Permanent Loan Limit Increase would be good for Homeownership, Says NAR
WASHINGTON, May 22, 2008
Making the temporary loan limit increases authorized by the Economic Stimulus Act of 2008 permanent will give families in high-cost areas equal access to fair and affordable loans on a continuous basis, according to the National Association of Realtors®.
“Congress created Fannie Mae and Freddie Mac to provide liquidity and stability to the mortgage markets. Making the Economic Stimulus Act limits permanent will significantly boost home buyer, lender and investor confidence and will bring more families in high-cost areas back to the marketplace with greater access to affordable financing,” said Realtor® Vince Malta, Chair of NAR’s Public Policy Coordinating Committee, in testimony before the House Financial Services Committee today. “This will also make more affordable interest rates available for families regardless of where they live because of the added liquidity to the mortgage market. We believe the result will be additional sales, lower inventories, and stronger home prices.”
Research studies have found that home prices have the biggest impact on foreclosures, and that strengthening and stabilizing home prices would reduce foreclosures.
“While jumbo mortgages were once associated with luxury housing, today every region of the country has areas that qualify for jumbo conforming loans,” said Malta. NAR estimates that adopting permanent high-cost area limits of 125 percent of the local median home sales price, up to $729,750, will allow more than 500,000 homeowners to refinance into lower interest rate loans every year, helping to reduce foreclosures by as many as 210,000. Additionally, this would generate over $35 billion in increased economic activity, strengthen home prices by 2 to 3 percent, increase home sales by up to 350,000 and save homeowners up to $600 per month.
“For all of these reasons, NAR urges Congress to make the Economic Stimulus Act loan limit increases permanent. Doing so is the right move for the nation’s housing markets and economy and is a matter of simple equity for American families residing in higher cost areas. Stability is what we are after and stability is what this action would provide,” Malta said.
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.
FBI details spike in mortgage fraud cases
Associated Press
May. 22, 2008 04:18 PM
WASHINGTON - The housing market slump translated into brisk business last year for mortgage scammers and the federal agents who pursue them, with the FBI winning 206 convictions, recovering nearly $22 million and still chasing a growing number of securities and commodities fraud cases.
According to an FBI report released Thursday, the 1,204 mortgage fraud cases pursued in fiscal year 2007, which ended last Sept. 30, resulted in 321 indictments and court orders for $595.9 million in restitution.
Results of this year’s financial crimes tally compare with 818 cases of mortgage fraud in fiscal 2006, that yielded 263 indictments, 204 convictions, court orders for $388.9 million in restitution and $1.4 million recovered.
Common types of mortgage fraud are misrepresentation of income or assets, forged documents, misrepresentation of a borrowers’ intent to occupy a property and inflated appraisals. The depressed housing market is an ideal climate for perpetrators of fraud, experts say. Identify theft, especially targeting borrowers with good credit, is prone to spike as are scams promoted as foreclosure rescues.
The FBI, working in conjunction with the Securities and Exchange Commission, is investigating more than 1,300 mortgage-fraud cases and conducting 19 corporate investigations linked to the subprime lending crisis. Federal authorities have formed a task force, headed by prosecutors in New York, to determine if lenders or Wall Street firms participated in fraud.
Thursday’s report also details the FBI’s activities regarding money laundering and fraud in health care, insurance and mass marketing.
The FBI pursued 1,217 cases of securities or commodities fraud in fiscal 2007, up from 1,165 in fiscal 2006.
The cases in 2007 brought $1.7 billion in restitution orders, $24 million recovered and $202.7 million in criminal fines, compared with $1.9 billion in restitution orders, $20.6 million recovered and $80.7 million in fines the previous year.
Some of the corporate fraud cases involved losses to investors exceeding $1 billion, the FBI said. Notable cases involved former executives of Brocade Communications Systems Inc., Qwest Communications, Hollinger International Inc. and Mercury Finance Inc.
“Financial crimes affect the economic security of millions of Americans, and the FBI is dedicated to working with our partners in industry and law enforcement to combat these offenses,” Kenneth W. Kaiser, assistant director of the FBI’s Criminal Investigative Division, said in a statement.
Other key findings:
-In fiscal 2007, the 2,493 health care fraud cases investigated by the FBI resulted in 839 indictments and 635 convictions of individuals.
