REALTORS® of South Central Kansas News

Flood Insurance Extended Three Months

President Donald Trump signed a three-month extension of the National Flood Insurance Program, ensuring insurance won’t lapse on Sept. 30. The program’s next expiration date is Dec. 8. NAR’s Call for Action concluded Sept. 8. NAR will continue legislative advocacy efforts for the 21st Century Flood Reform Act, which provides for long-term reauthorization and makes needed reforms.

Fannie Raises DTI, Tackles Student Debt

Fannie Mae is increasing its maximum debt-to-income ratio to 50 percent from 45 percent and last month eased underwriting for borrowers carrying heavy student loan debt. The changes will help more households obtain financing to buy a home and are explained in an NAR video with Fannie Mae Vice President Jonathan Lawless.         

Credit Issues Still Impede Homeownership

Tight credit and tight inventory are among the reasons the national homeownership rate remains down despite the growing economy. NAR convened experts at a homeownership summit last week at the University of California at Berkeley to identify causes and explore solutions. Read coverage

Regulations, Retention and Recruitment Pressing Issues for Appraisal Industry

WASHINGTON (May 17, 2017) – Any perceived shortage of appraisers may be location specific and dependent on whom you ask, but there is universal agreement that more needs to be done to keep appraisers in the profession and attract new talent. That’s according to panelists yesterday at a property valuation forum at the 2017 REALTORS® Legislative Meetings & Trade Expo.

The conversation with property valuation experts comes at a time of numerous challenges within the industry. NAR’s Appraiser Trends Study released earlier this year underlined many of the ongoing issues in the profession, including regulatory burdens, insufficient compensation, and dissatisfaction in the work leading to what some say is a shortage of appraisers.            

Providing their insights on these issues and ways Realtors® can communicate more effectively with appraisers were David S. Bunton, president and CEO of The Appraisal Foundation; James Park, executive director at the Appraisal Subcommittee; and Jim Amorin, 2017 president at the Appraisal Institute. Susan Martins-Phipps, a Realtor® and certified residential appraiser, moderated the session.

Much of the discussion during the session focused on balancing the need for appropriate regulation without overly burdening the industry. Sharing their own experiences, Bunton and Amorin discussed how the multiple federal, state and international standards can conflict with each other at times and cause confusion, frustration and an inability to appropriately serve the needs of clients.

Citing NAR’s appraisal survey, Amorin said that excessive regulation is the number one reason appraisers are leaving the industry, along with decreased fees and increased expenses. While regulation serves its purpose, Amorin stressed the need for ‘appropriate updating’ given that technology and consumer preferences have changed over the past decade.  

“Appraisers are being crushed in the current regulatory environment and there are fewer people entering the profession,” said Amorin. “There are changes that can be put into place that make the process easier for everyone and not put added costs on the consumer.”

According to Park, public trust in the appraisal profession is important, and while there are certainly challenges in the industry, few of those challenges have to do with federal regulation. He also said outside of a few areas, he believes there is not a shortage of appraisal professionals. Citing the lower mortgage volume compared to the early 2000’s, Park said the number of active appraisers is proportionate to the current level of work in most of the country.

Amorin added that although the number of appraisers have declined around 23 percent since 2007, any actual shortages are primarily in some rural areas, and what some see as a shortage in quantity is actually just a dearth of appraisers willing to work for the low fees that have failed to keep up with inflation. However, Amorin did sound the alarm on what could be an inadequate number of appraisers in the future.

“The number of new entrants into the business is abysmally low, and a looming shortage is something we should be concerned about,” said Amorin. “The typical appraiser is in their mid-50s. We’ve got to find a way to make the profession more attractive and lucrative so that technology doesn’t completely take over the valuation process.”

Bunton agreed with Amorin and indicated he’s hopeful an improving housing market will bring more individuals, including millennials, to the industry. “If you’re a millennial, what’s not to like? You get to use technology, the hours are flexible and there’s always work,” he said.

The end of the session focused on bettering the appraisal process for the greater benefit of the real estate industry. While appraisers must maintain their independence, Amorin stressed the important role real estate agents can play in helping serve their clients and improve the work of appraisers. He said to applause from the crowd that it’s certainly fine for agents to talk to appraisers as long as they aren’t putting undo pressure on them.

