registered to VOTE!!!

Did you know that only 76% of Texas REALTORS® are registered to VOTE? That means that roughly 1 in 4 Texas REALTORS® is NOT registered to vote. This is where I need your help. Please take the initiative to make sure as many REALTORS® in your local Association is registered to VOTE. In order to vote in the November 2nd election, you have until OCTOBER 4TH to get registered. I have also attached the link to the TAR Voter Guide. Please share this with your membership.

Support real estate-friendly candidates this November—download the 2010 Texas Association of REALTORS® voter guide.

Protect your home and land from abusive eminant domain

Dear Fellow Texans,

In Texas, a family’s home is their castle and there was a time when we protected our home and property with our lives. In 1836, Texans stood together in defiance of an oppressive government, one that was attempting to trample their rights as citizens. Unfortunately, rural and urban Texans today face a very similar problem in the form of eminent domain.

Last November, Texans took the first step toward strengthening private property rights against abusive eminent domain by passing Proposition 11 with an overwhelming 81% of the vote. While passage of Proposition 11 was a good first step, true eminent domain reform will only happen when additional protections are passed into law.

Now the legislature needs to complete eminent domain reform by also passing additional reforms that establish stricter penalties for not negotiating in good faith; demand adequate compensation for loss of access; provide a 10-year buy back provision for land that isn’t used; and clarify that eminent domain must only be exercised for public use.

The 14th Amendment to the U. S. Constitution says in part: “No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law.” This is one of the founding principles our country was built on, and I need your help to ensure the Texas Legislature finishes the job.

A fair and equitable solution exists to this problem, and it begins with you. Will you exercise your rights and help protect Texas? Please click here to read and sign my petition and send the message: “In Texas, a family’s home is their castle” and it will be protected from injustice of any kind.

May God Bless Texas,

P.S. Every Texas homeowner, neighborhood association and landowner needs to unite against abusive eminent domain.

Bandera Realtors ‘git ‘er done’ for Texas Association of Realtors

By Judith Pannebaker, Bandera County Courier – www.bccourier.com

If it’s one thing real estate agents and brokers understand it’s “location, location, location.”

Bandera’s Medina River Ranch could not have been a more appropriate – or gorgeous – location for a seminar of Region 7 Realtors of the Texas Association of Realtors (TAR). Hosted by the Bandera County Board of Realtors, the two-day session took place on Thursday and Friday, June 17 and 18.

During a working luncheon on Friday, Bill Jones, TAR chairman of the board and Travis Kessler, TAR president and CEO, spoke to realtors from Bandera, Canyon Lake, Del Rio, Eagle Pass, Fredericksburg, Kerrville, Laredo, New Braunfels, Seguin and Uvalde.

“We have attended more than 19 conferences similar to this across the state, meeting with the leadership of our membership,” Jones said. One of the mandates of TAR is to protect the private property rights so that landowners and homeowners do not become unduly burdened by ever-increasing taxes. “Texas is growing rapidly and the two greatest issues facing residents today are those of transportation and water,” he noted, adding, “Texas has plenty of water. It’s just in the wrong place.”

TAR’s other function is to make the Texas Legislature aware of issues facing its members. Jones candidly asserted that the TAR is a lobbying group. “However, we only address one issue – private property rights.”

“If it’s good for the Texas consumer, it’s good for Texas,” Kessler added. He also said that by meeting with grassroots realtors in meetings, TAR directors could identify concerns that may soon be facing them on a statewide level.

“We listen to the issues that are particular to one area,” he said, “and that often helps us spot future problems.” TAR has members in all 254 Texas counties. “When we started 17 years ago, we had 43 members,” Kessler said.

During a question and answer session, Kessler also warned realtors to beware of real estate scams emanating online.
“Unscrupulous people are taking a realtor’s information and posting it on social networks and Craigslist,” he explained. “This is an insidious problem and there’s no one solution. They do it because, as of now, they can get away with it.”

Actions to Take Before Buying a Home Today

As the housing downturn has shown, home ownership is about more than buying a home – you have to make sure you can keep the home over the long term. If you’re thinking about buying a home, these five steps can help ensure you get the right house for you and the affordable financing that helps make home ownership a long-term success:

Get Educated. A little mortgage know-how goes a long way toward ensuring you get an affordable mortgage
Before you hire an agent or find a lender, get educated on the loan process and key factors that make a loan affordable. You’ll want to know about loan types – fixed-rate mortgages, adjustable-rate mortgages, FHA and VA loans – and the full range of line items that contribute to the total cost of securing the loan, including discount points, appraisals, and real estate agent commissions.

If you would like more in-depth information, the Department of Housing and Urban Development (HUD) can put you in touch with the nearest housing counseling professional in your area. You can also check with local government, neighborhood associations and neighborhood bank branch offices for information sessions on home buying as well as homebuyer-education programs.

Get Your Finances in Order. Given today’s stronger lending guidelines, it’s more important than ever to get your finances in order
First, get a copy of your credit report, which usually includes your credit score. If your credit score is low (anything below 620), take the time to improve it. If you find errors on the report, take the time to correct them. This may put your home buying plans on hold (creditors typically look for a two-year history of consistent, on-time bill payment to establish good credit), but it could result in a better loan and more affordable rates.

Establish a Budget. Before you start searching for your home, make sure you know how much home you can afford
Lenders will evaluate all your debts and take into account your full financial situation when qualifying you for a mortgage. A key factor is how much income you bring in versus how much you will pay out each month. Here’s a good guideline to check where you are:

* Your housing expense (the mortgage payments on the house you are buying) should generally not exceed 28 to 33 percent of your total monthly gross income.
* All revolving debt (including car payments, credit cards payments, and your mortgage payment) should not exceed 36 to 40 percent of your total monthly gross income.

It’s always helpful to create a monthly budget, itemizing all your recurring expenses, including estimated maintenance costs, taxes, utility bills, and condo or homeowners’ association dues. Then, test your budget. If you can pay all these debts and continue to add to savings, you may be ready to buy a home. If not, you may have to revise your plans.

Start Saving. Having savings in reserve helps ensure you can afford the upfront costs of home ownership
Upfront costs of home ownership include:

* Down Payment – Five to twenty percent of the purchase price. Keep in mind, a lower down payment means you’ll have to qualify for a higher loan amount and pay for mortgage insurance – adding to your monthly mortgage payment.
* Deposit – Two percent of the purchase price, typically. Sometimes called earnest money, a deposit shows the seller you’re serious about buying the home. If your offer is accepted, the deposit or earnest money will be applied towards the down payment. If your offer is rejected, the down payment will be returned to you.
* Closing Costs – Three to five percent of the purchase price, on average. These costs include all fees required to execute the sale, including attorney fees, title insurance, appraisals, and points.

Get Pre-Approved. In today’s competitive market, home buyers should get pre-approved for a mortgage before they begin their house hunt

To be pre-approved for a loan, your lender will gather information about your job, assets, income, and debts and then determine how much financing you’re qualified to receive. If you are pre-approved, you will receive a pre-approval letter from the lender. When you’re ready to make an offer on a home, this pre-approval letter will tell the seller you’re a serious and qualified buyer. It will also give you an edge over competing buyers who are not pre-approved.

Keep in mind, pre-qualification doesn’t mean you have an approved loan. You’ll still need to apply for a loan if your offer is accepted.

Texas SAFE Act – Owner Financing

Owner Financing! Not any more!!

The Texas SAFE Act and Its Impact on Owner-Finance Sellers and Hard Money Lending, By Abid Hussain

In our real estate investor community, there has been much discussion and fear over the Texas version of the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act). Although several resources and articles exist on the Internet (including the bill itself), the Lonergan Law Firm, P.L.L.C., feels that a simplified guide might be more useful to our clients. As a standard disclaimer, the following is not legal advice, and any publication of this document does not create an attorney/client relationship between the Lonergan Law Firm and the reader.

SAFE vs. T-SAFE
Before getting into the statute itself, let’s discuss the federal statute first. You may have heard that the Texas version of SAFE (T-SAFE), passed in 2009, is more restrictive than the version enacted by the federal government. This is true. T-SAFE can be more restrictive than SAFE because the federal government’s version establishes a minimum threshold of rights and protections. States may add more protections to their own specific versions of a federal law, but they may not go the other way and provide fewer rights or protections than the minimum threshold set by that federal law.

