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.
2013 NAR Treasurer Bill Armstrong shares his experience on the The Real Estate Roundtable Board of Directors where they met with White House top advisors Valerie Jarrett and Gene Sperling, and where NAR’s message — Do No Harm to Housing — was heard loud and clear.
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 Gary Thomas, 2013 NAR President
I wanted to share with all REALTORS® the message that went to our members at the Newtown Board of REALTORS®, in Newtown, Conn., to let them know that the entire membership of NAR is sharing in their loss, and keeping them in our thoughts and prayers.
December 17, 2012
Ms. Eileen Brooks
2012 President
Newtown Board of REALTORS®
I write on behalf of the entire membership of the National Association of REALTORS® to express our deepest sympathies for the lives lost in last week’s tragic shooting. It is truly unfathomable to understand the tragedy, the loss of innocent lives and what it means to all of you who live there.
It is very difficult to accept that such terrible things happen in our world, especially in a town as quaint and traditional as Newtown. We understand that the incident has also touched your office, and our hearts go out to you.
Words seem inadequate to express the sadness of your loss, which is also our collective loss: young lives stopped before they had barely begun to unfold their promise.
If there is any comfort to be found, it was in the loving words offered by some of the family and loved ones of the victims. We should lean on the thoughts of Robbie Parker, whom you heard speak so eloquently about his own daughter Emilie.
He said, “Let it [be] something that inspires us to be better, to be more compassionate and humble people. Let us please keep the sentiments of love that we feel for our families, and the compassion that we feel for others—even complete strangers—and keep them with us at all times, not just in times of sorrow and tragedy. And may we do this so that we can better all of our communities, and all of our cities and all our states, so we can make everyone, everywhere in this country feel safe.”
We can’t say it any better. His words offer comfort and hope. Please know you are in our thoughts and prayers during this difficult time and always.
Sincerely,
Gary Thomas
2013 President
National Association of REALTORS®
by Gary Thomas, NAR President
I recently had a good meeting with leaders in Congress and reminded them why the mortgage interest deduction is vital to the stability of the American housing market and economy. See more in the video below. And if you haven’t already answered our related Call for Action to ask Congress to do no harm to housing, please do so now. Thanks!
Watch the video below and hear 2013 NAR President Gary Thomas talk about what’s in store for REALTORS in 2013.
- NAR President Moe Veissi celebrates the VA Home Loan Program with Department of Veterans Affairs officials and Elizabeth Carpenter, shown at left, who is the recipient of the 20th million loan through the program. Elizabeth’s son, Joey, rides his tricycle in the driveway of their new home.
by Moe Veissi, 2012 NAR President
I was honored today to celebrate the 20th million loan given by the Department of Veterans Affairs home loan program.
Even more special was meeting the recipients of that loan — Elizabeth Carpenter and her son Joey. Elizabeth’s husband, Captain Matthew Carpenter, was a West Point Graduate and a veteran of the Iraq war who died of cancer in December of 2010. Last month, Elizabeth used her surviving spouse benefits to purchase a home in Virginia to be closer to family. I can’t describe what a thrill it was to welcome her and Joey to their new home.
NAR President Moe Veissi and Elizabeth Carpenter
The VA loan guaranty, which began in 1944 under the GI bill, provides veterans with a zero-downpayment loan. VA loans have one of the lowest default rates, and provide affordable financing to our nation’s military families.
NAR is working in partnership with the Department of Veterans Affairs to promote the VA home loan guaranty, and assure REALTORS® are familiar with this program and the benefits it provides veterans and their families. We are proud to work closely with the Department of Veterans Affairs to ensure that the VA guaranteed home loan program is not only a top priority for our nation’s policy makers, but is also widely promoted so that every veteran is aware of home ownership’s invaluable benefits. NAR never stops working with our elected officials to ensure that home ownership is accessible and affordable for our nation’s veterans.
We are especially proud of our work with Congress that raised VA loan limits and make permanent the VA adjustable rate mortgages.
Congratulations to the Department of Veterans Affairs for creating one of the most enduring programs – the VA home loan program – and for reaching 20 million loans.
Learn more about this terrific program in the video below.
by Ron Phipps, 2012 Immediate Past President, NAR
So if you are like me, you have been working in real estate for a long time. You think you have seen it all. Your body of work includes lots of transactions, and some amazing human stories, both happy and sad. In real estate we deal with the full range of life experiences.
Our collective experience right now of getting to closing is an obstacle course. Doesn’t it feel like the stars are conspiring to knock your transaction off track? Just closed one that ended up with 4 appraisals and weeks of heartache before we got to closing.
So what is happening behind the Wizard of Mortgage Oz’s curtain? Am I the only one who struggles to get my buyer to the closing table? The answer is absolutely not.
What we do know is that we have over corrected from the free-flow capital, no underwriting standards of 2004-2006. I repeat…over corrected. Prior to 2004, the average credit score for Fannie Mae and Freddie Mac mortgage was 720; today it is 760. This means that 15 percent of potential buyers cannot qualify.
In the past, pre-approval letters actually meant something. Now, they are a single yellow brick on the road to homeownership. The sad part is that they do not have a lot of value.
So what is going on? The problem is that the market for mortgage backed securities is very limited. The federal government continues to buy or insure most of them, upwards of 9 out of every 10 mortgages. In other words, the government provides the capital to keep the mortgage market, and, in turn, the real estate market alive.
As a result, the mortgage package needs to be perfect and complete. Three years of tax returns and back statements are not enough. Explanations of all deposits and expenses over $1,000 are now required.