“Regarding the relationship between appraisers and Realtors®, my message to Realtors® is to help them help you,” said Amorin.

To improve the overall appraisal experience, Bunton concluded that real estate agents should be more involved with The Appraisal Foundation and its boards to stay abreast of the issues. “Nearly half of Realtors® are on our boards, and we would certainly like to see that number even higher,” he said. “Less friction and more commonality on how to make the system more cohesive for everyone will ensure a better process.”

NAR submitted a letter late last year to the Appraiser Qualifications Board in response to their efforts to improve recruitment and retention of new appraisers. Knowing the integral part appraisers are to real estate transactions, NAR supports AQB’s revisions to some of the education and experience requirements to bring new appraisers to the industry.

For more information on NAR’s valuation activities and advocacy efforts, visit www.nar.realtor/appraisal.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

Tax Reform Could Deliver a Tax Hike for Homeowners: New Research

WASHINGTON (May 18, 2017) – While tax reform proposals swirling around Washington, D.C., promise lower tax bills for American families, new estimates indicate that many middle-income homeowners may actually see a tax increase if those proposals go through.

The study, “Impact of Tax Reform Options on Owner-Occupied Housing,”(link is external) illustrates the effects of a tax plan that echoes certain elements of the “Better Way for Tax Reform(link is external)” or “Blueprint” proposal released last year, as well as the White House tax reform outline released in April, to which the National Association of Realtors® responded. 

While most individuals would see a tax decrease under such a proposal, the study estimates that many middle-class homeowners could in fact see a net average tax increase. Homeowners with adjusted gross incomes between $50,000 and $200,000 would see their taxes rise by an average of $815. The study also estimates that combined tax savings from claiming the mortgage interest deduction and real estate property tax deductions would drop 82 percent between the 2018 and 2027 period.

“Tax reform and lower rates are worthy goals, but only if we can achieve them in a fiscally responsible way,” said NAR president William E. Brown, a second-generation Realtor® from Alamo, California and founder of Investment Properties. “Balancing tax reform on the backs of homeowners isn’t an option.”

The study, which was commissioned by NAR and prepared by PwC (PricewaterhouseCoopers), estimates that this tax increase would result from the interaction of several provisions in the reforms under consideration. For many homeowners that currently benefit from the mortgage interest deduction, the elimination of other itemized deductions and personal exemptions would cause their taxes to rise, even if they elected to take the increased standard deduction. For others, the elimination of the state and local tax deduction alone would result in higher federal income taxes.

 In addition to increasing taxes on many middle-income homeowners, the report finds that such a proposal could cause home values to fall by an average of more than 10 percent in the near term. In areas with higher property taxes or state income taxes, the drop could be even greater. Although the study doesn’t directly analyze the “Better Way for Tax Reform” plan or the recent White House outline, it examines a proposal with many similar elements.

Those elements include lowering and consolidating marginal tax rates to only three rates, setting a top income tax rate of 33 percent, doubling the standard deduction, eliminating all itemized deductions (other than charitable contributions and mortgage interest) and personal exemptions, eliminating the alternative minimum tax, and capping the tax rate on pass-through business income at 25 percent.

PwC estimated that roughly 35 million households will claim the mortgage interest deduction in 2018, three quarters of which have incomes between $50,000 and $200,000. According to NAR, roughly 70 percent of those eligible for the MID claim it in a given tax year.

“A tax reform proposal that hikes taxes for homeowners is a raw deal, and consumers know it,” said Brown. “Leaders in Washington who are driving tax reform have shown every indication that they have the best of intentions, and we’re hopeful they’ll consider our study as this process plays out in the months ahead.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing over 1.2 million members involved in all aspects of the residential and commercial real estate industries.

Obstacles Hinder Aspiring Home Buyers

Affordability pressures, student debt and possible confusion about down payment requirements have kept many aspiring homeowners from reaching the market, according to NAR's Aspiring Home Buyers Profile, which analyzes data from the association's Housing Opportunities and Market Experience (HOME) survey. "Nearly all non-homeowners said they want to own a home in the future, but it's evident that higher rents and home prices—up 41 percent in the past five years—along with limited entry-level supply and repaying student debt have combined to make buying a challenging goal," says NAR Chief Economist Lawrence Yun. News release.

