Commercial real estate sectors, hurt by weak job growth, are offering incentives in many areas that are conducive to business expansion, according to the National Association of Realtors®.

Lawrence Yun, CONTINUED »

National Association of Realtors

The National Association of Realtors® today commended the Federal Housing Finance Agency for taking steps to restrict government-sponsored enterprises – Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks – from investing in mortgages with private transfer fee covenants.

A private transfer fee, often attached to a property by a developer, is a fee due to the developer each time the property is resold. The term of some covenants can extend for 99 years. NAR is a leader of a coalition that strongly opposes such fees.

“NAR is the leading advocate for private property rights and housing issues and we firmly believe that private transfer fees add an unnecessary burden to the real estate transaction and can delay a closing or even kill the transaction. There is no service performed for such fees and they add nothing to the value of a property,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates, Tucson, Ariz. “FHFA is to be commended for proposing a guidance that would ban this unnecessary fee.”

FHFA, as required by law, has sent a Notice of Proposed Guidance to the Federal Register for publication and seeks public comment on its proposal. The public comment period on the proposed guidance will be open for 60 days after the notice is published.

Twelve states enacted legislation in 2010 that ban private transfer fees. They are Arizona, Delaware, Hawaii, Illinois, Iowa, Maryland, Louisiana, Ohio, Mississippi, Minnesota, North Carolina and Utah. A growing number of other states have indicated they are considering similar actions.

The Federal Housing Administration has also denied its home loan programs to transfer fees.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

National Association of Realtors

Testifying before a House panel today, Jim Helsel, treasurer of the National Association of Realtors® and commercial real estate specialist, told members that a strong commercial real estate sector is vital to millions of U.S. jobs and helps keep the national economy afloat.

“As the leading advocate for private property rights, NAR believes it is critical for Congress to act soon and to get capital flowing to small businesses and to the commercial real estate market,” Helsel, president of Helsel Inc., Realtors®, in Camp Hill, Pa., told the House Committee on Financial Services.

“Lack of available credit remains a significant challenge for our industry right now,” Helsel said. He commended the panel for passage in June of H.R. 5297, “The Small Business Lending Fund Act of 2010,” which ensures community banks have both the incentive and capacity to increase total loans to small businesses. Raising the SBA loan limits and allowing SBA 504 loans to be used to refinance performing property can help ease the liquidity crisis in the commercial sector, he said.

Another credit avenue, credit unions, could increase available credit to small businesses, Helsel said. NAR strongly supports legislation, H.R. 3380 introduced by Reps. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.), that would raise the credit union member business lending cap from 12.25 percent to 25 percent of total assets. Currently, small regional and community banks account for almost half of the small business loans issued in the U.S.

“That has put a significant dent in the credit available to the small business community and has reduced cash flow and elevated vacancies in commercial real estate,” he said. The Credit Union National Association estimates that if H.R. 3380 becomes law, credit unions could extend up to $10 billion in additional business loans and help create 108,000 jobs. Helsel said NAR is strongly urging the Senate to include such provisions when it considers H.R. 5297.

Helsel also said that NAR supports the Senate’s efforts to include more generous depreciation allowances for commercial properties in the Senate bill. “Accelerated depreciation would incentivize new equity investment to commercial real estate, reducing debt-to-income ratios and strengthening income-producing properties,” he said.

NAR also applauds the goals of H.R. 5816, the “Commercial Real Estate Stabilization Act,” to clear troubled properties off the market, and is ready to work with the committee when it begins to review the proposal, Helsel said.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

The House today approved a flood insurance reform bill that would reauthorize the National Flood Insurance Program to September 30, 2015, a provision strongly supported by the National Association of Realtors®.

Passage of H.R. 5114, the Flood Insurance Reform Priorities Act, would strengthen the NFIP and bring certainty to many real estate markets that are much in need, NAR said, and commended Rep. Maxine Waters (D-Calif.) for marshalling the bill through House passage.

“This longer-term reauthorization of the NFIP is critical to millions of taxpaying American families who rely on the program for flood insurance, which is required to obtain a mortgage in nearly 20,000 communities across the nation. This would restore flagging confidence in a vital program by ensuring its continuation for several years without further disruption to real estate markets upon which our nation’s economic recovery depends,” said Vicki Cox Golder, NAR president and owner of Vicki L. Cox Real Estate in Tucson, Ariz.

Golder noted that the authority has been allowed to expire twice in the past two years while Congress approved eight short-term extensions, resulting in multiweek delays if not cancellation of thousands of real estate transactions. Such stop-gap measures have caused many hardships and lost sales for property buyers, sellers and their communities, she said.

The bill now heads to the Senate where the prospects of passage are not clear.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

National Association of Realtors

The National Association of Realtors® today commended Congress for timely passage of two bills to extend the home buyer tax credit closing deadline and reauthorize the National Flood Insurance Program. Both bills, strongly supported by NAR, had cleared the House earlier and were passed by the Senate last night. They now head to the president for his signature.

