2010 June

RESPA Home Warranty / Referral Compensation Ruling

June 29, 2010 by Steve Kornspan

New RESPA Interpretive Rule:

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 3500 [Docket No. FR–5425–IA–01]

TITLE: Real Estate Settlement Procedures Act (RESPA): Home Warranty Companies’ Payments to Real Estate Brokers and Agents

AGENCY: Office of General Counsel, HUD.

ACTION: Interpretive rule.

DATES: Effective date: June 25, 2010. Comment Due Date: July 26, 2010.

SUMMARY: Under section 8 of RESPA and HUD’s implementing RESPA regulations, services performed by real estate brokers and agents as additional settlement services in a real estate transaction are compensable if the services are actual, necessary and distinct from the primary services provided by the real estate broker or agent, the services are not nominal, and the payment is not a duplicative charge. A referral is not a compensable service for which a broker or agent may receive compensation… [Read more...]

Filed Under: Buyer Info, Legislation

House approves homebuyer tax credit extension

June 29, 2010 by Steve Kornspan

The House of Representatives voted to give first-time home buyers three more months to close on their home purchases and receive the $8,000 tax credit.

The Senate had needs to approve in the next 24 hours to meet the June 30th deadline .

Buyers must have signed a contact by April 30 to qualify. The issue is the date the sale must be closed by. June 30th versus Sept 30. Many lenders and title companies are having trouble closing the sales on time. If they close one minute passed the deadline there are about 200,0o0 buyers that will loose their $8000 credit. [Read more...]

Filed Under: Buyer Info, Mortgage & Finance

HUD announces temporary policy that will expand access to FHA mortgage insurance

June 29, 2010 by Wendy

For many home buyers, FHA-insured mortgage financing is often the only means of home financing available. With certain exceptions, FHA has granted a temporary waiver to allow FHA home borrowers access to recently foreclosed properties by using FHA mortgage insurance for home purchase and resale within 90 days. The policy change will permit home buyers to use FHA insured financing to purchase HUD owned properties, bank-owned properties, or properties resold privately. This change in policy is expected to allow homes to resell as quickly as possible, helping to stabilize real estate prices.

The waiver took effect February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices to unsuspecting home borrowers, this waiver is limited to those sales meeting the following general conditions:

All transactions must be arms-length, with no identity of interest between the home buyer and seller or other parties participating in the sales transaction.
In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.
The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

More details regarding this temporary policy are in the text of the waiver, available on HUD’s website.
http://www.hud.gov

http://www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf

Filed Under: Mortgage & Finance