The Weekly Membership Newsletter of the Tennessee Assn. of REALTORS

1. Bank of America Buys Countrywide
2. Clarksville Market Is Praised
3. FBI Says Mortgage Fraud on the Rise!
4. HOT LINE: Paying Buyer’s Closing Costs
5. Former TAR President Billy Williams Dies
6. Realtor License Plate – SIGN THE PETITION!
7. Rates Drop Below 6!

1. Bank of America Buys Countrywide

The giants are taking control of the home-mortgage market.

Friday’s agreement for Bank of America Corp. to buy Countrywide Financial Corp. for $4 billion shows how size and financial solidity are trumping everything else in mortgage lending. With the heft to withstand rising defaults and falling home prices, these big companies are helping prevent a total shutdown of mortgage lending.

“Bank of America stepping in right now is a very good thing for the market” because it signals confidence in an eventual revival of the housing and mortgage markets from what appears to be the worst slump since the Great Depression, said Susan M. Wachter, a finance and real-estate professor at the University of Pennsylvania’s Wharton School.

There is a price to pay: Their greater role means less competition and higher costs for consumers, at least in the short run.

But giant banks like Bank of America have the ability to finance their lending relatively cheaply through deposits and to keep on their books loans that are hard to sell to investors. That insulates them from the market fears that, in the past year, have knocked thousands of small and midsized lenders and brokers out of business because they could no longer find takers for loans they generate or borrow money at reasonable rates.
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[SOURCE: Wall Street Journal]

2. Clarksville Market Is Praised

A recent Nashville Business Journal article (“Clarksville housing market tops ‘most promising’ list”) by Linda Bryant notes:

Clarksville has been singled out as the most promising real estate appreciation market in the country by Fiserv, a global company that provides information management systems and services to the financial industry.

The company projects real estate prices will rise 6.4 percent through 2009 in the Montgomery County city of about 125,000.

The statistic is in stark contrast to the overall national real estate market.

…The Fiserv designation doesn’t mean that home sales in Clarksville will rise, just that they are expected to continue going up in value. However, local Realtors say sales are continuing to go up yearly.
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[SOURCE: Nashville Business Journal]

3. FBI Says Mortgage Fraud on the Rise!

A new USA TODAY article describes a significant rise, nationally, in the number of mortgage fraud convictions …and the problems are NOT going away:

Federal mortgage fraud convictions have more than doubled in the past year, and the FBI expects a growth in foreclosure scams as the crisis over substandard, high-interest home loans escalates.

…In the past year, the bureau created 34 mortgage fraud task forces and working groups with investigators from departments including Housing and Urban Development, Treasury and Veterans Affairs.

They investigate suspicious activity such as deceptive pricing and falsified documentation by mortgage brokers, lenders, appraisers, real estate firms and others, [FBI Section Chief Sharon] Ormsby says.
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To access the entire article, go to:


4. HOT LINE: Paying Buyer’s Closing Costs

QUESTION: Can I pay some of the buyer’s closing costs from my commission if it is done solely on the HUD-1 (i.e. my commission is $1,000, but the closing agent writes me a check for $900 and applies the other $100 to the buyer’s closing costs)?

ANSWER: You can offer to use a portion of your commission check to pay the buyer’s closing costs only under certain circumstances. You must follow the Gifts and Prizes Rule under TREC Rule 1260-2-.33. It states:

(1) A licensee may offer a gift, prize, or other valuable consideration as an inducement to the purchase, listing, or lease of real estate only if the offer is made:
(a) Under the sponsorship and with the approval of the firm with whom the licensee is affiliated; and
(b) In writing, signed by the licensee, with disclosure of all pertinent details, including but not limited to:
1. accurate specifications of the gift, prize, or other valuable consideration offered;
2. fair market value;
3. the time and place of delivery; and
4. any requirements which must be satisfied by the prospective purchaser or lessor.

In addition, a new state statute states that you cannot pay a client cash for doing business with you. Tenn. Code Ann. 62-13-302(b).

Therefore, you CANNOT pay the buyer directly, but you can reduce your commission and apply that to the client’s closing costs, as long as the lender approves. Make sure that the lender approves of this transaction. AND make sure that it is the lender and not the mortgage broker (always get this in writing)!!!

You can also agree to simply cut your commission. Again, any time that the purchase price is changed or the manner in which the funds will be distributed is changed, make sure that you have written authorization of the mortgage company. Also, you do not want to do anything which will provide cash back to the buyer. Most banks will not allow this activity.

[SOURCE: TAR’s Legal & Ethics Hot Line Attorneys]

5. Former TAR President Billy Williams Dies

We have sad news to report in this issue of the TAR DIGEST. 1982 TAR President Billy Williams died Saturday night following a long illness.

Billy Williams was loved by all. Family visitation will be Tuesday from 2:00 to 4:00 PM and from 6:00 to 8:00 PM at First Baptist Church, 211 N Main Street, Greeneville, TN. Funeral services will be held on Wednesday at 1:00 PM at First Baptist Church and burial will be at Andrew Johnson Monument Hill Cemetery.

Condolences may be sent to his wife Margie at: 37 W Ridgefield Ct, Greeneville, TN, 37745, and/or to his son Mark Williams, 1506 Brentwood Dr, Greeneville, TN, 37743.

The family has established a scholarship at Tusculum College in honor of Billy. Donations can be given in his name to the Billy Williams Scholarship Endowment, Tusculum College, Attention: Kim Kidwell, P.O. Box 5040, Greeneville, TN, 37743.

6. Realtor License Plate – SIGN THE PETITION!

As you have already read about here in the TAR DIGEST, the TAR Governmental Affairs team is getting ready to file legislation to create a REALTOR license plate in Tennessee! With the creation of this license plate, Tennessee REALTORS will be able to have an identifying emblem on their automobile and show the world how proud we are to be part of the American Dream of home ownership.

If you have any interest in having a special REALTOR vanity plate on your vehicle, PLEASE go to:
…and sign the online petition.

We want to show the General Assembly that REALTORS will have no problem getting the required 1,000 registrations, so we need more signatures!

The legislative session has just started, so please sign up and let’s show how proud we are of being a member the most respected trade association in America!

[SOURCE: TAR’s Governmental Affairs Dept.]

7. Rates Drop Below 6!

Freddie Mac reports a drop in the 30-year fixed mortgage rate to 5.87 percent during the week ended Jan. 10 from 6.07 percent the prior week in response to a recent government report revealing a boost in the unemployment rate to 5 percent in December from 4.7 percent in November.

The 15-year fixed mortgage rate fell to 5.43 percent from 5.68 percent over the same period. Meanwhile, the five-year adjustable mortgage rate sank to 5.63 percent from 5.78 percent; and the one-year ARM dropped to 5.37 percent from 5.47 percent.

Freddie Mac chief economist Frank Nothaft notes that a more than a quarter-point decline in mortgage rates in recent weeks has bolstered refinancing requests.

[SOURCES: Information, Inc.: Freddie Mac]

TAR’s Home Page for Tennessee REALTORS is at: