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Linda Christianson, President of the Greater Lakes Association of REALTORS®, Kevin Goedker
President of the Greater Lakes Multiple Listing Service and Janie Weston, CEO of the Greater Lakes Association of REALTORS® attended the National Association of REALTORS® Mid Year Meetings in Washington D.C. May 13-19. REALTORS® from around the nation attended business meetings and met with their Congressman/Congresswoman to discuss their concerns for private property rights. Meeting with the Minnesota delegation was Senator Coleman and Senator Amy Klobuchar. The Legislative Assistants for Representatives Walz, Line, Ramstad, Oberstar, and Bachmann visited related to the Minnesota delegation and listened to the requests to enact legislation that modernizes the FHA single family mortgage insurance program and permanently increase loan limits; strengthen the housing mission of Fannie Mai and Freddie Mac and permanently increase loan limits; enable a temporary tax credit for individuals who purchase a principal residence; and reauthorize the National Flood Insurance Program before it expires on September 30, 2008; and enact small business health reforms to correct the inequities inherent in the nation’s health insurance delivery system.
The Greater Lakes Association of REALTORSÒ has real estate professionals in Aitkin, Cass, Crow Wing, Hubbard, Mille Lacs, Morrison and Todd Counties.
|from the NAR website|
One out of three the metropolitan areas in the U.S. showed rising home prices in the first quarter, with only a small number of jumbo loan originations and higher foreclosures resulting in mixed conditions around the country, NAR’s quartely report shows. Median existing single-family home prices were up in the first quarter in 48 out of 149 metropolitan statistical areas; 100 had price declines; one was unchanged. “It’s more important than ever to examine what’s happening with home prices at the city and neighborhood level,” says NAR President Richard Gaylord said. “The old real estate mantra of ‘location, location, location’ is perhaps more relevant today than ever before. Consumers should check with REALTORS® for local expertise on what’s going on in their own area because conditions can vary considerably from one neighborhood to the next.”
The Greater Lakes Association of REALTORS® awards four $500 scholarships to high school seniors that are related to a REALTOR® member. The Greater Lakes Association of REALTORS® is one of 18 Real Estate Trade Associations in Minnesota that has members in Aitkin, Cass, Crow Wing, Hubbard, Mille Lacs, Morrison, and Todd Counties.
The following students are the recipients.
Holly is the daughter of Ronda Bjornson-Main
Holly’s educational objective after graduating from Isle High School this spring is to attend Itasca Community College to obtain her degree in License Practical Nursing. She will then transfer to St. Scholastica for her Masters in Nursing. Holly plans on continuing her education by getting her RN degree. Holly would like to do some volunteer or missionary work before settling down.
Megan Malz is the daughter of Scott Malt who works for Aspen Real Estate. Megan is currently on the student at Pequot Lakes High School and is on the student council, track team, volleyball, mock trial and band. Megan plans on attending St Bens College and major in psychology and art.
Ben Tweed, son of Bonnie Tweed, Breezy Point Real Estate. Ben will graduate with honors from Pequot Lakes High School. Ben has played sports most of his life. He enjoys his part-time job as a cook and helps his dad in the construction business. Ben will start his college career at the University of Minnesota in the Twin Cities as a pre-med major.
Ciara Timothy, is the daughter of Liz Timothy of Keller Williams Brainerd Lakes Realty. Ciara is a graduate of Brainerd High School where she was active in DECA, manager of the Warrior Track Team and was a finalist at State in Retail Merchandising. Ciara plans on attending the University of Minnesota Mankato and will be studying secondary education in Social Sciences.
Information provided by the Minnesota Association of REALTORS
Minnesota requires sellers of single-family residential property to provide
buyers with numerous disclosures including a material fact disclosure made to the best of the seller’s knowledge. With the increase in foreclosures, there has been confusion as to whether a lender/bank, that has taken title to property by foreclosure, is required to provide these disclosures when they sell the foreclosed property.
