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December 18, 2007
President Bush
Unveils Plan to Aid Families Facing Foreclosure
President Bush announced last week a plan to curb the increase of
foreclosures by allowing modification of certain loans or freezing
interest rates up to five years.
The administration
believes with an estimated 1.8 million adjustable rate loans scheduled
to reset in 2008, that thousands of families could be protected under
this plan, which the National Association of REALTORS® has publicly
supported.
“The dream of
homeownership should not turn into a family’s worst nightmare,” said NAR
President Richard Gaylord in a prepared statement. “As the leading
advocate for housing issues, NAR has been working with Congress and the
administration to protect homeowners who may be facing foreclosure as
the result of predatory lending practices and as the interest rates on
many subprime loans reset. The loan modification program introduced by
President Bush and U.S. Treasury Secretary Henry Paulson is a good first
step in helping deserving families keep their homes.”
Detailed below are
eligibility requirements for the program should you or your clients have
questions.
-
To qualify for a
five-year interest rate freeze, home owners must have received a loan
between January 1, 2005 and July 31, 2007 and be facing a reset of
their interest rate between January 1, 2008 and July 31, 2010.
-
Homeowners who
haven’t missed a mortgage payment but may once interest rates reset,
are eligible for the program. Those who can’t afford higher payments
and who have credit scores below 660 and less than three percent
equity in their homes will get the biggest break from lenders.
-
The plan
excludes homeowners financially stable enough to make their mortgage
payments as well as those not living in the property facing
foreclosure (i.e. second homes).
REALTORS® across
the country have differing opinions on the plan’s long-term
effectiveness. Some think the plan will do more harm than good; others
say this political grandstanding, while some believe it’s a reasonable
short-term fix.
What do you think
of President Bush’s new plan? Visit GBAR’s new
polling site and
give your feedback as to whether you think it’s going to be effective.
Look for more polls
relevant to the industry in 2008.
NAR has also
created a brochure titled Learn How to Avoid Foreclosure and Keep
Your Home, which is available for purchase or to download
online.
GBREB
& MAR
Oppose Cumbersome Changes To Lead Paint Law
During a recent hearing on Beacon Hill, Patricia Baumer, GBREB's director of
government affairs, and Margaret Grant, associate general
counsel for the Massachusetts Association of REALTORS® testified before
the Joint Committee on the Judiciary in strong opposition to a bill that
would dramatically increase the requirements of the Commonwealth’s lead
paint law.
As proposed, the
legislation, SB 1230 which is sponsored by Senator Pat Jehlen of
Somerville, would dramatically expand the burden on owners and sellers
of property to test and remediate lead to also include soil and tap
water. Under the Jehlen proposal, landlords would be required to
recertify a unit for lead compliance every two years or at the
commencement of a new lease-regardless of whether or not a child under
six resides in the apartment. It would also require a lead inspection
on sales of all property. The testing and remediation required under
this proposal would require property owners to spend significant time
and resources to test and remediate lead including the replacement of
soil, water pipes and fixtures.
GBREB and the
state REALTOR® association oppose the measure as one that would be costly
and unnecessarily burdensome to property owners given the
state’s already stringent lead law and a steady decline in the number
of documented cases of children with elevated lead levels in
Massachusetts during the past decade.
Under current
state law property owners who are selling or leasing a property built
prior to 1978 must provide prospective buyers or tenants with
information regarding lead paint. Furthermore, the law allows
prospective homebuyers and tenants to conduct a lead inspection if they
wish and all landlords are required to provide a lead safe environment
for children under the age of six years old. Failure to comply with
the law results in strict liability for the owner.
Please Help Those
in Need This Holiday Season
On Wednesday, December 5, 47 Everett residents were left homeless after
a gasoline tanker carrying 9,400 gallons of fuel exploded. While the
Red Cross has been providing food and clothing to the victims, they
still have a long road ahead. The city of Everett is part of GBAR’s
jurisdiction. We hope you will consider lending a hand to those who
have lost everything.
A relief fund has
been set up at Eagle Bank. The amount of clothing and household
item donations to the victims has been overwhelming. Because of
that, the town respectfully asks that monetary donations be made.
Checks can be sent to:
Main Street Fire, c/o Eagle Bank, 466 Broadway, Everett, MA 02149
On a similar note,
the city of Boston has been overwhelmed by the amount of “Toys for Tots”
requests. To date, there are 800 children who will not receive a toy
this Christmas. To make the season brighter for these children, GBAR
asks that you please consider donating a gift wrapped toy by Wednesday,
December 19 at City Hall in Boston. Or if you have the time, please
help deliver the toys on December 22 or 23. For more details please
call Kristin Langone at 617-399-7851.
