-
What is the new rule related to the HUD-1 and Good Faith Estimate forms being eliminated?
The rule combines the GFE and the TIL disclosure and requires the closing disclosure to be in the consumer's hands 3 days before closing.
-
What is the issue regarding RESPA and TILA?
It will make the closing process more rigid and uniform but could lengthen or delay the closing.
-
What does the Data Accountability and Trust Act do?
DATA clarifies and strengthens a business's obligation to notify customers when their personal information has been exposed. The notification requirement is within 30 days from the discovery of a breach.
-
What could a covered bond market do for commercial real estate?
It would provide additional finance options for commercial borrowers
-
What does the Dodd-Frank Act require, and how does the QM rule alter that?
The Dodd-Frank Act requires that originators make a good faith effort to verify a borrower’s ability to repay (ATR) his/her mortgage and imposes stiff penalties if he/she does not. The QM rule allows for varying degrees of assumed compliance with the ability to repay rule, which is advantageous to lenders as it allows them to minimize and to budget for potential penalties and litigation expenses.
-
What change is the FHFA making to the GSE REO policy?
The change is to allow previous homeowners who have been through foreclosure to purchase their home back at current market value, if available, and allow third-party purchasers to buy the property on the previous homeowners' behalf.
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What are the concerns related to appraiser independence, and what legislation is being considered to address these?
Most of the concerns include appraiser geographic competency, appraiser independence, and the ineffectiveness of the appraisal appeals processes.
There is no legislation being considered that would impact the appraisal issues.
-
What is the issue related to eminent domain and how will this impact the availability of mortgage credit?
The issue is that local governments want to use eminent domain to take residential underwater mortgages from lenders and investors, then reduce the amount owed on the mortgage, and resell it to new investors.
It would restrict the availability of mortgage credit because mortgage investors are reluctant to purchase mortgages in participating communities due to difficult-to-quantify lending losses and collateral risk.
-
What are the oppositions to the Visitable Housing initiatives, and what are local governments addressing it?
It could impact the flexibility in home design or may add cost to home construction and could lead to full accessibility requirements in housing.
A number of local governments have required or encouraged new housing to be built with visitable features.
-
What is HUD's stand on discrimination based on sexual orientation?
HUD prohibits discrimination based on sexual orientation and gender identity in HUD-funded housing.
-
How did the Supreme Court ruling on same-sex marriage effect real estate?
The ruling allowed married same sex couples in all states to enjoy the property rights and tax benefits of marriage.
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What is the risk to property owners if energy efficiency becomes federally mandated?
Their ability to sell their home would be at risk without first having to conduct energy audits and improve the heating and cooling system, windows, insulation, and/or lighting. Also, owners of older homes that do not meet adequate energy efficiency requirements or score poorly on energy use assessments may lose value in their homes compared to newer, more efficient homes.
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What is the impact of contractors having to be lead paint certified and having to comply with lead-safe renovation procedures?
It drives up the cost of renovation activities, which then drives up the cost of owning and managing both residential and commercial properties.
-
What is one contention of the current tax system in general?
The current tax system is riddled with loopholes that benefit mostly high-income Americans.
-
What is the main roadblock to tax reform?
The main roadblock to reform is the inability of the both sides of the government to agree on what needs to be done, how it needs to be done, and who will be impacted.
-
What impact would tax reform have on the real estate industry?
Changes to the tax system could detrimentally impact the economics of home ownership and real estate investment by modifying real estate-related tax benefits. It could impact mortgage interest deductions.
-
Act that would make two adjustments to the Truth in Lending Act’s (TILA) definition of “points and fees” to ensure greater consumer choice in mortgage and settlement services under the Ability to Repay/Qualified Mortgage (QM) rule.
The Mortgage Choice Act
-
HUD-1
- a new closing disclosure and a new loan estimate have replaced HUD-1 settlement statement and Good Faith Estimate forms and the Truth in Lending Act disclosure for most residential closed-end mortgage loans.
- closing disclosure must be in hands of consumer 3 days before closing
-
RESPA/TILA Harmonization
- makes the closing process more rigid and uniform, but it also could lengthen it.
- The requirement that the settlement disclosure be issued 3 days before closing may lead to delays even though things other than major loan terms can be adjusted during that period.
