TheREALTYgram Blogger

NAR Political Doublespeak On Preempting State Rights;'No' For Banks And 'Yes' On Health Care Benefits

Is it any wonder that the National Assn. of REALTORS® is losing credibility? In the same week that it announces a $1.2 million effort to support the Small Business Health [Un]Fairness Act to supercede state laws regarding health care benefits, the group testifies before the FDIC to urge them to block a preemption petition:

"NAR testified Tuesday before the Federal Deposit Insurance Corp. against a petition asking the FDIC to preempt state laws to permit state banks to operate nationally under the laws of their home states.

"NAR urged the FDIC to deny the petition, sought by the Financial Services Roundtable, because it would harm the ability of states to protect their citizens. The petition would result in undue concentration of banking services and fewer choices for consumers, open the door to the mixing of banking and commerce, undermine the state banking system, and disrupt the competitive balance among financial service providers, NAR said.

" 'Because real estate is local, the issue of preemption of state and local laws applicable to lenders is of great concern to REALTORS®,' testified Pat Vredevoogd, NAR first vice president. 'NAR and its members have been deeply involved in issues relating to competition among federal banks and thrifts, state banks, and non-depository institutions because they play such an important role in helping American families buy their homes.'"

NAR Throws $1.2 Million Into PAC PotTo Reduce Health Care Premiums, Slash Benefits

The National Assn. of REALTORS® rally to lobby for the association health care bill featured a Presidential visit to its mid-year meetings in Washington, D.C. and now carries a $1.2 million PAC price tag. The health-care benefit bill will allow providers to preempt existing state regulations relating to required coverage. Cost savings will result directly from reduction in benefits mandated at the state level. Not surprisingly, NAR has directed its million-dollar rhetoric at the hype of the issue and not the facts. Where will this savings be achieved? Here is a list of possibilities from state mandated benefits in Pennsylvania.

Benefits That Must Be Covered

• Alcoholism treatment
• Breast reconstruction
• Cancer hormone treatment
• Cervical cancer screening (pap smear)
• Chemotherapy
• Childhood immunizations
• Diabetic supplies, education
• Drug abuse treatment
• Emergency services
• Formulary for PKU
• Gynecological exams
• Hearing aids
• Mammography screening
• Maternity care
• Mental health, parity (group plans only)
• Mentally retarded child care
• Minimum mastectomy stays
• Minimum maternity stays
• Physically handicapped child care
• Well child care

Benefits That Must Be Offered

None

Persons Who Must Be Allowed Coverage

• Conversion to non-group
• Handicapped dependents
• Newborns

Providers Who Must Be Covered

• Chiropractors
• Dentists
• Licensed Health Professionals
• Nurses
• Nurse (Anesthetists)
• Nurse Midwives
• Nurse Practitioners
• Nurse Psychiatric
• Optometrists
• Osteopaths
• Physical Therapists
• Podiatrists
• Psychologists
• Speech/Hearing Therapists

Miscellaneous

• Group policies benefits for cancer chemotherapy and cancer hormone treatment approved by the FDA. If in general use in the treatment of cancer, cancer chemotherapy and cancer hormone treatments must be covered whether performed in a physician’s office, an outpatient department of a hospital, a hospital inpatient, or any other medically appropriate treatment setting.
• Moreover, all group health policies must cover mammographic examinations. The minimum coverage required includes all cost associated with a mammogram every year for a woman 50 years of age or older, and with any mammogram based on a physician’s recommendation for women 50 years of age. However, an insurer is not required to cover a mastectomy.

Colorado Governor Axes Renter Protection Bill;State REALTOR® Association Backs Landlords

  Colorado Gov. Bill Owens has vetoed a renter protection bill that was designed to bring Colorado up to speed with the rest of the country regarding landlord-tenant law. The veto followed an aggressive lobbying campaign against the bill by the Colorado Assn. of REALTORS®. Many of the issues addressed are critical problems for low-income and fixed-income tenants. Owens disagreed, contending that the measure “is unfair to property owners and would result in unintended, negative consequences.”