The confusion provision seems to be under MN Stat. 513.54 (5) which provides an exemption for transfers by foreclosure or deed in lieu of foreclosure. This provision provides an exception to the material fact disclosure requirement only when the property is being transferred from the borrower to the lender/bank by foreclosure. Once the property title is transferred to the bank, and the bank subsequently proceeds to sell the property, the bank must provide a material fact disclosure in compliance with MN Stat. 513.55 and any other disclosures required under state and federal laws.
Material Fact Disclosure:
The disclosure must include all material facts of which the seller is aware, that could adversely and significantly affect:
Sellers may utilize the MNAR approved Seller’s Property Disclosure Statement to meet this requirement.
Other Disclosure Requirements:
Seller Disclosure Alternatives
Additionally, a buyer may agree to a waiver of the seller disclosure requirements under MN Stat. 513.52-513.60. However, the buyer must agree to a waiver of the seller’s material fact disclosure requirement, in writing, prior to entering into the Purchase Agreement.
NOTE: Waiver of this disclosure does not waive, limit or abridge any obligation for seller disclosure created by any other law such as those listed above.
NOTE: There is no like waiver for real estate licensees. Utilizing the waiver provision is essentially a reversion back to no seller disclosure requirements. Real estate licensees are required under MN Stat. 82.22, Subd. 8, to disclose all material facts of which they are aware. MNAR successfully pursued the legislation requiring seller’s to disclose material facts since, to a large degree, REALTORS® must rely on sellers to know material facts regarding the property. All real estate licensees must disclose ALL material facts of which they are aware that could adversely and significantly affect an ordinary purchaser’s use or enjoyment of the property or any intended use of the property of which they are aware.
In conclusion, REALTORS® involved in the sale of a lender/bank-owned residential property, must make certain proper disclosures by the lender/bank, and yourself as a licensee, are being provided to prospective buyers, or alternatives provided, prior to the buyer and seller entering into a Purchase Agreement.
As the REALTOR Turns
Transfers: Jim Albers (Edina Brainerd) to Edina Garrison
MLS Only Member: None
No Longer GLAR Member: Randy Johnson (RE/MAX Lakes Area Realty)
Licenses Sent to State: None
No Longer an MLS Only Member: Susa Ugstad (Woods Bay REalty); Tim Radeback (Click Realty)
Education Class in Walker – Cancelled
MLS Principals: MLS Bylaws
Please review the bylaws. The changes are in yellow and red.
Once approved by the Principals, the Bylaws will be sent to the National Association of REALTORS for their final approval.
Habitat for Humanity Golf Tournament
Come join us for an afternoon of golf & fun-filled games to support HFHMC!
Habitat for Humanity of Morrison County, Seventh Annual Benefit Golf Tournament, Pine Ridge Golf Course, Motley, MN, June 9, 2008 Special Early Bird Price!
$70 per golfer before May 12th / $75 per golfer after May 12th
_____ Hole & Team Sponsorships $380/$400 includes 1 team and 1 hole sponsorship, lunch, buffet supper, green fees for 4 golfers, use of 2 carts _____ Team Registration $280/$300includes 1 team sponsorship, lunch, buffet supper, and green fees for 4 golfers, use of 2 carts
_____Individual Golfer $70/$75 ~ includes lunch, buffet supper, green fees & shared cart
______Hole sponsor only ~ $100 ~ includes name recognition on specific hole
Please note: Minimum Team Handicap of 65.
Registration deadline is May 30th ~ limited to first 36 teams
Hole Sponsorship Name (if sponsoring a hole)
Dinner only @ $15 each
______ I will volunteer at the Golf Tournament
__ ____Enclosed is my tax-deductible donation to HFHMC
Please send registrations and donations to:
Habitat for Humanity of Morrison County – PO Box 321 – Little Falls, MN 56345
Call if you’d like us to pick up your donation: 320-616-2084 or email at: email@example.com
All proceeds from the tournament help build simple, affordable homes in partnership with qualifying low- income families. We welcome cash donations and door prizes to help defray the cost of the tournament.
Card Reader Update Mandatory
All Card Readers must be upgraded.!!!