- CFPB dropped many provisions including the "all in" APR
- took effect in October of 2015
-
Data Privacy & Security
Personal Data Notification & Protection Act clarifies and strengthens the obligations businesses have to notify customers when their personal information has been exposed, including establishing a __-day notification requirement from the discovery of a breach.
Consumer Privacy Bill of Rights is aimed at giving people more control over their data
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Commercial Real Estate
More than $1.2 trillion in commercial real estate loans will come due over the next few years, and many of these deals will have trouble getting financing.
Unfair regulatory scrutiny is preventing many commercial lenders from taking actions that could avoid defaults, even for performing properties.
A___ ___ market would provide additional finance options to borrowers in commercial real estate markets
covered bond
-
Basel III
- will require banks to hold more capital
- could significantly curtail the flow of capital to real estate and harm the commercial and residential property market and property values
- Loans permanently financing owner occupied commercial real estate are not considered HVCRE under the final rule.
-
Legislative issues with Tenants in Common
- has increasingly been sold as private placement securities offerings
- TICs sold as securities generally meet the Supreme Court's definition of an investment contract.
- Though TIC securities are real estate, securities laws and regulations prohibit securities broker dealers from either directly or indirectly compensating non broker dealers.
-
Qualified Mortgage Rule
- first of two rules that came from the Dodd-Frank Act that will impact the housing market
- QM rule allows for varying degrees of assumed compliance with the ability to repay rule
- some have argued that the rules will raise costs and reduce access for consumers
- All mortgage applications received on or after January 10, 2015, are required to comply with the QM rule
-
Issues with Credit and Lending Policies
- Overly stringent lending standards have continued to limit the availability of affordable mortgage financing for credit worthy consumers.
- Federal policymakers are weighing a number of proposals aimed at creating healthier housing and mortgage markets.
-
Issues with Government Sponsored Enterprises
- Without the GSEs and FHA-insured loans, which currently constitute nearly 90% of the market space, there would be almost no capital available for mortgage lending.
- GSEs required homeowners who have been through foreclosure and want to buy their home back to pay the entire amount owed on the mortgage.
- Change will allow previous homeowners who have been through foreclosure to purchase their home back at current market value.
- Change will also allow third-party purchasers to buy the property on the previous homeowners' behalf.
- Change is limited to Fannie Mae and Freddie Mac REO inventory of single-family homes as of November 25, 2014.
-
Fannie Mae Streamlines Condo Approval
Fannie Mae published an update to its lender selling guide to improve and streamline its condo project approval process.
-
Appraiser Independence Regulations
- concerns are in regards to appraisals, including appraiser geographic competency, appraiser independence, and the ineffectiveness of the appraisal appeals processes.
- currently no legislation impacting the appraisal issues
-
Eminent Domain issues
- several proposals circulating in localities across the country to allow local governments to use eminent domain to take residential underwater mortgages from lenders and investors
- would restrict the availability of mortgage credit because mortgage investors are reluctant to purchase mortgages in participating communities due to difficult-to-quantify lending losses and collateral risk
- The Federal Housing Finance Agency (FHFA) issued a statement in August of 2012 expressing serious concerns with such mortgage-seizing proposals.
- Defending American Taxpayers from Abusive Government Takings Act did not pass but would have prohibited the origination of taxpayer-guaranteed mortgages in areas where the power of eminent domain is being used to seize mortgages.
-
Fair Housing / Accessibility issues
- Visitable Housing is designed and built to allow guests with mobility impairments to visit someone in their home without architectural barriers impeding their ability to move in and out of the home or use facilities a guest.
- Some oppose any new requirements that could impact the flexibility in home design or that would add any cost to home construction.
- Others are concerned that minimal visitability requirements will lead to full accessibility requirements in housing.
- A significant number of local governments have required or encouraged new housing to be built with visitable features.
-
Fair Housing Act issues on discrimination
- Twenty state and numerous local laws prohibit discrimination on the basis of sexual orientation.
- In other states, there are no such laws.
- There are those who oppose civil rights protections based on sexual orientation and gender identity.
- In several states, there have been legislative efforts to allow discrimination on the basis of sexual orientation and gender identity based on religious beliefs.
- HUD has announced its intention to issue rules prohibiting discrimination based on sexual orientation in federally funded housing.