-The FBI investigated 548 money laundering cases in fiscal 2007, resulting in 141 indictments, 112 convictions, $66.9 million in court orders for restitution, $2.2 million recovered and $11.4 million in criminal fines.
Leading Commercial Real Estate Index Contracts in First Quarter
WASHINGTON, May 21, 2008
Although fundamentals are sound, activity in commercial real estate markets is expected to ease in the months ahead, according to a forward-looking index for the commercial real estate sectors published by the National Association of Realtors®.
The Commercial Leading Indicator for Brokerage Activity1 edged down 0.7 percent to an index of 119.0 in the first quarter from a downwardly revised reading of 119.9 in the fourth quarter, and is 0.8 percent below the first quarter of 2007 when it stood at 120.0.
This is the third consecutive quarterly dip since reaching a record of 120.5 in the second quarter of 2007. Before that, the index showed generally positive expansion from the middle of 2003; NAR’s track of the index dates back to 1990.
Lawrence Yun, NAR chief economist, expects somewhat diminished business opportunities for commercial real estate practitioners in the months ahead. “The moderate erosion in the index suggests that commercial activity, as measured by net absorption and the completion of new commercial buildings, will be positive but somewhat weaker over the next six to nine months. Private nonresidential investment in structures is likely to subtract one-third to one-half percentage point off GDP growth,” he said. “Along with the impact of the credit crunch, a weakening in leasing and building sales activity should come as no surprise because commercial real estate follows changes in overall economic activity.”
The quarterly decline results from falling employment in the sectors requiring office space, rising first-time unemployment claims, a lower rate of return as measured by NCREIF (National Council of Real Estate Investment Fiduciaries), and a falling NAREIT (National Association of Real Estate Investment Trust) price index. In addition, there was a modest decline in industrial production.
Realtors® members who specialize in office and industrial properties indicate in a separate attitudinal survey2 that they anticipate a much lower level of business activity in the upcoming quarters.
“The job market is weak, but not recessionary,” Yun said. “There are large regional variations, with job growth in the South, while overall professional business service jobs are in the process of a long-term expansion.
“The U.S. is the world leader in the knowledge-based industry, and trade exports are solid – combined, these are solid underlying fundamentals for positive rent growth and net absorption in the commercial real estate market.”
The commercial leading indicator is a tool to assess market behavior in the major commercial real estate sectors. The index incorporates 13 variables that reflect future commercial real estate activity, weighted appropriately to produce a single indicator of future market performance, and is designed to provide early signals of turning points between expansions and slowdowns in commercial real estate.
The 13 series in the index are industrial production, the NAREIT price index, NCREIF total return, personal income minus transfer payments, jobs in financial activities, jobs in professional business service, jobs in temporary help, jobs in retail trade, jobs in wholesale trade, initial claims for unemployment insurance, manufacturers’ durable goods shipment, wholesale merchant sales, and retail sales and food service.
More than 80,000 NAR members offer commercial services, and 60,000 of those are currently members of the REALTORS® Commercial Alliance, NAR’s commercial division.
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.
Commercial Real Estate Edges Down
Although fundamentals are sound, activity in commercial real estate markets is expected to ease in the months ahead, according to a forward-looking index for the commercial real estate sectors published by the NATIONAL ASSOCIATION OF REALTORS®.
The Commercial Leading Indicator for Brokerage Activity edged down 0.7 percent to an index of 119.0 in the first quarter from a downwardly revised reading of 119.9 in the fourth quarter, and is 0.8 percent below the first quarter of 2007 when it stood at 120.0.
This is the third consecutive quarterly dip since reaching a record of 120.5 in the second quarter of 2007. Before that, the index showed generally positive expansion from the middle of 2003; NAR’s track of the index dates back to 1990.
Lawrence Yun, NAR chief economist, expects somewhat diminished business opportunities for commercial real estate practitioners in the months ahead. “The moderate erosion in the index suggests that commercial activity, as measured by net absorption and the completion of new commercial buildings, will be positive but somewhat weaker over the next six to nine months.
Private nonresidential investment in structures is likely to subtract one-third to one-half percentage point off GDP growth,” he says. “Along with the impact of the credit crunch, a weakening in leasing and building sales activity should come as no surprise because commercial real estate follows changes in overall economic activity.”
