Category: Real Estate

Homeland Security Declares Real Estate ‘Essential,’ But … | Realtor Magazine

Federal guidance from the Department of Homeland Security has included real estate in a list of essential services that are deemed critical to public health and safety, as well as economic and national security.. State and local officials, however, have been issuing guidelines that could prevent normal business operations for real estate professionals in some areas. Those local mandates should take precedence over federal guidance, experts advise.

Where real estate services are continuing—albeit in modified forms—brokerages are cautioning their agents to act responsibly and to practice safe social distancing in light of the coronavirus outbreak.

Under the issued Homeland Security guidance, “residential and commercial real services” are included on a 15-page list of essential services. These cover settlement services and government offices that conduct title searches, notaries, and mortgage and recording services, as well as construction. The advisory letter was created by the Homeland Security’s Cybersecurity & Infrastructure Security Agency.

“This list is advisory in nature,” the guidance notes. “It is not, nor should it be considered, a federal directive or standard.”

Indeed, REALTORS® should follow the guidelines set forth by their city, county, and state governments, urges Katie Johnson, general counsel and chief member experience officer for the National Association of REALTORS®. “It is imperative you adhere to the order” of your local jurisdiction, Johnson says.

“Being deemed an essential service means that you have a special responsibility and opportunity to continue operations if you choose to but not if you don’t. It means you have the special responsibility and mandate to adhere to your state’s executive order regarding ‘essential services.’ ”

REALTORS® also have a responsibility to abide by all necessary health and safety precautions mandated by your state’s executive orders that would apply to business activities such as in-person property showings or other face-to-face gatherings.  “We all have a special responsibility to lead by example, to do what we think is best for our communities and ourselves, and to do what we think best for the reputation of the industry,” Johnson says.

4 Ways Coronavirus Could Impact Housing Long-Term | Realtor Magazine

The COVID-19 outbreak will undoubtedly have a long-lasting influence on Americans and the housing market moving forward. Housing analysts are already weighing in on what those changes could be.

In a new report, Apartment List highlights a few of the long-term changes they foresee coming from the COVID-19 pandemic:

Mobility will initially be low before spiking.

“Geographic mobility generally declines during downturns, when a lack of job opportunities catalyze fewer long-distance moves across market or housing upgrades,” the report notes. Evictions and foreclosure moratoriums will also help slow mobility. But housing analysts are predicting a spike in moves once the COVID-19 outbreak eases. “Many upgrade and downgrade moves will be postponed rather than canceled, creating a reshuffling of households throughout the recovery,” researchers note. The future wave will include those relocating for jobs, moves to be closer to family, and young adults forming their own households. Also, those who still hurt financially even after the pandemic lessens likely will need to move too.

Affordable housing is likely to become even more difficult to find.

Affordable rentals and homes for sale were already in short supply prior to the pandemic. “Fewer people moving means fewer homes available,” the report notes. “With both pandemic and policy keeping people in place, affordable units will become even more rare through the 2020 peak season.” Luxury apartment inventory, on the other hand, may be abundant.

Housing inequality could increase.

Higher earners will likely take advantage of low borrowing costs for refinancing to lower their payments as well as have more choices with the growing luxury rental inventory. On the other hand, lower-income households will likely struggle due to a sluggish economy and face increased competition for limited affordable housing. “As shelter-in-place orders cover a growing share of the nation, those who are able to work remotely are at a distinct economic advantage,” the report notes. “Unfortunately, a correlation between income and the ability to work from home reveals that the lowest earners will be hit hardest by these measures. Fifty-two percent of full-time workers who earn more than $100,000 annually say they can work from home. But only 15% of workers who earn less than $25,000 are able to work from home.”

Sight-unseen housing is likely to accelerate.

Some households may need to make a move sight unseen into their new home or apartment. “Many apartment communities are already enabling virtual tours in response to the pandemic, and many renters and owners alike may soon be evaluating their next home through a tablet screen,” the report notes. “Mainstream adoption of sight-unseen moves will bring both opportunities and challenges for the housing market.” In the rental market, sight-unseen transactions may prompt elevated levels of rental fraud, Apartment List notes.

