VanEd Newslog

VanEd Presents: Economics & Demographics course online

VanEd announces the launch of our newest course, Economics & Demographics. This course is available online and is designed to teach students the concepts and applications of economics as they relate to the real estate transaction, as well as different approaches to economic study and analysis through demographics. The course will be available for registration beginning Wednesday August 1st.

The Economics & Demographics course, a 6 Credit Hour course, was written by the Planning Institute of Colorado. Other PIC courses include the Planning Process, Principles of Zoning and Subdivision and Comprehensive Planning courses. These courses are also available online at www.vaned.com.

VanEd Revisits RESPA, attends HUD training

Last week, VanEd attended the "RESPA-1" training class conducted by HUD's Denver Regional office. Some of the highlights from the class are presented here, even though some may not be new information. While HUD expects a revised proposed RESPA rule, it was not certain as to when that rule may be available.

HUD recently changed it rules on who may pay closing charges on an FHA loan, eliminating many formerly restricted provisions. At present closing costs and fees are freely negotiable except for the tax service fee which the borrower may not pay.

Question: Can a real estate broker give money to the seller at closing without violating RESPA? Answer: Yes - as long as it is shown on the HUD-1 settlement statement.

The question often arises as to whether a broker may pay an unlicensed person for leads. This is acceptable provided 1) the payment is a flat fee 2) the payments is not conditional on closing a transaction and  3) the payment is not a sliding amount based on the potential value of the transaction.

The HUD Denver Regional Office covers 17 state for RESPA. There are currently 7 ongoing RESPA investigations in the office. The biggest complaint to HUD is low-ball Good Faith Estimates (GFE). Colorado law was recently revised to require any upward difference between the GFE and the actual settlement costs to the borrower be communicated to the borrower at least 3 days before closing.

Both HUD and the Colorado Division of Real Estate believe their hottest new enforcement issues to be affiliated business arrangements/shams, appraisal issues and mortgage fraud. Erin Toll, Director of the Colorado Division of Real Estate reminded all attendees of the requirement for all licensees to register affiliated business arrangements annually via the Division Website.

Click Here for more information on the Affiliated Business Arrangement disclosure.

Finance Friday: Flight to quality

As the economy slows down, investors are looking for secure investments.  The new home sales released yesterday showed a large decline and many experts are predicting that housing will adversely affect the economy through 2009. The stock market has had large declines the last few days and the yield on the 10 year treasury, considered the bell weather investment security, dropped to under 4.80%, down over a half of a percent from the 5.31% top in June. 

However, "A" grade mortgage rates have only dropped a quarter of a percent from the June highs, down to 6.5%.  In other words, mortgage rates ran up with the increase in treasury yields, but are now declining more slowly than the treasury securities.  All mortgage instruments are looked at skeptically now as the sub-prime losses mount.  I still believe that "A" paper mortgages will be back in favor later in the year and mortgage rates will approach 6.00%.

Guest Author Randy Kelly is a Mortgage Banker and Finance Author with Boulder West Financial Services. He can be reached on-line at http://www.boulderwest.com/.

VanEd Presents: TRC certification course online

VanEd now offers members access to the online TRC, Transnational Referral Certified course through REALTOR^® University. This course, managed by the National Association of REALTORS^® is designed to teach students the Transnational Referral system and how to increase business with international referrals. The goal of the program is to teach the international referral system developed by NAR and the International Consortium of Real Estate Associations for making and receiving international referrals.

Students will learn the referral systems and pledge to follow a code of conduct in their business dealings. Also discussed throughout the program is making sure that compensation will be a part of each transaction. Learn more about the TRC, Transnational Referral Certification course by visiting www.vaned.com/TRC.

Papillion named 6th on CNNMoney.com's "Best Places to Live" list

Money Magazine has placed Papillion, Nebraska as #6 on their annual "Best Places to Live" list. Papillion, just a few miles from Omaha, came in just behind Claremont, CA and just ahead of Milton, MA. The researchers use a combination of demographic and economic data to narrow the list down, and then combine those findings with visits to the local communities where they assess things such as the sense of community and congestion.

To see what cities and towns Papillion beat out, you can read the entire list by visiting CNNMoney.com.

