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New Credit Reporting Changes To Impact Real Estate Closings Positively and Negatively

By Alexandra Swann, GenEquity Mortgage and Member, CCAR’s REALTOR®/Lender Committee

On July 1, the three major credit reporting agencies—Transunion, Experian, and Equifax—are going to implement some major changes to the way they report judgments and tax liens on individual credit reports. As with many new rules, this one has both positive and negative ramifications for your borrowers.

So what are these changes? In accordance with the National Consumer Assistance Plan, the three major bureaus will no longer be able to report public records—specifically civil judgments and tax liens—without verifying three pieces of consumer Personal Identifying Information (PII). These three items are:

  1. Name of consumer
  2. Address of consumer
  3. Social Security number and/or date of birth

Civil judgments and tax liens not containing all three elements must be deleted from consumer credit reports.

Additionally, the new standards require that the three agencies must update their records every 90 days with the courthouse. This means that changes to public records—such as a paid judgment—will show up sooner than they have in the past.

What does this mean for you and your clients?

The Good:

In the short term, it should mean that virtually all civil judgments (the official statement from the Consumer Data Industry Association says “a vast majority”) and about 50% of tax liens will be removed from credit files on July 1. Since public records have a negative impact on credit scores, the immediate result should be improved credit scores for borrowers who are plagued with public records.

Since the rule requires that public record reporting be updated every 90 days, we should also see paid judgments updating more quickly on credit reports. This can help scores to improve dramatically, and it can also allow more borrowers to get approved.

Going forward, John and Mary Smith should not have public records and tax liens from 10 other John and Mary Smiths reporting erroneously on their credit reports. The new requirements should eliminate some of the errors today that occur among people with common names and should help to protect the innocent from having their credit ruined just because they share a name with someone with credit problems.

The Bad:

The new law will also shield the guilty—at least for a while, and that may be very problematic. Although tax liens and civil judgments may be initially removed for a time, the attorneys and government entities can refile with proper information. That may result in a time lag between initial pre-qualification and final loan approval, where a judgment or tax lien that was initially removed has now reappeared on the credit report complete with all identifying information. Since lenders have to recheck credit as late as 48 hours before closing, this could cause serious issues for underwriting.

Also, even though the reporting requirements have changed with regard to tax liens and civil judgments, underwriting standards have not. No government agency or government-sponsored enterprise will make a loan to a consumer with an open tax lien or judgment. As part of the mortgage application process, the consumer is asked whether he or she has either tax liens or judgments against him or her. If a consumer is less than truthful, the loan originator may not know that there is a problem, since in the past, lenders have relied heavily on credit reporting information to fill in gaps in consumers’ memories, so the judgment or tax lien may not be discovered until well into the underwriting process. This could potentially kill some transactions that looked great at the point of pre-qualification.

How to Protect Yourself:

Whether you are a buyer’s agent or a listing agent, talk to the loan originator. Make sure he or she is asking the right questions. If the loan is a government loan—VA, FHA or USDA, ask if the loan originator has run the borrower information through CAIVRS—HUD’s Credit Alert System—prior to issuing a pre-qualification letter. This system catches many hidden issues that torpedo files.

Finally, recognize that the title company is going to be an increasingly important partner in the loan transaction. The title company can search for public records, liens and judgments and can help identify hidden issues.

For more information on this or any lending issues, please contact your REALTOR®/Lender Committee at realtorlender@ccar.net.

mckinneyhome

McKinney Residents Now Eligible for SETH 5 Star Texas Advantage Program

Courtesy of the City of McKinney

The City of McKinney Housing & Community Development Department has announced the city has been added to the Southeast Texas Housing Finance Corporation (SETH) 5 Star Texas Advantage Program.

The SETH 5 Star Program makes homeownership possible for families and individuals wanting to purchase a home in McKinney by providing support for down payment and closing costs. The program provides qualified buyers a grant for up to 6 percent of the total loan amount. The grant can be used toward a buyer’s down payment and closing costs. Mortgage options include 30-year fixed rate FHA, VA, USDA, and conventional financing. The program is intended to assist a broad range of families that include middle- and low-income households.

With this program, there is no first time homebuyer requirement. All borrowers on the mortgage loan must complete the SETH on-line Homebuyer Education Course. The program can be used for the purchase of single-family homes, townhomes, condominiums, and owner-occupied properties containing up to four units. Interested homebuyers can find more information about the program here.

Jonna Fernandez

Jonna Fernandez Named CCAR’s New Chief Operating Officer

Jonna Fernandez has been named CCAR’s new Chief Operating Officer (COO). Having served as Communications Director since 2007, Jonna accepted the position vacated by the retirement of former COO, Steve Haid. In her new role, Jonna will continue to apply her vast knowledge and experience in REALTOR® association leadership, as well as communication.

