Howard County Association of REALTORS® Legislative Update Center keeps you up-to-date on issues and pending real estate legislation that can impact both its members and the Howard County community. To view the current Federal, Maryland, or Howard County updates, click on the news items below and the Related Links to the left.
Loan Estimate and Settlement Forms
Will Change as of August 1, 2015
June 4 update -- On June 3, the Consumer Financial Protection Bureau (CFPB) announced that it would be "sensitive" to companies that make a good-faith effort to comply with the new Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure (TRID) regulation that goes into effect on August 1, 2015. This is a welcome development that can be compared to the effective CFPB implementation of the Qualified Mortgage (QM) regulation in 2014.
Bottom Line: The announcement by CFPB is a net win but less than what some Members of Congress requested, which was a hard deadline five-month testing or "grace" period.
Next Steps: NAR has been leading the effort to ensure an effective implementation of the TRID regulation. We will continue to have a dialog with Congress and the CFPB as we move toward August 1, 2015. It was through our member efforts during the 2015 REALTOR® Legislative Meetings and Trade Expo that more than 275 U.S. Senators and Representatives signed onto a letter to CFPB Director Richard Cordray to ask for the clarification that was issued yesterday.
Please visit www.realtor.org/respa for the latest information on this issue, as well as learning how to prepare for the August 1 changes by reading and visiting the following resources.
The Consumer Financial Protection Bureau's (CFPB) changes to the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA) will take effect on August 1, 2015.
The new rule combines the Good Faith Estimate with the Truth in Lending (TIL) disclosure now called the "loan estimate" -- and the HUD-1 settlement statement with the final TIL, now called the "closing disclosure." Perhaps the greatest change is that the closing disclosure must be in the hands of the consumer three days before closing.
Click here to view a comprehensive webinar offered by NAR >
CFPB Review: New Regulations & Enforcement Actions > - powerpoint
CFPB samples of the new Loan Estimate and Closing Disclosure forms >
Several RESPA changes have already occurred; including new enforcement efforts under RESPA's anti-kickback provisions. CFPB is aggressively enforcing RESPA and people should be reminded that they cannot receive anything of value for the referral of settlement services in residential transactions involving a mortgage. Furthermore, marketing agreements are under extra scrutiny as well.
EPA: Withdraw The Water Rule
By Russell W. Riggs, Austin Perez, Colin Allen
November 14, 2014
The Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (The Corps) have issued a controversial proposed regulation that would place more water bodies under federal authority, which would result in more property rights violations, more time consuming and expensive permits, more regulatory red tape, and less economic development in communities across the country.
The comment period closed on Nov. 14, 2014. NAR signed onto two coalition letters, helped engineer comments from Congress, and circulated a model comment letter to REALTOR® members they could send to EPA that detailed the impacts of this proposed regulation on their businesses and clients. Even though the comment period has ended, NAR will continue its legislative and regulatory efforts to have EPA withdraw this rule and start from scratch to develop more effective ways to protect the quality of our country's water.
Waters Advocacy Coalition Letter
Waters Advocacy Coalition Comment Letter
Regulators Finalize QRM Rule
By Charles Dawson, Vijay Yadlapati
October 31, 2014
After three years of strong opposition from NAR, congressional leaders, and consumer and industry groups, the six financial regulators released the final version of the long-awaited qualified residential mortgage (QRM) rule. The six regulators listened to NAR when finalizing the rule which now equates QRM with the "Qualified Mortgage (QM)" standard. As originally proposed, the QRM rule would have narrowly defined QRMs to require a 20 percent down payment. REALTORS® were among the most vocal opponents of the originally proposed QRM rule and forged the broad-based Coalition for Sensible Housing Policy, which includes nearly 50 organizations, to draw attention to the regulations onerous 20 percent down payment requirement and other credit limiting features such as strict debt-to-income limits. The coalition asked for and received an extension of the proposed regulation comment period in 2013. During that time, NAR and its coalition partners gathered the support of 44 U.S. Senators and 282 House members, who wrote to regulators expressing their intent on QRM and opposing the sizable down payment requirement.
