The Weekly Membership Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville


CONTENTS
1. Updated Info on New RESPA Rule
2. Higher Closing Costs in Tennessee
3. Swine Flu Precautions
4. ALERT: Fannie Condo Policies
5. HOT LINE: Agency Disclosure When Handling Rentals?
6. Upcoming TAR Courses & Events!
7. Rates Move Lower
8. No DIGEST Next Week

To ask a TAR Legal & Ethics Hot Line question, go HERE.

For other questions about this newsletter, please use the “CONTACT” form HERE.


1. Updated Info on New RESPA Rule

The Department of Housing and Urban Development (HUD) has released three sets of new FAQs (Frequently Asked Questions) on the new RESPA rule published in November 2008. The latest additions were published on HUD’s website on Sept. 3, 2009 — they are actually dated Sept. 4, 2009 — after two previous releases in August. The FAQs are organized by subject and cover multiple topics ranging from questions concerning effective dates, to filling out the new GFE and HUD-1 forms.

While some provisions of the final rule went into effect on January 16, 2009, the majority of the provisions, including mandatory use of the new GFE and HUD-1 forms, will go into effect on January 1, 2010.

To download the latest information (in PDF form) click HERE.

[SOURCES: HUD; NAR]


2. Higher Closing Costs in Tennessee

Bankrate.com recently conducted its annual national survey of average origination, title, and closing costs, for a $200,000 loan, assuming a 20 percent down payment and good credit.

*** BEGIN QUOTE ***
Nationwide, the average origination and title fees on a $200,000 mortgage this year totaled $2,732, according to Bankrate’s annual survey of closing costs. The fees in the survey don’t include taxes, insurance or prepaid items such as prorated interest or homeowner association dues.
*** END QUOTE ***

So how did Tennessee do, and where did our state rank nationally?

Tennessee ranked 12th highest in the nation (a significant jump from our 24th place ranking in 2008) with total average costs of $2,901 … $169 higher than the national average.

[SOURCE: Bankrate.com]


3. Swine Flu Precautions

A recent Nashville Business Journal article encourages businesses — and this would include all real estate businesses — to be proactive in our current swine flu challenge. Citing guidance from the Centers for Disease Control, the article recaps a number of steps that businesses can take to minimize the threat to agents, employees, customers, and clients:

  • Advise workers to be alert to any signs of fever or influenza-like illness before reporting to work each day, notify their supervisor and stay home if they are ill.
  • Expect sick employees to be out for three to five days in most cases, even if antiviral medications are used.
  • Ensure that your sick leave policies are flexible and that employees are aware of the policies.
  • Those who become ill during the work day should be separated from other workers and asked to go home promptly.
  • Provide tissues and no-touch disposal receptacles for use by employees.
  • Provide soap and water and alcohol-based hand sanitizers in the workplace.
  • Frequently clean all commonly touched surfaces in the workplace, such as desks, countertops and doorknobs.
  • Offer opportunities at your worksite for influenza vaccination or consider granting employees time off from work to get vaccinated.

To read the entire article, go HERE.

The federal government also maintains a comprehensive flu information center online at: http://www.flu.gov/

[SOURCE: Nashville Business Journal]


4. ALERT: Fannie Condo Policies

NAR staff and leadership held a conference call recently with representatives of Fannie Mae regarding condo policies and issues that have held up or blocked transactions involving the financing of condo transactions.