Now, let’s dive right into T-SAFE and see how it impacts you.

T-SAFE Summary
T-SAFE is encompassed in the Texas Finance Code, Chapter 180. The act establishes minimum requirements for obtaining a mortgage loan original license, the process for obtaining such a license, who must obtain a license, and penalties for originating loans without a license. The act specifically applies to residential mortgage loan originators.

Under the act, a residential mortgage loan originator (RMLO) is any individual who takes a mortgage loan application, or offers or negotiates the terms of a residential mortgage loan. There are several exceptions to the definition of an RMLO, but the two most relevant to our clients are:

  • People who perform only administrative or clerical tasks for a licensed RMLO.
  • A real estate broker or agent, unless he is compensated by a lender, mortgage broker, or other RSLO, or their agent.

A residential loan (RL) is a loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other security interest in a dwelling or residential real estate. This definition provides a very narrow exception to hard money lenders that we’ll cover below.

A dwelling has the same meaning as defined in the Truth in Lending Act, which is a residential structure or mobile home containing one to four family housing units, or individual units of condominiums or cooperatives. Residential real estate means real property located in Texas on which a dwelling is – or is intended to be – constructed.

There are only a few classes of people exempt from having to be licensed when originating a residential mortgage loan. They are:

  • A registered mortgage loan originator, meaning someone who is an RMLO and an employee of a depository institution, a subsidiary thereof that is regulated by a federal banking agency, or an institution regulated by the Farm Credit Administration.
  • An individual who offers or negotiates terms of a residential mortgage loan with or on behalf of an immediate family member of the individual
  • A licensed attorney who negotiates the terms of a residential mortgage loan on behalf of a client as an ancillary matter to the attorney’s representation of the client, unless the attorney does both of the following two things: (a) The attorney takes a residential mortgage loan application, and (b) offers or negotiates the terms of a residential mortgage loan.
    An exclusive agent of a registered financial services company who is individually enrolled as a registered mortgage loan originator with the Nationwide Mortgage Licensing System and Registry.
  • Someone who offers or negotiates terms of a residential mortgage of his own homestead property.
  • A non-profit organization providing self-help housing that originates zero-interest residential mortgage loans for borrowers who provide sweat equity to construct the dwelling securing the loan.

Becoming licensed as a RMLO requires classroom work and passing an exam. The Texas Department of Savings and Mortgage Lending will also conduct a background check. The full details of how to become licensed are available on the agency’s Web site.

The penalties for originating a residential mortgage loan application without a license are severe. The agency is authorized to:

  • Deny, suspend, revoke, condition, or decline to renew a license.
  • Order restitution.
  • Impose an administrative fine up to $25,000.
  • Issue cease-and-desist orders, as well as immediate temporary orders if necessary.

The overall goal of T-SAFE is to ensure that each licensed RMLO is assigned a unique identification number, which appears on each residential mortgage loan that the RMLO originates. By doing so, T-SAFE hopes to track originated loans and install some accountability that was lacking in the recent housing and finance crisis.

Impact to Owner-Finance Deals
The impact of T-SAFE to owner-finance deals is significant. The definitions of residential loan, residential real estate, and RMLO are broad and extensive. We are hard-pressed to imagine a scenario where the seller in an owner-finance deal would not discuss the terms of the loan with the buyer. Therefore, T-SAFE makes it practically impossible for investors who routinely enter into owner-finance transactions to do so without being licensed.

The net impact of T-SAFE is that owner-finance sellers must fall into one of the exemptions if they want to avoid being licensed. Unless any such seller is originating a loan for an immediate family member (defined as a spouse, child, sibling, parent, grandparent, or grandchild) or owner-financing the sale of their own homestead property, the seller will have to outsource the loan application to a registered RMLO or use an attorney.

Complicating matters further, in the attorney exemption, the attorney can only originate the loan as an ancillary matter to the seller’s representation, and the attorney must not both take a residential loan application and offer or negotiate the terms of the residential mortgage loan. For example, if the attorney is drafting the loan package and the deed for the owner-finance seller as well as reviewing additional contracts and disclosures, and as a function of such a role also provides loan terms to the buyer, this is one of the few scenarios where T-SAFE is not violated.

