Property Writes

Obama Administration Unveils Plan to “Heal the Housing Market”

HAR Government Affairs — Fri, 17 Feb 2012 21:04:20 +0000

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

HAR Government Affairs — Fri, 17 Feb 2012 21:03:13 +0000

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

HAR Government Affairs — Fri, 17 Feb 2012 20:58:33 +0000

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:

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:

Government Offers to Review Foreclosure Handling in More than 4 Million Individual Cases

HAR Government Affairs — Mon, 30 Jan 2012 19:15:26 +0000

Borrowers who faced foreclosure in 2009 or 2010 may be eligible for a free independent review of their foreclosures. The reviews which were ordered by the Office of the Comptroller of the Currency (OCC) and the Federal Reserve in April of 2011 cover foreclosures handled by most major loan servicers. They are intended to determine whether borrowers suffered financial injury due to improper handling of the foreclosure action and, if so, how much compensation should be paid.

OCC has mailed 4 million letters to likely eligible borrowers notifying them of this opportunity. Other borrowers who believe they are eligible for this review of their foreclosure can request application forms by calling (888) 952-9105. Applications are due by April 30, 2012.

Tax Director Finds Real Estate Profession has the Most Criminal Convictions.

HAR Government Affairs — Mon, 30 Jan 2012 19:12:16 +0000

Residents rely on State government services on a daily basis: from the roadways, to the safety of our drinking water, to the education of our children. The public’s financing of these necessary services relies on the taxes paid by residents and non-residents, including millions of tourists who visit our islands each year.

One of my goals as Tax Director for the State is to ensure that our taxpayers have as much information as possible to submit their taxes accurately. The accurate payment of taxes ensures that there’s enough money coming right back to our residents in the form of services. It also ensures that the State’s tax laws are being applied accurately and fairly.

Sometimes, as new laws are adopted, residents aren’t aware of how the new law works, or when it goes into effect. Information to educate taxpayers and practitioners is available through the Department’s website at www.hawaii.gov/tax. Our Taxpayer Services Branch (587-4242) and Technical Section (587-1577) are also available to answer your questions.

Here are a few updates from the Department:
• Starting October 2011, the Department of Taxation notified approximately 10,000 General Excise and Use Tax (GET) licensees that have not received their Annual Return (Form G-49). Completing the Annual Return is required, even if you timely filed your monthly/quarterly/semi-annual returns (Form G-45) for the tax year. Even if you had no income to report, you are required to file an Annual Return. Instructions on how to cancel a GET license is also included in the letter.

• In 2012, the Department will be launching new electronic services. These new services will include electronic bulk filing of Forms G-45 and G-49 (GET returns), withholding information and tax clearance requests. The first new services will be launched in January 2012, starting with the electronic filing of GET forms. Please continue to check our website for updates.

• As a word of caution, since the inception of the Department’s criminal investigation division in 1996, the industry with the most number of criminal tax convictions is the real estate profession. Criminal tax charges commonly arise from taxpayers neglecting to file their tax returns and submit taxes owed for several years. If you are aware of any tax avoidance activities that may need our review (whether criminal or civil), please feel free to email the information to tax.directors.office@hawaii.gov or tax.compliance@hawaii.gov . Information provided will be kept confidential. When taxpayers get into a situation where they need assistance to catch up on past returns not filed and payments not made, we always encourage them to contact the Department to correct the problem.

Opening Day of Legislative Sessions Kicks-Off on January 18, 2012

HAR Government Affairs — Wed, 18 Jan 2012 19:13:51 +0000

Bills will be introduced, new and old ideas will be debated in hearings and in the media, and the Capitol will be aflutter with people coming and going. HAR will be heavily involved in testimonies and in discussions with our elected officials. We will continue to keep the members informed on issues and will advocate for real estate and homeowner interests.

A few bills have been prefiled that directly relates to real estate licensees. Session hasn’t started and HAR anticipates many more bills.

HB1706 - Requires owners of residential units who reside on a different island or out-of-state to provide the managing agent or resident manager of the condominium project with contact information of a rental agent located in the State who is responsible for the management of the unit.

HB1707 - Requires nonresident owners of single family residential dwellings, apartments, condominiums, or townhouses who rent their property as a transient accommodation for 30 days or less to rent the property through a licensed real estate broker or salesperson. Provides for penalty.

2011 NAR Legislative and Regulatory Year in Review

HAR Government Affairs — Tue, 20 Dec 2011 19:39:45 +0000

During 2011, the REALTOR® Legislative and Regulatory Agenda has focused on ensuring the continued flow of capital into the real estate market, preserving residential and commercial property ownership, and protecting the business interests of its members. NAR has made significant progress on all fronts. The issues highlighted here represent just a portion of the advocacy activity conducted on behalf of REALTORS®.

To view the full list of issues NAR is working on, please visit:
http://www.realtor.org/politicaladvocacy >>

New Federal Hotline Available for Mortgage Complaints

HAR Government Affairs — Tue, 20 Dec 2011 19:39:02 +0000

A new source of federal help is now available for borrower’s to submit formal complaints regarding their interests in banking, home loans and other forms of consumer credit. The complaint hotline launched on Dec. 1 and so far has handled 5,074 complaints, according to the Consumer Financial Protection Bureau (CFPB).

When a borrower submits a formal complaint to the bureau, the information is sent to the lender or mortgage servicer named in the complaint using a secure web portal. The lender then reviews the information and determines what action needs to take place to solve the issue. The lender is required to report any action to the bureau which sends it on to the borrower for review.

According to the CFPB, borrowers can log onto the agency’s secure consumer portal or call their toll-free number to receive updates, provide additional information and review responses from their lender.

The CFPB agency was created in part due to last year’s Dodd-Frank financial reform. It is supposed to look out for consumer interests in banking, financial products and home loans.

National Flood Insurance Program (NFIP) Extension to End Dec. 16-Extended Again

HAR Government Affairs — Tue, 20 Dec 2011 19:38:19 +0000

The National Flood Insurance Program (NFIP) extension Congress enacted last month will be extended again. Late Thursday, December 15, Congress reached a deal on the federal spending deal that would avoid a government shutdown. Included in this deal is an extension of the National Flood Insurance Program to May 16, 2012. While the six month extension will avoid a lapse in coverage for homes in flood plains, it is not the longer term extension NAR has been working for.

Schedule GE-1 “Survey of General Excise/Use Tax Exemptions and Deductions”

HAR Government Affairs — Tue, 20 Dec 2011 19:37:19 +0000

Act 105, Session Laws of Hawaii 2011, requires the Department of Taxation (“Department”) to gather information from all taxpayers who have exemptions or deductions from the general excise and use tax, in order to provide comprehensive information for determining the impact of Act 105 on businesses. Taxpayers who only report amounts not subject to tax under section 237-18(a), (b), (e), (f), (g) or (h), as an exemption or deduction on their Form G-45 and Form G-49, have inquired whether Schedule GE-1 should be filed and if so, how Schedule GE-1 should be completed.

The Hawaii Association of REALTORS submitted a letter of inquiry to the Department of Taxation requesting guidance and additional information. According to Tax Announcement 2011-27, real estate licensees are not required to file Schedule GE-1 because sections 237-18(a), (b), (e), (f), (g) and (h) are divisions of income, not exemptions or deductions. If any taxpayers already filed Schedule GE-1 and reported amounts under sections 237-18(a), (b), (e), (f), (g) or (h), as an exemption or deduction, there is no need to amend Schedule GE-1.

Read the full Tax Announcement 2011-27 >>