Supporters assert the bill (H.B. 1061) was needed to protect tenants from unscrupulous landlords. The measure was designed to prohibit landlords from charging excessive late penalty fees. It also aimed to expedite the return of security deposits after a tenant has moved.

Colorado doesn’t restrict how much a landlord can charge in late fees for delinquent rents. The General Assembly bill set a ceiling of 2 percent per day, up to a maximum penalty of 15 percent of the monthly rent.

Owens noted that a tenant with a $400 monthly rent would pay a maximum $75 in late fees. But he said the lower penalty could prove to be a “disincentive” for tenants to pay their rent on time. “Tenants with financial difficulties would be more likely to pay their delinquent credit card bill before paying rent, precisely because this bill significantly diminishes the economic incentive to have tenants pay back rent,” Owens said.

Bill sponsor State Rep. Michael Merrifield said that the bill would protect tenants against negligent landlords and put Colorado on par with landlord-tenant laws around the country.

“This is a very modest bill that will give tenants a bit more leverage in dealing with their landlords,” Merrifield said. “This bill is really aimed at the minority of landlords who one might call unscrupulous. Landlords who treat their tenants with respect and humanity will not be affected.”

HB 1061 includes five provisions: It would require landlords to return security deposits or a notice of reasons for retention within 30 days; require landlords to provide a copy of a lease to their tenants; prohibit landlords from levying excessive charges on late fees; require landlords to provide basic information about eviction proceedings and provide tenants common law protections such as the right to notice, right to trial by jury, etc.    

Reverend Peter Morales, a minister at the Jefferson Unitarian Church in Golden, is currently having a dispute with his former landlord over late charges. He has been hit hard financially by a system with no caps on fees.

“The lack of a cap allows landlords with deep pockets to intimidate tenants,” Morales said. “Most people don’t have the type of resources to defend themselves in court. Someone needs to stand up to these bullies on the playground.” 

The legislation also called for landlords to return security deposits within 45 days, instead of the current 60 days. The Colorado Association of REALTORS said the 45-day period wouldn’t allow adequate time to insure that the tenant had paid all utility bills.

Hats Off To HUD For Spanish Outreach;Let's Develop More Multi-Lingual Initiatives

A new Spanish-language radio ad campaign designed to educate consumers and businesses about fair housing laws has been launched in Texas and five other states. Developed by the U.S. Department of Housing and Urban Development and delivered by the Hispanic Radio Network Inc., the ads will play in Austin, Houston, Dallas, and Amarillo markets, reports REALTOR Magazine Online.

The campaign is one portion of a $1.7 million HUD effort to deal with discrimination against Hispanics in six states.

Carol Parker, president of the Austin Board of REALTORS®, applauds the radio campaign, particularly because it makes the information "available to everyone" in a user-friendly format. "A radio campaign is a comfortable listening tool for many people," Parker says.

Discrimination issues aside, the real estate industry would enjoy positive economic consequences from a larger pool of buyers who are better educated in the real estate process overall. We are told that Texas has compiled a set of standard real estate forms that are printed in Spanish. Why not apply this concept to meet the needs of prospective Vietnamese buyers and others?

I can already hear a chorus knee-jerk response of  "my grandfather came to this country and he had to learn the language." To that choir I would say this: Consider this concept from a pure marketing perspective, as an approach that will have a positive impact on the market overall.

A New Breed Of Day TradersHits The Real Estate Market

  They snap up real estate, flip it, then chase the next hot market. They’re the new day traders—and they’re dancing on the edge of a volcano. -- This clever lead prefaces an article titled REAL ESTATE FRENZY Riding the Boom in the latest Fortune cover story.

Other articles:
The New King of the Real Estate Boom
· Real Estate Investing: How Real People Get Rich
· Is the Housing Boom Over?
· A Ball Player Goes From Hoops to Houses

Investment Mortgages Skyrocket In First Quarter

Mortgage bankers originated $31.3 billion in commercial and multifamily loans in this year's first quarter, an increase of 39.6 percent from a year earlier, according to the Mortgage Bankers Association.