A new version of the SentriLock card utility, version 2.04.40, is available for download. This version allows “1-click” and scheduled card renewals, enhanced troubleshooting capabilities, forgotten password recovery, and other new features.
To get the new version, click the “Support” button at the Sentrilock webpage, then the “Downloads” button on the newly-opened page, then the “SentriLock Card Utility 2.04.40 Update” link in the popup window and follow the instructions you’ll find there.
An HTML page and a PDF file outlining the major new features and how to use them are available in the same location.
Sandelands Realty & the University of MN Extension are sponsoring “Septic System Care & Maintenance”, Monday May 5, 6-8 pm at the Malmo Sunrise Cafe (in the Cenex Complex). This seminar is for REALTORS and the public. There is no charge for this program and pre-registration is not required.
This program will offer information on:
May 7: “This Ain’t Your Momma’s Code of Ethics” – (does NOT fulfill the NAR requirement)
May 7: “Being a Good Agent Means Happier Clients”
Wells Fargo Home Mortgage, Sponsor
Up North Education at the Bear Pause in Hackensak
May 22: “Your E & O Policy ‘ How Not to be Sued”
Greater Lakes Association of REALTORS · 15344 Pearl Drive · Baxter · MN · 56425
Today’s reason for this memo, a regulatory call to action, is just as significant. In the same way that a hurricane destroys a broad swath indiscriminately, there are new regulations being handed down from Washington which will wreak havoc on a wide scale in the real estate industry, and real estate agents will be directly harmed. Like with Katrina, I hope you’ll respond again, and help me stop this damage to our businesses.
The new regulations came out of a lawsuit brought by the New York Attorney General involving coercion of appraisers by large institutions. In the settlement agreement, the GSEs (Fannie Mae and Freddie Mac), and the Office of Federal Housing Enterprise Oversight (OFHEO) agreed to change national appraisal rules — in exchange for the Attorney General’s office terminating its investigation of the GSEs.
Unfortunately, while we believe the agreement has the best of intentions, the hastily written embedded regulations (called the “Home Valuation Code of Conduct”, or HVCC) do not solve the problem and in fact severely punish agents, mortgage brokers, appraisers, and ultimately consumers. If there ever was a case of the cure being worse than the disease, this is it.
The two portions of the HVCC that most affect you are:
“The lender will not accept any appraisal report completed by an appraiser selected, retained, or compensated in any manner by… mortgage brokers and real estate agents…” and
“…any person… who is compensated on a commission basis upon the successful completion of a loan… shall be forbidden from… any communications with an appraiser”
Why every agent should be concerned about the proposed HVCC:
- Agents are specifically singled out as being “the problem”, and are banned from even talking to appraisers at all; that’s a RESPA “death sentence” for every relationship you’ve ever built
- It shifts power toward large institutions and away from agents, since the lender alone becomes the sole point of contact for the borrower in critical areas
- Your role as the prime coordinator of the transaction will be severely damaged, and handed to the lender
- Buyers will wind up paying for a separate appraisal for every potential lender, driving up closing costs, reducing competition, and ultimately pushing housing affordability even lower — directly affecting your homebuyers
- The business relationships that you’ve spent years building with mortgage brokers are made worthless overnight, as borrowers will be forced to lock in with one lender almost immediately
- The entire regulation is biased toward the large institutions and against independent appraisers, mortgage brokers, and agents
- If this becomes law, what part of your value-added role will come under attack next?
As you can see, this isn’t just about appraisers. The draconian measures in the HVCC absolutely exclude you from properly assisting buyers and sellers during the appraisal, one of the most important (and stressful) areas of the transaction. As the market slows down and you’re under fee pressure, is this the time to find that you’ve had the core of what you do — guiding and counseling buyers and sellers through your industry knowledge and business contacts — taken away from you in the dark of the night?
I don’t think so. That’s why the whole industry needs your help. And you can do it with just a few clicks and perhaps a phone call or two.
