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April 28, 2011

REALTORS® Applaud Repeal of Onerous 1099 Tax Reporting Requirement

President Obama has signed into law legislation repealing a new tax reporting requirement imposed on small property owners to track payments and distribute IRS 1099 Forms to all those who provide services in excess of $600 or more in a given year.  In the past, only those in the business or trade of rental real estate had been subject to the more onerous reporting requirement.  However, in an effort to close the tax gap last year, a provision was inserted into small business legislation enacted in 2010 to expand the requirement to any person who receives rental income from real estate. 

The repeal is an important victory for landlords and the real estate practitioners that work with them since many two-family homeowners and other small-scale owners of rental property are ill-prepared to handle the additional paperwork or absorb the expense of hiring a tax accountant to assist them in preparing 1099 Forms.  The National Association of REALTORS®, which worked hard to educate federal lawmakers as to the burden landlords and other small rental property owners would face in complying with the rule, applauded Congress and the White House for acting in a timely manner to repeal the requirement.

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Foreclosure Fallout: Regulators Take Action Against More Than One Dozen Lenders

Earlier this month, federal regulators announced formal enforcement actions against 16 of the nation’s largest mortgage lenders and servicers to address a pattern of misconduct and negligence related to deficient practices in residential mortgage loan servicing and foreclosure processing.   The action was prompted by the disclosure last year of “robo-signing” practices among several large mortgage companies and follows on-site reviews by regulators of foreclosure procedures by the mortgage loan providers.

As a result of consent agreements executed by the Office of the Comptroller of the Currency, Office of Thrift Supervision, and Federal Reserve Board, the loan servicers are prohibited from foreclosing on homeowners who have been approved for loan modifications and must compensate homeowners who should not have been foreclosed on.  In addition, they have agreed to hire outside consultants to review foreclosures initiated from 2009-2010, and are subject to penalties which regulators said they will assess separately on a future date. 

During their investigation regulators found critical weakness in foreclosure governance processes, foreclosure document preparation processes, and oversight and monitoring of third party vendors, including foreclosure attorneys.  The lenders with whom regulators have taken action include Bank of America, Citibank, JPMorgan Chase, Sovereign Bank, SunTrust Bank, Wells Fargo and 10 others.  Notably, state attorneys general who are conducting their own joint investigation into the handling of foreclosure paperwork will have the right to take additional enforcement actions against these mortgage providers.

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Real Estate Pre-Licensing Requirements Set to Increase on June 1

As a result of legislation signed into law by Bay State Governor Deval Patrick last summer, the eligibility requirements to take both the real estate salesperson and brokers’ licensing exams in Massachusetts will increase on June 1, 2011.  On that date, the classroom instruction time required to sit for the salesperson’s license exam will increase from 24 hours to 40 hours.

As of June 1, real estate salespersons wishing to obtain a broker’s license also will need to complete 40 hours of classroom instruction, up from the current 30-hour course requirement.  In addition, under the new law licensees will be required to have three years experience as a practicing salesperson, as opposed to the current one year affiliation with a broker, in order to sit for the broker’s exam. 

Notably, in instances where a candidate for licensure has already completed the necessary classroom instruction time under current law (24 and 30 hours,) but they have not yet taken the exam or passed each portion of the test and time remains on the school certificate (good for two years from date of pre-licensing course completion), the Board of Registration of Real Estate Brokers & Salespersons has stated that it will honor the current education requirements for pre-licensure.  However, no such grandfathering will be allowed for the affiliation requirement for salespersons, meaning as of June 1st all candidates for the broker exam must have completed three years of affiliation with a broker to sit for the license exam.

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Local Home Buyer Demand Remains Weak in March

Sales of single-family homes and condominiums remained tepid across metropolitan Boston last month as more rigid mortgage financing requirements, a lack of new inventory, and poor winter weather kept home buyers on the sidelines early this year. Sales of detached single-family homes fell 9.5 percent in March from the same month last year to their third lowest level since 2000, though sales of homes valued at $1 million or more rose by nearly one-quarter (23.8%) over the past 12 months. Meanwhile, condo sales declined for the eighth time in the past nine months, dropping 21.4 percent from March 2009. However, the decrease in sales volume was more modest than in several recent months, and the 541 condos sold this past March ranks as the eighth best sales total on record for the month.

The drop in buyer activity can be seen in the pending sales and days on market data as well. In the single-family home market pending sales fell 12 ˝ percent in March from the same month one year ago, while average market time for homes that sold rose a full month (32 days) over the past year. Additionally, pending sales of condos declined nearly 24 percent last month from March 2010 and the average market time for condo units that sold increased 9 days between last March 2010 and March 2011.