Louisville, Co. named to "Best Places to Live" list....again

Just a year after being snubbed, Louisville is back on the list. After researching over 2,800 cities and looking at education scores, crime rates, demographics and cost of living data, CNNMoney.com listed Louisville, Colorado #3 on its annual "Best Places to Live" list, behind Middleton, Wisconsin and Hanover, New Hampshire. Parker, Co. was ranked #26 on this years list.

The rankings are based on demographics of the areas combined with more qualitative findings such as interviews and natural surroundings. The annual list ranked Louisville #5 in 2005 and Ft. Collins was #1 in 2006.

Ameriquest settlement makes $1.88 million available to Nebraksa consumers

The Attorney Generals office in Nebraska released a press statement on July 12th, 2007 which announced that Ameriquest Mortgage and its related companies had made restitution payments of $1.88 million as a result of a 2006 settlement. More than 2000 Nebraskan's are eligible for restitution payments from the fund.

The settlement that was reached revolved around allegations that Ameriquest did not disclose the terms of home loans adequately and charged excessive loan origination fees and penalties. Other charges included directing borrowers to inappropriate loan types and services, as well as inflating appraisals to help borrowers qualify for the loans being offered.

The AG's office began notifying consumers in early July, and those consumers will have until September 10th, 2007 to complete the required paperwork and return it to the the settlement administrator. More information regarding the settlement and consumer eligibility for restitution is available on the web site listed below or by calling the Settlement Administrator at 800-420-5875.

Settlement Administrator’s Web site: www.ameriquestmultistatesettlement.com.

Finance Friday: Fannie Mae Toughens Underwriting Guidelines

The new Fannie Mae underwriting guidelines published in their July 13th announcement will make qualifying more difficult for nontraditional loans, which include interest only loans and loans with potential negative amortization. 

The new guidelines require applicants to qualify at the highest payment needed to fully amortize the loan.  The payment for an I/O fixed rate loan requires only interest for the first ten years; then becomes a 20 year amortized loan, and typically has an interest rate penalty of .25%.  For a $200,000 loan at 7.00%, the I/O payment is $1366, which requires a monthly income of about $4200.  The minimum payment for the 20 year amortized portion will be $1550, which requires a monthly income of $5300.  The payment for a fully amortized fixed rate loan at 6.75% is $1297, which requires a monthly income of $4500.  We have already noticed changes with electronic underwriting, where an applicant was approved for the 30 year fixed rate loan, but was turned down with the interest only option.
        Option ARMs present more problems because along with qualifying at the fully indexed accrual rate, borrowers must qualify for the amortized payment based on the higher balance because of the potential negative amortization.

On the interest rate front, rates have been stable at 6.75% for no point low fee loans.  The ten year treasury index dipped below 5.00% today, after reaching a high of 5.31% last month.

Guest Author Randy Kelly is a Mortgage Banker and Finance Author with Boulder West Financial Services. He can be reached on-line at http://www.boulderwest.com/.

New Deeds of Trust release form is available in Colorado

The Colorado Public Trustees' Association (CPTA) has made available a writable Full and Partial release of Deed of Trust forms on their web site. These new forms, just completed and put online, were required by HB 07-1265 which required new language and the new form. The bill was signed by Governor Ritter and the forms should be used now for all release requests. The CPTA also has a Foreclosure Information Publication available on their site. The forms are available using the links below.

        Full and Partial Release of Deed of Trust (with Evidence of Debt) - Instructions            

        Full and Partial Release of Deed of Trust (without Evidence of Debt)    - Instructions

        Foreclosure Information Brochure

Fannie Mae issues Update in Response to Guidance on Nontraditional products

In a July 13, 2007 announcement, Fannie Mae stated that for loans with an application date after September 13, 2007 all nontraditional mortgage loans sold to Fannie Mae must be in compliance with all aspects of the Interagency Guidance on Nontraditional Mortgage Product Risks, originally published by the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve, the FDIC, the Office of Thrift Supervision and the NCUA. While the original Guidance applied to all institutions regulated by the Federal Banking Agencies when issued in October or 2006, Fannie Mae was not covered by the Guidance. On July 10th, the Federal Registrar published the final Statement on Subprime Mortgage Lending which became effective immediately.