It would be easy to think that this is an appraisal issue, and appraisers can deal with it themselves. I think I’ve shown above that it’s very damaging to agents specifically, but I believe also that there’s a bigger issue here. Back when I first personally donated $150,000 to the REALTOR® Relief Fund (click here for the news story), we had just entered the agent software market, having spent 20 years serving appraisers. The money that went to benefit agents and their families in the affected areas ultimately came from appraisers, and those same appraisers stepped up to the plate again in matching my additional $250,000 challenge.
You can return the favor to those appraisers — and safeguard your own career — by simply visiting our website and using our convenient form to send your comments to the powers-that-be. Agents outnumber appraisers roughly 10-to-1, and your voice will have a huge impact on the OFHEO, Fannie, Freddie, and Congress. All you have to do is visit our political action page by clicking here: http://www.alamode.com/HVCC-RE. (Remember: If left unchanged, it harms you too.)
I mentioned that we were comparative newcomers to the sales side of the real estate business in 2005. But today, over 35,000 agents use our websites and tools. And all told, over 100,000 agents, appraisers, and mortgage brokers use our products. Unfortunately, all the software in the world won’t make this latest problem go away. But 100,000 people collectively voicing their opposition to poor regulations — now that can indeed make a difference. Join me in sending a message to Washington, without making any donation or spending any money at all, by just using your mouse. Join us now in sending a clear message by visiting http://www.alamode.com/HVCC-RE.
Thanks for reading this, and thank you in advance for your help.
An Inman News article about the National Association of Realtors’ consideration of new multiple listing service rules relating to properties that may be subject to short-sale transactions drew a range of reader comments and letters. An NAR committee is expected to consider next month whether to offer guidance on when MLS participants must disclose that a property may be subject to lender approval as a short-sale transaction.
Short sales are typically defined as transactions in which the lender agrees to accept less than the full amount due on a mortgage when a property is sold in order to avoid a lengthy and costly foreclosure process, and the consideration of new rules is in response to the growing share of short-sale and foreclosure transactions across the country. Short-sale transactions can lead to lower compensation for real estate professionals involved than they would receive in standard transactions.
Daniel Ickowicz, director of sales for Elite International Realty in Aventura, Fla., told Inman News that he had contacted the national, statewide and local Realtor associations to call attention to MLS issues with short sales.
In a letter to Realtor organizations, Ickowicz stated, “There are a large number of listings currently placed on our MLS system that are falling into the so-called ‘short-sale’ category. What concerns me is that the prices and terms being marketed are not realistic. Realtors, together with their sellers, come up with a figure that they ‘think’ the bank will take.
“Usually, it is not until offers start pouring in that the seller goes to his lender and tries to negotiate the terms, including price and commissions to be paid; mind you that pricing and most terms are on the MLS to begin with, without the bank’s knowledge in most cases,” he wrote. “I do not think that by placing a sentence on the remarks station stating ‘offer subject to third-party approval’ is enough disclosure.”
Mike Thiel, associate counsel for the National Association of Realtors, assured in a response e-mail that the association “is giving serious consideration” to the issue of short sales, and Ickowicz also received responses from state and local Realtor groups.
Tom Scaglione, a Tampa, Fla., Realtor, said in a comment at the Inman News site that the Mid-Florida Regional MLS, which is owned by a group of 13 Realtor associations and serves about 35,000 users, adopted a short-sale rule that specifies disclosures and consent procedures properties that may end up in short-sale transactions.
The rule, which was deliberated by an MLS task force for several months and received a nod from the national Realtor group in January, applies when a listing broker “becomes aware that the listing price may not be sufficient to permit the seller to fully satisfy all encumbrances and pay the seller’s closing costs, including the listing broker’s offer of compensation.”
In these instances, the listing broker may obtain written consent from the seller to disclose this potential for a short sale to cooperating brokers, buyer and the public; and “clearly and promptly disclose the short-sale circumstance to all cooperating brokers and, when and if appropriate, disclose that the sale of the listed property may be conditioned upon the approval of a court, a lender, or other third party.”
