Industry News

National Association of Realtors on the Tax Cuts and Jobs Act – What it means for Americans

Tax Reform Bill December 2017

The National Association of REALTORS® (NAR) worked throughout the tax reform process to preserve the existing tax benefits of homeownership and real estate investment, as well as to ensure real estate professionals would benefit from proposed tax cuts. Many of the changes reflected in the final bill were the result of the engagement of NAR and its members.

The report states that the results were mixed. The exclusion for capital gains on the sale of a home, and mortgage interest rate deductions on homes and second homes was saved, but incentives pertaining to real estate for individuals was overall altered negatively. Significant incentives for large investors were included, helping their tax situation.

The article includes these categories and can be viewed here NAR Tax Cuts and Jobs Act

Introduction
Major Provisions Affecting Current and Prospective Homeowners
Major Provisions Affecting Commercial Real Estate
Major Provisions Affecting Real Estate Professionals
Appendix 1 – Examples of How the Deduction for Qualified Business Income May Affect Various Real Estate Professionals
Appendix 2 – Examples of How The New Law Will Affect the Tax Incentives of Owning a Home

HUD Releases Guide to Help Struggling Homeowners Avoid Foreclosure

Press Relelase
December 20, 2017

The U.S. Department of Housing and Urban Development today released the Homeowners Guide to Success as part of a public-private partnership between federal agencies and industry partners. The guide provides homeowners with information on the critical first steps to take if they are at risk of missing a mortgage payment or facing foreclosure.

HUD Secretary Ben Carson said, “This guide arms consumers with easy to understand, reliable information about the assistance available to help them keep their homes. Valuable information like this can make a tremendous difference in the lives of homeowners who may be faced with foreclosure.”

This guide ensures homeowners will have resources at their fingertips and will be ready and responsible for the next steps. The guide also covers the value of HUD-approved housing counseling agencies. They are on the front lines providing resources to help homeowners avoid foreclosure. These HUD-approved housing counseling agencies offer free assistance to consumers and help borrowers find housing counselors and avoid scams.

As families recover from the recent hurricanes and are more likely to be targeted by scams, a HUD-approved housing counselor can assist them through the process of purchasing or keeping a home. Independent research shows that borrowers working with a HUD-approved housing counseling agency are more likely to avoid foreclosure than borrowers who do not seek housing counseling.

“Steering consumers away from fraudulent schemes is especially important when they are already facing the difficult situation of not being able to make their mortgage payment,” said Sarah Gerecke, Deputy Assistant Secretary for the Office of Housing Counseling at HUD.

As part of the partnership between HUD, Department of Veterans Affairs, Department of Agriculture, the Treasury Department, the Consumer Financial Protection Bureau, Federal Housing Finance Agency, Mortgage Bankers Association, and housing counseling agencies, the guide will be available on federal agency and industry partner websites

Reimagining Land Records and GIS


An event, “Reimagine Land Records – Join the Conversation” orchestrated by the Legislative Committee of the Minnesota State Bar Association, Real Property Section, took place on October 20th. In attendance were an assortment of County Recorders and other County Officials, Land Surveyors, Abstractors, Attorneys, GIS Specialists, Teachers, Land Records Information Systems (LIS) Software Companies and Title Companies.

The session started out with a slide as to what constitutes land records and it was broken down three general categories and who maintains the records and uses them.

Objects (Improvements – roads, physical easements, buildings, etc.
Land Rights (Ownership, estates, government rights, liens, easements, restrictions, etc.)
People (Title, liens that tie to people, etc.)

Discussion revolved around Layers of Information needed by land title specialists and how they can be mixed and used by all most effectively. We all have a stake in this – Homeland Security; FEMA; DOT; Federal, State and local authorities; and hundreds of other entities. My takeaway of the future from the event is as follows:

CLOSINGS OF THE FUTURE

In the not too distant future, we will feel light-years ahead of today. For those of us who remember typing abstracts on electric typewriters, and getting fax machines in the office, it is truly amazing. Even those who daily toil creating and printing documents, watching people sign, making copies of the signed documents, preparing them for delivery back to the lender and to the respective counties, cutting checks, etc. will see an amazing change.

THERE WILL BE NO PAPER. Documents and closings will be “Born Digital.” They will be created in a secure electronic commerce cyber-system, and emailed to the client through a secure web portal. The closer, a licensed, e-sign notary (perhaps hundreds of miles away from the clients,) will see the clients using a web-cam, review their drivers licenses against the online faces, and e-sign their notary as the clients click through, and e-sign the mortgage, deeds, and other documents.