The quarterly decline results from falling employment in the sectors requiring office space, rising first-time unemployment claims, a lower rate of return as measured by NCREIF (National Council of Real Estate Investment Fiduciaries), and a falling NAREIT (National Association of Real Estate Investment Trust) price index. In addition, there was a modest decline in industrial production.
Lower Business Activity Expected
NAR members who specialize in office and industrial properties indicated in a separate attitudinal survey that they anticipate a much lower level of business activity in the upcoming quarters. “The job market is weak, but not recessionary,” Yun says. “There are large regional variations, with job growth in the South, while overall professional business service jobs are in the process of a long-term expansion.
“The U.S. is the world leader in the knowledge-based industry, and trade exports are solid – combined, these are solid underlying fundamentals for positive rent growth and net absorption in the commercial real estate market,” he says.
The commercial leading indicator is a tool to assess market behavior in the major commercial real estate sectors. The index incorporates 13 variables that reflect future commercial real estate activity, weighted appropriately to produce a single indicator of future market performance, and is designed to provide early signals of turning points between expansions and slowdowns in commercial real estate.
The 13 series in the index are industrial production, the NAREIT price index, NCREIF total return, personal income minus transfer payments, jobs in financial activities, jobs in professional business service, jobs in temporary help, jobs in retail trade, jobs in wholesale trade, initial claims for unemployment insurance, manufacturers’ durable goods shipment, wholesale merchant sales, and retail sales and food service.
School districts get tough as foreclosures rise
Amy Merrick and Joe Barrett
The Wall Street Journal
May. 21, 2008 10:23 AM
Some school districts, hoping to control costs and prevent overcrowding, are intensifying efforts to make sure students actually live where they are registered.
Districts from Florida to California are hiring private investigators, creating anonymous tip lines and imposing penalties when they believe people have registered at false addresses. The measures often are spurred by parents who feel they pay a premium in property taxes to get their children into good schools.
One reason for the crackdown is the rise in home foreclosures, which may prod parents into faking addresses to keep their children at their current schools, some in the field say.
“Foreclosure rates are up. Displacement is up. People are becoming homeless,” says William Beitler, a private investigator specializing in address verification for school districts in the Chicago area. Mr. Beitler says he has contracts with 32 districts, up from 23 last year, and his caseload has increased to 7,000 from 3,000. He claims he will save districts a total of $12.2 million next year through removing students.
Officials give estimates of $7,000 to $14,000 for the cost of educating one student for a year. Administrators argue that students who attend the wrong schools can cause overcrowding in one district and leave another with too much staff and not enough revenue.
Schools can get it wrong when they attempt crackdowns, because of unreliable public records or ignorance of education law. The McKinney-Vento Homeless Assistance Act, an updated version of a 1987 law, says school districts can’t deny enrollment to children who are homeless because of foreclosure or other economic hardship.
“No district should be chasing people away because of foreclosure, but we know they are,” says Laurene Heybach, director of the Law Project of the Chicago Coalition for the Homeless.
Last October, Palm Beach County, Fla., hired a demographer to examine student addresses full time. In March, the county set up an anonymous tip line to report suspected nonresidents. It has received at least 250 calls.
Palm Beach County officials say the tips have led to dozens of students switching schools and help ensure that individual schools in the district aren’t bearing disproportionate burdens. They say they have heard of families illegally sharing homes in upscale areas that are zoned for single-family homes.
While housing-market turmoil is forcing some people to give up their homes, the opposite may be happening in Palm Beach County. The school district’s planning director, Kristin Kern Garrison, says she expected a decline this school year of as many as 3,000 students, which would have forced teacher layoffs. But the decrease was less than 1,000. “We believe, anecdotally, that parents who had been planning to leave could not because their homes did not sell,” she says.
Mr. Beitler, the Chicago private investigator, says his company did a “blitz run” for a district in March, examining the purported address of every enrolled student. They found a nine-block area in an inner-ring Chicago suburb where some students were registered even though nearly every building was boarded up. Mr. Beitler says the district dropped 100 students from its rolls as a result of that discovery and others. The district superintendent didn’t return calls seeking comment.
For families facing foreclosure, avoiding a school change is often a priority.