How is Home Buying and Selling during Shelter In Place

 

It is in best interest of everyone to follow the instructions and guidelines from the authorities about Shelter in Place. Therefore, as good citizens all buyers, sellers and all real estate professionals are advised to follow best practices. Housing has been categorized as essential business activity. Extreme care should be taken during conducting business. 

Need to Sell: Given personal circumstances, some seller HAVE to sell. Therefore those homes have to come on market. If they had the chance, ideally they would wait for market activities to pick up so they would benefit the most. If they can’t wait, then have to put the home on market. 

Vacant vs Occupied Homes: If the home is not occupied, it becomes much easier during these times. It is much easier to get essential services to prepare the home for sale. It would be easier to avoid coming in close proximity of other people. It gives the agent an opportunity to create Virtual Tours with sophisticated technology available today. Instead of having the buyers visit the properties, it would be best to view the virtual tour and shortlist homes for writing offers. It is harder to sell homes that are occupied in that respect. It is extremely difficult to get other professionals in and out of homes, while we know that the sellers have to live in the home. It is quite risky. Extreme sanitizing measures have to be taken in these situations. Other steps would be the same but the time taken would extend. 

 

Subject to Viewing offers: The offers can be written “subject to inspection/viewing”. This clause allows the buyers to get in contract and then at a more suitable and low risk opportunity, view the home and then decide if they want to proceed further or back out. Sufficient time should be given for each contingency as applicable and also close of escrow. The contingencies and hence the closing are all dependent on various professionals therefore, there is likelihood of delays. 

 

Time Factor: Since most activities in a transaction are dependent on other professionals, appropriate time has to be factored. Following are the possible professional dependencies (not limited to). Not all professionals are willing to go out and work and therefore, even being an essential activities, there will be delays.

– Inspectors

– Appraisers

– Loan Originators

– Loan Processors

– Underwriters

– Title/Escrow professionals

– Government officials (Taxes, Assessors etc). 

 

Real Estate sales are happening. Properties are coming in market and getting in contract during these times as well. Real Estate professionals are educating the clients and navigating them thru the processes with everyone’s health and safety in mind. 

 

For questions or discuss your situations please call Yajnesh or Sangeeta. 

Yajnesh – 408-547-7845 | Lic# 01924991

Sangeeta – 408-547-7910 | Lic# 02026129

 

Homeowners Facing Hardship Get Mortgage Payment Leeway | Realtor Magazine

Mortgage giants Fannie Mae and Freddie Mac unveiled a payment deferral option for homeowners struggling to make their mortgage payments, regardless of whether the reason is related to COVID-19. Homeowners could be eligible to defer two months of their mortgage payments until the end of their mortgage, depending on their circumstance.

The GSEs had intended to announce a payment deferral program later this year, but the agencies decided to roll out the program now due to the coronavirus outbreak. The payment deferral program is available to borrowers who have faced a short-term hardship that has caused them to miss one or two months of mortgage payments.

If borrowers resolve that hardship within those two months, they will be eligible to defer the two months of missed payments to the end of their loan, without having to modify their loan.

“This innovative relief solution addresses a unique hardship situation—homeowners who have resolved a short-term hardship,” Freddie Mac said in a statement about the new program. “It aims to serve those homeowners with a more affordable workout that’s between a repayment plan and a modification. This is a broad offering that is aligned with Fannie Mae … to assist more struggling homeowners.”

In recent days, the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, also has announced forbearance options for up to 12 months and mortgage relief to those facing a hardship due to the coronavirus national emergency. The FHFA has also suspended all foreclosures and evictions for at least 60 days. The aid applies to homeowners who have a loan backed by Fannie or Freddie.

Scammers Are Trying to Dupe Homeowners Who Need Help | Realtor Magazine

Scam artists are reportedly using multiple methods, including spoofing tactics, to try to trick struggling homeowners with offers of financial aid. Freddie Mac warned this week that it learned of a scam where borrowers were receiving fraudulent calls impersonating the mortgage financing giant in offering low interest rates and other false promises.

Freddie Mac says it will never reach out to consumers over the phone with a refinancing opportunity or a new loan.

As some homeowners struggle from the economic toll of the COVID-19 outbreak, scammers are looking to take advantage of those looking for help. They may call owners offering immediate relief from foreclosure or relief from making mortgage payments.