The Office of Federal Housing Enterprise Oversight (OFHEO) has now directed Fannie Mae to establish policies consistent with the Guidance.  Fannie Mae will issue policies that take this action. Underwriting standards will be changed to address the impact of substantial payment increases over the life of a loan, and those changes will be made by July 22nd. Fannie Mae will also require a new lender representation and warranty for nontraditional mortgage product types.

$4.5 million in Community Development Block Grants (CDBG) announced

On Monday Gov. Dave Heineman announced that almost $4.5 million had been awarded to 29 local Nebraska communities through the CDBG program. The CDBG funding is from the U.S. Department of Housing and Urban Development (HUD), and the process is a partnership with various agencies at both the State and Federal levels.

Projects to be funded through the program include funds dedicated to developing or updating comprehensive plans and study city water systems. The projects may also be considered for other grants or programs. To view the list of Grant recipients, click here or visit the Office of the Governor web site online.

Electronic disclosure of all Affiliated Business Arrangements required by Colorado Division of Real Estate

In an email issued today, the Colorado Division of Real Estate announced that the required disclosure of all Affiliated Business Arrangements may now be made electronically.  The disclosure is required by state law, and Rules E-22 and E-46 were changed this past year to implement the changes. Users will need to create an online account and then are required to disclose any ABA when any of the following occurs;

1. A licensee enters into an affiliated business arrangement
2. Any time a licensee changes affiliated business arrangements
3. A licensee applies for a license
4. A licensee changes status from inactive to active
5. Any time a licensee transfers from one brokerage firm to another

In addition, Employing Brokers are required to make disclosure annually.  It may be important to note that a separate form is required for each ABA. The online ABA disclosure replaces the previous paper disclosures discussed in an earlier Newslog post. You may register or log in to the new ABA disclosure page online at the Division web site or by clicking here.

Finance Friday: GE to sell subprime unit

General Electric announced that it is selling its sub prime mortgage lending unit, WMC Mortgage because of the worsening sub prime environment. Moody's rating service recently downgraded over $5 Billion worth of bonds backed by mortgage securities.   Over 60% of these bonds are backed by mortgages originated by four lenders, WMC Mortgage (which GE is looking to sell), Long Beach Mortgage (a division of Washington Mutual), New Century Financial (currently in bankruptcy) and Fremont General.  Fremont General has also been ordered to stop selling sub prime loans by the FDIC.

On the interest rate front, mortgages are behaving like somebody running in place.  They are creating a lot of action, but going nowhere.  The 10 year bond has traded between 5.00% and 5.20% in the last week, but no point low fee mortgages stayed at 6.75%.

Guest Author Randy Kelly is a Mortgage Banker and Finance Author with Boulder West Financial Services. He can be reached on-line at http://www.boulderwest.com/.

VanEd launches Nebraska Pre-License program today!

Van Education Center Director Vann Hilty today announced the launch of the new Nebraska online Pre-License program. The first course, Principles of Real Estate, is approved and available online. Students may begin enrolling in the program today. VanEd also offers the GRI 106: Taxation & Technology course as well as the MRE Affordable Housing course for CE Credit in Nebraska. Additional courses for both Pre-license and Continuing Education are currently under development.

The 30 hour Principles course will meet the first of two courses, or part of the educational requirements for a Nebraska pre-license student. Students will also need to take a second course from the NREC approved list. VanEd is currently developing a course that will meet that requirement. Contact VanEd via email or phone with questions.

2007 REALTORS® Conference & Expo provides volunteer opportunities for agents

Sunday, November 11 and Monday, November 12 at the annual NAR convention in Las Vegas REALTORS® will again have the opportunity to volunteer in the community. A portion of attendee registration fees will go to the local Habitat for Humanity and a children's shelter in Las Vegas. Members are again urged to continue their good works started in New Orleans and carry those over to this years host city, Las Vegas. Read more using the link below!

Volunteer space is limited and attendees are asked to begin registering after August 1st on the Conference Web site. We will post the link here beginning August 1st. You can register now for the conference, however, by clicking on the image or visiting the NAR conference web site.