-
Marriage Equality issues
- Marriage can affect real estate in several ways including how property is titled, tax consequences related to real estate, and estates in the event of death or divorce.
- There may be multiple private property rights issues related to marriage that impact same sex couples and possibly create a difference in treatment on the basis of sexual orientation.
- Actions by the Courts have held that restrictions prohibiting same-sex couples from marrying are unconstitutional; however, the issue has not been decided by the Supreme Court.
- Legislatures in several states have pushed measures allowing discrimination on the basis of sexual orientation if a business person has a religious belief that homosexuality is wrong.
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Energy Efficiency issues
- The federal government is moving forward with voluntary energy efficiency policies and programs.
- If energy efficiency were federally mandated, property owners’ ability to sell their home or building would be at risk without first having to conduct energy audits and improve its heating and cooling system, windows, insulation, and/or lighting.
- The Department of Energy (DOE) has completed development of a voluntary Home Energy Performance Score.
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Lead Paint issues
- Under the Residential Lead-Based Paint Hazard Reduction Act, the Environmental Protection Agency regulates renovation, repair, and painting (RRP) activities in pre-1978 residential properties.
- Residential property managers now must spend more on staff that must be EPA certified in lead-safe renovation procedures.
- The Agency may impose the same regulatory burden on commercial building owners and managers if data show their RRP activities pose a child lead hazard.
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Tax Reform issues
- Over the past few years, the growing federal debt, weak economic recovery, and continued growth of tax complexity have kept tax reform near the top of the national agenda.
- Most Democrats insist that tax reform should produce even more revenue from higher-income taxpayers, and most Republicans insist that all additional revenue from broadening the tax base in tax reform be used to lower tax rates.
- Alterations to that system would change – likely to the detriment – the economics of homeownership and of real estate investment. Any modification of real estate-related tax benefits in the current fragile economy could do serious damage and will certainly create uncertainty for prospective purchasers.
- Tax reform based on a goal of lowering the tax rates as much as possible could mean that policymakers ignore the societal and economic benefits of important and long-standing deductions, such as the mortgage interest deduction, in favor of reaching the ultimate low tax rate.
- Some argue that the current tax system is riddled with loopholes that benefit mostly high-income Americans.
- The new leaders of both tax-writing committees have indicated a willingness to explore the possibility of enacting tax reform in the next 2 years. However, so far there have been no detailed plans from either committee
-
The proposal released by banking regulators that would help improve bank capital standards is called
Basel III.
Base II.
HVCRE.
covered bond market.
Basel lll
-
Which of the following is not a concern in regard to valuation issues related to appraisals?
Geographic competency of appraisers
Appraiser independence
Appraiser availability
Ineffectiveness of appraisal appeals processes
Appraiser availability
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Fannie Mae has made changes to improve and streamline its condo project approval process. Which of the following is included in those changes?
An increase from 50% to 70% in pre-sale requirement for new projects
A decrease in the number of days for which 15% of unit owners may be past due on common expense assessments
An increase from 20% to 25% for the allowable commercial space allocation
Waiver on the 10% investor ownership limit on projects between 5 and 20 units by allowing a single entity to own up to 3 units
An increase from 20% to 25% for the allowable commercial space allocation
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Which of the following is NOT an issue related to the requirements for lead-based paint hazards?
Residential property managers now must spend more on staff that must be EPA certified in lead-safe renovation procedures.
The Agency may impose the same regulatory burden on commercial building owners and managers if data show their RRP activities pose a child lead hazard.
Contractors must be certified and comply with the lead-safe renovation procedures, which drives up the cost of these renovation activities.
The EPA is required to determine whether or not RRP activities in commercial and public buildings create a lead hazard that harms occupants.
The EPA is required to determine whether or not RRP activities in commercial and public buildings create a lead hazard that harms occupants.
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Which agency undertook the effort to harmonize Real Estate Settlement Procedures Act and Truth in Lending Act disclosures and regulations?
Consumer Financial Protection Bureau
HUD
Congress
Federal Housing Finance Agency
Consumer Financial Protection Bureau
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What is the main roadblock to tax reform?