“For us, it was huge,” said Mike Bertrand, a 36-year-old father of two in Newbury Park, Calif. Mr. Bertrand, an Internet marketer and DVD editor, spent almost a year trying to hold on to a house made unaffordable by a layoff and job change that cut his income in half.
This month, the bank took over the house and the Bertrands moved into a rental in their school district, enabling the kids to stay at the same school. “If we weren’t attached to Newbury Park or the school, we would have given up” on trying to keep the family home months earlier, he said.
About two million children are likely to be affected by the wave of foreclosures on subprime mortgages, mostly this year and next, according to an analysis by First Focus, a bipartisan child-advocacy group based in Washington. The calculation is based on estimates that about two million subprime foreclosures will occur, combined with data on how many children live in the average household.
Carmela Sanchez is desperately trying to hang on to her house so her daughters, 11 and 16, can stay in their Highland Park, Ill., schools and keep up their ballet training. The 44-year-old interior designer bought her house for $413,000 three years ago after a divorce. She compiled $30,000 in credit-card debt after her mother became ill and the housing slowdown cut into her business. Ms. Sanchez is behind in her mortgage payments. She counts seven other houses on her block on the market.
The bank has said she can stay in the house until at least the end of the year. If she can’t work out new loan terms with her bank, she figures, she’ll have to pull the kids out of school and move somewhere less expensive.
“I’m petrified it will affect them,” she says. “They’ve been through enough.”
REALTORS® See Senate Stimulus Bill as Step Toward Housing and Mortgage Market Stabilization
WASHINGTON, May 20, 2008
The National Association of Realtors® expressed appreciation to Senate Banking Committee Chairman Christopher Dodd, D-Conn., and Ranking Member Richard Shelby, R-Ala., for their efforts to bring forth a bipartisan bill that can bring stability to the housing market and help stem the rising rate of foreclosures. Today, the committee voted to pass the Federal Housing Finance Regulatory Reform Act of 2008.
“Our 1.2 million Realtor® members appreciate the hard work and commitment of the Senate Banking Committee in advancing legislation that will help people buy and keep their homes,” said NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif.
NAR expressed ongoing support for all the major features in the housing package passed earlier this month by the U.S. House of Representatives, and for the government-sponsored enterprise (GSE) reform (Fannie Mae and Freddie Mac) and Federal Housing Administration foreclosure prevention measure included in the Senate bill.
“We are pleased with the overall direction of this bill,” Gaylord said. “As Senators Dodd and Shelby noted, this legislation is good for both the housing market and the homeowner. However, we continue to strive for permanent increases to the conforming loan limits at the higher level passed by the House. This truly would be good for current and future homeowners.”
Realtors® have long advocated reform of Fannie Mae and Freddie Mac, as well as permanent loan limit increases for the GSEs and FHA. “This legislation, reforming the Fannie Mae and Freddie Mac and creating a refinancing program designed to stem foreclosures, should help thousands of families refinance existing mortgages and keep their homes,” said Gaylord.
“We look forward to working with the House and Senate to finalize an aggressive bill that will ensure that every American who can afford to own a home and aspires to do so will have that opportunity, and that every American who responsibly owns a home is able to keep it,” said Gaylord.
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.
REALTORS® See Senate Stimulus Bill as Step Toward Housing and Mortgage Market Stabilization
WASHINGTON, May 20, 2008
The National Association of Realtors® expressed appreciation to Senate Banking Committee Chairman Christopher Dodd, D-Conn., and Ranking Member Richard Shelby, R-Ala., for their efforts to bring forth a bipartisan bill that can bring stability to the housing market and help stem the rising rate of foreclosures. Today, the committee voted to pass the Federal Housing Finance Regulatory Reform Act of 2008.
“Our 1.2 million Realtor® members appreciate the hard work and commitment of the Senate Banking Committee in advancing legislation that will help people buy and keep their homes,” said NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif.
NAR expressed ongoing support for all the major features in the housing package passed earlier this month by the U.S. House of Representatives, and for the government-sponsored enterprise (GSE) reform (Fannie Mae and Freddie Mac) and Federal Housing Administration foreclosure prevention measure included in the Senate bill.
“We are pleased with the overall direction of this bill,” Gaylord said. “As Senators Dodd and Shelby noted, this legislation is good for both the housing market and the homeowner. However, we continue to strive for permanent increases to the conforming loan limits at the higher level passed by the House. This truly would be good for current and future homeowners.”