Freddie Mac, Fannie Mae, and many lenders are offering programs to help homeowners at this time, but those calls need to be initiated by the owner.

“Spoofing is when a caller deliberately falsifies the information transmitted to your caller ID in an effort to disguise their identity while pretending to be someone else,” Freddie Mac warns in a statement about the growing scam.

“During times of distress, it is important to be on your guard against fraud schemes,” Freddie Mac says in a post.

Here are some tips from Freddie Mac to help homeowners avoid being scammed:

• If a call comes from an unknown number, let it go to voicemail. If it’s important, the caller will leave a message.
• If you answer and receive a robocall, don’t press any numbers. Hang up.
• Never give out any personal, financial, or other sensitive information unless you’ve verified the caller is a legitimate source.
• Be cautious of numbers on your caller ID since scammers can make any name or number appear.

Scammers Are Trying to Dupe Homeowners Who Need Help | Realtor Magazine

Scam artists are reportedly using multiple methods, including spoofing tactics, to try to trick struggling homeowners with offers of financial aid. Freddie Mac warned this week that it learned of a scam where borrowers were receiving fraudulent calls impersonating the mortgage financing giant in offering low interest rates and other false promises.

Freddie Mac says it will never reach out to consumers over the phone with a refinancing opportunity or a new loan.

As some homeowners struggle from the economic toll of the COVID-19 outbreak, scammers are looking to take advantage of those looking for help. They may call owners offering immediate relief from foreclosure or relief from making mortgage payments.

Freddie Mac, Fannie Mae, and many lenders are offering programs to help homeowners at this time, but those calls need to be initiated by the owner.

“Spoofing is when a caller deliberately falsifies the information transmitted to your caller ID in an effort to disguise their identity while pretending to be someone else,” Freddie Mac warns in a statement about the growing scam.

“During times of distress, it is important to be on your guard against fraud schemes,” Freddie Mac says in a post.

Here are some tips from Freddie Mac to help homeowners avoid being scammed:

• If a call comes from an unknown number, let it go to voicemail. If it’s important, the caller will leave a message.
• If you answer and receive a robocall, don’t press any numbers. Hang up.
• Never give out any personal, financial, or other sensitive information unless you’ve verified the caller is a legitimate source.
• Be cautious of numbers on your caller ID since scammers can make any name or number appear.

NAR Urges Swift Passage of Remote Notarization Bill | Realtor Magazine

The National Association of REALTORS® has sent a letter to Congress urging lawmakers to include policy in coronavirus response legislation that would pave the way for remote notarizations nationally and make it easier to complete transactions entirely digitally as the coronavirus crisis deepens. The Securing and Enabling Commerce Using Remote and Electronic Notarization Act of 2020, also known as the SECURE Notarization Act, was introduced last Wednesday by a bipartisan coalition of senators and has already garnered broad support across the real estate industry.

Twenty-three states have remote online notarization policies, which permit a notary and signer in different physical locations to safely execute electronic documents. But borrowers in more than half of the states remain unable to close a real estate transaction without an in-person notary. “As the nation and world grapple with some of the most difficult and uncertain circumstances of our lives, NAR continues working with the federal government to secure policy to promote public safety and protect this critical driver of our nation’s economy,” NAR President Vince Malta said in a statement.

How online closings dramatically speed up final fund transfers and commission payments

To address fraud and security concerns, the SECURE Notarization Act requires multifactor authentication, use of tamper-evident technology, and use of two-way, real-time audiovisual technology to enable the signer and notary to see and hear each other simultaneously.

The reliability and validity of notarized public records is central to the real estate market and provides a foundation for all parties when mortgaging, purchasing, and selling real property, NAR says. An electronic notarization takes place when the notarial seal, signature, or certificate is created, placed, and stored electronically. Beyond real estate transactions, the SECURE Notarization Act would allow Americans to execute legal, healthcare, financial, and other vital documents from the safety of their own homes.

Addressing concerns that the legislation will prohibit states from promulgating their own notary training policies, NAR clarified that the bill sets the floor—not the ceiling—for use of remote online notarization and doesn’t prevent states from passing their own laws or setting their own regulations. States that have already enabled the use of RON would have to meet the proposed minimum national standards under the SECURE Notarization Act. Minimum regulations set forth in the act aim to ensure consumers are adequately protected when using RON. In addition to the 23 states that have already passed RON legislation, 13 other states are considering following suit.

