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 In This Issue Business Report SBA Clarifies that Real Estate Agents are Eligible for SBA Guaranteed Financial Assistance HUD Releases FAQs on New RESPA Rule NAR Launches New Webpage on REALTOR.org Addressing Money Laundering and Terrorist Financing in the Real Estate Industry NAR Submits Letter to HUD Requesting Meeting on Administrative Fees and Home Warranty Contract Fess Under RESPA Housing Report NAR Calls for Rescission of Two Appraisal Requirements on Certain FHA Loans FHA Suspends Taylor, Bean & Whitaker Business Report  SBA Clarifies that Real Estate Agents are Eligible for SBA Guaranteed Financial Assistance In a letter to NAR President, Charles McMillan, dated August 5, 2009, the Small Business Administration (SBA) Office of Financial Assistance stated that licensed real estate agents are eligible for SBA guaranteed financial assistance. The SBA letter came in response to Mr. McMillan's written request to SBA Administrator, Karen Mills, dated July 24, 2009, requesting clarification of this issue, after NAR received reports that some real estate agents, who generally operate as independent contractors, were denied eligibility for SBA loans. The SBA response also reiterated that real estate brokers are eligible for SBA guaranteed financial assistance. SBA Response to NAR, 8-5-09 NAR Letter to SBA Administrator, 7-24-09 Scott Rinn 202-383-7508, Marcia Salkin 202-383-1092, Russell Riggs 202-383-1259 back to top HUD Releases FAQs on New RESPA Rule On August 13, 2009 the Department of Housing and Urban Development (HUD) released its first series of "frequently asked questions" (FAQs) that help to explain multiple aspects of the Real Estate Settlement Procedures Act (RESPA) final rule published November 17, 2008. Nearly 90 FAQs, organized by subject, cover multiple topics ranging from questions concerning effective dates to filling out the new GFE and HUD-1 forms. While some provisions of the final rule went into effect on January 16, 2009, the majority of the provisions, including mandatory use of the new GFE and HUD-1 forms will go into effect on January 1, 2010. HUD FAQs on New RESPA Rule HUD FAQs Press Release Scott Rinn 202-383-7508, Marcia Salkin 202-383-1092, Kenneth Trepeta 202-383-1294 back to top NAR Launches New Webpage on REALTOR.org Addressing Money Laundering and Terrorist Financing in the Real Estate Industry NAR has launched a new webpage on REALTOR.org addressing the use of real estate in money laundering and terrorist financing schemes and the role real estate professionals can play in combating such activity. The webpage contains information that informs NAR members of information and steps they can take to comply with existing regulations and to help avoid additional regulations that might be unnecessary and costly. NAR Webpage on Money Laundering and Terrorist Financing Marcia Salkin 202-383-1092, 202-383-1090, Scott Rinn 202-383-7508 back to top NAR Submits Letter to HUD Requesting Meeting on Administrative Fees and Home Warranty Contract Fess Under RESPA On August 13, 2009 NAR sent a letter to HUD Assistant Secretary for Housing – Federal Housing Commissioner, David Stevens, requesting a meeting with HUD officials to follow-up discussions that began in April 2008 with regard to appropriate guidance from HUD on two RESPA-related issues causing onging confusion in the marketplace. The first issue concerns administrative fees and their proper structure under Section 8 of RESPA. The second issue concerns RESPA-compliant compensation of real estate brokers and agents by home warranty companies in the marketing and sale of home warranty products. The letter from NAR President Charles McMillan requests a meeting at an early date to discuss appropriate HUD guidance on both issues. NAR Letter to HUD Scott Rinn 202-383-7508, Marcia Salkin 202-383-1092, Kenneth Trepeta 202-383-1294 back to top Housing Report NAR Calls for Rescission of Two Appraisal Requirements on Certain FHA Loans On August 14, 2009, NAR President Charles McMillan wrote to FHA Commissioner Dave Stevens to request the Federal Housing Administration's (FHA) requirement of two appraisals in certain circumstances be rescinded. Mortgagee Letter 2008-09, released on April 1, 2008, states that a second appraisal is required for properties that exceed $417,000. The property must also be in a declining area where the loan-to-value (LTV) ratio, including upfront mortgage insurance premium, exceeds 95 percent. NAR believes this requirement imposes an undue burden on properties in the hardest hit markets, is redundant and increases the cost of the real estate transaction for the consumer. One appraisal, completed in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP), should be sufficient to reflect the true value of a home. NAR Letter to FHA on Requirement of Two Appraisals in Some Markets Mortgagee Letter 2008-09: Second Appraisal Requirements/Limits on Cash-Out Refinances Jerome Nagy 202-383-1233, Chere LaRose-Senne 312-329-8455, Megan Booth 202-383-1222 back to top FHA Suspends Taylor, Bean & Whitaker The US Department of Housing and Urban Development (HUD) suspended Taylor, Bean & Whitaker preventing the company from originating and underwriting Federal Housing Administration (FHA) mortgages. Additionally, Ginnie Mae defaulted and took over Taylor, Bean & Whitaker's mortgage backed securities program. Taylor, Bean & Whitaker's wholly owned appraisal management company was also shut down. The suspension is temporary pending the completion of an investigation by the HUD Inspector General, an ongoing review by HUD's Office of Housing, and any legal proceedings that may ensue. FHA suspended Taylor, Bean & Whitaker because the company failed to submit a required annual financial report and misrepresented that there were no unresolved issues with its independent auditor. However, their auditor ceased its financial examination after discovering certain irregular transactions that raised concerns of fraud. Secretary Donovan said HUD is sending a "very clear message that should be heard throughout the FHA lending world - operate within our standards or we won't do business with you." HUD Press Release on Taylor, Bean & Whitaker Suspension Frequently Asked Questions for Industry Partners Frequently Asked Questions for Consumers Jerome Nagy 202-383-1233, Megan Booth 202-383-1222 back to top Go to archived weekly reports >> Last Updated: 08/21/2009 Kara Beigay |
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