These disclosures, according to the new rule, can occur at any time, “but it is suggested they occur at the time of MLS input, if known, or within one business day upon receipt of knowledge.”
Under these new short-sale disclosures, listing brokers must specify to cooperating brokers that the offer of compensation may be adjusted by a third-party to the transaction after a contract for sale and purchase, Scaglione stated.
Derek Eisenberg of New Jersey-based Continental Real Estate Group said in a comment that banks, in approving short-sale deals, can renegotiate the real estate commission paid out to the listing broker, who in turn shares a portion of the commission with a cooperating broker to the transaction.
“A broker might sign with the seller at 6 percent” of the sale price as payment for real estate services, he said, though the bank could pay out 5 percent in approving a short sale, for example. He suggested that the advertisement of a percentage commission split of 50-50 to a cooperating broker, as an example, could eliminate confusion if the property is ultimately sold through a short-sale transaction.
Jay Thompson, broker-owner of Thompson’s Realty in Phoenix, commented, “The practice of putting ridiculously low list prices into the MLS needs to stop,” as it may not accurately reflect a price that the lender may approve. “It is difficult to impossible to know what a lender may accept in advance, but listing a home at $99,000 when the market value is in the $350,000 range is nothing but a snarky bait and switch tactic.”
Another commenter suggested that there are too many other real estate issues of national importance for NAR to deal with, and that the short-sale issue should remain in the domain of local and state Realtor groups.
And Dawn Rupersburg, a Realtor for Coral Shores Realty Inc. in Ocala, Fla., said in a letter to Inman News, “I think the MLS needs to stand up to the banks and make them sign a listing agreement that they will pay ‘X’ commission or the listing doesn’t go on the MLS.
“I think the MLSs should make the broker stand behind the commission that is offered in the MLS no matter where the listing comes from. Realtors have a business to run, not a charity, and by allowing the banks not to commit to a listing agreement with a commission we are saying, ‘We love to work for nothing.'”
Gary White, broker-owner of FlexIt Realty in Grand Rapids, Mich., and a member of a local MLS committee, stated in a letter that his MLS has had discussions about short-sale disclosure. “Having to disclose (possible short sales) may further erode the distressed property pricing but have less impact on the sellers with well-maintained property that are looking for a fair market price based on condition, location and the real market.”
In response to the rising tide of short-sale properties and foreclosures, a National Association of Realtors committee that meets next month is expected to consider new rules to better describe the status of properties in Realtor-affiliated multiple listing services.
Some local and regional multiple listing services have worked out definitions and disclosures about the status of properties and developed their own policies related to bank-owned foreclosure properties and short sales. Short sales are typically defined as transactions in which the lender agrees to accept less than the full amount due on a mortgage when a property is sold in order to avoid a costly foreclosure process.
There are some differences of opinion within the industry about how and when to characterize a property as a “short sale” property, and members of the National Association of Realtor trade group’s Multiple Listing Issues & Policies Committee are scheduled to review and discuss policy recommendations on the issue during the association’s annual conference in Washington, D.C., in May.
MetroList MLS, which has about 25,000 participants in the Greater Sacramento area, allows its participants to specify whether a property has a “short sale lender approval contingency,” for example, among other categories.
The MLS, which serves several counties including national foreclosure hotspot San Joaquin County, requires participants to designate short-sale properties using a specific MLS data field, and to communicate to cooperating brokers whether the commission offered could potentially be reduced because of the required court or lender approval.
Most MLSs do have data fields that specify whether a sale is “subject to lender approval” or “subject to court confirmation” said Colleen Badagliacco, a Realtor in San Jose, Calif., who is serving as the chairwoman for NAR’s Multiple Listing Issues and Policies Committee.
And in cases where the property has been bought back by the bank through a foreclosure process and is for sale as a real estate-owned or REO property, MLS participants can describe this status and the possible impact on commission in private comments to other participants.
“The (issue) that we’ve really been trying to focus on and pin down for discussion at the May meeting is: How do you define a short sale? Because technically you don’t have a short sale until it comes to closing and there is not enough money to pay off the lender,” Badagliacco said. “This can be a slippery slope.”