Each side of the debate refusing to give up kickbacks they are receiving for stalling reform
Presidential vetoes on all reform proposals
Inability of both sides of the issue to agree on whether and how to reform the system
Lack of interest and willingness to consider tax reform
Inability of both sides of the issue to agree on whether and how to reform the system
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The American Taxpayer Relief Act of 2013 did not make the lower tax rates enacted in 2001 and 2003 permanent for
the highest-income taxpayers.
low income taxpayers.
property owners.
property taxes.
the highest-income taxpayers.
-
What are the two Congressional tax-writing committees?
House Ways and Means and Senate Finance
House Ways and Means and Senate Tax Reform
House Finance and Senate Ways and Means
Congressional Ways and Means and House Finance
House Ways and Means and Senate Finance
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Fannie Mae's updates to improve and streamline its condo project approval process do not include
a decrease in pre-sale requirement for new projects.
separation of Condo Project Manager and Full Review Processes.
an increase in the number of days for which 15% of unit owners may be past due on common expense assessments.
an increase for the allowable commercial space allocation.
separation of Condo Project Manager and Full Review Processes.
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What EPA RRP regulations were issued in 2010 regarding lead-based paint?
Lead-based paint must not be removed from commercial buildings.
Studies must be conducted to determine if renovations in buildings which contain lead-based paint would put occupants in danger.
Renovators and remodelers must be certified in lead-safe procedures.
The residential RRP regulations were extended to all commercial buildings.
Renovators and remodelers must be certified in lead-safe procedures.
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What law is intended to protect consumers by strengthening underwriting standards, but is believed by some to raise costs and reduce access for consumers?
The Qualified Mortgage Rule
The Dodd-Frank Act
The Data Accountability and Trust Act
The Truth in Lending Act
The Qualified Mortgage Rule
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If the costs associated with adding basic visitable features add little to the cost of housing at the time of construction, which of the following statements is not a related issue with requiring these features?
New requirements could impact the flexibility in home design.
Minimal visitability requirements will lead to full accessibility requirements in housing.
Adding any cost to home construction is opposed.
Housing with these features could be marketed as visitable to buyers.
Housing with these features could be marketed as visitable to buyers.
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What could bring about the danger that vital tax benefit provisions for commercial and investment real estate could be repealed or limited in order to “pay for” lowering the tax rates?
Both sides of the tax reform debate will continue to disagree.
Neither side of the debate will be willing to continue debating.
If common ground on tax reform is found
If the president vetoes any agreement the two sides may come to
If common ground on tax reform is found
-
What limits the availability of affordable mortgage financing for credit worthy consumers?
Unavailability of Basel III
The QM Rule
Overly stringent lending standards
GSEs
Overly stringent lending standards
-
The changes related to the HUD-1 settlement have nothing to do with
it being replaced by a new loan estimate.
changes to the closing process.
the closing disclosure needing to be in the hands of the consumer 5 days before closing.
combining it with the final TIL.
the closing disclosure needing to be in the hands of the consumer 5 days before closing.
-
The creation of a covered bond market in the US will
decrease credit availability.
increase liquidity.
decrease liquidity.
create refinancing challenges in the commercial real estate sector.
increase liquidity.
-
Which of the following would most likely not be a result of the proposed use of eminent domain to allow local governments to take residential underwater mortgages from lenders and investors and then resell them to new investors at a reduced price?
Fewer credit-worthy borrowers would be able to purchase a home.
The demand for housing would be pushed below its current levels.
The availability of mortgage credit would be increased.
Down payments would rise to compensate for the added eminent domain risk.
The availability of mortgage credit would be increased.
-
How are many local governments responding to the issue of visitable housing?
They are suspending construction on any houses that include visitable features.
They are recommending that opposition to visitable housing conduct a study to determine the benefits of the visitable features.
They are looking to the US Supreme Court for guidance.
They are requiring or encouraging new housing to be built with visitable features.
They are requiring or encouraging new housing to be built with visitable features.
-
Improvements to the condo approval process have been called for in order to
increase property value.
increase mortgage rates.
increase property eligibility.
increase property availability.
increase property eligibility.
-
The FHFA change to the GSE REO policy regarding when and how former homeowners can repurchase their homes after a foreclosure is limited to
Freddie Mac REO inventory.
Ginnie Mae and Fannie Mae REO inventory.