Finance Friday: Seniors Beware

As the sub-prime mortgage market shrinks, many unemployed brokers are looking to Reverse Mortgages for new opportunities.  This could be disastrous for seniors.  First of all, reverse mortgages are extremely complex and are often misunderstood.  Elderly people are often targets for scams, and sub-prime lenders are experienced in providing misleading information.  Unfortunately, seniors may be their new target.  Reverse mortgages are helpful to only a small percentage of seniors.  In most situations, senior citizens would be better served by standard financing including Home Equity Lines of Credit.

On the interest rate front, rates have started to inch downward.  Low fee no point 30 year fixed loans are hit 6.625% this week.  It is likely we have seen the highs in rates for the year.

Guest Author Randy Kelly is a Mortgage Banker and Finance Author with Boulder West Financial Services. He can be reached on-line at http://www.boulderwest.com/.

Differentiate yourself with Education, Designation programs available from VanEd

After a holiday or long weekend spent with the family, getting back to work can be difficult. Even more challenging is finding the time to complete your Continuing Education classes. VanEd offers classes online that fit your schedule and will help you gain an edge on the competition as well as earn credits towards various designations.

VanEd not only offers GRI, Graduate REALTOR® Institute courses in various states as well as the MRE, Master of Real Estate designation program, we also offer access to other designation programs that are available online. Some of the designations offered through VanEd are the CRS, Certified Residential Specialist; ABR, Accredited Buyer Representative; CIPS, Certified International Property Specialist and the ALC, Accredited Land Consultant designation courses. These programs and designations can add value to your services and are added differentiators in the marketplace. To learn more about these programs, visit the VanEd Designations page today!

All of us at VanEd wish you a happy and safe 4th of July

To allow our staff and instructors time to be with their families, Van Education Center offices will be closed on Independence Day, July 4th. We wish you and yours a happy and safe holiday.

Our offices will re-open on Thursday July 5th to serve our members. Happy July 4th!

Colorado Division of Real Estate issues Position Statement covering Non-Traditional Mortgage Products

The Division of Real Estate in Colorado today issued a position statement regarding non-traditional mortgage products in order to clarify to mortgage lenders the DRE position regarding recently passed legislation. The new laws require mortgage brokers to inquire about a borrowers income and debt obligations and make recommendations based on that information.

As posted by Guest Author Randy Kelly in his Finance Friday article, The question posed by lenders was weather or not this law allowed for stated income or no income verification loan products, or other loan types where limited or no information is produced from the borrower and if these would be a violation of the new law or the Colorado Consumer Protection Act. The DRE today responded with a position statement entitled NON-TRADITIONAL MORTGAGE PRODUCTS AND DOCUMENTATION TYPES. The statement clarifies that these non-traditional loan products are not prohibited but rather that the law "...prohibits the abusive recommendations by mortgage brokers."

The statement from the Division can be viewed in its entirety by clicking the following link: Download mort_broker_position_statement.doc or you may visit the Mortgage Broker page on the Division web site by clicking here.

National Affordable Housing Trust Fund Introduced in House

In what would be the largest expansion of Federal Housing programs in decades, H.R. 2895, dubbed the National Affordable Housing Trust Fund, was introduced in the house on Thursday. The bill would allow an estimated $800 million and $1 billion annually to be allocated to affordable housing programs and will allocate 60% of the money to larger cities and counties and the remaining 40% to states and Indian Tribes.

The bill allows for the fund to be used to rehabilitate and preserve affordable rental housing and would also allow for down payment and closing cost assistance for first time home buyers. Targeted ratios for assistance means that 75% of the funds will be directed towards extremely low income families and 100% of monies would be designated for low income families.

Those delivering Trust Fund grants, such as states and localities, would be required to fund all qualified entities, which would include non-profits, for profit and faith based organizations. Funding will be allocated using a funding competition requiring geographic diversity and prioritization of project criteria including project merits and local need for the project. The bill is slated to be heard by the House Financial Services Committee on July 12th, and has already received support from NAR, the NAHB and the National Low Income Housing Coalition. Read more by clicking here.