News and issues affecting you, 2011
Dec. 16, 2011Got a complaint against a mortgage company?
As of Dec. 1, 2011, consumers can file complaints against mortgage companies with the federal Consumer Financial Protection Bureau (CFPB) through the agency’s home page. Consumers may file complaints if they are unhappy with the mortgage-loan-application process or the mortgage-loan-repayment process. You can even specify the outcome you are seeking. Read more.
Dec. 12, 2011Help our state parks
One of the most attractive things about living in Texas is the abundance and variety of state parks. No matter where you live in our state, you’re likely within a reasonable driving distance of some of nature’s most beautiful wonders. Read more.
Dec. 7, 2011Beware of scammers when renting a home
What happens when the person who offers a home for lease actually has no authority to do so? The sad reality is that the lease is most likely invalid and the tenants will be forced to move, potentially losing thousands of dollars. Read more.
Dec. 5, 2011More landlords and property managers
Factors such as rising foreclosures and tightened mortgage standards have led many real estate agents toward property management … and owners of rentals are often happy to have a professional to handle the details of leasing their property. Read more.
Nov. 21, 2011Texas housing market returning to old form
The latest Texas Quarterly Housing Report, issued by the Texas Association of REALTORS® and compiled by the Real Estate Center at Texas A&M, is out. And the news is encouraging. Statewide, home sales were up 18% in third quarter 2011 with prices holding steady. Inside Texas Real Estate host Stacy Armijo interviews Center economist Jim Gaines, Ph.D., on what these results portend for the future. Read more.
Oct. 27, 2011Cash for keys
More banks are starting to offer homeowners facing foreclosure “cash for keys” due to the rise in sales of distressed properties. Some banks are also making this program available to short sellers. How does it work? Read more.
Oct. 26, 2011What does buying a home have to do with a visa?
A recent bill introduced in the Senate would offer visas to foreigners who make a cash investment of at least $500,000 in residential real estate. Foreign investors could spend at least $500,000 on one residence or spend at least $250,000 on a residence and invest the remaining $250,000 in other residential property, such as rental property. Read more.
Oct. 14, 2011Bus stops in Texas to highlight attacks on homeownership
The National Association of REALTORS®’ “Homeownership Matters” bus pulled into Austin on Oct. 11 as part of its nationwide tour to draw attention to attacks on homeownership, including proposed changes to the mortgage interest deduction, FHA loan limits, and downpayment requirements at the federal level. Watch the YouTube video.
Oct. 10, 2011An extraordinary opportunity … if you are approved
Recently, the average rate on a 30-year fixed mortgage fell to 3.94%. That’s not just a low rate; it is the lowest rate ever. If you are considering purchasing a new home or refinancing your current home, it’s a good … no, great time to do so to get a low mortgage rate. Read more.
Oct. 7, 2011How green is that home really?
Many homes you see listed for sale these days advertise they are “green” homes. But what does that mean? Until now, there has been little or no mention of a home’s green features in a property appraisal report. But with the introduction of a new appraisal form, home sellers as well as potential buyers now have a tool to tell them exactly how green a home really is. Read more.
Sep. 29, 2011Texas REALTORS® help homeowners affected by natural disasters
Unfortunately, wildfires that damage and destroy homes are only the latest natural disaster to hit Texas. Fortunately, the Texas REALTORS® Relief Fund has provided more than $1.1 million in assistance to Texans who have been affected by hurricanes, floods, and other disasters – including the recent wildfires. Read more.
Sep. 27, 2011Is curb appeal a casualty of the drought?
It is almost impossible to escape the headlines declaring this to have been one of the hottest, driest summers in recorded Texas history. You can't drive down the street without noticing how brown the lawns are and how thirsty the trees look. But, that doesn't have to mean that a home has poor curb appeal. Read more.
Sep. 20, 2011Texas REALTORS® Relief Fund accepting applications, donations
Wildfires have devastated many Texas communities this year. The Texas REALTORS® Relief Fund is accepting applications for financial assistance for Texans whose primary residences were damaged or destroyed by wildfires this year. Read more.
Sep. 19, 2011Refinancing program may be expanded
The existing Home Affordable Refinance Program is expected to expand to allow more homeowners to refinance their mortgages at lower interest rates. Currently, mortgage rates are at record lows. The program was originally created more than two years ago to help homeowners qualify for loans. Read more.