Realtors® have long advocated reform of Fannie Mae and Freddie Mac, as well as permanent loan limit increases for the GSEs and FHA. “This legislation, reforming the Fannie Mae and Freddie Mac and creating a refinancing program designed to stem foreclosures, should help thousands of families refinance existing mortgages and keep their homes,” said Gaylord.
“We look forward to working with the House and Senate to finalize an aggressive bill that will ensure that every American who can afford to own a home and aspires to do so will have that opportunity, and that every American who responsibly owns a home is able to keep it,” said Gaylord.
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.
Is it worth it to buy a timeshare?
Erin Conroy
The Associated Press
May. 20, 2008 11:50 AM
Q. I’m thinking about buying a timeshare. Would it be a worthwhile investment?
A. Timeshares can bring their owners substantial savings in time and money when planning vacations, but experts warn that they should never be viewed as a financial or real estate investment.
Timeshares are typically resort condominium units that multiple parties have the right to use, generally by the week, and are an alternative for people who don’t want to rent and can’t afford to own a vacation home or condo outright. The timeshare system also allows owners to trade weeks at a property with timeshare owners elsewhere.
They do have their drawbacks - an owner hoping to sell a timeshare might end up taking a loss. And while there are laws protecting buyers who purchase a timeshare from a developer, they don’t help someone buying from an owner.
People interested in buying a timeshare shouldn’t need to think carefully before buying into a property, according to Lisa Ann Schreier, author of “Timeshare Vacations for Dummies.”
“A lot of times, people get caught up in the moment and drop a ton of money on a timeshare, and then never use it,” Schreier said. “You have to take into consideration how spontaneous you are; how often you vacation, and for how long; and how much you’re willing to spend for your accomodations. If you’re used to going away for a few days and spending less than $80 a night at a hotel, then a timeshare is probably not for you.”
Schreier suggested this formula for determining if a timeshare makes sense financially: If you’re paying $100 for hotel rooms 10 nights a year, you would break even after 13 years if you bought a timeshare for $13,500.
The average cost of a two-bedroom timeshare is $18,000, plus about $500 a year in maintenance fees, according to Howard Nusbaum, president of the American Resort Development Association. The resorts offer amenities that many hotels don’t, Nusbaum said, such as a full kitchen, jacuzzi or screened-in porch.
“Basically, if you take at least a week of vacation each year and don’t like sleeping on grandma’s couch, then this is a great deal,” Nusbaum said. “But if you’re not a vacationer, then I wouldn’t recommend this, just as I wouldn’t recommend you buy a car if you don’t drive.”
Nusbaum and Schreier both said it’s important to understand what you’re purchasing - most importantly, when and how the time can be used. Is it fixed for the same week of every year? What is the policy for transferring the stay to another city or resort? Also, are you buying a deeded interest, or just access to the resort?
It’s also important to find out about maintenance fees or other hefty, unexpected fees. Some timeshares require an owners vote to approve a developer’s request for a special assessment fee.
Schreier says prospective buyers should be sure they’re not lured by sales pitches, often made at high-pressure presentations put on by developers.
“You have to remember to think like a consumer as you would in any other situation. They’re trying everything to get the sale that day, so if it sounds too good to be true, then it is. If they’re saying it’s perfect, ask questions and consider whether it makes sense for you,” she said.
Schreier said it’s important to look at a timeshare as a long-term commitment, and said reselling or renting one out can be extremely difficult.
There is a secondary market for timeshares, in which the properties are resold by their owners, but timeshares depreciate dramatically in value, Nusbaum said. A timeshare purchased for $15,000 would likely sell for about $5,000.
Prospective buyers might think that purchasing from a timeshare owner could seem like a steal, but Nusbaum warns, buyer beware. While there are consumer protections and regulatory oversight of the industry, that would not apply to a sale in the secondary market. Most important, the buyer should be sure that all of the rights to the property or access to the facilities would transfer with the deed. While a contract with the developer is government-backed, that protection may not extend to the person the timeshare is resold to.
“Sure, there are great bargains out there, but it’s the same as if you opened a newspaper to buy a used car,” Nusbaum said. “You don’t really know what you’re getting.”