Our thanks to Steve Brown from Crye-Leike for passing along some notes from that call, that included the following:

*** BEGIN QUOTE ***
Waivers Permitted; Lender Policies May Be the Problem.
Lenders may ask Fannie Mae to waive its national guidelines to accommodate particular local situations where a waiver makes sense. Members indicated this fact is little know by many lenders and that lenders often are not interested in pursuing waivers. Fannie indicated they approve waivers routinely, often within 24-48 hours because the system is electronic, but the decision whether to request a waiver is at the discretion of the lender. Some lenders blame Fannie for policies that are lender policies and blame Fannie for inflexibility when it is the lender that is declining to request a waiver.

eFannieMae.com.
Fannie suggested that members can go to eFannieMae.com to find applicable Fannie policies. This can be useful in challenging lenders who assert the problem is a Fannie policy when it is, in reality, a lender policy or lender confusion about the Fannie policy. Members may sign up for an email service to be notified whenever Fannie modifies or adopts a new guideline.
*** END QUOTE ***

[SOURCE: NAR Governmental Affairs Staff]


5. HOT LINE: Agency Disclosure When Handling Rentals?

QUESTION: In a rental/property management situation, when are Agency Disclosures needed?

ANSWER: This can be confusing because of differences between Tennessee statutes and the REALTOR Code of Ethics. The disclosure requirements under the Broker’s Act (i.e., in Tennessee law) are contained within Tenn. Code Ann. 62-13-405. In the last portion of this statute, it states: “Real estate transactions involving the transfer or lease of commercial properties, the transfer of property by public auction, the transfer of residential properties of more than four (4) units, or the lease or rental of residential properties shall not be subject to the disclosure requirements of 62-13-403, 62-13-404 and this section.” — Tenn. Code Ann. 62-13-405(e).

Therefore, Tennessee law does not require that agency status be disclosed in residential rental property transactions.

HOWEVER, the rules are different under the REALTOR Code of Ethics. If the licensee is a REALTOR, then disclosure of your agency status must be done in ALL cases. This includes all commercial transactions, property management transactions, etc.

See Standard of Practice 16-10:

REALTORS, acting as buyer or tenant representatives or brokers, shall disclose that relationship to the seller/landlord’s representative or broker at first contact and shall provide written confirmation of that disclosure to the seller/landlord’s representative or broker not later than execution of a purchase agreement or lease. (Amended 1/04)

…and Standard of Practice 16-12:

REALTORS, acting as representatives or brokers of sellers/landlords or as subagents of listing brokers, shall disclose that relationship to buyers/tenants as soon as practicable and shall provide written confirmation of such disclosure to buyers/tenants not later than execution of any purchase or lease agreement. (Amended 1/04)

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


6. Upcoming TAR Courses & Events!

GRI 3: Financing the Successful Transaction — Sept. 10 – Oct. 14, (E-Class distance learning course), 16 hrs. CE. For more information, go HERE.
https://www.123signup.com/event?id=zmtfz

TAR’s 2009 Annual Convention! — Sept. 15-18 (Point Clear, AL), 12 hours CE. TAR will be hosting the 2009 TAR Annual Convention in Clear Point, Alabama, at the Grand Hotel Marriott Resort, Golf Club & Spa. National speakers include real estate guru Stefan Swanepoel, Karel Murray, Internet-savvy Randy Eagar, and productivity wizard Merlin Mann! NOTE: The deadline has passed for advance registrations, but you may still register on-site!

GRI 4: From Offer to Contract to Closing — Sept. 28-29 (Knoxville, TN), 16 hrs. CE. For more information, go HERE.

Watch each week’s TAR DIGEST for schedule changes and additions!


7. Rates Move Lower

Freddie Mac reported a dip in borrowing costs for long-term mortgages this week. According to the federally chartered company, average interest on 30-year loans fell to 5.08 percent from 5.14 percent a week ago; while rates on 15-year loans came down to 4.54 percent from 4.58 percent. Adjustable-rate mortgages declined as well, with the one-year ARM sliding to 4.62 percent from 4.69 percent and the five-year ARM moving down to 4.59 percent from 4.67 percent.

[SOURCES: Freddie Mac; Information, Inc.]


8. No DIGEST Next Week

TAR staff will be traveling next week, due to the 90th TAR Annual Convention! The TAR DIGEST will not be published next week, but we will return with the 9-22-09 Edition, that will include reports of any significant news from the Convention.


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