Sep. 14, 2011Is a rental property in your future?
Looking for an investment? If you’ve read the news lately, all the buzz is on the rental market. Last month, the Obama administration solicited ideas on converting the inventories of foreclosed homes into rental properties. The rental market is attractive to investors since the demand is rapidly increasing. Read more.
Sep. 6, 2011Low advertised mortgage rates don’t always translate to a low average rate for consumers
The gap between the lowest advertised mortgage rate and the average rate that borrowers actually get is as high as it has been in two years. One might expect this differential to be due to borrowers’ financial condition in the current economic crisis. In reality, though, it is simply due to the way lenders are lending. Read more.
Sep. 2, 2011Sellers required to provide buyers additional property-condition information
When selling a single-family home, most sellers must provide the buyer a disclosure notice regarding the condition of the property. Thanks to the 82nd Texas Legislature, buyers are now entitled to additional information. As of September 1, sellers who are required to provide a seller’s disclosure notice must also supply three additional pieces of information. Read more.
Aug. 25, 2011Are lower interest rates in store for millions of homeowners?
It certainly could be said that when times are tough, people tend to get more creative. The U.S. government has tried a number of ideas and programs to get the housing market shocked back into activity again. Here is the latest: allow homeowners with government-backed mortgages to refinance at today’s interest rates. Read more.
Aug. 23, 2011Tax breaks for investors who rent out homes?
There’s no question the U.S. residential rental market is in the midst of a boom; the softness of the sales market has assured that. But will that be enough to keep investors, already skittish about the prospects of an economic recovery, interested in buying rental properties? Perhaps instead of relying on the promise of rental income as being the lure for investors, adjustments to tax policy might be the way. Residential investor tax breaks anyone? Read more.
Aug. 19, 2011Despite all the hoopla, buying is still cheaper than renting in most U.S. cities.
There was a short while when it made more economic sense for many people in the U.S. to rent rather than buy, but with falling home prices and the demand for rental properties increasing dramatically, it’s now cheaper for most people to buy a two-bedroom home than to rent one. According to real estate website Trulia, buying was cheaper than renting in 74% of the country’s 50 largest cities. Read more.
Aug. 18, 2011The Sage of Omaha: Housing is the key to economic recovery
Berkshire Hathaway CEO Warren Buffett states that the key to significantly reducing our unemployment rate to below 7% hinges on getting back to a million housing starts. Buffett says he thinks the housing market could work off its excess inventory before mid-2013. What Buffett is talking about is often referred to as a “multiplier effect,” meaning that housing activity spurs many other types of purchases and provides a boost to the economy. Read more.
Aug. 15, 2011Going down? Mortgage rates get more attractive
If you’ve been thinking about refinancing your home or buying a new one, take a look at current mortgage rates. Despite lingering economic woes, mortgage rates across the country are declining to near-record lows. The average rate for 30-year fixed-rate mortgages fell to 4.54% last week … not far from the record low of 4.42% set in 2010. Read more.
Aug. 12, 2011Big investors snatching up single-family properties
With so many homes in foreclosure and homeownership on a decline, the single-family rental market is on the rise. Big investors such as hedge funds, private-equity firms, pension funds, and university endowments are taking advantage, purchasing foreclosed homes and then renting them out with the hope of flipping the homes in the future. The practice has been yielding double-digit returns. Read more.
Aug. 5, 2011Has your county imposed a burn ban?
You’ve probably seen local news reports of authorities establishing a burn ban in your area. In fact, a record 248 of Texas 254 counties have a burn ban currently in place. But what does that mean for property owners? Read more.
Jul. 29, 2011Legislature keeps Texas a homeowner-friendly state … for now
The 82nd Legislature has kept Texas a homeowner-friendly state, at least for now, according to a prominent political insider. Daniel Gonzalez of the Texas Association of REALTORS® says the recently concluded legislative session did not pass any new taxes on Texas property owners, but it did bring new transparency for those living in areas with homeowners associations. Read more.
Jul. 22, 2011Where does Texas redistricting stand?
Texas’s effort to finalize it’s congressional, legislative, and State Board of Education redistricting map is far from over. Despite the governor having signed the legislative redistricting bills earlier this week, challenges remain. The most recent development is that Texas Attorney General Greg Abbott elected to file the maps for approval by a federal judicial panel based in Washington D.C. instead of with the US Department of Justice. Read more about what this all means at the Texas Tribune.