Valley home-sales reports are at odds
Trustee-sales figures skew real-estate picture
J. Craig Anderson
The Arizona Republic
May. 20, 2008 12:00 AM
One sign of the Valley’s troubled housing market is the growing incidence of lenders assuming ownership of homes.
Ironically, the increasing number of those transactions has led to a false perception that the real-estate market may be showing signs of recovery.
The confusion stems from a report on April home sales by Jay Butler, director of real-estate studies at Arizona State University’s Morrison School of Management and Agribusiness.
Butler compiles a report each month on home-resale transactions in Maricopa County.
The report said home resales were up 15 percent compared with the same month in 2007, the first year-over-year increase since July 2005.
That conflicts with a report released Monday by the Arizona Regional Multiple Listing Service indicating a 12 percent decrease in home sales in the same period.
The reason is Butler’s report does not differentiate between “trustee sales,” in which banks take over properties from borrowers in default, and routine home resales.
More than one-third of the sales reported by Butler for April, or 2,025 of the 5,585 total, were trustee sales.
When real-estate consultant Scott Smith saw Butler’s latest report, Smith said he knew something was wrong with the numbers. Smith, who owns a real-estate services firm and tracks area home sales “on a daily basis,” said Butler’s April sales figures were simply too high.
“After checking the data several times . . . there is no doubt that Mr. Butler made a big mistake,” Smith said.
Smith’s opinion was based on information from the multiple-listing service, which records every home sale involving a professional real-estate agent.
Usually, monthly home-sales figures from the multiple-listing service run higher than those reported by Butler.
Unlike Butler, the listing service includes new-home sales, some pending-sale transactions and sales in certain areas of Pinal County.
But since January, Butler has been painting the rosier picture, reporting higher sales figures than the listing service for each of the year’s first three months.
Butler said he agrees that trustee sales should not be lumped in with routine resales and would be reported separately from now on.
The market has changed so rapidly, he said, that the methodology he once relied on for accurate sales data suddenly has become obsolete.
Until recently, Butler said, trustee sales represented a very small portion of overall sales activity and often involved an actual sale, such as at a foreclosure auction, which is why he has always included them.
But as the foreclosure rate began to climb in late 2007, more and more cases involved lenders simply assuming ownership of the home, still considered a trustee sale and still included in Butler’s reports.
On Monday, ARMLS reported 4,874 home sales in April. Butler’s revised figure would be 3,565 sales, he said.
NAR Advances Plan for Property Database
Meeting in Washington, D.C., on Saturday, the NATIONAL ASSOCIATION OF REALTORS® Board of Directors took a major strategic leap, authorizing the association to work with a technology company to create a broker-controlled national repository or “library” of property data that would provide members-only access to detailed information on all properties in the United States.
The repository, which NAR is calling a “digital library/archive,” would be revenue neutral but could eventually be fee-based to cover operating costs.
In a report preceding the vote, NAR CEO Dale Stinton emphasized that the repository will not be a national MLS. There will be no offers of cooperation or compensation, nor any attempt to create a national online marketplace for property listings. The database also will be accessible to REALTORS® only, with no consumer-facing components.
“A number of technology companies are actively working to aggregate property data and provide such information to consumers, with the potential of creating an ‘information gap’ between content available to consumers and reliable information available to REALTORS®,” according to a whitepaper prepared by NAR’s Leadership Team to explain the scope and importance of the project. “We want to…arm our members with the most comprehensive information imaginable, literally for every property in the U.S. In that way our members will remain in the preeminent position to serve their clients with the best information available for any property,” the paper reads.
Last year, the directors gave approval for start-up funding for the project. Now, the association and its technology partner are charged with delivering a “proof of concept” working model of the property library/archive as soon as possible, using one or more pilot locations around the country.
The proposal wasn’t without detractors, who expressed concern about the cost and operation of such a database. Stinton said waiting for a business plan and budget to be presented for board approval would almost certainly doom the idea, allowing competitors to get a leg up in establishing their own database. After a brief debate, the directors overwhelmingly passed the proposal.
Other Major Board Decisions
In a three-hour meeting, the board approved new policies on topics ranging from short sales to NAR election rules and officially elected the association’s 2009 officers. Here’s a recap of the board’s major decisions:
Approved new model rules for MLSs that would enable practitioners to alert one another to potential short sales and put them on notice about the sharing of any reduction in gross listing commission required by a lender. MLSs are given the authority to decide whether or not their participants have to disclose reasonably-known short sales.
