VA loan limits

ANNOUNCING LOAN LIMIT INCREASES FOR VA HOME LOANS IN 2018

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This provides more options for veterans

in choosing a new home!

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Effective immediately, VA loan limits have increased to $453,100! This is a 6.84% increase from last year’s loan limit.

Bee Keeping AG exemption

If you wish to get your own bee hives!! Bandera County has their standards published here is more info… http://banderaproptax.org/data/_uploaded/file/intensity%20standards%202013.pdf

Here is the snap shot of the “bee keeping info on Pg 17”

G. Beekeeping Operation
This type of operation provides many products: honey, beeswax, propolis, pollination of crops, and bees to sell to other beekeepers. To qualify for agricultural appraisal, state law permits keeping bees for two purposes:

  1. pollination of crops, and
  2. production of human food or products that have commercial value.
  1. Typical requirements in the District include keeping a minimum of three (3) active hives of honeybees. Each hive must include at a minimum one brood box (8 or 10 fram es) with a cover and bottom.  The District also requires that not less than five (5) or more than twenty (20) acres be used in this type of operation.
  2. Management practices for this type of operation include maintaining the required number of hive boxes, providing adequate shade and water for the bees, providing adequate pest control, receipts for purchases and sales of equipment, bees, and products. The landowner does not  need to own the bees, but the hives must belocated on the property seeking open-space agricultural appraisal. The landowner may choose to lease the land to a beekeeper who manages the bees on the leased land.
  3. Typical equipment for this type of operation include, but is not limited to,protective clothing (head net, suit, gloves),smoker, hive tool,hive boxes (deep broodboxes, honey supers, etc.)

The term also includes the use of land for wildlife management. The term also includes the use of land to raise or keep bees for pollination or for the production of human food or other tangible products having a commercial value, provided that the land used is not less than 5 or more than 20 acres.  more follow this link. http://www.statutes.legis.state.tx.us/Docs/TX/htm/TX.23.htm

The new tax code change that now qualifies beekeeping as an agricultural use enterprise in Texas open-space land appraisals has generated a lot of interest, said Dr. Chris Sansone, Texas AgriLife Extension Service entomologist in San Angelo.
Sansone said that in a recent update, Deborah Cartwright, director of the Property Tax Assistance Division from the state comptroller’s office ( http://www.window.state.tx.us/ ), announced the Texas Legislature added beekeeping as another agricultural use for purposes of open-space land appraisal.

Tax Code Section 23.51(2) was amended to include in the definition of agricultural use “the use of land to raise or keep bees for pollination or for the production of human food or other tangible products having a commercial value, provided that the land used is not less than five or more than 20 acres.”
“The second option states that the food or products must have commercial value, not commercial production,” Sansone said. “While human food and products must be produced, the law does not require that they be sold commercially. Commercial production of agricultural products, such as livestock or crops, is not required for land to qualify for open-space land appraisal under current law. The other option requires that the land be used for raising or keeping bees for pollination.”
Sansone said the Texas Comptroller’s office recommended that each appraisal district consult their local AgriLife Extension office concerning the number of acres and hives needed to fulfill the requirement.
“A bee yard or apiary can be run on a pretty small scale,” he said. “Bees forage over a large area, sometimes well over a mile depending on available resources. Central Texas is not the optimum for beekeeping because of the lack of a consistent pollen and nectar source compared to the Houston/College Station areas. Sansone said the website:
http://www.ent.uga.edu/bees/pollination/managing-bees-pollination.html offers a good overview of managing bee populations.
“There may be some differences in how the different County Appraisal Districts apply the regulation, and I suspect that some burden may be on the property owner to justify the use of land for bee pollination and to show how the bees are an agricultural enterprise,” Sansone said. “Property owners should think about a landscape plan of the property that shows how different plants and plantings would contribute to the bees’ foraging. Property owners may also be required to provide a basic marketing plan on how honey, and related products such as beeswax candles, soaps, etc. could be sold. They may also discuss renting the hives for pollination services.”
Sansone said local appraisal districts will determine the number of hives that are required on a per-acre basis and other requirements for beekeeping as an agricultural enterprise.
Sansone said Paul Jackson, chief apiary inspector for the state with the Texas Apiary Inspection Service, is an excellent resource person for local appraisal districts needing information. He can be reached at: http://tais.tamu.edu/

More information provided at: http://agrilife.org/tcch/2012/04/13/beekeeping-qualifies-as-an-agricultural-use-enterprise/

Texas REALTORS® urge lawmakers to protect homeowners

Apr. 13, 2011

More than 2,000 Texas REALTORS® converged on Austin yesterday to visit with state lawmakers on issues affecting Texas homeowners.  I was one of them!