“Jonna is so deserving of this promotion. She is always open to accepting new challenges, and I know she will far exceed all expectations,” says Mary Leidy, Chief Executive Officer. “She is a vital team member, who we all love and respect, and she is committed to CCAR and supporting our members’ success. I’m happy to say she will continue to oversee our CCAR communications as well!”

Jonna began her career with CCAR in 2007, having previously served in public relations and communications roles for the higher education and nonprofit sectors. Under her leadership as Communications Director, CCAR has implemented key branding strategies that have made the association stand out as a source for professional and reliable real estate information in North Texas. Her media relations work has garnered CCAR and its members local and national coverage, enhancing the REALTOR® image and promoting the protection of private property rights. In addition, she has led the complete redesign of CCAR’s member and consumer websites on two separate occasions, and established the Association’s decade-long social media presence.

“I’m honored and excited by the opportunity to serve as Chief Operating Officer of this great association. CCAR has a fantastic team of talented and skilled individuals, who I am truly privileged to have the opportunity to work with each and every day,” says Fernandez. “Our association is also blessed to have one of the most dynamic membership bases around, and I look forward to continuing to serve our members and helping them succeed at all levels.”

Jonna has a bachelor’s degree in Corporate Communication from Doane University and a master’s degree in Public Relations from the University of Denver. In addition, she received the REALTOR® Association Certified Executive designation from the National Association of REALTORS® in 2015. She is also a graduate of CCAR’s Texas REALTORS® Leadership Program, Class VII.

A native Coloradoan, Jonna has resided in North Texas since 2003. Married to her husband, Dedrick, for 13 years, they have two children. Outside of work, Jonna serves as Co-Leader of her daughter’s Girl Scout troop, sits on several church committees, and volunteers for Plano ISD at the district and campus levels.

Texas House Bill 2385

Texas House Bill 2385 Addresses “Required Use”

by CCAR’s REALTOR®/Lender Committee

REALTORS® can make a difference in the current legislative session by eliminating a practice in our industry that regularly harms consumers. Texas House Bill 2385 addresses what is known to regulators as “required use.”

“Required use” is widely used by volume or national builders to require the use of their mortgage and title companies. Here is how it works:

Your client goes to a new home build site and enters into a contract to purchase land and build a home. During your client’s build, the builder of the home offers an incentive of $15,000 towards kitchen upgrades (various incentives can be used), so long as the client agrees via contract to use the choice or owned lender or title company of the home builder. Later, when it is getting close to finalizing the mortgage and title issues, the client must use the lender or title company that they signed to use through the incentive, regardless if the actual market rate at this time is much less. At this stage, the incentive becomes a penalty, as the client must pay the $15,000 if the client decides to use a better market rate from a lender or title company that is not the choice or owned lender/title company.

Although the “required use” issue is viewed as a Real Estate Settlement Procedures Act (RESPA) violation, neither the Housing and Urban Development (HUD) nor the Consumer Financial Protection Bureau (CFPB) has had the resources to redress.

There is a history of Texans asking for “required use” oversight and enforcement at the state level. Legislation in the same spirit of HB 2385 was sponsored in the past, but was withdrawn because in March 2009, HUD indicated that the Department would begin to enforce the “required use” provisions nationally. Unfortunately, a lawsuit dissuaded HUD from moving forward in enforcing the provisions (see National Association of Home Builders, et al. v. Shaun Donovan, et al., Civ. Action No. 08CV1324, United States District Court for the Eastern District of Virginia, Alexandria Division). Today, CFPB oversees the “required use” provisions. Like HUD, CFPB has not taken any action to enforce.

Numbers don’t lie: Choice or owned title and lenders capture approximately 80% of their perspective mortgage and title business. In comparison, REALTOR® in-house mortgage companies struggle to capture 15% of their perspective business because there is no incentive penalty. HB 2385 helps ensure consumers have a choice in their mortgage or title business, up until they close without a penalty.

Examples of “required use” and the consumer:

  • A buyer was offered a $22,000 discount on the price of a home for using an affiliated lender, but the interest rate offered by the lender was 0.5% higher than the market rate and the origination fee charged by the affiliated lender was higher.
  • A buyer would be required to make a higher earnest money deposit and would lose a $2,000 “closing incentive” if the buyer did not use the builder’s affiliated lender.
  • A $3,000 incentive is promised on the purchase price and $6,000 towards closing costs, if the buyer used the affiliated lender, which charged an interest rate that was 1% higher than the market rate and carried additional fees.

How can you make a difference? The REALTOR®/Lender Committee is encouraging you to contact your State Representative and Senator to ask them to support House Bill 2385.

As always, if you have a question or comment about anything related to lending, please contact us at realtorlender@ccar.net.