40,000 Could Lose Out in FHA Suspension

The Trump Administration's suspension of reduced FHA mortgage insurance premiums is the top story in the latest Voice for Real Estate news video from NAR. As many as 40,000 households could be priced out of home buying if the suspension remains in place, NAR says. Other segments look at the 10-year high in home sales in 2016, what's happening with the Ben Carson nomination for HUD secretary. and how clients can use a reverse mortgage to buy a home. Share video link

CFPB Hits Brokers For Marketing Agreements

The Consumer Financial Protection Bureau yesterday fined a mortgage lender, two real estate brokerages, and a mortgage servicing company for referral arrangements the companies had entered into that CFPB says are prohibited under the Real Estate Settlement Procedures Act (RESPA). In a statement, CFPB Director Richard Cordray says the action "sends a clear message that it is illegal to make or accept payments for mortgage referrals."  Read More

Rural Development Fees Reduced

Upfront and annual guarantee fees from the USDA's Rural Development program have been reduced. The upfront fee is 1 percent of the loan amount, down from 1.35 percent, and the annual fee is 0.35 percent of the average unpaid principal balance, a reduction of 0.15 percent.

Home Aid Increase for Disabled Vets

Disabled veterans can get slightly more assistance under the federal government’s specially adapted housing program. The program makes funds available to veterans to build or remodel housing that meets their needs.

NAR Presses CFPB on Closing Disclosure Access

As the Consumer Financial Protection Bureau (CFPB) considers updates to the Know Before You Owe initiative, NAR has submitted comments urging the agency to emphasize in its rule that real estate professionals may have access to the Closing Disclosure. NAR also asked the agency to take steps to decrease uncertainty during the closing process. More.

Court Sides with PHH Upholding RESPA Section 8

FHA Single Family Handbook Update Delivers Clarity for Appraisers, Say Realtors®

National Association of REALTORS® News

• H.R. 3700 Becomes Law...President Obama on July 31 signed H.R. 3700, the Housing Opportunity Through Modernization Act, which makes it easier for condo buyers to obtain mortgage credit. NAR has long been an advocate of the bill, testifying before Congress and lobbying for its passage. Details and video. Video message from NAR President Tom Salomone.
• Rural Loan Funds Running Out...The federal Rural Housing Service only has funds for its Sec. 502 direct loan program for about three more weeks. After that, borrowers will have to wait until the start of the new fiscal year in October to get a loan. There are alternatives, though, including the agency’s guaranteed loan program. The rural loan issue is a top story in The Voice for Real Estate for the week of Aug 1. Other stories look at President Obama’s signing of the NAR-backed condo bill, whether home sales have peaked for the year, and which metro areas are impacted by the federal government’s stepped-up effort against money laundering in real estate. The video also looks at how residential rules to come out after the mortgage crisis are impacting commercial real estate lending, and NAR’s victory this week when the federal government issued a statement that says lenders and title officers have no reason to cite privacy concerns as a reason for not sharing the closing disclosure in residential transactions with agents. Access and share the video.
• CFPB: Lenders Can Share Disclosure...The Consumer Financial Protection Bureau (CFPB) has announced a proposed rule that would make clear it is appropriate for lenders to share the Closing Disclosure (CD) with real estate professionals. Since the implementation of the agency’s “Know Before You Owe” mortgage initiative in 2015, lenders have been reluctant to share the document out of concern that they could be held responsible for improperly disclosing clients’ nonpublic personal information. NAR urged the CFPB to clarify the issue. More.
• NAR Examining Dodd-Frank Update...In case you missed it: NAR says it is pleased with provisions in the Financial Choice Act that will enhance transparency, accountability, and fairness in the financial system. But the association isn’t prepared to support the bill, which would update Dodd-Frank banking regulations, as it presently stands because of continuing concerns with its approach to reforms. More.
• FinCEN Expands Efforts to Stop Money Laundering...The Financial Crimes Enforcement Network (FinCEN), one of the Treasury Department's lead agencies in the fight against money laundering, has expanded the number of geographic areas where title companies must identify the people behind legal entities used to pay cash for high-end residential real estate. Details.Video.