“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

Seller-financing license requirements delayed


The federal Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act requires most property owners who wish to seller-finance to be licensed as residential mortgage loan originators (RMLO). The Texas Department of Savings and Mortgage Lending, responsible for the act’s implementation in Texas, announced last week that it’s delaying the licensing deadline from May 31 to Aug. 31.

This delay is the first step toward reinstating the de minimis rule, which allows a seller to finance the sale of up to five properties within 12 months without a license. The Texas Finance Commission will consider a rule change reinstating the de minimus rule at its August meeting. This is good news for private-property owners and Texas REALTORS®.

Learn more about the SAFE Act and what these changes could mean for your transactions by listening to Texas REALTOR® Update Episode 77.

“SAFE Act"

Texas Department of Savings and Mortgage Lending Issues Information on “SAFE Act”

from Commissioner Douglas Foster, TDSML

Many of you have witnessed the impact upon lenders in the last few months with the significant changes to RESPA. There are still more changes ahead in the mortgage lending arena for those of us in Texas with implementation, on April 2, 2010, of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“SAFE Act”) which was signed by President Bush in July 2008 creating the Nationwide Mortgage Licensing System and Registration (NMLSR).

SAFE specifies minimum standards for all states in the regulation of residential mortgage loan originators (RMLO). Fortunately, Texas was one of only two states that already exceeded all of these standards. However, there are also certain mandates that remove flexibility we have provided in the past and significantly expand the range of individuals required to be licensed.

The purpose of this article is to both raise your awareness of the upcoming changes and to seek your continued cooperation in ensuring only properly licensed individuals are providing residential mortgage loans. Unlicensed residential mortgage loan origination is a misdemeanor offense in Texas. Many people who have never been required to be licensed before will need to have completed the licensing process prior to May 31, 2010.

Our agency developed an on-line verification system in 2007 that will eventually migrate completely to the NMLSR; however, we recommend you check our system and NMLSR to verify proper licensing at least through the end of 2010. You can reach the NMLSR website through links from our website home page.

Texans have in the past enjoyed a de minimus exemption for an owner of real property who originated no more than five mortgage loans in a rolling twelve month period. Under the SAFE Act, this exemption no longer applies. There remains an exemption for seller financing of your homestead, or on behalf of direct familial relations, but anyone else who originates a loan or provides seller financing not covered by the two above circumstances, even just once, without being licensed, will be committing a misdemeanor.

The department is concerned that realtors be fully informed of these changes as they may be asked to assist a client in establishing financing terms or paperwork related to seller financing or they may finance the sale of their own residential properties sale financing. Key issues in determining if RMLO licensing is required for a realtor in such situations would include either the forms of compensation or the type of services performed. Before we set up a couple of specific examples let’s restate that exemptions only exist if the dwelling serves as the individual’s primary residence or if you are providing a loan transaction on behalf of a direct familial relative.

If all of your compensation or gain from the transaction will be in the form of your real estate sales commission and you are earning no other fee and have no interest in the property being sold, and all your actions are to facilitate the closing of the sale, then you do not need to be licensed under SAFE.If, however, you are receiving a separate fee or earning interest on a loan then you may need to be licensed and we request you contact our department to discuss the specifics of the scenario.

As to services provided, your client may ask you to help them with drawing up standard terms or providing template documents for establishing a seller financed loan transaction. If it is their homestead they are exempt from licensure, but if you perform the functions of offering or negotiating rate or terms with the buyer you may have triggered the need to be licensed regardless of whether the property is a homestead or not. For a non-homestead transaction the seller in a seller financed transaction must have a licensed individual perform the loan functions of offering or negotiating rate and terms or become licensed themselves.

Please keep in mind, if the dwelling does not serve as the individual’s primary residence or the loan origination service is not on behalf of a direct familial relative, then the individual is acting in the capacity of a residential mortgage loan originator and must be licensed even for just one transaction.

