Howard County Association of REALTORS^® Legislative Update Center keeps you up-to-date on issues and pending real estate legislation that can impact both its members and the Howard County community. To view the current Federal, Maryland, or Howard County updates, click on the news items below and the Related Links to the left.

As a follow-up to the 2012 REALTOR^® Party Policy and Advocacy Conference, NAR has released its Federal Public Policy Priorities - a detailed list of the most important issues on the Agenda for 2012 - including Taxation, Real Estate Finance, Property Insurance, and Appraisal and Commercial Issues.

For more information on Federal Issues being tracked by NAR click here.

On Friday, December 16, Congress extended National Flood Insurance Program (NFIP) authority through May 31, 2012. This latest extension was a part of H.R. 2055, a "megabus" appropriations bills to fund the federal government's 2012 fiscal year.

NAR is urging Congress to use the additional time to complete work on a 5-year NFIP re-authorization bill (H.R. 1309) to provide certainty and avoid further disruption to real estate markets. The NFIP ensures access to affordable flood insurance for millions of home and business owners across the country.

Freddie Mac has amended its short sale affidavit policy. The purpose of the affidavit is to prevent fraud by requiring the buyer, the seller, the real estate brokers, the escrow/closing agent, and any transaction facilitator to make various certifications (including that the short sale is an arm's length transaction and the buyer will not resell within 120 days unless there are substantial improvements).

Policy changes will be mandatory as of January 1, 2012; however, servicers were encouraged to implement the changes immediately. NAR advises members to make sure that any short sale affidavit they sign is an updated form. If presented with an old form, members should request the servicer to update the form before signing, to avoid potential liability issues.
Details >

Congress passed legislation on November 17 and President Obama signed the legislation on Friday, November 18 to restore FHA loan limits for 2 years. The reinstated FHA loan limit formula and cap change will help make mortgages more affordable and accessible for hard-working, middle-class families in 669 counties in 42 states and territories, where the average loan limit reduction after the reset last month was more than $68,000. The maximum FHA loan limit in Howard County has been restored from the lowered limit of $494, 500 which went into effect on October 1, 2011, back to its former limit of $560,000.

2012 NAR President Moe Veissi reminds us, "I know that when we work together we can accomplish anything we set our minds to in order to preserve, protect and defend the American Dream of Home Ownership."

Thank you for your support of homeownership! More details >

On June 30, 2011, the Department of Housing and Urban Development (HUD) published a final rule under the Secure and Fair Enforcement Mortgage Licensing Act of 2008 (SAFE Act). The rule is now in effect. The SAFE Act requires states to establish loan originator licensing requirements that meet minimum federal standards. HUD had overall responsibility for interpretation, implementation, and compliance until July 21 when the Consumer Financial Protection Bureau (CFPB) officially took over these responsibilities.

NAR urged HUD to exempt all seller financing from the licensing requirements or at least exempt some categories of seller financing, and also asked HUD to clarify that payment of a real estate commission by a lender for the sale of a lender-owned property (REO) does not require the real estate agent to be licensed. In the preamble to the rule, HUD states that it lacks statutory authority to grant exemptions to licensing under the SAFE Act. The final rule requires licensing of individuals who engage in the business of a loan originator.

HUD chose not to decide how frequently an individual may provide financing, but NAR expects the CFPB to defer to reasonable state laws on the number of seller financing transactions that would trigger licensing. Sellers financing the sale of their own property would completely avoid the issue of licensing by retaining the services of a licensed loan originator.

SAFE Act Final Rule >
More details and FAQs >

FHA's condominium portfolio is performing extremely well, but loans are hard to get, so NAR and a coalition of partners asked FHA to increase liquidity in the market by modifying its rules on owner-occupancy, FHA concentration, and investor ownership. The coalition also asked for rule modifications on pre-sales, delinquent HOA assessments, and commercial space. HCAR President Kenny Smallwood met with Dave Stevens, former HUD Assistant Secretary for Housing/FHA Commissioner on these topics and HCAR also worked closely with NAR on the delinquent HOA assessments issue.

As a result of these efforts, the Federal Housing Administration (FHA) released Mortgagee Letter 2011-22: Condominium Approval Process for Single Family Housing - Consolidation and Update of Approval Requirements. The Mortgagee Letter was released along with an implementation schedule and the Project Approval and Processing Guide in an effort to clarify, expand, consolidate and update existing guidance. The new guidance provides increased flexibility for FHA to address individual circumstances so that the agency can be more effective at the neighborhood level.

One of the more notable changes is in the calculation of delinquent homeownership association (HOA) dues. Previously, FHA permitted no more than 15 percent of units to be in arrears but this did not include bank-owned foreclosures. The new guidance states that the calculation includes all units - occupied, investor, bank-owned, and vacant). FHA did not increase the maximum permitted investor ownership of units or commercial space requirements.

National Legislation Impacting Real Estate

Representatives from HCAR, MAR and NAR meet with our U.S. Senators and Representatives on a regular basis to communicate the issues critical to REALTORS^®, our businesses, communities and the consumers we represent. NAR prepared the following talking points which were presented to Members of Congress during the May Midyear Legislative Meetings:

Talking Points

• The Future of the Secondary Mortgage Market
• Access to Affordable Mortgage Products
• Affordable and Available Property Insurance
• Preserving Home Ownership Tax Benefits
• Short Sales

Make Your Voice Heard - A million voices together can't go wrong. Visit the NAR Action Center today and be heard on the issues you care about most!