National Association of REALTORS® News

• Senate Passes H.R. 3700…The U.S. Senate unanimously passed H.R. 3700, the "Housing Opportunity Through Modernization Act," on July 14. The legislation includes reforms to current Federal Housing Administration restrictions on condominium financing, among other provisions, and has long been supported by NAR. President Obama is expected to sign it. News release. More.
• Voice for Real Estate: Housing Symposium, Condo Win…The latest Voice for Real Estate news video takes a look at the Housing For All symposium NAR hosted this week. Hundreds of housing experts joined NAR to explore solutions to affordable housing and homelessness challenges. NAR Vice President for Government Affairs Sherri Meadows hosted the event, which took place over two days in Washington. The video also looks at NAR's big FHA condo loan win, surveillance video issues, and NAR efforts to curb Americans with Disabilities Act lawsuits. Access and share the video.
• NAR Supports Financial Choice Act…NAR has sent a letter to the House Financial Services Committee supporting the Financial Choice Act (FCA), which would update the Dodd-Frank banking regulations. Among other changes, the FCA would make adjustments to the Truth in Lending Act’s definition of "points and fees," allowing for greater consumer choice in mortgage and settlement services under the Ability to Repay/Qualified Mortgage (QM) rule. Details.
• NAR Urges Changes to Distressed Asset Program…NAR has asked the FHA to require investors to prioritize owner-occupants when looking to sell a foreclosed property as part of the agency’s efforts to enhance the Distressed Asset Stabilization Program. In a letter to HUD Secretary Julián Castro, NAR President Tom Salomone also expressed support for the FHA’s decision to involve community partners in the acquisition of loan pools through expansion of its auction program to nonprofits. More.
• Senate Passes FAA Bill…The Senate has passed the Federal Aviation Administration Reauthorization Act of 2016, which funds the FAA through Sept. 30, 2017, and was approved by the House earlier in July. The bill includes a provision that allows the FAA to authorize Section 333 exemption holders to operate drones for beyond-visual-line-of-sight and night flights. More.

National Association of REALTORS® News

• Changes to Appraiser Requirements…Supervisory Appraisers no longer need to be state certified and in good standing in the jurisdiction where a Trainee Appraiser they supervise conducts appraisals under changes made by the Appraiser Qualifications Board. Supervisory Appraisers must still be state certified appraisers in good standing for a minimum of three years prior to supervising other appraisers. The changes, which took effect July 1, are in line with previous requests made by NAR. More.

• House Panel Approves ADA Updates…The House Judiciary Committee on July 7 approved a bill, the ADA Education and Reform Act of 2015 (H.R. 3765), that would curb the practice of so-called “drive-by” lawsuits, in which litigants attempt to force settlements that consist primarily of attorneys’ fees for easily correctable violations of the Americans with Disabilities Act. NAR, along with IREM and CCIM, joined a coalition letter sent to the committee in support of the bill, known as H.R. 3765. Details.

• Proposed Changes to Water Regulations…The U.S. Army Corps of Engineers has proposed changes to the process it uses to issue streamlined authorizations for dredge-and-fill activities that the Corps has determined will have minimal adverse effects on the aquatic environment. NAR will be commenting on the proposed revisions. More.

• Voice for Real Estate: Brexit, Drones, Flood Ins…In case you missed it: The latest Voice for Real Estate news video looks at the Brexit impact on U.S. real estate, the federal government’s final rule on the commercial use of drones, testimony from a REALTOR® on federal flood insurance, and the Call for Action on condo financing, The video also excerpts from, and links to, the recent tax planning webcast. Click here to watch.

National Association of REALTORS® News

• 95,000 Urge Senate Action on Condo Financing…If you have not already joined the tens of thousands of REALTORS® who have already responded to NAR’s Call for Action on FHA-insured condo financing, it just takes a visit to the REALTOR® Action Center to send a message urging senators to vote for legislation supported by NAR that would make it easier to buy a condo. The bill, S. 3083, would also streamline rural housing programs and is virtually identical to H.R. 3700, which the House passed unanimously in February.