Gave MLSs discretionary authority to enable participants to offer cooperative compensation through the MLS as a percentage of the net sale price. The net sale price is the gross price minus seller concessions and new-construction buyer upgrades.
Approved a statement of principles on immigration, saying NAR will be involved in immigration issues as needed to support stable, prosperous, thriving, and secure communities and to enhance the United States as a destination of choice for those seeking to own, transact, lease, and use real property. Among the principles, the association supports the right of foreign citizens to acquire and own real estate, supports the free flow of international capital for real estate, and opposes laws that would impede that flow. The directors voted to support a federal resolution on securing borders to prevent illegal immigration while allowing for the flow of legal immigrants to accommodate the labor needs of the economy.
Supported an increase in H-2B worker visas to ensure an adequate supply of foreign workers in the United States, particularly in resort areas, which are highly dependent on such workers.
Supported voluntary, market-based solutions to address pollution and degradation of the country’s waterways, while supporting private property rights; said federal water resource policy should take into account traditional state, local, and private water rights and uses.
Updated the association’s policy on federal transportation funding, setting aside specific policies in favor of a flexible policy accounting for changes in travel patterns, shrinking petroleum supplies, and continuing technological innovation.
Clarified that NAR policy does not prohibit REALTOR® associations from establishing service centers in other association jurisdictions, nor does it prohibit associations from offering member recruitment dues incentives.
Supported use of the FHA insurance program to help homeowners refinance out of unaffordable mortgage products, provided safeguards are in place to protect FHA goals and minimize taxpayer risk.
Affirmed that the association seeks affordable health insurance coverage that preserves choice but opposed a single-payer system and any requirement that employers provide coverage to employees.
Approved a series of changes to NAR policies and processes for nominating and electing NAR officers, among them, that the association will hold a candidate forum at its annual and midyear meetings and create venues for directors to learn about the candidates. Of roughly two dozen election reform recommendations, only two were defeated by the board: One would have required that when the Nominating Committee interviews more than one candidate and any interviewed candidate who was not nominated chooses to run through the petition process, the committee then must present to the board a rationale for its decision to nominate the chosen individual; the second would have required NAR candidates’ Web sites to include a section for voluntary disclosure of campaign receipts and disbursements. Several of the approved changes require amendments to the NAR Constitution so will come before the NAR Delegate Body at its November meeting.
Provided $332,753 to fund two legal cases. One involves the constitutionality of a municipal requirement for a property inspection at the point of sale. The other involves treatment of exclusive agency listings by an MLS, including exclusion of such listings from the MLS data feed.
2009 Officers Elected
Directors elected the following NAR officers for 2009. They will be inaugurated at the REALTORS® Conference & Expo in Orlando, Fla., in November.
Charles McMillan, CIPS, of Irving, Texas, president
Vicki Cox Golder, CRB, of Tucson, Ariz., president-elect
Ronald Phipps, CRS®, GRI, of Warwick, R.I., first vice president
James Helsel Jr., CRE, CCIM, of Lemoyne, Pa., treasurer
More News from the Board of Directors
Distinguished Service Award. Recipients of the 2008 Distinguished Service Award were announced. They are Michael Owen, ABR®, CRS®, of Boca Raton, Fla., and Sally Heimbrook, CRB, CRS® of Beaver, Pa. The DSA recipients will accept their awards at the 2008 Annual Conference in Orlando in November.
RPAC Nears Fundraising Goal. REALTORS® Political Action Committee Fundraising Chair Moe Veissi reported that NAR is well on its way toward meeting an ambitious $10 million fundraising goal for 2008. As of April 30, nearly $4.6 million had been raised, and 12 states and territories had already met their RPAC goal for the year.
Membership Projections. Treasurer James Helsel reported projected membership of 1.18 million in 2009 and 1.24 million in 2010. The association annual dues of $80 will remain unchanged.
NAR Headquarters Finds Retail Tenant. The Real Property Operations Committee announced that the Charles Schwab Co. has signed a 10-year lease (with two five-year renewable options) for the retail space in the Chicago building. This will be Schwab’s flagship location in Chicago.