Steve Haid

Chief Operating Officer, Steve Haid, Set to Retire

“I’ll miss my work family and the parade of members that come by my office every day. I’ll miss my conversations with the Team Directors who come to bounce ideas off me or just to talk over an issue they are facing. I’m pretty sure I’ll miss the fast pace that happens at CCAR every day.”

—Steve Haid

Since 2012, Steve Haid has served as CCAR’s Chief Operating Officer (COO). Prior to that, he served in various capacities for CCAR since 2004, including MLS Director, and the Director of Education, Communications, Member Services, and Information Technology. However, on March 31, Steve will say good bye to CCAR as he begins a new phase of life–retirement.

“I joined CCAR because I saw it as a great opportunity to stay in real estate, but in a management role,” he said. “I have been in management most of my adult life, except for the six-and-a-half years I sold real estate. I used to come to the Association offices periodically for committee meetings, events, and to pay dues. Every time I was there, the CEO at the time, Randy Wright, would try to get me to join the team in various capacities. Finally, when he offered me the MLS Director position, I jumped on board.”

Although Haid said the organization allowed him the opportunity to grow professionally and try new things, working with the various people he encountered was the best reward. “CCAR’s staff is amazing, and even when one person leaves, we hire another great person to join our family,” he said. “We now have around 7,500 members and Affiliates, and I have personally enjoyed working with many of them. I am blessed to have made many friendships in the real estate industry that will last far beyond my last day as an employee. Every day at CCAR is a new adventure, and it really is like being a part of a big family.”

Among his many accomplishments, Haid made the REALTOR® Store the principal source of non-dues revenue for CCAR and negotiated equipment leases and health plans that have saved the association money. “I think my most significant achievement is being a calm presence for our employees who often endure stressful situations,” he said. “All of our employees know that they can come to me with a difficult problem, and I will either talk them through it or completely take it off their hands. I believe my management style fits perfectly in the family culture that Mary Leidy, our Chief Executive Officer, has developed over the years, and it has been wonderful to be in that family.”

Upon retiring, Haid intends to travel to visit family members and become more involved at his church. He also plans to spend time woodworking and fly fishing, as well as playing music, singing, and performing in community theater.

All CCAR members are invited to join us on Tuesday, March 28 from 11:30 a.m.-1:30 p.m. in the CCAR Banquet Room, for a retirement luncheon to honor Steve’s career and wish him well on his new adventure. Please click here to RSVP for the luncheon no later than March 24.

keyboard

zipForm Account Up for Renewal

Beginning January 15, you will be prompted to renew your existing Software & Form Libraries license agreement when accessing your zipForm account. Renewals must be completed prior to midnight on Tuesday, February 14 to avoid lose of access to the product or any prior transactions completed within the software.

To verify the current expiration date of the product, click the drop-down arrow below your name, select the View Profile option, and choose the Libraries tab on the left margin.

During this renewal process, you will also be requested to renew any optional add-on services subscribed to during 2016 such as zipForm® Mobile Web Edition (TAR).

As long as the base product and libraries are renewed, you may always add on optional services at any time in the future by clicking here.

If you currently subscribe to a multi-user account and are not sure who your rep is to call to renew, please contact zipForm directly at 866-627-4729. This will direct you to the multi-user department who will be able to look up your account and either assist with the renewal, or put you in contact with the correct person.

Contact the CCAR MLS Department at 972-618-3800 if you have any questions.

dues

Reminder: 2017 Annual Membership Renewal Dues

Dear CCAR Member,

December 1, 2016 was the due date for 2017 Dues.  A $50 late fee will be assessed for all dues received at CCAR after Dec. 15, 2016. Following are the three ways to submit your payment:

  1.  To view your invoice and/or pay online:
    1. Go to www.ccar.net and from the “Team, Tools, Resources” box on the homepage, click on “Pay Dues.”
    2. Log-in with your seven-digit real estate license number. You will also need your MLS password. If you don’t remember your password, please click here.
    3. Affiliate members: use your CCAR member number and password assigned by CCAR’s Member Services. If you don’t remember your password, please click here.
    4. Follow the step-by-step procedure to pay your invoice.
    5. PRINT your receipt page for your records.
  1. You may fax in your credit card payment:
    1. To fax in your credit card payment, complete this form: http://www.ccar.net/docs/membership/forms/credit_card_form.pdf
    2. Fax the completed form to 972-491-3180.
  1. You may also pay your dues by bringing or mailing a check payable to CCAR to:
    1. Collin County Association of REALTORS®
      6821 Coit Road
      Plano, Texas 75024
    2. If you pay Local Dues to CCAR as a Secondary Member, and you wish to make CCAR your Primary association, please contact Member Services at 972-618-3800 or membership@ccar.net Application fees for REALTORS® and Designated REALTORS® are waived if you are transferring membership from another association in Texas or joining CCAR as a secondary member.