Impact to Hard Money Lenders
Hard money lenders who only lend to investors enjoy a very narrow exception to T-SAFE. The legislation is designed to protect residential borrowers. However, many hard money lenders work exclusively with real estate investors who do not plan to live in the homes they purchase. In such scenarios, the SML Web site offers the following guidance:

Loans made to purchase and rehab properties with the intent to resell and loans to acquire rental properties are for business purposes, not personal, family, or household use, and are not subject to licensure under the Texas SAFE Act.

Note that if you are a hard money lender who originates even one loan to a residential buyer, then the exception quoted above does not exempt you from T-SAFE.

Here are 2 links that may be helpful.

http://www.ffiec.gov/safeact.htm

http://www.sml.state.tx.us/tdsml_important_information.html#safe_nmlsr

http://www.hud.gov/offices/hsg/ramh/safe/smlicact.cfm

AND if you wish to become registered, http://www.allianceacademy.org , they have great information including classes.

To register: Check out: http://mortgage.nationwidelicensingsystem.org/Pages/default.aspx

Home Maintenance Tip:

Keep Cool this Summer with Preventative Maintenance Help your clients keep cool by reminding them to conduct annual maintenance on their air conditioning units before the heat hits this summer!

Here are a few things that most homeowners can do themselves to help maintain their air conditioner:

  • Ensure the filter is clean and/or replaced regularly. Disposable filters are inexpensive and should be replaced once per month during periods of high usage.
  • Trim back plants so there is at least one foot of clearance around the A/C unit – this will allow proper air flow and prevent motor strain.
  • Sand and other debris can get sucked into the condenser coils. To clean the coils, first disconnect the power to the A/C and then use a garden hose to spray the coils.

The best advice you can give your clients is to have an annual maintenance inspection performed by a professional HVAC Technician. Your home warranty company is an excellent resource for qualified referrals. When interviewing Technicians, ensure the following items are included in their service:

  • Condenser – Check pressure, oil the motor bearings, tighten all hardware, check current electrical draw, and visually inspect wiring and condenser coils.
  • Air Handler/Evaporator – Visually inspect wiring; oil the motor bearings; clean or replace filter; tighten all hardware; inspect condensation drain, pan, pump, and auxiliary pan; clean drain system; ensure that evaporator coils are clean and free of damage.

With proper maintenance, the air conditioner should run smoothly for years. However, should a covered unit fail due to normal wear and usage, your client’s Old Republic Home Protection Plan will repair or replace the covered parts and components!

Economist's Commentary: Commercial Challenges, Financing

By George Ratiu, Research Economist

The March 2010 results of the Realtors® Commercial Real Estate Quarterly Market Survey confirm difficult conditions in Realtor® markets. The survey report, which covers fourth quarter 2009 activity, indicates that the national commercial market struggled with continued declines in new construction, rental activity and rent levels. For most commercial Realtors®, the biggest challenge remained the availability of financing to close deals. Sales volume continued to slide, with sales prices down 39 percent over 2009.

Commercial fundamentals were weak across most of the country. New construction continued to decline (down 14 percent), with a significant number of respondents reporting a complete absence of construction activity. On the leasing side, rental activity was down two percent in the fourth quarter. Lease rates declined nine percent during the quarter, following a 13-percent decrease in the third quarter. Aggregated over the four quarters of 2009, rents dropped 41 percent. Rent concessions continued to grow, but at a slightly slower pace—nine percent during the fourth quarter.

However, the fourth quarter 2009 also provided signs of improvement in Realtor® markets. The steep decline in sales volume began to moderate, decreasing eight percent from the third quarter. After double-digit drops in the second and third quarter of 2009, sales prices lost nine percent in the fourth quarter. The advance in cap rates also moderated from 95 basis points in the second quarter of the year, to 32 basis points in the fourth quarter. Looking ahead, commercial Realtors expect cap rates to increase, on average, another 15 basis points in the next twelve months.

In addition, the direction of business opportunities improved in 2009. Based on member comments, along with financing, the other major obstacles for commercial real estate are employment, banks’ lending activities, Federal legislative activities and consumer confidence in the economic environment. For the full report, including state-by-state detailed results, please see the Commercial Real Estate Market Survey: March 2010.