Obama Administration Unveils Plan to “Heal the Housing Market”

On February 1 President Obama, speaking to a crowd in Falls Church, Virginia, detailed his plan to “help responsible homeowners and heal the housing market.” The plan calls for streamlined refinancing for potentially millions of borrowers with loans backed by Fannie Mae and Freddie Mac, while also creating a new FHA mortgage program to re-finance non-GSE mortgages. The FHA program will require Congressional approval as will most of the reforms proposed for GSE mortgages. Most observers consider that approval to be uncertain in the current environment.

For GSE mortgages, the plan would eliminate appraisal costs for borrowers, increase competition among the GSE’s by allowing them to re-finance each other’s loans, cover closing costs, and extend eligibility to all performing GSE borrowers. The new re-fi program for non-GSE loans would include the same elements and be financed by a new Financial Crisis Responsibility Fee imposed on the largest banks.

In a statement to the news media NAR President Moe Veissi expressed enthusiasm for efforts to help troubled homeowners and the housing market while emphasizing NAR’s concerns with elements relating to disposition of REOs.

View the complete details on the Obama Administration plan can be found here >>

Understanding Mortgage Debt Forgiveness

A lender will, on occasion, forgive some portion of a borrower’s debt. The general tax rule that applies to any debt forgiveness is that the amount forgiven is treated as taxable income to the borrower. Some exceptions to this rule are available, but, until recently, when a lender forgave some portion of a mortgage debt (such as in so-called “short sales,” foreclosures and “workouts”), the borrower was required to pay tax on the debt forgiven.

A law enacted in December 2007 provides relief to troubled borrowers when some portion of mortgage debt is forgiven. That relief expires on Dec. 31, 2012.

View information to better understand mortgage debt cancellation >>

HAR Hard at Work on Important Real Estate Issues

With the session just starting, HAR continues to advocate for REALTOR® issues that are important to our members, the real estate industry, and homeowners.

Senate Bill 2740 & House Bill 2478 increases the Hula Mae Multifamily Revenue Bond authorization amount from $500,000,000 to $750,000,000.

Position:  Support – HAR has historically supported mechanisms to help increase the supply of low and moderate income affordable housing such as the Hula Mae Multifamily and Rental Housing Trust Fund Programs which can help effectuate the development of mixed-income and mixed-use projects.

To view testimonies and the status of the blls:

• http://www.capitol.hawaii.gov/measure_indiv.aspx?billtype=SB&billnumber=2740
• http://www.capitol.hawaii.gov/measure_indiv.aspx?billtype=HB&billnumber=2478

Senate Bill 2089 requires any nonresident owner who operates a transient accommodation located in the nonresident owner’s private residence, including an apartment, unit, or townhouse, to employ a property manager approved by the real estate commission.

Position:  Expressed Concerns – HAR understands the importance of ensuring that the State collects the appropriate amount of taxes owed by non-resident property owners, but, the requirement that the property manager be responsible for filing and remitting taxes is contrary to the current requirement in the tax code, which provides that the owner of the property, not the property manager, is responsible for paying the General Excise Tax and Transient Accommodations Tax.

To view testimonies and the status of this bill:

• http://capitol.hawaii.gov/measure_indiv.aspx?billtype=SB&billnumber=2089

SB2429 & HB1875 implements the 2011 recommendations of the Mortgage Foreclosure Task Force to address various issues relating to the mortgage foreclosures law and related issues affecting homeowner association liens and the collection of unpaid assessments.

Position:  Comments – HAR believes that non-judicial foreclosures should exist as a mechanism only if it is a fair and balanced process for both the borrower and the creditor.  HAR believes that, in the meantime, court oversight via the judicial foreclosure process should continue to be utilized as the only foreclosure mechanism and be only limited to owner-occupants.

HAR strongly supports the expansion of the condominium foreclosure law to cover planned community associations so that planned community associations are able to obtain relief due to unpaid common assessments as a form of recovery from foreclosure.

HAR has concerns on the creation of a 180-day period for an action to void the transfer of title from a purchaser of the foreclosed property.  This action would severely impact the ability of a bidder to be able to purchase foreclosed real estate at auction because it  will discourage potential bidding from the public at large.  Also, the waiting period will make it a challenge to obtain financing.

To view testimonies and the status of the bills:

• http://www.capitol.hawaii.gov/measure_indiv.aspx?billtype=SB&billnumber=2429
• http://www.capitol.hawaii.gov/measure_indiv.aspx?billtype=HB&billnumber=1875