NO PERSONAL HANDSHAKES when meeting, no paper, no file folders, no copies, no notary stamps or checks, just cyberspace. If owners need information, it will all reside in the cloud, or on their computer or flash drive.

THE FUTURE OF LAND RECORDS AND GIS

The digitally signed documents will then be electronically submitted back to the lender, with digital copies for the title company, and of course an e-signed digital copy will go directly to the appropriate county (with e-fees) where the documents will move though departments to verify, and reside digitally.

Someday, when the owner takes a future home equity line or sells the property, a title searcher will simply go to a computer to look up the digital documents in cyberspace. But there will be only one place to look up all needed information for each piece of real estate.

A Geographic Information System, accessed by a PIN number (a smart number that ties to Sec- Twp-Rng-1/4 -1/4 and parcel) will open up a Pandora’s Box of information. We will be able to access anything you can imagine about real estate – the physical properties of buildings; terrain; topography; zoning; ownership rights, title and interests; roads; utilities; flood information; zoning; Homeland security; layer after layer.

Records from the – Treasurer, Auditor and Assessor that include current and delinquent taxes (Green Acres, etc.); type of property (single family 3BR, 3BA, 2 story, 2300 sq ft….home); Register of Deeds and Registrar office information (with the ownership, restrictions, easements, mortgages, etc.); District Court files (showing judgments, divorces and court filings against the owners); Death and Probate Court documents; Health and Human Services information (maps of wells and lien information); Federal District Court filings; Dept. of Transportation (updates on roads and widening of streets); Department of Natural Resources; Wind farms; Detailed utility information; FEMA flood maps; City zoning data; Trash bills; Photos of the property with GIS overlays and on and on.

And the records will solve problems besides title searches for many – FEMA, 911, DOT, Homeland Security, Minnegasco, Xcel, public utilities, – when a hurricane or tornado blows through, FEMA can overlay the GIS of the hurricane and know the owners names and rough amount of damage to the property. 911 will have better access to helping people,, because they will estimate number of people impacted, where the nearest hospitals are, and fastest routes to get people there. The DOT will estimate road damage will know where to concentrate their efforts. Gas and electric companies will know where the gas and power are out, and how to proceed as quickly and effectively as possible to make needed repairs.

It’s hard to believe, but the pieces are already there, it’s just (just???) that all the pieces need to be joined into one access point. The future of GIS is coming and it will be interesting.

CFPB Charges Title Company with $1.25 million Dollar Fine

The CFPB takes RESPA matters seriously. While many states, like Minnesota, require a disclosure form describing the relationship between lenders, real estate agents, title companies, appraisers, etc., those who do not disclose those relationships are up for serious fines.
Read the full article here CFBP RELEASE

CFPB Issues Summary of Changes and Clarifications to TRID

To support implementation of the recently issued 2017 TILA-RESPA Rule, the Bureau has issued a Detailed Summary of Changes and Clarifications.

You can access the Detailed Summary of Changes and Clarifications here.

FinCEN Advisory on Money Laundering Scams

FinCEN Advisory

See Advisory HERE

Lender Sues Specialty Insurer for Cyberspace Crime

A California-based mortgage company hit its insurer with a lawsuit in a New York federal court Tuesday seeking to recoup under a $3 million policy “substantial” losses incurred when an impostor duped the mortgage lender into wiring money for a nonexistent transaction.
American Pacific Mortgage Corp. asserts that Aspen Specialty Insurance Company must indemnify it for a cyberattack that resulted in an employee wiring more than $75,000 to a fictional company.

More here at Housing Wire

Last year, the Federal Trade Commission and the National Association of Realtors issued a warning to people interested in buying a home that scammers were posing as real estate agents, Realtors and title insurance companies to steal consumers’ closing costs.
And earlier this year, the FTC and NAR reissued that same warning because similar scams are still taking place.
In these scams, hackers take over the email accounts of homebuyers, real estate agents, lenders or Realtors. They obtain information about upcoming real estate transactions and send an email to the homebuyer, pretending to be the real estate agent or the title company that’s being used for the closing.