You know all of the new requirements. You also know the reality of conditional commitments. Is the lender really committing to the buyer if the ‘commitment letter’ really isn’t a letter of intent? What does that mean for a seller? What does that mean for you? How can a commitment be rescinded two days before closing?
What you need to know is that strict underwriting standards are being applied precisely and aggressively. Some investors will penalize the origination loan company $30,000 if a mortgage defaults in the first year. Yes, that will make the processor obsessive.
We have not even talked about the appraisal process. In general you need direct, like kind sales within six months and within a few miles of the subject. If not, it will be a problem. What is also true is that the “appraisal review” is where the real problems occur. Someone in the process looks at the appraiser’s work as something to just pick apart.
All of this is part of the process of compliance…to make sure the package is “perfect and complete.”
When Dorothy was lost in the Land of Oz and wanted to get back home, she just clicked her heels three times. I wish it were that easy for REALTORS® and consumers to get back to a place where closings would make it to the table.
In the meantime, what can we as REALTORS® do? Here are a few recommendations:
1. Understand the process, particularly underwriting criteria.
2. Educate the buyers (and sellers) to process and requirements.
3. Be realistic in timelines.
4. Manage buyer and seller expectations.
5. Help buyers identify the lenders that are most likely to provide them the loan.
6. Be proactive in real time with the process.
7. Be active in NAR with Calls to Action and RPAC to improve the situation.
We will get through this…sooner rather than later. See you at closing.
So if you are like me, you have been working in real estate for a long time. You think you have seen it all. Your body of work includes lots of transactions, and some amazing human stories, both happy and sad. In real estate we deal with the full range of life experiences.
Our collective experience right now of getting to closing is an obstacle course.
Doesn’t if feel like the stars are conspiring to knock your transaction off track?
Just closed one that ended up with 4 appraisals and weeks of heart ache before we got to closing.
So what is happening behind the Wizard of Mortgage Oz’s curtain? Am I the only one who struggles to get my buyer to the closing table? The answer is absolutely not.
What we do know is that we have over corrected from the free-flow capital, no underwriting standards of 2004-2006. I repeat…over corrected. Prior to 2004, the average credit score for Fannie Mae and Freddy Mac mortgage was 720; today it is
760. This means that 15 percent of potential buyers cannot qualify.
In the past pre-approval letters actually meant something. Now, they are a single yellow brick on the road to homeownership. The sad part is that they do not have a lot of value.
So what is going on? The problem is that the market for mortgage backed securities is very limited. The Federal Government continues to buy or insure most of them, upwards of 9 out of every 10 mortgages. In other words, the Government provides the capital to keep the mortgage market, and, in turn, the real estate market alive.
As a result, the mortgage package needs to be perfect and complete. Three years of tax returns and back statements are not enough. Explanations of all deposits and expenses over $1,000 are now required.
You know all of the new requirements. You also know the reality of conditional commitments. Is the lender really committing to the buyer is the ‘commitment letter’ really isn’t a letter of intent? What does that mean for a seller? What does that mean for you? How can a commitment be rescinded two days before closing?
What you need to know is that strict underwriting standards are being applied precisely and aggressively. Some investors will penalize the origination loan company $30,000 if a mortgage defaults in the first year. Yes, that will make the processor obsessive.
We have not even talked about the appraisal process. In general you need direct, like kind sales within six months and with a few miles of the subject. If not it will be a problem. What is also true is that the ‘appraisal review’ is where the real problems occur. Someone in the process looks at the appraiser’s work as something to just pick apart.
All of this is part of the process of compliance….to make sure the package is ‘perfect and complete.’
When Dorothy was lost in the Land of Oz and wanted to get back home she just clicked her heels three times. I wish it were that easy for REALTORS® and consumers to get back to place where closings would make it to the table.
In the meantime, what can we as REALTORS® do? Here are a few recommendations:
by NAR First Vice President Steve Brown
Taking action that could benefit small businesses and real estate professionals, the House recently passed the Real Estate Settlement Procedures (RESPA) Home Warranty Clarification Act of 2011. If the measure clears the Senate and is signed into law, real estate professionals could again market home warranties more easily to consumers.
In 2010, a ruling reversed decades of common understanding of RESPA. Previously, it was common practice for real estate professionals and home warranty companies to partner in providing home warranties to consumers. For nearly two decades, the industry carried on this practice. Then in 2008, HUD called the practice into question and issued a rule in 2010 by the Department of Housing and Urban Development that made it a violation to offer compensation to an agent for the sale of a warranty product. HUD cited that the warranty program was a part of the financial closing process in the purchase of a property, which is indeed under the purview of RESPA.
NAR disagreed. A warranty product, while put in place during the closing of a real estate property, has nothing to do with the buyer’s financial process and therefore not under the purview of RESPA.
HUD’s ruling is not consumer friendly. The result of this ruling was in fact the removal of the real estate professional from the warranty sales process. This in turn hurt consumers because the real estate professional is in the best position to explain and service the warranty when questions or problems arise.
This bipartisan legislation clarifies the intention of Congress with regard to RESPA and warranties. The new legislation restates that home warranties are not covered by RESPA. It also directs the disclosure of any relationship between the real estate professional and the warranty company, which had been the practice before the RESPA rule.
The bipartisan legislation, introduced by Representatives Judy Biggert (R-Ill.) and William “Lacy” Clay (D-Mo.), has 40 co-sponsors. We’re very pleased the House has passed the clarification of RESPA, and NAR will continue to work with our industry partners to pass the measure in the Senate.
NAR President Moe Veissi shares great news about the Aug. 1 merger between the REALTORS® Federal Credit Union and Northwest Federal Credit Union – together now known as REALTORS® Federal Credit Union, A Division of Northwest Federal Credit Union.
