Summary of Key Provisions of H.R. 3221 - The Housing Stimulus Bill (as of 7/30/08)

H.R. 3221, the “Housing and Economic Recovery Act of 2008,” passed the House on July 23, 2008, by a vote of 272-152. On Saturday, July 26, 2008, the Senate passed the bill by a vote of 72-13. The President signed the bill on July 30, 2008. The bill includes the following provisions: 
 

 GSE Reform – including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).

FHA Reform – including permanent FHA loan limits at the greater of $271,050 or 115% of local area median home price, capped at $625,500; streamlined processing for FHA condos; reforms to the HECM program, and reforms to the FHA manufactured housing program. The downpayment requirement on FHA loans will go up to 3.5% (from 3%). The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).Homebuyer Tax Credit - a $7500 tax credit that would be would be available for any qualified purchase between April 8, 2008 and June 30, 2009. The credit is repayable over 15 years (making it, in effect, an interest free loan).

FHA foreclosure rescue – development of a refinance program for homebuyers with problematic subprime loans. Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide. Program is effective on October 1, 2008.

Seller-funded downpayment assistance programs – codifies existing FHA proposal to prohibit the use of downpayment assistance programs funded by those who have a financial interest in the sale; does not prohibit other assistance programs provided by nonprofits funded by other sources, churches, employers, or family members. This prohibition does not go into effect until October 1, 2008.

• VA loan limits – temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.

• Risk-based pricing – puts a moratorium on FHA using risk-based pricing for one year. This provision is effective from October 1, 2008 through September 30, 2009.

• GSE Stabilization – includes language proposed by the Treasury Department to authorize Treasury to make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae could not fail.

• Mortgage Revenue Bond Authority – authorizes $10 billion in mortgage revenue bonds for refinancing subprime mortgages.

• National Affordable Housing Trust Fund – Develops a Trust Fund funded by a percentage of profits from the GSEs. In its first years, the Trust Fund would cover costs of any defaulted loans in FHA foreclosure program. In out years, the Trust Fund would be used for the development of affordable housing.

• CDBG Funding – Provides $4 billion in neighborhood revitalization funds for communities to purchase foreclosed homes.

• LIHTC – Modernizes the Low Income Housing Tax Credit program to make it more efficient.

• Loan Originator Requirements – Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate). Federal bank regulators will establish a parallel registration system for FDIC-insured banks. The purpose is to prevent fraud and require minimum licensing and education requirements. The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state, unless they are compensated by a lender, mortgage broker, or other loan originator.

"Copyright National Association of REALTORS®, Reprinted from REALTOR.org with permission"

 

Broker Management CE Classes

Broker Management Continuing Education

All Illinois  brokers licensed after April 30, 2008 are required to complete the course within 180 days of licensing.  The course which includes: broker licensing and responsibility, agency agreements and issues, office management and escrow responsibilities, risk reduction and disciplinary actions. 

Classroom sessions are scheduled for Saturday August 9, and Saturday November 15, 2008 in Aurora.  The classes will be conducted at 318 N Lake Street from 9:00 AM to 4:00 PM, test follows.  Course fee:  $125.00.  

The Illinois Academy of Real Estate Home Study Course has been approved and consists of the State required textbook and a workbook that guides the student through the course.  Student scenarios and practice exams prepare the student for the course final.  Course fee:  $99.00.

2008 Class Schedule Update

Basic Real Estate Transactions 

August 12, 2008 

316 N. Lake Street, Aurora, IL

Tuesday and Thursday - 6:30 PM to 9:30 PM 

Course fee:  $295.00

Register on line or call Laurie at 630-844-0222

Class size:  Minimum 10   Maximum 30

September 23, 2008

Hillside - Instructor:  Lee Baker

501 N Wolf Road, Hillside  IL

Tuesday and Thursday 6:00 to 9:00 PM

Course fee:  $300.00

To register, call Lee at 708-544-1717

Class size:  Minimum 10  Maximum 12 

October 7, 2008

Aurora - Instructor:  Mike Fair

316 N. Lake Street, Aurora, IL

Basic Real Estate Transactions

Tuesday and Thursday - 6:30 PM to 9:30 PM 

Course fee:  295.00

Register on line or call Laurie at 630-844-0222

Class size:  Minimum 10   Maximum 30

Home Study Classes Available.  May Start at any Time

Broker Pre-License

Aurora, Illinois

Beware of Real Estate Educational Scams

I just received a call from a client that really angered me.  The initial question was "How can you determine if a business is legimate?"  The client had done a web search, checked Dunn and Bradstreet, white pages, yellow pages, internet yellow pages and the Better Business Bureau.

It seems that the client received an unsolicted offer of employment from this company and had sceduled an interview and was doing research to find out more about the company.  She had two different phone numbers and has been calling and leaving messages for several days, but no one is returning her calls.  She had two web site addresses, one of which had been deleted for failure to renew domain name and the other with no physical contact information.

The company was a real estate investment company that specialized in forclosures.  When she told me that, bells started ringing in my head.  It has been my experience to find that many of these investment companies and apprentice programs are at the best deceptive and at the worst ilegal or a scam.

There is little doubt in my mind that my client had done due diligence and there were many warning signs.  Could the company be legimate.  It could, but how can a person know?

The call angered me because the deceptive programs and scams are a blight on the real estate profession.  The get rich gurus become a part of the industry in the eyes of the consumer and it is the very practices of these types of gurus that brought real estate license laws into existence in the first place.

What can we as real estate professionals do to seperate ourselves from those who would use real estate to cheat and con others.  What can we do to help protect the public and the industry.

I apoligize for the rant, but I just needed to get this off my chest.