Jul. 20, 2011New rules give you more access to your credit score
On July 21, new federal rules will take effect allowing consumers, in many situations, to receive their credit scores from certain businesses. For example, in some instances when a landlord or mortgage lender uses the score to determine whether to engage in business with the consumer, that person has a right to receive their score. Read more.
Jul. 11, 2011Is homeownership still the American dream?
Despite the economic conditions, owning a home is still the ultimate goal for renters, according to a survey released by the National Association of REALTORS®. The results revealed that 72% of renters surveyed said owning a home is their priority for the future. Americans believe that home ownership is the key to stability and safety. Read more.
Jul. 7, 2011New HUD program for homeowners
The Department of Housing and Urban Development launched the $1 billion Emergency Homeowners' Loan Program (EHLP) in June. EHLP is expected to help 30,000 homeowners across the country by providing mortgage payment relief. The program's goal is to assist homeowners experiencing a substantial loss of income resulting from unemployment caused by economic conditions or medical conditions. HUD has until September 30 to spend the entire $ 1 billion, which gives applicants until July 22 to apply. Read more.
Jul. 5, 2011A national flood insurance program helps all taxpayers
Mortgage lenders require flood insurance for properties located in flood zones. But flood insurance in the private market is not available to all homeowners who need it. That is where the National Flood Insurance Program (NFIP) steps in. Floods are responsible for claiming more lives and more property than any other type of natural disaster in the U.S. over the last century. For properties that are uninsured, whether by choice or due to lack of availability, all taxpayers pay the post-disaster bills for cleaning up and rebuilding. Read more.
Jun. 30, 2011Texas REALTORS®, lawmakers keep Texas a homeowner-friendly state
While the 82nd Texas Legislature had plenty of high-profile challenges, Texas REALTORS® helped keep elected leaders focused on issues important to homeowners. Read more.
Jun. 24, 2011Texas REALTORS® support keeping financing options available
Federal Housing Authority (FHA) mortgages are often sought by first-time homebuyers and other buyers who do not qualify for conventional loans. Although an FHA mortgage can be the difference in homeownership for some, it is not helpful to homebuyers in certain areas of the country where its maximum mortgage limits have not kept pace with the median home price. Read more.
Jun. 17, 2011Exactly what is a short sale?
In today’s real estate market, most people have heard the term “short sale” tossed around, but do you really know what this means? A short sale occurs when a mortgage lender allows a homeowner to sell a home for less than the amount the homeowner owes the lender. Short sales are typically used to avoid foreclosure. Read this real-world example of just how and when a short sale can be used to avoid foreclosure at the Wall Street Journal.
Jun. 16, 2011Sanctuary-city bill being considered by Legislature
After the sanctuary-city issue died during the regular session and Gov. Perry didn’t include it in the original call for the special session, most thought the sanctuary-cities debate was over for Texas … at least temporarily. Well, soon enough Gov. Perry included the issue in the call, and now the measure has passed the Senate. What could the ultimate passage of this measure mean for Texans? Read more at the Texas Tribune.
Jun. 6, 2011Who owns that property?
Banks across the country are facing foreclosure obstacles due to questionable ownership of loans. The cause of the problem lies in the document. Some cases reveal instances where banks have failed to properly assign ownership of mortgages, whereas others include documents that were backdated or fabricated. These assignment problems have proven difficult to cure since many of the lenders that originated the loans have gone out of business. Read more at The Wall Street Journal.
May 31, 2011You're required to report gifts of real estate
When does a gift have potential tax implications? If you give as a gift property that is valued at more than $13,000, you must file a gift tax return (Form 709) with the IRS, even if that gift is to a family member. The IRS is using state land-transfer records as evidence of noncompliance. Texas is among many of the states that have handed over information on gift transactions to the IRS. Keep in mind this filing requirement is different from the $5 million lifetime exemption amount that a person can give without having to pay gift taxes. Read more at the Wall Street Journal.
