5 to Watch: April 2011

News and trends that we're keeping an eye on this month.

April 1, 2011

1. Rollin’ Across America

Thousands of REALTORS® and consumers greeted NAR’s Home Ownership Matters bus as it toured the United States in March carrying the message that REALTORS® are going to bat for families that want to achieve the dream of home ownership. "We want to make sure the opportunity to achieve the American dream is a reality for families across the country and is protected for our children and grandchildren," NAR President Ron Phipps said March 19 at the bus tour’s stop in Denver. The tour started in Washington, D.C., and made stops in Chicago; St. Louis; Topeka, Kan.; Denver; Ogden, Utah; Boise, Idaho; and Portland, Ore. In addition to holding town hall meetings at some of the stops, NAR leaders hosted consumer events that made information available about why home ownership matters for households and communities.

2. Nationwide Open House Gears Up

Associations across the country are gearing up for the 2011 REALTOR® Nationwide Open House Weekend on Saturday and Sunday, June 4–5. The goal is to give REALTORS® a high-profile platform on which they can build marketing campaigns to attract buyers to homes for sale in their area and to focus attention on the central role of home ownership in the country. About 60 percent of associations participated in the first Nationwide Open House Weekend, held last year and spearheaded by a handful of ­associations. This year, NAR is making resources and assistance available to help participants increase media coverage, boost consumer awareness, and drive traffic to their members’ events.

3. Fed Says No to Yield-Spread Premiums

Compensation to mortgage brokers can no longer be based on the loan’s interest rate or other terms, except on the amount of credit extended, according to a Federal Reserve rule that took effect April 1. The rule seeks to curb risky loans by prohibiting yield-spread premiums, which critics say gave originators an incentive to steer borrowers into higher-cost mortgages during the housing boom. It also prohibits originators from charging borrowers a fee if they’re already being compensated by the lender who is providing the money. The National Association of Mortgage Brokers and the National Association of Independent Housing Professionals are reportedly looking into filing lawsuits to prevent the rule’s implementation.  More: www.federalreserve.gov (Aug. 16, 2010, release).

4. Help for Expiring Loans

The U.S. Small Business Administration is accepting refinance applications for commercial real estate mortgages that are maturing by the end of 2012. Mortgages can be replaced with long-term, fixed-rate loans under the SBA 504 program and can be for up to 40 percent of the appraised property value. The balance must come from another source of funds such as a community development corporation, and applicants must provide at least 10 percent down. Ideal candidates are those with a balloon payment coming due in the next two years who haven’t been able to find a lender to refinance the loan, NAR analysts say.  More: www.sba.gov (Feb. 17 release).

5. Borrowers Face Higher Monthly FHA Premiums

The FHA has increased the mortgage insurance premium by 25 basis points for loans with case numbers assigned on or after April 18. This increase, which is the third in the last 12 months, is necessary to restore the agency’s finances, which remain under a required 2 percent reserve, the FHA says. NAR opposes the increase, which will cost the average buyer an extra $30 per month. Existing borrowers are not affected. The upfront MIP will remain unchanged at 1 percent.  More: www.hud.gov (Mortgage Letter 11-10).

Robert Freedman

Robert Freedman is the former director of multimedia communications at NAR.