In synchronizing both definitions, the revised rule encourages safe and financially prudent mortgage financing while also ensuring creditworthy homebuyers have access to safe mortgage financing with lower risk of default. In addition, consistency between both standards reduces regulatory burden and gives mortgage professionals much-needed clarity and consistency in the application of the important mortgage standards required pursuant to Dodd-Frank.
QRM Final Rule
NAR Urges Congress to Extend VA Limits
By Sarah C. Young, Megan Booth
November 20, 2014
The VA loan limits have remained at higher levels since 2008, at 150% of the GSE loan limits. But that provision will expire on Dec. 31, 2014, if Congress does not act. The VA Home Loan Guaranty provides veterans and active-duty military personnel with a zero-downpayment home loan. Those loans perform better than any other loan product on the market. Currently, veterans living in high cost areas can use their guaranty to purchase home. But this ability is in jeopardy. The National Association of REALTORS® this week sent a letter to House and Senate Appropriators, urging them to make the loan limits permanent. Veterans should not be penalized based on where they chose to live. NAR is a strong supporter of the VA Home Loan program, and encourages REALTORS® to always ask their buyers if they qualify for a VA Home Loan.
Letter to House
Letter to Senate
More info on VA Home Loan Guaranty
NAR's Military Relocation Professional certification
FHA Releases 2014 Actuarial Report
By Sarah C. Young, Megan Booth, Daniel Blair
November 20, 2014
On Monday, Nov. 17, 2014, FHA released its Annual Report to Congress and the FY 2014 Independent Actuarial Assessment of the FHA Mutual Mortgage Insurance Fund. The review shows that the fund has gained $6 billion over the past year and the current economic net worth has improved to a positive $4.8 billion. FHA's current cash reserves to pay claims total $40 billion. The capital reserve ratio is required to be at or above 2 percent and FHA is expected to meet that obligation by 2016. Improvements can be attributed to:
- Serious delinquency rates for the active portfolio fell from 8.2 percent in FY 2013 to 7.1 percent in FY 2014.
- Recoveries on dispositions have improved by more than 5.5 percent of the loan unpaid balance at default. In particular, the recovery rates for the Distressed Asset Stabilization Program (DASP) improved to 64 percent in FY 2014 from 49 percent in FY 2013.
- FHA made program changes to HECMs, such as lowering principal limit factors, changes to upfront MIP pricing and limits on the types of Fixed Interest Rate mortgages that can be insured through HECM.
2015 NAR President Chris Polychron issued the following statement on behalf of NAR:
"NAR is pleased that the 2014 Actuarial Review of the Federal Housing Administration released today confirms that the Mutual Mortgage Insurance Fund is healthy and continues its positive trajectory. The ongoing decline in delinquencies and stabilizing home values indicate that FHA will stay on track to rebuild its capital reserve fund and ultimately meet the 2 percent excess reserve amount required by Congress.
"Now that the MMI Fund is on a path to recovery, NAR urges FHA to lower its annual mortgage insurance premiums and eliminate the requirement that mortgage insurance be held for the life of the loan. Achieving homeownership has become more difficult with current FHA mortgage insurance premiums.
"NAR estimates that in 2013, nearly 400,000 creditworthy borrowers were priced out of the housing market because of high FHA insurance premiums. By lowering its fees, FHA could provide greater access to homeownership for historically underserved groups. To put it in perspective, over the past four years, the percent share of first-time buyers using FHA-backed loans shrank from 56 percent to 39 percent.
"A shift in policy would also increase the volume of borrowers acquiring FHA-backed loans and contribute to the solvency of the MMI Fund.
"NAR is a strong supporter of the FHA and its vital role in the mortgage marketplace. In light of this report, NAR believes that Congress should not dramatically change the FHA or redefine its purpose. We will continue our work with FHA to help make the dream of homeownership a reality for millions more Americans."
FHA FY 2014 Annual Report to Congress
FHA FY 2014 Actuarial Report
National Legislation Impacting Real Estate
Representatives from HCAR, MAR and NAR meet with our U.S. Senators and Representatives on a regular basis to communicate the issues critical to REALTORS®, our businesses, communities and the consumers we represent.