May 26, 2011Texas REALTORS®-supported eminent domain protections now law
Legislation strengthening Texans’ protections against eminent domain abuses has been signed into law by Gov. Rick Perry. The new law tightens restrictions on state and local governments’ ability to invoke eminent domain authority to convert private property for public use. It requires government entities to make reasonable purchase offers to landowners for their property, allows landowners to buy their land back at the original price 10 years later if it isn’t used by then, and adds criteria that agencies must meet before declaring eminent domain over private property. The Texas Association of REALTORS®, the advocate for REALTORS® and private-property owners, supported these protections. Read more at the Dallas Business Journal.
May 13, 2011Large loans may get harder to come by
If you were waiting until the perfect time to buy that $700,000 house, you may not want to wait any longer. By the time this summer ends, the federal government will no longer back jumbo loans of $700,000 and above, making such mortgages harder to obtain. For more about this looming change, read this article from CNBC.com.
May 4, 2011Storm surges a significant risk for coastal properties
For many, living along the coast is the stuff of dreams. Before you begin the process of turning your dream into a reality, take a look at this article. Living the beach-house lifestyle is not without its risks. Hurricanes pose threats to properties in coastal regions. Whether that risk is worth it in exchange for waking to the sound of crashing waves in the morning is up to you. Read more at Caller.com.
May 2, 2011Texas an economic leader, thanks to healthy real estate market
Texas homes are maintaining their value, preserving the Lone Star State’s leadership position in terms of economic recovery from the national recession. “Texas has avoided the real estate bubble felt in other parts of the country and continues to lead the U.S. in recovery – due in large part to the leaders of our state actively protecting private-property rights in past legislative sessions,” says Dwight Hale, chairman of the Texas Association of REALTORS®, in the organization’s latest Texas Quarterly Housing Report. “For more than a decade, sound public policies have contributed to our quality of life and relatively low cost of living. As the latest numbers show, we are continuing to recover well, but we are not out of the woods yet. We encourage lawmakers to continue to keep the interests of homeowners foremost in their actions.” Read the news release on PR Newswire.
Apr. 28, 2011What … bigger isn’t still better?
Have you been thinking lately about buying or building a 6,000 square foot house so your huge home can be the envy of all your friends and family? You may be part of an ever-dwindling class of homebuyers. More and more American’s are electing to purchase homes that are smaller and more practical for their particular needs. It is starting to appear that the days of the McMansion are drawing to a close. Read more at US News and World Report.
Apr. 25, 2011Texas Supreme Court to rehear pivotal Open Beaches Act case
The Texas Supreme Court granted a rare rehearing of a private-property-rights case that seeks to balance the rights of homeowners who live along the beach and the right of the general public to access the state’s beaches. The court had initially ruled that although a right-of-use easement could move due to natural erosion, the state could not drastically move the easement due to a catastrophic tropical storm (in this instance Hurricane Rita). The court will issue their new decision at a later time. Read more at Chron.com.
Apr. 20, 2011Reining in mortgage servicing companies
Separate bills that would regulate mortgage servicing companies have passed the Texas Senate and House. Senate Bill 17 and House Bill 213 approach the issue in different ways, but both provide protections for homeowners whose mortgages are serviced by nontraditional mortgage servicing companies that do not otherwise fall under state or federal regulation.
Homeowner complaints of abuses by such companies … including “robo-signing” of foreclosure documents as well as using unscrupulous collection tactics … have prompted legislative action. The bills would, among other things, require mortgage servicing companies to disclose certain information to a homeowner regarding the homeowner’s loan, require these companies to register with the state, and give the Texas Department of Savings and Mortgage Lending the ability to assist homeowners harmed by one of these companies. Read more at the Austin American Statesman.
Apr. 19, 2011President signs repeal of tax-reporting requirement
On April 14, 2011, President Obama signed H.R.4, which repeals the 1099 expanded reporting requirements for landlords. H.R. 4 also repeals the 1099 reporting requirements that were to take effect Jan. 1, 2012, subjecting all businesses to similar reporting requirements, including reporting payments made to corporations and payments for tangible goods. Read more at the Journal of Accountancy.
Apr. 13, 2011Texas REALTORS® urge lawmakers to protect homeowners
More than 2,000 Texas REALTORS® converged on Austin yesterday to visit with state lawmakers on issues affecting Texas homeowners.
“Texas withstood the real estate bubble that ravaged the rest of the country, largely because state leaders made private-property rights a priority in recent sessions,” says Dwight Hale, chairman of the Texas Association of REALTORS®. “We are focused on maintaining those policies so homeownership remains affordable in Texas.”