We know that
charity work does not begin or end with the holidays. Please
e-mail
us and let us know of the worthy charities and causes you and/or your
office have been involved with in your community this year. Our hope is
to promote to the public the many ways REALTORS® give back to their
communities.
IRS Announces Mileage Allowances for 2008
The IRS has issued Revenue Procedure 2007-70
specifying the permissible allowance for business and charitable use of
an automobile during 2008. The business allowance increases from 48.5
cents per mile to 50.5 cents per mile. Charitable deductions for the use
of a car will remain at 14 cents per mile driven. These rates will apply
to business or charitable miles driven on an after January 1, 2008.
Absorption Rate
Key to Pricing a Home
Many times telling sellers the price they want to hear will get you the
listing, but it won’t get you the sale, according to Zan Monroe, ABR®,
CRB and CRS® who presented at last month’s NAR Convention in Las Vegas.
Monroe says only
pricing a listing right will sell a home, which depends largely on the
current absorption rate in your market. Here’s how to find the
absorption rate:
-
Determine the
number of homes closed in your market over a specific period of time
-12 months for example (which can be accessed through MLS);
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Divide the
number of homes by the number of months in the period. This
calculation gives a per month absorption rate;
-
Divide the rate
into the number of current listings. This yields the months’ supply
of homes.
In Massachusetts,
7 ˝ to 8 ˝ months of supply is considered a balanced market – when the
number of listings roughly equals the number of buyers. When inventory
levels exceed 8.5 months of supply, market conditions favor buyers,
while less than 7.5 months of supply represents a sellers’ market. In
Greater Boston, there was 8.2 months of supply available for sale as of
the end of November.
To assess sales
trends you can calculate the supply over a shorter period of time such
as three and six month periods. You can also apply this method to
particular neighborhoods or price ranges.
By doing another
simple calculation you can find the odds of selling any one home. To
make this calculation:
-
Search the MLS
to determine how many transactions have closed in the last six months;
-
Divide that
number by the number of the new listing that came onto the market
during the same six months (don’t include listings that expired and
then were relisted)
Now you have the
percentage of homes entering the market that actually sold. So if 100
homes sold and 200 were listed, the odds of selling are 50 percent.
Have you Met Your
Code of Ethics Requirement for 2008?
As you know, a significant difference between licensed real estate
agents and REALTORS® is that you are bound by a strict Code of Ethics,
which you are expected to uphold every day. Therefore,
as a condition of
your membership in the REALTOR® organization, the National Association
of REALTORS® mandates that you complete 2 ˝ hours of ethics training
every four years.
If you have not
received this training during the current four-year cycle (which began
January 1, 2005),
you have until December 31, 2008 to receive this training in the
classroom or online. Please note that the continuing education class,
Real Estate Brokerage Professional Ethics (RE33RC03), does not satisfy
this membership requirement.
GBAR will be offering numerous ethics courses throughout the upcoming year
with the first being on January 10 10:00 a.m. – 12:30 p.m. at the John
Joseph Moakley U.S. Court House – 1 Courthouse Way, Suite 1420, Boston,
Ma. The early bird registration fee is $30 if you register two weeks
prior to the course. Standard registration cost is $45.
*Three courses will be held at the John Joseph Moakley U.S. Court House
in Boston while the last three will be held at the Natick Courtyard
Marriott in Natick. Click
here for city courses, or
here for suburban
courses.
If you prefer, you can visit NAR’s
website to take the course online. For questions please contact
Kristin Langone at 617-399-7851 or via e-mail at
klangone@gbreb.com.
2008 GBAR
Continuing Education Classes Scheduled
Courtyard Natick
Marriott – 342 Speen Street
9:30 – 11:30 a.m.
– Seller Agency
11:45 a.m. – 1:45
p.m. – Conducting an Open House & Developing a Safety Plan
2:45 – 4:45 p.m. –
National Economic Trends
Cost: $45 single
class/$105 all day
Courtyard Natick
Marriott – 342 Speen Street
9:30 – 11:30 a.m.
– Foreclosure/Short Sales
11:45 a.m. – 1:45
p.m. – Understanding Title & Concerns
2:45 – 4:45 p.m. –
Buyer Agency
Cost: $45 single
class/$105 all day
Greater Boston
Real Estate Board – 11 Beacon Street
9:00 – 11:00 a.m.
– 21 E. Brownfield
11:15 a.m. – 1:15
p.m. – Evolution of the Commercial Product
2:15 – 4:15 p.m. –
Title 5
Cost: $45 single
class/$105 all day |
