I just returned to Texas after a whirlwind trip to the east coast, where I met with the New York Attorney General’s office and officials from the Federal Housing Finance Agency and Fannie Mae. The topic: appraisals, and specifically the concerns and perspectives that you, our REALTORS and appraiser members have raised about the implementation of the HVCC.
First and foremost, I want to thank all of you for sharing your comments on the Voices of Real Estate blog this past week. Steve Brown’s entry, “All’s Not Quiet on the Midwestern Front” has received more than 120 comments – all of them very insightful. In fact, your thoughts were so important to the discussion that we shared them directly with the staff from the New York Attorney General’s office as prime examples of the problems we are seeing. We also shared the results of a recent survey of members, which highlights the overall impact of appraisal challenges on the mortgage transaction.
Those of you who have met me know that I don’t pull any punches. So, let me give you my honest assessment of my meetings:
1. All of the officials we met with wanted to hear about our experiences, and they conceded that there are problems.
2. All agreed that we can and should immediately address gaps in communication and education to help resolve how the HVCC is being applied.
3. How we resolve other more fundamental problems is not yet clear and will likely require a longer-term effort.
So what’s next?
First, in the weeks ahead NAR will be working closely with everyone in the industry, including Fannie Mae, Freddie Mac, the Appraisal Institute and government officials, to clarify the HVCC and how it should be applied. As many of you noted in your comments on this blog – pointing fingers is not the solution, we have to work together to improve the process for everyone.
Second, NAR is working with Congress to move legislation that would place an 18-month moratorium on the Home Valuation Code of Conduct, so that we can consider how best to modify the HVCC and to resolve additional concerns that many of you have raised about it and other appraisal issues in the current environment.
As always, we will keep you posted on our efforts on this blog and on Realtor.org. I encourage you to check out our HVCC Myths and Facts for more information. We also will be updating our FAQ to answer many of the questions you have raised in your e-mails and posts.
Of course, we encourage you to continue to share your thoughts and experiences with us whenever you can. With your participation, we will move the housing market forward, “United Toward Tomorrow.” – Charles McMillan, 2009 NAR President
Let’s face it, it’s rare in the business world to see people putting their own agendas aside in favor of what’s best for the majority. But I had the pleasure of witnessing such sentiments at NAR’s Commercial Real Estate Industry Outreach Meeting last week in Washington, D.C.
NAR gathered representatives from 19 commercial real estate associations and firms to find solutions to the serious liquidity and credit issues facing commercial real estate. I'm talking below with Jan Sternin of the Mortgage Bankers Association and Blaine Walker (right), Chair of the REALTORS® Commercial Alliance.
From Coldwell Banker Commercial to the Commercial Mortgage Securities Association to The Real Estate Roundtable, I found myself overly impressed with the quality of all the participants and everyone’s passionate commitment to finding a solution to revive the commercial industry.
I felt especially honored to sit with Congressman Paul Kanjorski, chairman of the Capital Markets Subcommittee, the night before at dinner. Rep. Kanjorski couldn’t attend the meeting, but his candid remarks at dinner and openness to hearing all sides of the issue showed he’s a true friend to REALTORS®. He not only understands the problems commercial REALTORS® are facing but is as committed as we are to finding a solution.
At the meeting, we talked about the difficulties we see, brainstormed ideas, and unanimously decided to draft a policy statement from which we can make recommendations to lawmakers. In the next two weeks, we will touch base again to fine-tune the statement.
Commercial real estate influences the residential market as well as plays a major role in the life of our entire economy. It’s critical that we revive this sector of business. I’m thankful NAR took the initiative to convene this meeting and press towards a solution.
We will keep you updated on our progress. In the meantime, I’m going let this meeting serve as a reminder to me that when several people unite toward a common goal, success seems like a greater possibility. – Gary Thomas, 2009 NAR Vice President and Liaison to Government Affairs
It is Father’s Day 2009, and I am so aware of my great fortune. I have been blessed with an exceptional family and three awesome children. Each shared his or her best wishes, love and thoughts with me today. It was touching and heartwarming. Being a father is the best part of my life: it is the rainbow, the sun, the moon, and the breath of my being. It is who I am.
Yet, I feel hollow today because I miss my father, who passed away five years ago. In between two open houses, I visited my father’s gravesite. We talked, or rather I talked, and he listened. It is really hard today to hear him. He was an exceptional father who taught each of his children to be people who lived lives of service to others and to do one’s absolute best. He was one of those rare people who understood that teachers are most effective when they live the lessons they teach. He did.
This past May, I was voted in as the 2010 President-Elect by the NAR Board of Directors, and I will become President the following year. People who know me well commented on how proud my father must be. I agreed with them, but I still wanted to celebrate the accomplishment with him. He was a procuring cause. He encouraged this fulfilling journey.
In leadership, you realize that you achieve as the result of great mentoring and teaching.
No one gets into leadership without lots of help. In truth, my teacher and mentors are numerous. My father’s best lesson was to find the best teachers and mentors, then study them and learn from them. Give them a stake in your progress. It is a great life lesson. You cannot become a NAR national leader without lots of help.
This past week a small group of REALTOR® leaders met to make 2010 Vice Chair of Committee selections. The challenge was to choose just one person for each position when so many capable and talented people had applied. We are working to complete the process. I cannot help but think about the example of my father: pick the best person for the position. We are working hard to do that, but how do you do that when you have so many “bests?”
It is also a privilege working with such a talented group of people on the leadership team. They teach my father’s lesson by example: be the best. Moreover, Charles McMillan, Dale Stinton, Vicki Cox Golder and I all have sons getting married on the 25th of July. Who says that the stars do not line up? It is my prayer for each of our sons, that they know unconditional love from their wives and children. We are part of a very special, extended family, the REALTOR® family. Our family includes all of YOU.
Thanks, Dad.
--Ron Phipps, 2009 NAR First Vice President
Here in the trenches, on the front lines of real estate in Ohio, we continue to face challenges:
First, there is an oversupply of houses, and home values are still in a general decline.
Second, although the average sale price is up, we have unprecedented marketing times and nervous appraisers (or at best very conservative appraisers). With sales nearly 20 percent below the previous year, many appraisers working on behalf of banks are brought in from out of town appraisal companies. They are only familiar with the market through Internet information. As a result, we have appraisals coming in as much as $100,000 below contract sales price – effectively killing the sale.
Third, too often foreclosed homes have been left without any care by the banks that now own them and the condition is deteriorating. The impact on neighboring homes is devastating.
Fourth, mortgage approvals are taking longer than ever, not uncommonly going beyond contract dates. (So much for "time is of the essence".)
Two recent Federal Acts: the Home Ownership And Equity Protection Act (HOEPA) and the Housing and Economic Recovery Act (HERA) are contributing to these problems. These regulations were intended to: a) provide greater financial education for consumers, thus aiding them in their financial lending choices; b) create safety checks in the lending process so consumers would not be victimized by predatory lending practices; and c) support more rigorous and transparent regulation of the real estate industry.
However, when Fannie Mae and Freddie Mac adopted the new Home Valuation Code of Conduct (HVCC) to assure appraisers would not be unduly influenced by lenders in the appraisal process, costs rose, while accuracy took a nosedive.
Although the goals are good and necessary, these laws were created and implemented without due consideration of how they would actually work for those of us who are in the "trenches." As a result, the time delays and cost increases are hurting the very consumers they were meant to protect.
We have heard from many of you, and I assure you that we "get it". NAR is lobbying federal legislators to correct and modify these laws. We also are pushing for a meeting with Federal Housing Finance Agency Director Lockhart to request a moratorium on the HVCC. Stay tuned for more news on this front next week.
Thankfully, the real estate industry and America’s real estate consumers have NAR to protect and defend us. In time, I hope our efforts will finally bring peace and quiet to the Midwestern front, and to the entire market. – Steve Brown, VP & Liaison to Committees
It’s only mid-June, but Washington’s feeling the heat. Congress has set an aggressive timeline to debate healthcare reform, and it plans to deliver a final bill to President Obama to sign by October 15.
A lot of work and talk will transpire between now and then, but no matter how hot the debate gets, NAR will continue to stand firm on Capitol Hill, meeting with Administration officials and lawmakers and advocating for legislation that supports small businesses.
However, when it comes to decision time, we will need all REALTORS® pitching in and contacting their representatives in Washington. Whether NAR will ultimately come down for or against the drafted legislation, we want lawmakers to clearly know where REALTORS® stand. With 1.2 million of us, our voice should be one of the clearest out there.
Charles McMillan just outlined NAR’s position on healthcare in his audio podcast on Tuesday. I hope you’ll listen to it to get the details.
Continue reading "Health Care Reform Hot on the Hill, Posted by Gary" »
According to NAR research, the percentage of first-time homebuyers has risen from roughly one-third of all buyers in January to just under half in March and April. Why the sudden jump??
The answer is simple: those buyers have an $8,000 incentive, in the form of a tax credit, to buy now.
We’ve heard from a lot of members lately who would like to see the tax credit expanded.
I recently asked our Chief Economist Lawrence Yun what the impact on the market would be if Congress extended the credit through 2010 and offered it to all homebuyers. According to Lawrence, those changes could result in 800,000 additional home sales this year, raising the total from 5.4 million to 6.2 million. That would certainly take a big bite out of inventory and help stabilize prices.
And, that’s not all…
When you consider that for each home sold in the United States $62,000 is pumped into the national economy, the resulting impact of expanding the credit could be nearly $50 billion. That’s what I call a true economic stimulus!
NAR is working with members of Congress to introduce legislation that would expand and extend the credit. We will keep you posted on those efforts in the months ahead.
In the meantime, we would love to hear your stories about how the tax credit is helping consumers in your local markets. Post your experiences right here on the Voices of Real Estate blog, and we’ll share them with lawmakers. Help us tell Congress to give credit where it is due – to ALL homebuyers. – Charles McMillan, 2009 NAR President
There is no doubt that this year has been important for real estate and our economy on many different levels. What matters most to REALTORS® is how changes in the industry and government policy affect our clients, customers and our businesses.
One of my greatest concerns as an NAR leader is that members feel helpless; that they do not have a voice in the changes that are happening in the industry; that too many of us have spent our entire careers building something that may not survive the current downturn.
As the largest trade association in the world, yes, NAR’s voice on Capitol Hill is very important when it comes to resolving the issues facing the economy. Fortunately, members of Congress and regulators are seeking our input to solutions to this housing crisis.
Consider how much influence we have now, imagine what would happen if more of our members responded to NAR’s “Calls for Action” when asked to do so.
The new Broker Involvement Program is designed to give the principal broker a quick tool to enlist your company’s agents in bring to Congress’ attention issues of concern to you and your business. The program provides agents a direct communication link to their lawmakers and in just seconds allows agents to express their opinions on those business issues with a personal letter that’s ready for them to sign and send.
We have discovered in the past year that when brokers alert their agents to key issues, agents listen and respond. In fact, since this program was initially launched, we have gone from just 30 brokers participating to now well over 1,000. Our goal this year is a 15 percent response rate, and with your help, I am certain we will achieve it.
If you are a broker and would like to join the effort – or, if you are an agent and would like your broker to participate – please contact Ed Lawler at elawler@realtors.org. Your involvement in this important program will strengthen our REALTOR® influence in determining outcomes of legislation that is important to our industry.
Please don’t sit back and see what happens. You DO have the influence to shape our industry and your business. –Vicki Cox Golder, 2009 President-Elect
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