Ginnie Mae and Freddie Mac REO inventory.
Fannie Mae and Freddie Mac REO inventory.
Fannie Mae and Freddie Mac REO inventory.
-
Making the closing process more rigid and uniform but also longer is an issue related to
HUD-1.
a new Good Faith Estimate form.
RESPA and TIL.
RESPA and HUD-1.
RESPA and TIL.
-
The proposals circulating in localities across the country to allow local governments to use eminent domain to take residential underwater mortgages from lenders and investors, reduce the amount owed, and then resell it to new investors do NOT include which of the following issues?
This would increase the availability of mortgage credit because investors want to purchase mortgages in participating communities.
Fewer credit-worthy borrowers would be able to purchase a home.
Many more homeowners could be pushed underwater by further declines in home values.
Mortgage rates would rise to compensate for the added eminent domain risk.
This would increase the availability of mortgage credit because investors want to purchase mortgages in participating communities.
-
Some argue that the current tax system is riddled with loopholes that benefit mostly
low income tax payers.
high income tax payers.
unemployed Americans.
self-employed individuals.
high income tax payers.
-
The current tax system is
favored by lawmakers.
favorable for real estate.
detrimental to real estate investors.
responsible for the real estate market crash.
favorable for real estate.
-
The Data Accountability and Trust Act establishes a requirement to notify consumers within __________ from the discovery of a breach that exposes their personal information.
5 days
20 days
1 year
30 days
30 days
-
What is the issue regarding commercial tenants in common?
Tenant in Common is a form of co-ownership in real estate which has increasingly been sold as private placement securities offerings.
The IRS has provided guidance on how the TIC ownership structure may be used in section 1031 tax deferred like kind exchanges.
Guidance by the IRS is often used by sponsors to attract investors to own a partial interest in real property.
Though TIC securities are real estate, securities laws and regulations prohibit securities broker dealers from either directly or indirectly compensating non broker dealers.
Though TIC securities are real estate, securities laws and regulations prohibit securities broker dealers from either directly or indirectly compensating non broker dealers.
-
Fannie Mae Streamlines Condo Approval
- Fannie Mae published an update to its lender selling guide to improve and streamline its condo project approval process. The comprehensive changes have already been made to allow for immediate implementation and were updated in Fannie Mae's Condo Project Manager in March 2015. Some of the changes that will be immediately impactful include the following:
- Consolidation of Condo Project Manager and Full Review Processes which will streamline the approval process
- A decrease from 70% to 50% in pre-sale requirement for new projects
- An increase in the number of days for which 15% of unit owners may be past due on common expense assessments from 30 days to 60 days
- An increase from 20% to 25% for the allowable commercial space allocation
- Waiver on the 10% investor ownership limit on projects between 5 and 20 units by allowing a single entity to own up to 2 units
-
_______________ would provide additional finance options to borrowers in commercial real estate markets where it might otherwise be limited.
Low-interest refinancing
A covered bond market
Less regulatory scrutiny
Basel III
A covered bond market
-
Housing that is built to allow guests with mobility impairments to visit without architectural barriers impeding their ability to move in and out of the home is called
ADA housing.
hospitable housing.
mobility housing.
visitable housing.
visitable housing.
-
Which is NOT an FHFA change to the GSE REO policy?
Qualified buyers can purchase current Fannie Mae inventory at market value.
Previous owners who have been through foreclosure can buy their home back at current market value.
Third-party purchasers can buy the property on the previous owner's behalf.
Borrowers who have been through foreclosure are no longer required to wait 3 years before becoming eligible for a GSE conventional loan.
Borrowers who have been through foreclosure are no longer required to wait 3 years before becoming eligible for a GSE conventional loan.
-
In regard to same-sex marriage, some argue that it is not
a real estate issue.
a basis for private property rights issues.
preventing couples from enjoying the same rights as those enjoyed in opposite-sex marriage.
a topic for regulatory discussion.
a real estate issue.
-
In what way is real estate NOT affected by marriage?
How property is titled
Purchase price
Tax consequences
Estates in the event of death
Purchase price
-
HUD prohibits discrimination based on sexual orientation and gender identity
in GSE REO properties.
in rental properties.
in visitable housing.
HUD-funded housing.
HUD-funded housing.
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