To view all of last month’s data and to get a more detailed analysis on the housing market in greater Boston, visit the Monthly Housing Reports page on gbar.org. You can also access our first quarter market report featuring data for all 54 cities and towns within the GBAR jurisdiction, as well as 10 adjacent communities, by going online to view GBAR’s Real Estate Rewind Reports.

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Apply Today to Become a REALTOR® Community Observer

The Greater Boston Real Estate Board (GBREB) is seeking members who are interested in acting as the association’s “eyes and ears” in their community by monitoring issues of real estate industry sensitive and alerting association staff when appropriate.  The role of a REALTOR® Community Observer is principally an informative one, and not one of advocacy.  It is to stay abreast of hot local issues, such as those that will impact homeownership, housing affordability, private property rights and real estate development, and submit reports notifying the association about proposed local ordinances, bylaws and “home rule” legislation that are relevant and meet the scope set forth by GBREB and its Government Affairs Committee.  Applications for REALTOR® Community Observer are being accepted through April 30.  Members may seek an appointment as an observer to one or more communities in which they live and/or work, and must attend an orientation session before assuming the role of observer.  A detailed overview of the role of a REALTOR® Community Observer, including official duties and responsibilities, and the application form are available online at gbar.org.  For questions, call GBREB Government Affairs Director Patricia Baumer at 617-399-7858.

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REALTORS® to Rally at State House on June 8

REALTORS® to Rally at State House on June 8 REALTORS® from across the Bay State will be gathering at the Massachusetts State House on Wednesday, June 8 for the 26th Annual REALTOR® Day on Beacon Hill. This is an opportunity for you to speak directly with state legislators on issues affecting your business, the rights of property owners, and the housing industry in Massachusetts.

The free program officially begins at 10 a.m. and will include an address by invited keynote speaker Massachusetts Lt. Governor Tim Murray, and an issues briefing on the REALTOR® organization’s legislative priorities for 2011. Following the session at the State House, GBAR members are invited to attend a complimentary networking lunch at the Greater Boston Real Estate Board (GBREB) offices with local legislators to discuss bills of primary interest to the real estate industry. In addition, members are welcome to attend a pre-program briefing at the GBAR/GBREB offices beginning at 9 a.m.

To avoid the expense and hassle of driving and parking in Boston, we encourage members to carpool to REALTOR® Day on Beacon Hill with elected GBAR leadership. Several pick-up locations will be designated within the GBAR jurisdiction where you will be met by an association officer or director who has agreed to drive into Boston. To register to attend, log onto the REALTOR® Day on Beacon Hill program information page. For carpool reservations and locations, contact Kate Reynolds at kreynolds@gbreb.com or by calling 617-399-7840.

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Nominate a Deserving Colleague for a GBAR Member Recognition Award

Do you know a deserving colleague or affiliate member whose professionalism and volunteer service to the REALTOR® association and the local community or charitable causes sets them apart from others?  If so, why not nominate him or her for one of this year’s GBAR member recognition awards?  Nominations are being sought for Affiliate Member of the Year, the Andrew F. Hickey Distinguished Service Award, Good Neighbor Award, Greater Boston REALTOR® of the Year, GBAR Good Neighbor, and REALTOR® Spirit Award.

Members may be nominated for one or more of the above awards.  The entry deadline for nominations is July 1, 2011.  For more information, including the purpose and criteria for each award, as well as nomination forms, visit gbar.org to download for the GBAR Awards Nomination packet.

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Candidates Sought for 2012 REALTOR® Leadership Positions   

Would you like to have an active voice in setting policy and being a decision-maker for the REALTOR® organization on the local and/or state level in the coming year?  Or, do you know a well-qualified colleague who should be considered for a leadership role in the association?  If so, we invite you to submit a nomination form for yourself or a fellow REALTOR® to serve in one or more of the following elected positions: officer or director of the Greater Boston Association of REALTORS® (GBAR); director of the Greater Boston Real Estate Board; regional vice president or state director with the Massachusetts Association of REALTORS® (MAR); or director of the National Association of REALTORS® in 2012.

Nominations for individuals interested in serving as the MAR regional vice president from Greater Boston are due by May 31, while the nomination period for all other leadership positions is open until August 1, 2011.  For detailed descriptions of the responsibilities of each elected office and qualification criteria, you may download the GBAR Nomination Packet from gbar.org.

Nominations of all candidates meeting the qualifications of the office or position they seek to hold in 2012 will be carefully considered by the GBAR Nominating Committee later this summer, with a formal slate to be noticed in September, and subsequently presented to the GBAR Board of Directors for vote in October.

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