The United States Flag flies over the Inland Valleys Association of REALTORS® office in Riverside.  What makes this flag so special?  It was flown over the U.S. Capitol soon after September 11, 2001.  The staff in the Washington D.C., office of Congressman Joe Baca was instrumental in having the flag flown over the U.S. Capitol for the Association.

The U.S. Department of Housing and Urban Development has announced that effective October 15, 2007; borrower social security information will no longer be validated in real time when a new case number assignment is requested in FHA Connection (FHAC).  Instead, the case number will be issued to the lender while an overnight verification attempt with the Social Security Administration (SSA) takes place.  SSA warned that the overnight validation process may actually take a few business days to complete.

If the SSA matching fails, a Case Warning for SSN Validation will be placed on the case number.  Lenders will have the opportunity to make the necessary corrections.  If a case continues to fail SSA validation and the lender submits a request for insurance endorsement because it believes the SSA database is in error, the lender must provide conclusive documentation in the case binder to the applicable Homeownership Center.  For the Lender Insurance program, the Case Warning for SSN Validation will require the lender to submit the case binder for endorsement along with conclusive documentation supporting the validity of the SSN.  It is anticipated that the number of loans that fail this validation process will increase.

FHA provides SSN checks to help protect the insurance fund it manages, and that lenders are still responsible to verify each borrower’s SSN and identity.  This verification service, provided by FHA at no cost to its approved lenders, may only be used for processing loans for FHA insurance.  A mortgage letter on this subject is expected in the near future.

New laws affecting REALTORS® in 2008:

1. New Disclosure for Private Transfer Fees:  Effective January 1, 2008, a seller who must provide a Transfer Disclosure Statement must also provide, at the same time, a disclosure statement of private transfer fees if applicable.  A transfer fee is defined as any fee that must be paid upon transfer of real property as imposed by deed, CC&Rs, or other documents, with certain exceptions (such as, but not limited to, transfer fees imposed by probate, trust, court order, or a governmental agency).  The new disclosure statement must contain, among other things, a notice that payment is required, the amount of the fee, and the entity to which payment must be made.  To comply with this new requirement, the CALIFORNIA ASSOCIATION OF REALTORS® will release a new standard-form Notice of Transfer Fees (NTF) in November 2007. (Source: Assembly Bill 980.)
2. Recording Private Transfer Fees:  Also effective January 1, 2008, any person or entity imposing a private transfer fee must, as a condition of payment of the fee, record the instrument creating the transfer fee and a separate notice of “Payment of Transfer Fee Required.”  These two documents must be recorded concurrently in the county recorder’s office for which a property is located.  The notice of “Payment of Transfer Fee Required” must include the following information:

n  Names of the current property owners;

n  Assessor’s parcel number and legal description;

n  Amount of the fee (or percentage of sales price);

n  Actual dollar-cost examples of the fee for residential property priced at $250,000, $500,000, and $750,000;

n  When the fee expires if applicable;

n  Purpose of the funds;

n  Name of entity to be paid and that entity’s contact information for sending the funds; and

n  Signature of that entity’s authorized representative.

The title of the notice of “Payment of Transfer Fee Required” must be in at least 14-point bold type.  For transfer fees imposed before January 1, 2008, the receiver of the fee must, as a condition of payment of any fee after December 31, 2008, record a notice of “Payment of Transfer Fee Required” by December 31, 2008 (or record a substantial equivalent as specified.)  (Source: Assembly Bill 980.)

Borrowers at risk of foreclosure can get help through the NeighborWorks® America foreclosure prevention hotline at 1.888.995.4673 (HOPE). A recent analysis by Moody’s indicates that, to date, less than one percent of subprime mortgages have been restructured.