October 20, 2020

5 TO WATCH . . . NEWS AND TRENDS TO WATCH


1. Texting While Driving

Nineteen states, plus the District of Columbia and Guam, now ban text messaging for drivers. Congress is trying to get into the act, too; last year a bill was introduced that would strip states of some of their federal Highway Trust Fund money if they don’t take action on the problem.

 AAA says distracted driving accounts for up to 8,000 accidents a day, though it does not break out figures for texting and other distractions.

 2. Definition of Green Features
In an effort to put rigor behind use of the term “green” in describing homes listed for sale, a number of multiple listing services (MLSs) are adding data fields so buyers can know with certainty what in a listing makes it green. With these new fields providing data on a wide range of green features—from energy-efficient appliances to electric carports—claims that a house is green are “verifiable, understandable, and certifiable.”  

National Association of Realtors (NAR) Green Resource Council estimates that as many as 50 MLSs have added some version of green data fields. The Council will be releasing a tool kit in 2010 on best practices for greening the MLS.

 3. Lead-safe Remodeling
U.S. Environmental Protection Agency rules taking effect April 22 require remodeling work on homes built before 1978 to be undertaken only by contractors certified by the agency in lead-safe practices. (An EPA-certified contractor is not necessary if the work does not disturb the paint, but that can be hard to know up front.)

The National Association of the Remodeling Industry recommends that home owners assume lead is present if their home was built before 1978 unless they’ve had it tested and found it lead-free. Certified remodelers are required to display their EPA-certified training certificate to home owners. 

4. Securities-Based Loans
Getting sales closed today might require Buyers to look at options other than traditional mortgages. Buyers with significant stock investments, for example, might look into a product that’s underwritten based not on the property they want to buy but on the stocks they own. Securities-based loans aren’t new, but lenders in the past year have started offering them up for home purchases.  

The loans are viable for households that have at least a modestly high net worth. Borrowers get a nonrecourse loan with an advantageous fixed interest rate (ranging from 2.5 percent to 4.5 percent in early 2010) with none of the underwriting and credit scoring issues of a mortgage loan, because the collateral isn’t the house but the stocks.

 Among the drawbacks: the loans can’t be prepaid, and if the stock value declines to less than the loan amount, the borrowers have to make up the gap.

5. Corporate Largesse
The U.S. Supreme Court in late January swept away a long-standing prohibition on direct political spending by corporations, but it will take time before the full force of the ruling is clear.

Under Citizens United v. Federal Election Commission, corporations can spend without limit on ads for or against candidates during an election as long as their efforts are undertaken independently of political campaigns. Before the ruling, corporations were prohibited from using corporate treasury funds for political communications and were required to set up separate political funds using only personal contributions from corporate employees.

“SHORT SALES”

The short sale of a home can be done faster under new Treasury Department rules.  People whose principal residence is worth less than the mortgage on it may be eligible if:
1.  they are delinquent on payments or default seems likely
2.  the loan was made before Janaury 1, 2009
3.  the loan is for less than $729,750
4.  their monthly mortgage payment is more than 31% of their gross income.

Caution:  Mortgage companies do not have to start using these criteria until April 5thWhat to do:  Talk to the bank holding your mortgage to find out whether you qualify under the new rules.