Mortgage Giants Ease Appraisal Requirements | Realtor Magazine

The Federal Housing Finance Agency has directed Fannie Mae and Freddie Mac to provide alternative appraisal requirements and employment verifications on loans the agencies service through May 17. The guidance is in response to the COVID-19 outbreak.

“To allow for homes to be bought, sold, and refinanced as our nation deals with the challenges of the coronavirus, [Fannie Mae and Freddie Mac] will leverage appraisal alternatives to reduce the need for appraisers to inspect the interior of a home for eligible mortgages,” the FHFA said in a statement.

If lenders cannot obtain verbal verification of a borrower’s employment before a loan closing, they will allow lenders to obtain verification via an email from the employer, a recent year-to-date pay stub from the borrower, or a bank statement showing a recent payroll deposit.

The FHFA has released several updates to its guidance since the coronavirus outbreak has led to mass sheltering in place or stay at home orders among cities. The FHFA has also suspended foreclosures and evictions for at least 60 days and offered forbearance for borrowers who are facing hardship from the coronavirus.

Also in a move on Monday, the FHFA suspended mortgage payments for landlords who are facing hardship with their buildings due to the coronavirus outbreak. Multifamily owners with loans serviced by Fannie Mae and Freddie Mac may be eligible for financial relief, but they must agree to not evict tenants during the outbreak.

“Renters should not have to worry about being evicted from their home, and property owners should not have to worry about losing their building due to the coronavirus,” FHFA director Mark Calabria said in a statement.

Fannie, Freddie, FHA Suspend All Foreclosures and Evictions | Realtor Magazine

Foreclosures and evictions for mortgages insured by the Federal Housing Administration, Fannie Mae, and Freddie Mac will be suspended for several weeks in response to the coronavirus outbreak.

President Donald Trump announced Wednesday that he had directed the Department of Housing and Urban Development to suspend foreclosures and evictions for mortgages insured through the FHA until the end of April. This will “allow households who have an FHA-insured mortgage to meet the challenges of COVID-19 without fear of losing their homes, and help steady market concerns,” says HUD Secretary Ben Carson. “The halting of all foreclosure actions and evictions for the next 60 days will provide homeowners with some peace of mind during these trying times.”

The Federal Housing Finance Agency also announced that Fannie Mae and Freddie Mac would stop all foreclosures and evictions for at least 60 days.

“This foreclosure and eviction suspension allows homeowners with [a Fannie Mae or Freddie Mac-backed] mortgage to stay in their homes during this national emergency,” said FHFA Director Mark Calabria. “As a reminder, borrowers affected by the coronavirus who are having difficulty paying their mortgage should reach out to their mortgage servicers as soon as possible. The Enterprises are working with mortgage servicers to ensure that borrowers facing hardship because of the coronavirus can get assistance.”

The FHFA also announced recently that borrowers impacted by the coronavirus who have a mortgage backed by Fannie or Freddie will be able to suspend their mortgage payments for up to 12 months.

Major Builder: Coronavirus Won’t Kill New Construction | Realtor Magazine

Low interest rates and inventory will draw buyers to the market, Lennar Corp.’s executive chairman, Stuart Miller, said on a conference call with industry analysts this week. The home builder, one of the largest in the country, said it was working on new ways for buyers to purchase new homes virtually, such as by leveraging its digital programs and offering drive-through closings. Such closings enable home buyers to sign documents from their car. “Even in the current environment, we are selling homes,” Miller said. “Since the first quarter, new orders continue to be strong.”

Miller acknowledged that in some cities, construction has been halted by local governments due to shelter-in-place restrictions aimed at slowing the spread of COVID-19. But Miller said Lennar has not halted its production yet, and the company will continue to build homes and adapt to the changing environment. He said low mortgage rates could incentivize a rush of new-home buyers once the coronavirus pandemic eases. The company has slowed its land purchases, focusing on reducing its outflow of cash to boost its liquidity and balance sheet position, a statement read on its earnings.

Lennar reported strong first-quarter earnings, totaling $398.5 million compared to $239.9 million in the first quarter of 2019. Its new orders also rose 18% on a year-over-year basis, with 12,376 homes in the first quarter.