Texas REALTORS® are urging passage of legislation to strengthen property owners’ rights against eminent domain abuses and eliminate private transfer fees … a scam in which a hidden fee must be paid by the homebuyer anytime a property is sold, for up to 99 years.
Texas REALTORS® also oppose legislation that would weaken home-equity lending protections Texas homeowners have enjoyed since 1998 … protections the Texas Association of REALTORS® pushed for back in the 1997 session. “This kind of protection doesn’t exist in other states, and many homeowners have found themselves upside down on their loans as a result,” Hale says. Read the news release on PR Newswire.
Apr. 13, 2011Tax-reporting requirements for landlords repealed
On Jan. 1, 2011, a law went into effect expanding the tax-reporting requirements for landlords. The new law compelled landlords receiving rental income from real property to report payments of $600 or more per year for services. Landlords were required to file a 1099 form and provide a copy to the service provider. REALTORS® strongly opposed this provision, since the law would place a burden on all rental-property owners … especially those who lacked the resources to comply with the requirements.
Efforts to repeal the bill proved successful, as Congress approved H.R.4 to repeal the expanded reporting requirements. The bill was sent to President Obama for his signature, and he is expected to sign the bill, as he addressed the issue in his State of the Union address back in January. Read more at the Speaking of Real Estate blog on Realtor.org.
Apr. 11, 2011How to avoid refinancing after a divorce
After a divorce, a marital property will either be sold or one party will buy out the other party’s interest. In the latter scenario, the mortgage remains in both names. This leads to refinancing because the party remaining in the property wishes to remove the other’s party’s name. Refinancing is not the only way to accomplish this task. The alternative is less costly and protects the credit of the parties, but the catch is that not all lenders offer this method. This method is known as release of liability, which involves a credit check on the requesting party and proof that the party is able to make the payments without the other party. If provided and approved by the lender, the loan note would solely be in the name of the requesting party, thereby removing the other party’s name. Read more at the New York Times.
Apr. 8, 2011Will major banks be a thing of the past?
Nonbank lenders may start outperforming major banks. During the housing crisis, nonbank lenders earned a bad reputation for offering riskier loans with higher rates to subprime borrowers. However, these nonbank lenders are now on the rise, as some now offer lower rates than those offered by major banks. Many of them no longer offer risky or subprime loans. Not only has there been an increase in business from middle-income borrowers, but higher-income borrowers are also seeking nonbank lenders. Read more at the New York Times.
Apr. 5, 2011Gov. Perry publicly pushes private-property protections
A bill that would sweep in new protections for private-property owners has cleared major hurdles in both the Texas Senate and the House. The eminent domain bill would require local and state governments to make fair offers based on all available appraisals. Governmental entities would also need to demonstrate in court the specific need that would be met by allowing eminent domain. Lastly, landowners would be allowed to repurchase land at the price they were paid for it, if it is not used for public purposes within 10 years. Read more at the Lubbock Avalanche-Journal.
Apr. 4, 2011The 30 year mortgage … going, going, gone?
The Obama Administration outlined a plan to gradually wind down mortgage giants Fannie Mae and Freddie Mac. Without the guarantee of payment by the federal government, the interest rates on 30-year mortgages would be significantly higher, making them a luxury product. The 30-year mortgage is widely credited for making homeownership attainable for middle-class borrowers. Even if approved, the plan would be slowly implemented, as consumers and mortgage providers would be given time to adjust to this new market. Read more from the New York Times.
Mar. 28, 2011Were there early signs of the foreclosure problems?
An internal report from 2006 warned Fannie Mae of foreclosure problems. The report raised red flags of questionable practices by foreclosure attorneys and concerning the Mortgage Electronic Registration Systems, more commonly referred to as MERS. However, the report did not find any evidence that borrowers were improperly foreclosed upon nor did it identify issues of robo-signing, which led to the more recent investigations of improper foreclosures. Read more at the Wall Street Journal.
Mar. 25, 2011Are the New Good Faith Estimate forms better?
The Good Faith Estimate form is a three-page disclosure form that emerged from the mortgage crisis. Changes were made over a year ago to provide borrowers with more accurate information of their borrowing costs. Does the new form provide borrowers with better information? According to industry experts, the new form has flaws and may not provide a true portrayal of costs. Nevertheless, the new form is still an improvement from the former. Will these Good Faith Estimate forms be revised again? Read more at the New York Times.