IMPORTANT NOTICE: to avoid termination of your REALTOR® membership and all services, please ensure your payment is paid to CCAR not later than December 31, 2016. After December 31, 2016 a $100 application fee and full 2017 annual dues will be required to reinstate your membership.

  • Please pay online at http://www.ccar.net or remit to: CCAR 6821 Coit Rd, Plano, TX  75024-5417
  • Collin County Association of REALTORS® is very pleased to have you as a member.  It is our mission to aggressively provide the tools and resources for our members to succeed. For 16 years CCAR has held the line on local dues costs while continuously improving the most responsive and personalized member services in the region. For personal attention to your Dues or Membership questions, please call us at 972-618-3800 or email membership@ccar.net.
carl raspante

Carl Raspante: Attempted Murderer Up For Parole

In 1997, Joan Malone was a real estate agent in the Dallas area.  Carl Raspante sought her assistance in viewing several residential properties for sale.  While visiting a property in Coppell TX, Raspante physically attacked Joan Malone, beating her and stabbing her.  Raspante robbed Malone of her valuables and left her for dead in the residence as he drove away in Malone’s personal vehicle.  Jan Malone dragged herself across the residence to a phone to call 911 for assistance with a broken back and as she bled profusely.  Joan Malone suffered serious injuries and a long recovery from her attack.

19 years later, Carl is scheduled to be considered for parole. Realtor family, friends and colleagues we implore your help! We encourage you to use the ‘No Parole Letter‘ and respectfully ask that parole be denied to Carl Raspante.

No Parole Letter available for download!

Further Info Regarding 1997 Murder Attempt and Conviction:

Thank you!

house

Property Taxes Are Out for Nearly all Texas Counties

By Julie C. Nichols, Member – CCAR’s REALTOR®/Lender Committee

Texas Tax Code § 31.01 identifies that all counties shall prepare and mail property tax bills by October 1, or as soon thereafter as practical. Most, if not all, Texas Counties have published their tax bills at this time. Be aware that any property listed for sale prior to the published tax bills will most likely list the 2015 taxes as the estimated tax number.

Before your buyer makes an offer on a home, make sure to verify the property taxes listed in MLS are current year. Loan Officers will be using the 2016 taxes to establish escrow accounts for the upcoming year, and with the property value growth we have experienced in our area, that number could be larger than what the buyer was anticipating for their budget if last year’s numbers are in MLS.

Another common question we hear this time of year from buyers is, “Why am I paying property taxes through December at my closing when I have not lived in the house yet?” Once the property tax bills are published, they are required to be paid at closing even though a late fee is not assessed until after January 31 of the following year. The time period between the published bills and January 31 is a grace period, however, the title company needs to show the taxes paid in order to provide the needed tax endorsements on the policy. Buyers who purchase a home after the property tax bills are published and prior to the end of December, will need to bring a bit more cash to closing to cover the pro-rated taxes than if they had purchased earlier in the year.

If you have any questions or need help explaining how property taxes work with your buyers, please contact CCAR’s REALTOR®/Lender Committee at realtorlender@cccar.net.

wcr_logo

Women’s Council of REALTORS®: Building Career Success

By Mary Nelson, WCR Past President

The Women’s Council of REALTORS® (WCR) is a national organization that promotes education for REALTOR® members. Many of our past leaders attribute their career successes to WCR, including Leslie Rouda Smith, Bob Baker, Linda Chase, Barb Trumbull, and David Alan Cox.

The WCR Collin County chapter has been chartered through CCAR since 1974, and we are grateful for the continued support of our Association. We invite all CCAR REALTORS® to join us and take advantage of our numerous educational programs, as well as our networking events. WCR is a safe haven that allows you to network with your peers and build relationships with the many mentors in our chapter. In addition, WCR members are connected to 12,500 others nationwide. The WCR Scholarship Program offers up to $300 in scholarships to all national members after one year of membership.

Upcoming events include:

Battle of the Bras
Annual fundraiser benefiting Women Rock, which assists local breast cancer victims.
October 28, 6-9:30 p.m.
Marriott – The Shops at Legacy, Plano

Marketing to Millennials
November 9, 11:30 a.m.-1 p.m.
Stonebriar County Club, Frisco

Installation of 2017 Officers
December 14, 4-6 p.m.
Gleneagles County Club, Plano

Finally, a note of thanks and remembrance to Karen Wunderlick for her support and dedication to our WCR Collin County chapter. Karen served as Chapter President in 1999 and was a member since 1994. Karen passed unexpectedly on August 19, and she is missed by so many. In her honor, the “Karen Wunderlick Performance Management Network (PMN) Scholarship” will be awarded to a qualified Chapter member who takes courses to obtain their PMN designation. PMN is a national WCR designation, and Karen was a PMN designee.

We hope that you will join us and find out for yourself all that WCR has to offer!