LeFrancis Arnold
Dear Member, The countdown to CALIFORNIA REALTOR® EXPO 2012 is on. In just over a week, the biggest C.A.R. event of the year will hit the Anaheim Convention Center, Oct. 2-4, to make a big impact on C.A.R. members. This year, C.A.R. has created an exceptional educational and networking experience that will leave you armed with the latest market information, insightful sales tips, and new connections. You’ll walk away with new ways to use technology, handle tough transactions, and make more money. Here are a few sessions you won’t want to miss:
  • At Tuesday’s PRE EXPO Luncheon, Brian Buffini will share insights and practical information from his brand new Peak Producers sales system.
  • C.A.R. CEO Joel Singer will moderate a panel of top executives from Bank of America, Chase, and Citibank to discuss how REALTORS® can effectively work distressed transactions, what new programs and services are being offered, and how REALTORS® can better serve their clients’ needs. The panel discussion will be held Wed., Oct. 3, 10 a.m. to 11:30 a.m.
  • At Wednesday’s Opening Luncheon, C.A.R. Chief Economist Leslie Appleton-Young will present “Housing Market Trends: What’s Next for Real Estate,” Wed. Oct. 3, noon – 1:30 p.m.
  • Thursday’s Closing Luncheon honoring C.A.R. servicemen and women will inspire you when you hear Iraq War veteran and 2011’s Dancing with the Stars winner J.R. Martinez’s motivating tale of optimism, survival, and perseverance.
C.A.R. Expo Video While you’re there, be sure to peruse more than 150 exhibitor booths for a look at the latest in real estate products and services. (Be sure to check out the video above.) Whether you’re a seasoned pro or new to the industry, CALIFORNIA REALTOR® EXPO 2012 is the place to go for trends and information to jumpstart your career or take it to the next level. Register here for any of CALIFORNIA REALTOR® EXPO 2012 events. Mortgage Debt Cancellation Last month, I mentioned the expiration of the mortgage debt cancellation provision, which ends Dec. 31, 2012. The mortgage debt forgiveness issue is only one of approximately 60 expiring tax provisions that Congress appears unable to extend prior to its recess for the November elections. Congress is pushing the extension of any expiring tax provision to the lame duck session, along with any increase in the debt ceiling, and any serious attempts to prevent the mandatory budget cuts agreed to during last year’s debt ceiling deal. California’s tax treatment of mortgage debt relief income generally aligns with federal law, and both the California and federal laws are set to expire at the end of 2012. For debt forgiven on a loan secured by a “qualified principal residence,” borrowers are exempt from both federal and state income tax consequences, but only until Dec. 31, 2012. The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000. However, these tax breaks apply only to debts discharged from 2009 through 2012. It may be that Congress will take action to extend the federal exemption before year’s end, but we will have to wait and see. If the federal law is extended, it is likely that California would follow in due course, as in the past, but it is not guaranteed. The last time the federal tax exemption was extended, California did not conform its tax law until well into the next year. If you’re working with sellers who have transactions closing after Dec. 31, 2012, they should speak to their own legal counsel or tax advisors about the impact of the expiration of these laws and their potential tax liabilities, including the applicability of other exemptions from debt relief income tax. Responsible Homeowner Refinancing Act Although interest rates are at record lows, only a fraction of homeowners are able to refinance, mainly because they are underwater. The Los Angeles Times reported this week that 69 percent of mortgages at the end of the second quarter had interest rates of 5 percent or higher and about 33 percent of them had rates above 6 percent. That’s why C.A.R. is praising California Sen. Barbara Boxer and New Jersey Sen. Robert Menendez for reviving a measure that would allow millions of homeowners to more easily refinance their mortgages at lower rates. The bill, known as “The Responsible Homeowner Refinancing Act of 2012,” was first introduced in May and would streamline and align the refinance processes of Fannie Mae and Freddie Mac and make it easier for homeowners who are current on their mortgage payments, but who have been previously unable to refinance, to finally take advantage of record low interest rates. Responsible homeowners who can refinance will avoid foreclosure and have more money in their pockets. Fannie Mae and Freddie Mac will see fewer foreclosures, and the housing market can continue its recovery. AB 1718 Degree Brokers Late last month, Gov. Jerry Brown signed AB 1718, a C.A.R.-sponsored bill that closes an important loophole in an applicant’s experience requirements for a real estate broker’s license. Typically, in addition to meeting stringent educational requirements and passing a brokers’ exam, an applicant for a real estate broker’s license must first become a salesperson and acquire at least two years of full time experience in real estate, working under the supervision of a broker, before one can become a broker. Existing law allows an exception to the experience requirement for a college degree, “which included a specialization in real estate.” Over the years, the “degree broker” exception has been interpreted to apply to any degree. Effective Jan. 1, 2013, the new law clarifies that the degree claimed as an exception must actually include a major or minor in real estate. The Department of Real Estate has issued an FAQ to provide details of the new law. Don’t forget to register for CALIFORNIA REALTOR® EXPO 2012 and PRE EXPO! Visit here to register. Please stop me and say “hello” in Anaheim. Sincerely, LeFrancis Arnold 2012 President CALIFORNIA ASSOCIATION OF REALTORS®