The email tells the buyer that there has been a last-minute change to the wiring instructions, and instructs the buyer to wire their closing costs to a different account – one controlled by the hacker. Then, once the buyer sends the money to the scammer’s account, the money disappears.

Do you have Cyber Insurance?

E-Mortgage filing in North Carolina

Industry News, Technology update
Thursday, August 10, 2017
North Carolina has been at the forefront of eMortgage and eClosing transactions, and Thursday saw the state at the center of another milestone.

The state’s first eMortgage purchase transaction was completed Thursday, with North State Bank; Brady & Kosofsky, PA; DocMagic; Simplifile and World Wide Notary working together to close the deal. The entire process took 46 minutes.

The loan was originated by North State Bank, and closed by the Matthews, N.C.- based law firm of Brady & Kosofsky, the company said in an exclusive announcement to October Research, LLC. Technology used in the transaction was supplied by DocMagic, Inc., World Wide Notary, LLC., Ramquest, LLC and USPROSERV, LLC, while eRecording was provided by Simplifile.

“The closing itself represented the future of the industry,” partner Jaime Kosofsky said.

The closing came in conjunction with a special event hosted by the North Carolina Department of Secretary of State. The event introduced a newly formed North Carolina Electronic Mortgage Closing Advisory Committee, and four of those members participated in the closing Thursday.

The buyer and seller each executed the closing instruments and financing documents with a biometric signature pad, Kosofky said, which helps protect parties from fraud and forgery. The use of electronic signature and notary technology, coupled with the robust legal framework provided by North Carolina state law, makes it possible for lenders to make safe loans within the guidelines of the new TRID guidelines.

The homebuyer was at the Keller Williams office in Mooresville, N.C., and the eSigning agent – who is an eNotary – was present, along with the real estate broker. The closing attorney, who was at the Matthews office 45 miles south, was present via video to preside over the transaction. The register of deeds office is 55 miles away from the Matthews office in Statesville, N.C.

The seller signed the closing materials via signature last week before leaving town.

Among the principal individuals involved in the transaction were:

Ken Sykes, Kelly Arrington and Jamie Harrington from North State Bank. Harrington was the loan officer, and she completed her second eMortgage transaction Thursday.
Jeff Bode of Mid America Mortgage, whose company acted as the investor for the purchase.
Mona Mohajerani, who acted as the closing attorney, and Brady & Kosofsky Executive Operations Director Esther Fernandes, along with eSigning agent Patricia Paxton.
Secretary of State Elaine Marshall and Director, Electronic Notarization and Notary Enforcement Ozie Stallworth, who founded the eClosing pilot program in North Carolina.
Jason Streit, president at World Wide Notary, along with the rest of the technology providers involved.

Housing Sentiment Hits Record Low

Market Data
Thursday, August 10, 2017
During July, the share of Americans who said now is a good time to buy a house decreased to a survey low, according to Fannie Mae’s Home Purchase Sentiment Index (HPSI).

The HPSI dropped 1.5 percentage points in July to 86.8, driven by decreases in three of the six components it measures.

“It’s clear that high home prices are a growing challenge helping to send buying sentiment to a record low,” Fannie Mae Senior Vice President and Chief Economist Doug Duncan said in a release.

“However, we find the notable decline in selling sentiment surprising. If it persists, this month’s decrease in optimism regarding the direction of the economy, which appears to coincide with rising uncertainty regarding the outlook for pro-growth legislation this year, could weigh on overall housing sentiment in the second half of the year,” Duncan added.

The HPSI found that the share of survey respondents (23 percent) who in July said now is a good time to buy a home fell 7 percentage points, while those who said now was a good time to sell (28 percent) dropped 11 percentage points. The share of Americans who said they were not concerned about losing their job jumped 9 percentage points.

Additionally, the share of Americans who expect home prices to continue to rise increased by one percentage point in July. Nearly half of the respondents who said now was a bad time to buy a home cited rising prices as their top concern.

Protect Your Money from Wire Fraud Schemes – ALTA Video

Buying and selling a home is an exciting time, but there can be pitfalls for unsuspecting consumers . The American Land Title Association wants homeowners and sellers to be aware that criminals are using wire fraud schemes to steal money meant for home purchases or the proceeds from the sale of the property. Watch this video for four tips to protect your money and advice for what to do if you’ve been targeted by a scam.

See the ALTA VIDEO HERE

Info On Home Closing

Home Closing 101: An Educational Initiative of the American Land Title Association