Mar. 22, 2011Legislature working to eliminate private-transfer-fee scam on Texas homebuyers
Lawmakers are considering legislation to prohibit private transfer fees on real estate transactions. These fees require a buyer to pay a percentage of the sales price of the home to a private entity each time the property is sold for a designated period of time, frequently 99 years. Read more.
Mar. 18, 2011New rules for mortgage brokers help lower costs for home buyers
Under new rules that go into effect April 1, mortgage brokers, and even small banks and credit unions, must offer borrowers the lowest possible interest rate and fees for which the borrowers qualify. Additionally, a lender can no longer pay a mortgage broker what is known as a yield spread premium. That is a rebate that is tied to the rate or terms of the mortgage – the higher the rate, the more money the mortgage broker would earn. Now the commission paid by the lender to the mortgage broker must be based solely on the loan amount. Read more at The New York Times.
Mar. 4, 2011Low downpayments may become rare
Seems like everyone is trying to convince consumers that "now's the time to buy!" Real estate that is. And you hear it everywhere. From economists indicating real estate prices are at an all-time low, mortgage brokers touting low loan rates, REALTORS® saying that this is a buyer’s market, and lawmakers trying to stimulate the economy. Well, here's one more … Downpayment requirements could be on the rise in the very near future. The days of the 100% loan are all but gone, but here's a story indicating most consumers may soon need to put down as much as 20% to get a loan. Read more at the Wall Street Journal.
Mar. 3, 2011Are oil prices driving people to urban areas?
For years, economists, demographers, and other experts have speculated that a sustained increase in gas prices would result in mass transition from rural areas to urban ones. Considering the historic and cultural composition of Texas, it seems hard to believe that would actually occur here. However, current trends suggest otherwise. Recent census data indeed shows there has been a shift in Texas from rural to urban areas. Could this be in part because of a sustained uptick in gas prices? If so, it might be helpful to learn more about the latest jump in prices. Read more at the New York Times.
Feb. 24, 2011This law is made in New York City? Texans say, “git a rope!”
A Manhattan court diminishes a 334-year-old legal precedent meant to ensure that all legal binding contracts for the sale of real estate be in writing and signed by the parties. The case has already been appealed to the Court of Appeals, New York state’s highest court. Although the case has no direct impact on Texas law, this could be a trend in courts across the country. So if you are in the process of selling or buying a home, be mindful of what you write in your e-mails. Read more at the New York Times.
Feb. 23, 2011The future of Fannie and Freddie
After $140 billion in taxpayer losses, the Obama Administration is seeking ways to wind down mortgage reinsurers Fannie Mae and Freddie Mac. There are three different exit strategies to offer a slow transition to a system that will primarily be backed up by the private sector. Currently, these two government sponsored enterprises are underwriting 92% of all new mortgages, posing a huge liability for the federal government and taxpayers. Read more at the Wall Street Journal.
Feb. 21, 2011Are lenders asking for higher down payments?
The median downpayment on conventional loans was once at 20%. It slowly began to decline and even dropped to as low as 4% in 2006. That all changed with the housing bust, which has led lenders to drive up downpayments to reduce their risk. Read more in the Wall Street Journal.
Feb. 18, 2011Is the Mortgage Crisis disappearing?
The mortgage crisis that began four years ago is easing, as the number of loans where a borrower had missed at least one payment fell to the lowest level in years. However, there is still a large inventory of loans in foreclosure that poses a significant threat to the housing market. Read more in the Wall Street Journal.
Feb. 10, 2011The 3.8% tax you’re not going to pay
A rumor has been circulating via e-mail and on the Internet about a 3.8% tax in the healthcare-reform law that will be imposed on unearned income … including proceeds from the sale of a home. The e-mail says you’ll pay $15,200 in taxes on the sale of a $400,000 home. Read more.
Feb. 9, 2011Why didn’t you get that loan rate?
Beginning January 1, mortgage lenders are now required to notify an applicant for a mortgage loan when the applicant doesn’t qualify for a financing rate that is comparable to what other applicants receive due to negative marks in the applicant’s credit score. Read more at the Federal Reserve.