For example, a house may be listed for sale at $500,000, and the outstanding loan amount may be $490,000. If the offer is above the loan amount then the property would not qualify as a short sale.
“What we’ve been grappling with is to come up with a consistent definition of a short sale,” she said, and to determine when this short-sale possibility should be disclosed.
“It is a material fact that there is a potential here (for a short sale) and someone should be aware of it, but when should you disclose it?” she said.
Awaiting lender approval of offers on short-sale, foreclosure and REO properties can be a lengthy process because of the volume of distressed properties that banks and the asset management companies are working with these days, and agents may want to know up-front whether a property could be tied up in a court process or that they won’t hear back for several weeks on whether an offer is approved.
In California, the status of properties is complicated by two types of foreclosure processes: the judicial foreclosure process and trustee sales, and each process has its own set of rules.
What’s being done to shore up housing? Many new, good ideas are currently being debated in Congress. These include jump-start tax incentives for homeownership, FHA and Freddie Mac/Fannie Mae changes that rationalize housing finance and ongoing projects to assure authorization of existing programs and develop solutions for new problems those programs don’t address. Of particular interest to REALTORS® is a new approach to health insurance for the self-employed. REALTORS® and Congress have a notable opportunity to work together to secure enactment of some important legislation.
Housing 2008: Is the homeownership glass half full or half empty? The answer depends on where you’re looking. The motto “Location, Location, Location” still drives the market. Despite the bleak picture painted in the news, sales in nearly half of the nation’s housing markets continue to perform well and home values in many of them continue to appreciate. Most mortgages are current, and the vast majority of homeowners have avoided foreclosure. Still, foreclosure rates continue to grow; they’re up 60% nationally from a year ago. The challenges in the subprime mortgage market persist, even though many, if not most, of the “bad guy” lenders have been shut down.
REALTORS® – All Together NAR’S 2008 LEGISLATIVE AGENDA: REALTORS® will be pressing Congress for completion of our legislative agenda.
Enact Housing Stimulus Legislation
Whether or not you will be traveling to Washington, D.C. your voice is needed to promote our goals. Real estate ownership and investment have historically been the drivers of a vibrant economy. Congress and REALTORS® must work together to restore that essential role. Let your Member of Congress and United States Senators know that you support the NATIONAL ASSOCIATION OF REALTORS® 2008 LEGISLATIVE GOALS:
Contacts: John DiBiase, 202-383-1037
This year NAR proudly observes the 40th Anniversary of the historic 1968 Fair Housing Act. On April 11, 1968, President Lyndon Johnson urged congress to approve the Fair Housing Act just one week following the assassination of Dr. Martin Luther King, Jr. as a tribute to Dr. King’s legacy and commitment to civil rights. One of the Act’s central objectives was to prevent discrimination based on race in the sales or rental of housing. This significant Act has since empowered people from all races and ethnicities to pursue the dream of equal access to housing.
Another significant event took place in 2002 when President George W. Bush enhanced our nation’s commitment to equal housing opportunities for all by designating June as National Homeownership Month, with the goal of increasing minority homeownership in America by 5.5 million by the end of the decade.
Today, as NAR members, you work hard to provide fair access to affordable housing and homeownership year-round. By commemorating Fair Housing Month in April and National Homeownership Month in June, you have the opportunity to help educate consumers on the important role you play in implementing positive change within your communities.
Again this year, in recognition of Fair Housing Month and National Homeownership Month, NAR provides a wealth of resources and tools that support homeownership and strong communities, in one easily accessible place on www.REALTOR.org. Browse resources in the areas of Housing Opportunity, Fair Housing, Diversity, Smart Growth and more and learn how you can help make the dream of homeownership a reality for all Americans. Visit www.REALTOR.org/homeownership today for facts and resources from NAR to help promote homeownership in your community. And for more on Fair Housing Month and the 40th Anniversary of the Fair Housing Act, visit http://www.REALTOR.org/diversity.