Property Writes

Off-Island Owner Vacation Rental Bill Heads to Conference

HAR Government Affairs — Thu, 19 Apr 2012 22:00:31 +0000

There have been numerous versions of bills that would affect off-island owners of properties. The versions ranged from:

Requiring real estate licensees to manage off-island owner vacation properties and condo hotel operators to manage condo-hotels;
Requiring real estate licensees to submit taxes to the State; and
Exempting off-island owners from using a real estate licensee or condo hotel operator if they receive a tax clearance.

HAR has opposed various versions of the measure, please read the testimony on HAR’s position. Furthermore, HAR would like to work with stakeholders and come up with a workable solution to ensure no unintended consequences.

The following is a summary of the latest version of House Bill 2078 which:

Defines the requirements for an off-island owner in designating an agent to maintain the property by requiring them to be an employee, serve as a local point of contact for the transient accommodation, and require them to respond to any issues or concerns, such as emergencies and natural disasters;
Requires the owner to furnish the contact information of the designated agent to the AOAO, community association, condominium association, cooperative, or other nongovernmental entity with covenants, bylaws, and administrative provisions. Also, the owner must notify within sixty calendar days if there is a change in the designated agent;
Requires the Counties to submit transient accommodation information to the Department of Taxation;
Requires the designated agent’s contact information to be included in the transient accommodation contract or written rental agreement and prominently posted in the accommodation. Failure to provide the information can result in a fine of not more than $25,000, or $100,000 for a corporation; and
Requires the transient accommodation tax identification number to be displayed in all advertisements and website solicitations. For off-island owners, it also requires the designated agent’s contact information to be displayed.

Link to testimony >>

Fannie, Freddie to Improve Short Sale Process

HAR Government Affairs — Thu, 19 Apr 2012 21:58:38 +0000

Fannie Mae and Freddie Mac have been directed by their regulator, the Federal Housing Finance Agency, to require servicers to acknowledge receipt of short sale purchase offers within 3 business days, response to the short sale request within 30 days (with possible extension), and make a decision within 60 days of purchase offer.

> View the Freddie Mac Bulletin

Judge Oks $26B Foreclosure Settlement

HAR Government Affairs — Thu, 19 Apr 2012 21:56:32 +0000

“A federal judge granted final approval to a landmark $26 billion settlement over foreclosure processing errors, clearing the way for the nation’s five largest lenders to begin unraveling aid to home owners. The settlement includes guidelines for banks in compensating home owners who may have been wrongfully foreclosed upon as well as mortgage modifications–including principal writedowns–of up to 1 million home owners.” The attorney general of Hawaii and 48 other States plus the District of Columbia are part of the agreement.

Read the full article from REALTOR® Magazine

FHA Hikes Fees on Mortgages

HAR Government Affairs — Wed, 11 Apr 2012 02:38:47 +0000

Beginning April 1, 2012, the Federal Housing Administration (FHA) backed mortgages by FHA will see a rise in fees. In particular, FHA will increase two fees that borrowers pay. Starting April 1, it will increase its annual mortgage insurance premium for all loans by 10 basis points (.10 percent), bringing the total cost from 1.15 percent of the loan amount to 1.25 percent. Starting June 1, loans above $625,500 premiums will see an increase of an additional 0.25 percent of a percentage point, bringing the total premium costs up to 1.5 percent of the loan amount. FHA also announced it will raise a fee for the upfront mortgage premium by 0.75 of a percentage point, which will now total 1.75 percent of the loan amount. The new fees will also apply to home owners who want to refinance their mortgages except for those FHA borrowers utilizing the streamline refinance program to reduce their interest rate; as announced this week by the Obama Administration.

FHFA Releases Final Ruling on Private Transfer Fees

HAR Government Affairs — Wed, 11 Apr 2012 02:37:56 +0000

The Federal Housing Finance Agency (FHFA) released the final rule on private transfer fees. The final rule is not substantively different than the proposed rule; however, it does include minor changes advocated for by the National Association of REALTORS® (NAR). FHFA removed the 1,000 yard requirement under the direct benefits section of the rule and instead offers a two-tier test. First, fees can be a direct benefit if property is open to the general public and is directly adjacent to the burdened community. Second, transfer fees may apply to more distant properties if said properties are primarily for the benefit of the burdened community. The rule also acknowledges that large developments often have one large homeowners association (HOA) with several smaller HOAs covering discreet subdivisions of the development. Transfer fees may be used to fund both organization types.

NAR generally opposes private transfer fees and has advocated they be prohibited since early 2010. In a series of letters to FHFA, NAR argued that private transfer fees increase the cost of homeownership and do little more than generate revenue for developers or investors and typically provide no benefit to homebuyers. NAR did acknowledge that such fees may be appropriate and supports the exception in the final rule for some organizations, such as homeowners associations, where there is a direct benefit to the homeowner, the fees are reasonable, and there is full disclosure.