• NAR Leads Call to Reduce GSE Fees…NAR, joined by 24 other organizations, is urging the Federal Housing Finance Agency to reduce or eliminate loan-level price adjustments (LLPAs) charged by the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac. In a June 22 letter to FHFA Director Mel Watt, the consortium said that LLPAs combined with guarantee fees that have more than doubled since 2011 have effectively resulted in many qualified borrowers being priced away from the conforming loan market. Details.

• Hearing Focuses on Banking Regulations…The Senate held a hearing on June 23 that focused on how regulations implemented to prevent another financial crisis may have unintentionally made it harder for small lenders to make financing available to their communities. More.

• Why Won't That Lender Give You the Closing Disclosure?...Agents across the country say lenders are refusing to give them their client's closing disclosure, saying it's a privacy violation. But nothing in the law has changed to increase lenders' privacy liability, NAR says, and you can still access the document to advise your clients. The issue is a top story in The Voice for Real Estate news video.

• Legal Pulse Newsletter for Third Quarter…Structural defects and water-related issues continued to show up in court decisions, but no licensees were held liable for damages over any disclosure issues in the cases published during the last quarter, according to the latest edition of NAR’s Legal Pulse newsletter. The report, for the first three months of 2016, looks at recent cases related to agency, property condition disclosures, RESPA and employment. Executive summary. Highlights video.

National Association of REALTORS® News

• Uh-Oh, New Home Construction Is Flatlining…Nationwide housing starts – including single-family and multifamily production – mostly held flat at a seasonally adjusted annual rate of 1.16 million in May. Permit issuance – a gauge of future construction – also held mostly flat at an annual rate of 1.14 million.  Read More

• 7 Sins of Personal Branding…Correct these mistakes to hone in on your brand statement and attract the ideal customer.  What is a “personal brand”? Just like company or product branding, it’s built around imaging and messaging that is designed to create a feeling. Your personal brand influences how you want others to feel about you.  Read More

• 9 Tax Deductions Every Real Estate Agent Should Know…Closing a real estate sale requires a big investment of your time and money. Whether expenses are business, personal, or something in between can be unclear — leading to missed deductions and overpayment of taxes.  Read More

• The Threat of Wire Fraud Is Real…When NAR General Counsel Katie Johnson asked a group of real estate professionals whether they or someone they knew had clients that were victims of wire fraud, more than one-third of the audience at the Idea Exchange Council for Brokers raised their hands.  Read More

Broker Council Update

National Association of REALTORS® News

• Call for Action on H.R. 3700...Please take action and urge the Senate to follow the House's lead by passing H.R. 3700, the "Housing Opportunity Through Modernization Act of 2016." The bill makes needed reforms to the FHA condominium loan program, federal assisted housing programs and Rural Housing Service loan programs. Letter to Senate.
• House Examines Banking Rules...NAR expressed its support for a hearing the House Small Business Committee held June 9 to examine the burden the Dodd-Frank banking regulations have placed on small banks and rural communities. During the hearing, representatives of community banks testified that the increase in compliance requirements has impacted their ability make lending decisions based on creditworthiness. More. 
• Live webcast: Preparing Now for Tax Time...You can hear from, and ask questions of, two accountants who work extensively with real estate clients on what to do throughout the year to maximize their tax position in a live webcast on Thursday, June 23, 2-3 p.m., Eastern time. Presenters are Peter Baker of Business Planning Group in Washington, D.C., and Linda de Marlor of Tax-Masters, Inc., Rockville, Md. Registration link.
• Tell Lenders Sharing Closing Disclosure is OK, NAR Urges CFPB...NAR is asking the Consumer Financial Protection Bureau (CFPB) to make clear to lenders that they may share the Closing Disclosure (CD) with real estate professionals and other third parties as long as the borrower provides consent. In a letter to the CFPB, NAR President Tom Salomone also asked the agency to provide lenders with additional guidance about revising the CD after sending it to the borrower and extend the deadline for correcting minor Know Before You Go errors from 30 to 180 days.