There is significant information and resources available on our website including detailed plans on the implementation and timing of the various licensees’ transition plans. Please take an opportunity to review what we offer at www.sml.state.tx.us and thank you for joining us in protecting the citizens of Texas in one of their biggest financial decisions.

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

Seller Financing

Seller Financing

There is a lot of buzz about Seller Financing right now.  Some of the buzz is good, some bad and some ugly.

The Good

Seller Financing can help get deals done when traditional financing in not available.  It is a wonderful tool for Sellers to use.  It can even be combined with a §1031 Like-Kind Exchange so that the Seller can get the property sold AND still achieve a TOTAL deferral of gain recognition.  Not just the delay in payment under §453, but a total deferral allowed under §1031.

Click here and Ask Us How!

The Bad

The Housing and Economic Recovery Act of 2008 (HERA 2008) included the Secure and Fair Enforcement for Mortgage Licensing Act which also required each State to pass a similar law.  Most states have complied.

Texas, for example, passed House Bill 10, the Texas Secure and Fair Enforcement for Mortgage Licensing Act of 2009.

This is not a treatise on the new law, but loosely if you are selling a property that has or could have a dwelling on it you MUST have a Mortgage Loan Originators License if you; 1. Take the application for a loan and/or 2. Negotiate the terms of a loan.

There are some extremely limited exceptions: You are otherwise licensed, you are selling to an immediate family member (as defined in the law) or you are selling your primary residence. (Commercial properties are not covered, but Sellers of agricultural properties may have some issues.)

The Ugly

The de minimis exceptions that existed in prior Texas law are NOT included in the Texas SAFE Mortgage & Licensing Act, so if you sell your rental house to your non-related tenant and you carry back a note, you MUST have a license if you take the application and/or negotiate the terms.  Both of those things you would most assuredly do under normal circumstances.

The Solution

You can get licensed or hire someone with the appropriate license to take the application and negotiate the terms.

Nothing in the new law interferes with the ability to achieve a complete tax deferral under §1031.


Click here
to download our Brief Exchange book.

Texas Ranch and Land meeting:

Texas Ranch and Land meeting: April 28, 2010

Texas is the 5th largest economy in world!  So what we do matters.   Currently we have around $7 billion in the rainy day fund, but because of the federal unfunded mandate of the new health care bill, we will have a 20 billion in debt Texas in the 1st year!

http://sunshinereview.org/index.php/Texas_state_budget

The reason is that 25% uninsured 2-4 billion cost for Texas.

Texas Unemployment 8.2% vs  10-20% or higher in other states . Illinois desperate, Navada, Florida, California are the worst off.

It will cost $4-$5 billion if the Cap Trade come into effect!

Not since great depreciation has the gov run private business out of business and not allowed  private industry take up the slack.

Tennessee valley authority took over the electricity business away in last depression by undercutting the private industry!

Texas Ground Water rights

Federal clean water act is working on removing the word “navigable” .  This is a bigger problem than at first glance. That would mean all water including your swimming pool.

Here is the current law suite information take a look! Don’t be left out in the dark of what is going on.  These are our rights that they are working on taking away.

http://stmarytxlaw.mediasite.com/mediasite/Catalog/pages/catalog.aspx?catalogId=c7b36466-40e3-4d88-b90c-0761e609344e

502 Rural Housing Program

Because of thousands of other members who supported the REALTOR® Party in taking action, the House and Senate last night passed an extension of the flood insurance program through May, 31 2010. The lapse in flood insurance resulted in many delayed and even canceled transactions. While awaiting Congressional action (which did come), NAR worked with federal agencies, GSEs and bank regulators to clarify what lenders and insurers may and may not do to help work through the program’s expiration. Be assured that NAR will work closely with key members of Congress to ensure the program is reauthorized and extended prior to the May 31 deadline.

Regarding 502 Rural Housing, the NAR CFA raised the visibility of this issue in Congress and spurred momentum on the legislation. NAR expects Congress to consider legislation to restore the rural housing 502 single family mortgage insurance program. The legislation will increase the upfront guarantee for the program, which will allow the loan program to be self-sustaining and placed on a more viable financial foundation. NAR will continue to work with the Senate to craft a companion to the House bill that will ensure the long-term viability of this critical program.

Sincerely,
NAR Government Affairs and Community & Political Affairs Divisions