Focus on Real Estate

New REALTOR®.com commercial debuted in April

A new REALTOR.com commercial debuted last month as part of NAR's 2007 Public Awareness Campaign. This commercial explains to home buyers and sellers that REALTOR.com is more than America's top site for home listings; it's the place to start when you start looking for a home. Whether consumers are looking for a REALTOR®, researching neighborhoods, or searching for the home of their dreams, REALTOR.com has everything they need to find a home. More than 6 million unique users visit REALTOR.com every month.

He Said, She Said

In a new report from the Congressional Joint Economic Committee (JEC), the Center for Responsible Lending predicts that one in five subprime loans issued in 2005 and 2006 will default, and that 2.2 million families have lost or will lose their homes in the next several years. The report relies on statistics from RealtyTrac, which claims 1.2 million foreclosures were reported in 2006 and that as many or more are expected this year.

The Mortgage Bankers Association argues that RealtyTrac is a company that specializes in marketing foreclosed properties and that it overestimates the number of foreclosures by about 30 percent. The MBA points to economic factors, rather than loan products themselves, as a cause of foreclosure. For example, the Midwest has lost more than 700,000 jobs since the middle of 2000.

Ohio, Michigan, Indiana, Illinois and Wisconsin account for 28 percent of the loans in foreclosure, and subprime borrowers account for only about half of the loans in foreclosure in those states. Bottom line, market forces have already led to a tightening of lending standards. Additional regulations should be evaluated carefully so we don't swing too far in the other direction and make it too difficult for people to obtain a home loan.

How do agents view lenders?

Campbell Communications has just released its fourth annual survey of real estate agents on mortgage lending. According to the answers from most respondents, the closer to home the lender is, the better. For 57 percent of respondents, a mortgage lender is a partner to their firm. However, only a small percentage of that group said they recommended their firm's mortgage lender partner. Nearly three quarters of respondents reported relying on a separate list of informal mortgage partners or a single informal lender partner.

Generally, agents recommend two mortgage providers. Non-minority homebuyers (55 percent) tend to trust their real estate agent's recommendation of a mortgage lender and will tend to hire that lender. Minority homebuyers are less trustful -- only 48 percent use their real estate agent's recommended lender. One reason may be language. Agents said that 42 percent of their Hispanic homebuyers and 11 percent of all clients would benefit from foreign language support.

To obtain the full report, "How Real Estate Agents View Relationships with Mortgage Providers in a Shifting Market," contact John Campbell, Campbell Communications, at john@campbellsurveys.com or (202) 363-2069.

Tighter Lending Standards: Good for Housing but Expect Slower Sales

NAR reports that tighter lending criteria and fallout from the subprime loan debacle will lead to a healthier housing market with greater assurance that owners can handle mortgage adjustments. But higher loan standards will slow the housing recovery. David Lereah, NAR's chief economist, says the changes are necessary for the long-term health of the housing market. "Tighter lending standards will dampen home sales a bit, but by less than a couple of percentage points from initial projections," Lereah says. "We still forecast 2007 to be the fourth highest year on record for existinghome sales, and housing remains a great long-term investment."

Do Craigslist ads violate federal housing law?

The Chicago Lawyers' Committee for Civil Rights Under the Law Inc. (CLC), a group of 45 law firms, filed a lawsuit against Craigslist Inc., alleging violations of the federal Fair Housing Act (FHA). In a typical month, Craigslist posts more than 10 million items of "user-supplied information." These postings are increasing at approximately 100 percent per year. In the housing category, the Craigslist Web site allows thirdparty users to post and read notices for housing sale and rental opportunities.

Examples of notices found include: "No minorities"; "Looking for gay Latino"; "Requirements: clean, godly, Christian male"; "Only Muslims need apply"; "Walk to shopping, restaurants, coffee shops, synagogue"; and "Apartment too small for families with small children."

But the judge ruled that Craigslist is a publisher of third-party content and therefore, protected by the federal Communications Decency Act (CDA) for third-party content which states that the publisher is not liable for the content provided by third parties. Therefore, Craigslist is not in violation of the federal Fair Housing Act, the judge concluded.

Housing discrimination complaints at record high

In 2006, the Department of Housing and Urban Development (HUD) and Fair Housing Assistance Program agencies received 10,328 housing discrimination complaints, up 65 percent from the 6,270 complaints received in 1996. Forty percent of the complaints in 2006 was disability, 39 percent was race, with familial status and national origin each accounting for 14 percent. In an effort to further educate the public, HUD ran 15-second fair housing ads in 60 theaters in April highlighting the kinds of housing transactions covered by the Fair Housing Act, and listed the Department's toll-free discrimination hotline number and its Web address.

Web Sites of Interest

www.odod.state.oh.us/research -- The Office of Strategic Research provides data and analysis on the economic, industrial and demographic trends of the State of Ohio. A few of the statistics you can obtain from this site include: the U.S. Census Bureau, U.S. Bureau of Economic Analysis, County Population Estimates, Ohio State-to-State comparison, etc.

www.brokeragentnews.com/prtnr/consumer_content.html -- Broker Agent News provides consumer articles free of charge for use in your e-letters and on your web site.

www.writemyads.com -- provides ad content through its subscription service. Just complete a checklist (with hundreds of options) about the property and the service provides six creatively written ads describing the listing.

One in Three Homeowners Don't Know the Type of Mortgage They Have

Bankrate.com released a new poll in March which found that more than three in 10 homeowners (34%) do not know what type of mortgage they own. In addition...

• 57% have a fixed-rate mortgage;
• 36 % with an Adjustable Rate Mortgage (ARM), plan to refinance to a fixed-rate loan when their ARM changes;
• 34% with ARMs do not know what they will do when their loan readjusts; and
• 28% worry about how they will afford their payments next year.
  

New forms could reduce closing costs

Fannie Mae and Freddie Mac, announced on 2/21/07 new jointly developed master and short form uniform security instruments. The downloadable forms for use in 27 states will permit recording of a master form mortgage or deed of trust and short forms that reference the master to document individual loans. The new jointly developed forms underscore both companies' commitment to reducing borrower closing costs. For example, in Ohio, county recorders charge $28 for the first two pages and $8 for each additional page. Since the new master and short form is three-pages long and the current form is 16-pages long, it could potentially trim recording fees in that state from an estimated $148 to $36.

Brokerage Not Liable for Prospective Buyer's Injuries

The Court of Appeals of Ohio for the Sixth District ruled that a brokerage is not liable for injuries suffered by a prospective buyer during her unaccompanied tour of a partially built home. The decision affirms the trial court's decision. The prospective buyer argued she was not provided with a safe exit from the home, after falling when stepping onto an upside-down bucket. Ohio law does not require an owner or occupier of land to warn people invited to the property about "open and obvious" dangers, since people are expected to assess possible dangerous situations themselves.