. Just go to REALTOR.org/COETraining.
Silver and gold…naughty or nice…learn the Code…don’t think twice!