In early July, President Obama signed into law The Biggert-Waters Flood Insurance Reform Act of 2012 as part of a transportation funding bill. The legislation extends the National Flood Insurance Program (NFIP) through September 30, 2017, and ends four years of short-term extensions that brought shutdowns and uncertainty to the real estate market. Without the five-year extension, the program would have expired at the end of this month.
C.A.R. and NAR have long supported the NFIP, which protects homeowners in more than 21,000 communities nationwide where flood insurance is required by law to obtain a mortgage. NAR estimates that a lapse in the program would have affected 1,300 transactions a day and that more than 40,000 home sales were delayed or canceled during a shutdown in June 2010. C.A.R. and NAR will continue to monitor the issue and ensure lawmakers understand the importance of retaining the NFIP.
Many of you have been reporting that short sales are getting easier to complete, and we hope that a newly introduced federal bill will help speed up the approval process and make short sales even easier. Just last week, Congressman Jerry McNerney (D-Stockton) introduced The Fast Help for Homeowners (FHFH) Act, a short sale bill that will require subordinate lien holders to respond to short sale offers within 45 days.
C.A.R. applauds Congressman McNerney and cosponsors Dennis Cardoza, Jim Costa, Barbara Lee, and George Miller for introducing this much-needed piece of legislation, which will require subordinate lien holders to respond to short sale offers in a fair and reasonable amount of time, ensuring distressed properties are brought to market and aiding in the recovery of the general economy. A recent C.A.R. survey found that nearly half of all properties sold as short sales in California had subordinate liens. This legislation will help pave the way for a quicker response, resulting in smoother short sale transactions. C.A.R. has been actively pushing mortgage servicers for improvements to the short sale process for the past year and a half and is continuing to advocate for changes that further streamline the process.
On July 11, Gov. Jerry Brown signed the California Homeowner Bill of Rights (AB 278), which is designed to halt the abusive tactics of loan servicers and protect struggling homeowners who are trying, in good faith, to renegotiate their mortgages. The passage of the bill makes California the first state in the nation to take provisions in the National Mortgage Settlement, which covered the nation’s five largest mortgage loan servicers, and apply those rules to all mortgage servicers.
C.A.R. opposed this well-intentioned legislation because it will encourage the filing of lawsuits intended for delay and further discourage lending. While we are disappointed in the passage of AB 278, the good news is that thanks to C.A.R. members’ successful lobbying efforts on Legislative Day, the bill is a much-improved version of the package of bills initially sponsored by the Attorney General. The original bill took the “Nevada Approach,” which would have forced anyone recording a notice of default to certify the chain of ownership of the mortgage – something that’s impossible to do because mortgages are frequently bundled and sold on the secondary market. This approach would have halted virtually all foreclosures, drying up both REO and short sale inventory, and forced those foreclosures to go through an arduous judicial foreclosure process.
We will continue to fight for a thoughtful, balanced reform of the foreclosure process. In fact, C.A.R. is sponsoring AB 1745 (Torres), which prohibits “dual tracking” to prevent lenders from selling a property at a foreclosure sale if a short sale has already been approved. We have also worked jointly with the Attorney General on several of the bills in her “bill of rights.”
For full details of the California Homeowner Bill of Rights.
Another issue that has been on the forefront at C.A.R. is the Federal Housing Finance Agency’s (FHFA) decision to move forward with the REO pilot initiative in California. We are extremely disappointed that the FHFA failed to understand that this initiative will harm the communities in which it will be implemented – Riverside and San Bernardino counties. C.A.R. has been working over the past several months to educate the FHFA that the ill-conceived idea of selling foreclosed homes in bulk to Wall Street investors is not a viable solution in a market that is experiencing a shortage of homes for sale in general and an even greater shortage of REOs. C.A.R. recently submitted a comment letter to FHFA Acting Director Edward DeMarco to express its disappointment and frustration with the FHFA’s decision. Read the comment letter.
On a much lighter note, October will be here before you know it, and that means CALIFORNIA REALTOR® EXPO is around the corner. This year’s REALTOR® EXPO, held October 2-4 at the Anaheim Convention Center, will bring you an excellent educational experience, incredible networking opportunities, and motivating luncheon speakers. (Be sure to check out the video above!) This year, during a very special Thursday Closing Luncheon, C.A.R. will honor members who are currently serving or have served our country.
J.R. Martinez, retired serviceman and motivational speaker, will surely inspire the audience with his story at Thursday’s closing luncheon. During a military deployment to Iraq in 2003, Martinez endured an explosion which burned more than 40 percent of his body. Martinez opted to remain positive, despite his injuries, and soon found that his positivity could be a beacon of support for other burn victims. In 2011, he became a household name as he took home the championship trophy on ABC’s Dancing with the Stars.
This year’s closing luncheon will offer attendees a unique opportunity not only to hear from an extraordinary veteran, but also honor the courage and bravery of C.A.R. members who serve or have served our country. If you have photos of yourself taken during active duty, please email them to firstname.lastname@example.org so that C.A.R. may include them in the luncheon presentation.
Tickets for the Thursday luncheon are $65 prior to EXPO; $70 on-site. Visit here to register.
We look forward to seeing you in Anaheim!
CALIFORNIA ASSOCIATION OF REALTORS®