Multifamily lending powered demand, soaring 62 percent from the same three months of 2004. Office property loans, meanwhile, increased 29 percent as hotel and motel loans skyrocketed 96 percent. Analysts now forecast that apartment demand will climb as the single-family home market decelerates, according to a report by Investor's Business Daily.

Are NAR Policy Wonks Having Second ThoughtsAbout Supporting Predatory Lending Legislation That Works?

The following article from today's edition of The Washington Post appeared in REALTORS®' inboxes today as part of the National Assn. of REALTORS® Online Daily News program for members:

Standards for Mortgage Lending Debated

(May 25, 2005) --   Consumer advocates and representatives of the mortgage industry butted heads at a recent congressional hearing on predatory lending practices, which saddle homeowners with exorbitant payments and fees that ultimately push them into foreclosure.

While the lending community supports national legislation that would preempt state laws and provide home-finance education to prospective buyers, consumer groups want to preserve the stringent consumer protections imposed at the state level.

North Carolina's six-year-old predatory-lending law, which has become a model used by other states, restricts fees, prepayment penalties, and flipping to protect the equity of borrowers with high-cost mortgages.

Incoming Mortgage Bankers Association President Regina Lowrie expressed concern that a patchwork of state laws will lead to a drop in subprime lending or higher interest rates on conventional loans, but North Carolina banking official Joseph Smith Jr. said his state's legislation has not dried up financing for subprime borrowers.

Earlier this month we were told that NAR was leaning toward a very consumer-unfriendly bill. While NAR has not explicitly stated today that it will throw its weighty support to consumer-friendly legislation,  we still hope that the group will support a bill that will help consumers.

Do Blogs Constitute A Fifth Estate?

Thirty-two million adults in the U.S. read blogs, according to a report by Pew Internet & American Life Project, in conjunction with BuzzMetrics and Dr. Michael Cornfeld.

The Center for Media Research says:

"The blogger audience now commands respect. It stands at 20% of the newspaper audience and 40% of the talk radio audience. Meanwhile, 6% of the entire U.S. adult population has created a blog. That's 11 million people, or one out of every 17 American citizens. There is a current sense among communications elites that it is important to have a blog."

Blogger Says Real Estate 'Bubble' Is Real

The Property Grunt takes a modified academic view of the real estate bubble theory today and issues words of caution for real estate buyers. He cites a recent issue of the Economist:

"The increasing riskiness of mortgages is not the only sign that America is experiencing a housing bubble. The ratio of house prices to rents is well above its historical average, as is the ratio of prices to median incomes. And people seem increasingly to be basing their house-buying decisions on the notion that the large capital returns of the past few years—house prices in America are up by 65% since 1997—will continue indefinitely. As with a stock market bubble, if this confidence is shaken, prices could begin to fall rapidly."

Attorney/Investor Thumbs NoseAt Pennsylvania Seller Disclosure Law

Buyers are advised to seek legal counsel when there are legal issues involving a settlement. They are doubly urged to seek legal counsel when the seller of real estate is an attorney.

The following caveat appears in a listing for an Easton (PA) property: "Sellers Disclosure will be disclosed when offers are presented. None online. Investor has not lived in property."

The Pennsylvania Seller Disclosure Act requires that sellers of residential dwellings of four units or less complete a statement that discloses material defects in the property. This statement is generally available online to real estate agents through the multiple listing service and shared with buyers PRIOR to signing an agreement of sale.

I had an appointment to show this property on Saturday and requested the disclosure. I was told that the seller would not release the disclosure until he had an offer in hand: "He is an attorney and he knows the law."

Here's what the law actually says:

7303. Disclosure of material defects

Any seller who intends to transfer any interest in real property shall disclose to the buyer any material defects with the property known to the seller by completing all applicable items in a property disclosure statement which satisfies the requirements of section 7304 (relating to disclosure form). A signed and dated copy of the property disclosure statement shall be delivered to the buyer in accordance with section 7305 (relating to delivery of disclosure form) prior to the signing of an agreement of transfer by the seller and buyer with respect to the property.

We passed on that showing.