The tax credit closing deadline and the NFIP reauthorization were extended to September 30. NAR worked closely with congressional leaders on both sides of the aisle to enact these important pieces of legislation. Extending the tax credit closing and flood insurance deadlines will help provide additional stability to real estate markets across the nation, NAR said.

“What a great way to begin celebrating our nation’s most patriotic holiday by opening the door to the American dream of homeownership to thousands of home buyers who would have been shut out of the homes of their dreams through no fault of their own,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox Real Estate in Tucson, Ariz.

“We know that up to 180,000 home buyers eligible for the tax credit are rejoicing this morning. And we all thank both houses of Congress for their work to ensure passage of both bills,” Golder said. She singled out Senate Majority Leader Harry Reid (D-Nev.), Senate Minority Leader Mitch McConnell (R-Ky.), Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.), Senator Johnny Isakson (R-Ga.), House Majority Leader Steny Hoyer (D-Md.), Congresswoman Shelley Berkley (D-Nev.) and Congressman Joe Courtney (D-Conn.) for their efforts to extend the tax credit closing deadline.

The passage of H.R. 5623, the Homebuyer Assistance and Improvement Act, applies the homebuyer tax credit closing deadline extension only to homebuyers who have ratified contracts in place as of April 30, 2010, but could not close before June 30. The legislation is designed to create a seamless extension of the new closing deadline for eligible transactions to September 30. There will be no gap between June 30 and the date the president signs the bill into law.

For more information on the extension, visit www.realtor.org/government_affairs.

Senate passage of the National Flood Insurance Program Extension Act of 2010 (H.R. 5569), reauthorizes extension the NFIP until September 30, allowing currently stalled transactions to move forward. The bill is retroactive and covers the lapsed period from June 1, 2010, to the date of enactment of the extension. Any new policy applications or renewals that were signed and submitted during the lapsed period will be effective from the date of application. In the case of waiting periods, the waiting period will start from the date of application.

“We know that thousands of property owners seeking flood insurance policies will now be able to close transactions. NAR appreciates the extraordinary efforts in both houses of Congress to end the lapse in flood insurance,” Golder said. She singled out Senate Majority Leader Reid, Senate Minority Leader McConnell, Senate Banking Committee Chairman Dodd, Senator David Vitter (R-La.), House Financial Services Committee Chairman Barney Frank (D-Mass.) and Congresswoman Maxine Waters (D-Calif.) for their efforts on NFIP reauthorization.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

The Ventura County Coastal Association of Realtors®, (VCCAR), today voiced its full support to the Ventura County District Attorney’s office in its efforts to bring to justice the 13 individuals, seven of whom were real estate agents, arrested in connection with filing fraudulent loan applications.

VCCAR President Susan Herrick stated that the local Realtors® association is proud of its relationship with the Real Estate Fraud Advisory Team, (REFAT), of which it is a founding partner, and working with Senior Deputy District Attorney Miles Weiss, head of the Ventura County Real Estate Fraud Prosecution Program, which resulted in the arrests.

“We are pleased that our members participated in this effort in identifying and curtailing this kind of real estate mortgage fraud and hope these efforts continue,” Herrick said.

Steve Goddard, president of the California Association of Realtors®, (C.A.R.), added that the state association, which has 160,000 members, and includes all Ventura County Realtors®, has a long-standing commitment to ethical practices for real estate practitioners.

“C.A.R. was an advocate in support of SB-537, legislation passed in 1995 that created the resources to fund the fraud enforcement activities of law enforcement agencies, including the Ventura County District Attorney’s Fraud Unit,” Goddard said. “The legislation imposed a $4.00 fee on real estate recordings, which counties could opt in to, with the proceeds supporting fraud enforcement efforts at the local level. It’s gratifying to witness the results in Ventura County,” Goddard said.

The Ventura County Coastal Association of Realtors® represents real estate practitioners in the cities of Ventura, Oxnard, Camarillo, Santa Paula, Fillmore and Port Hueneme in West Ventura County.

National Association of Realtors

Existing-home sales remained at elevated levels in May on buyer response to the tax credit, characterized by stabilizing home prices and historically low mortgage interest rates, according to the National Association of Realtors®. Gains in the West and South were offset by a decline in the Northeast; the Midwest was steady.

Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, were at a seasonally adjusted annual rate of 5.66 million units in May, down 2.2 percent from an upwardly revised surge of 5.79 million units in April. May closings are 19.2 percent above the 4.75 million-unit level in May 2009; April sales were revised to show an 8.0 percent monthly gain.

Lawrence Yun, NAR chief economist, said he expects one more month of elevated home sales. “We are witnessing the ongoing effects of the home buyer tax credit, which we’ll also see in June real estate closings,” he said. “However, approximately 180,000 home buyers who signed a contract in good faith to receive the tax credit may not be able to finalize by the end of June due to delays in the mortgage process, particularly for short sales.

“In addition, many potential sales are being delayed by an interruption in the National Flood Insurance Program. Florida and Louisiana, also impacted by the oil spill, have the highest percentage of homes that require flood insurance.”

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