NAR Comments on FHFA Pace (Property Assessed Clean Energy) Proposal

HAR Government Affairs — Wed, 11 Apr 2012 02:35:53 +0000

NAR recently commented on an Advanced Notice of Proposed Rulemaking (ANPR) issued by the Federal Housing Finance Agency (FHFA) on Property Assessed Clean Energy (PACE) programs. PACE programs allow local governments to provide homeowners with the financial resources to make energy improvements to their home. Homeowners then pay back the money through an assessment on their property tax bill.

NAR supports voluntary, incentive-based programs that encourage owners to make their homes more energy efficient. However, this must be balanced with the safety and soundness of the mortgage financing system and secondary mortgage markets. In the comments on the ANPR, NAR noted that most PACE loans are in the primary lien position, which means that in the event of a default, these loans get repaid first, even before the mortgage. NAR believes that this first lien position of PACE loans adds an unnecessary risk and may threaten mortgage markets during the current fragile recovery of real estate markets.

U.S. House Propose to Extend Debt Forgiveness for 1-2 Years

HAR Government Affairs — Wed, 11 Apr 2012 02:34:35 +0000

There is now legislation in the U.S. House that would extend the provision of debt forgiveness for two years, and another provision that would extend it for one year. Obviously two years is better than one, but we are not taking a position on which one goes forward. More information about the issue can be found at: Will I Pay Tax on Short Sales, Foreclosures or Loan Modifications >>

Bill Clarifying the Revocation, Suspension and Fine Provisions for Real Estate Licensees at Final Stages

HAR Government Affairs — Wed, 11 Apr 2012 02:30:05 +0000

Senate Bill 3002, which HAR strongly supports, amends provisions relating to the licensing and penalties of real estate brokers and salespersons by clarifying that real estate brokers and salespersons:

Cannot be held liable for misrepresentations based upon a good faith reliance on the information provided by a reputable property inspector, seller of representative of the seller, surveyor, contractor, licensed professional, community or homeowner’s association representative, public record or property manager;
Cannot be held liable for failure to ascertain and disclose all material facts concerning a property if there was a good faith reliance on a prepared disclosure statement; and
Allows the Regulated Industries Complaints Office and Real Estate Commission to determine whether the real estate licensee relied in good faith on the information provided.

The measure can either go to Conference Committee or be approved and head to the Governor’s Office where he can sign it into law, not sign it into law or veto it.

Link to HAR Testimony >>

HAR Opposes State Purchasing Existing Loans on Distressed Residential Properties

HAR Government Affairs — Wed, 11 Apr 2012 02:28:52 +0000

There have been numerous bills that would allow the state to operate like a “State Bank” and purchase distressed property loans for owner-occupants that qualify. Under Senate Bill 2394, HAR strongly opposed the bill, specifically:

Its impact on Hawaii’s bond rating;
Creating a special mortgage recording fee to fund the program. This fee would require all new homeowners to essentially bailout distressed properties within the program; and
There are already existing programs such as refinancing, short sales and loan modifications.

Note: The current version has removed the special mortgage recording fee.

View HAR’s testimony >>

Off-Island Owner Vacation Rental Bills Morph and Move Forward

HAR Government Affairs — Wed, 11 Apr 2012 02:27:31 +0000

There have been numerous versions of bills that would affect off-island owners of properties. The versions ranged from:

Requiring real estate licensees to manage off-island owner vacation properties and condo hotel operators to manage condo-hotels;
Requiring real estate licensees to submit taxes to the State; and
Exempting off-island owners from using a real estate licensee or condo hotel operator if they receive a tax clearance.

The following is a summary of the latest version of House Bill 2078 which:

Defines the requirements for an off-island owner in designating an agent to maintain the property by requiring them to be an employee, serve as a local point of contact for the transient accommodation, and require them to respond to any issues or concerns, such as emergencies and natural disasters;
Requires the owner to furnish the contact information of the designated agent to the AOAO, community association, condominium association, cooperative, or other nongovernmental entity with covenants, bylaws, and administrative provisions. Also, the owner must notify within sixty calendar days if there is a change in the designated agent;
Requires the Counties to submit transient accommodation information to the Department of Taxation;
Requires the designated agent’s contact information to be included in the transient accommodation contract or written rental agreement and prominently posted in the accommodation. Failure to provide the information can result in a fine of not more than $25,000, or $100,000 for a corporation; and
Requires the transient accommodation tax identification number to be displayed in all advertisements and website solicitations. For off-island owners, it also requires the designated agent’s contact information to be displayed.

Link to HAR testimony >>