The 8-16-11 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville


CONTENTS
1. Tennessee Foreclosures Down
2. Short Sales To Remain Strong Through 2013
3. Home Ownership Hits Lowest Level Since 1965
4. HOT LINE: Mediation/Arbitration Clause in the Contract?
5. HOT LINE: New Forms Needed?
6. Upcoming GRI & Other Courses
7. Rates Keep Dropping
8. Useful Web Links

To ask a TAR Legal and Ethics Hot Line question, CLICK HERE.

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


1. Tennessee Foreclosures Down

Although the national economy still seems turbulent, there was a sliver of GOOD NEWS this past week, reported in the Nashville Business Journal:

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Foreclosure activity in Tennessee fell sharply in July compared to a year ago, according to a report released late last week by RealtyTrac.

Tennessee foreclosure filings — including default notices, scheduled auctions and bank repossessions — were down 34 percent from July 2010.

…Tennessee ranks squarely in the middle [of the country], 25th, in foreclosure rates. Nevada, California and Arizona posted the highest foreclosure rates.

Nationwide foreclosure activity in July declined by 35 percent from a year ago, bringing foreclosure totals to their lowest level since November 2007.
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[SOURCE: Nashville Business Journal]


2. Short Sales To Remain Strong Through 2013

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Short sales will remain strong for the next several years as foreclosure inventories timelines grow even longer, according to the chief operating officer of Equator, a premier software platform for default servicers. …In May, CoreLogic predicted the number of short sales will increase 25 percent next year after tripling over the past two years.

New federal regulations that took effect April 10 are expected to add to the interest in short sales by removing barriers involving second liens. Prior to this change, secondary lien holders were unlikely to receive any portion of the proceeds of the sale. This likelihood was increased if the property was in a state of negative equity. The secondary lien holder could block the approval of the short sale by refusing signoff on zero payoff.

Due to the change in the laws regulating short sales there are now incentives for secondary lien holders to approve the sales. There is also an incentive for the seller to pursue this option. Secondary lien holders will receive a portion of the sale proceeds; an amount of at least $3,000. They will also receive an additional $1,000 from the federal government and sellers will receive an incentive of $3,000 for relocation expenses.
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To read more, CLICK HERE.

[SOURCE: Real Estate Economy Watch]


3. Home Ownership Hits Lowest Level Since 1965

While the Census Bureau recently reported a decline in the U.S. homeownership rate to 65.9 percent during the second quarter, Morgan Stanley analysts say the government statistics may be conservative. Their research paper suggests that when taking into account delinquent borrowers likely to eventually lose their homes — something the Census does not consider — the homeownership rate actually is closer to 59.2 percent. That would be the lowest level since the government began tracking the data in 1965.

For more information, CLICK HERE.

[SOURCES: CNNMoney; Information, Inc.]


4. HOT LINE: Mediation/Arbitration Clause in the Contract?

QUESTION: My buyer wants to put the following language in the purchase and sale agreement: “…any dispute of this contract will be handled by arbitration or mediation….” Is this legal?

ANSWER: Contracts for the sale of real estate can be made subject to an arbitration and/or mediation clause, which would prescribe one or the other in the event of a buyer-seller dispute (as the alternative to litigation).  However, we would recommend not using one as simplistic as the one mentioned.  Typically, there are issues such as selection of the mediator/arbitrator, payment for mediator/arbitrator, etc., that should be considered.

TAR has a form which can be used for mediation. Form F24 is the Resolution of Disputes by Mediation Addendum/Amendment.

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


5. HOT LINE: New Forms Needed?

QUESTION: When a listing is withdrawn or expires, a new listing agreement signed by the seller is required by MLS. What about the TAR forms, such as the Property Disclosure, Disclaimer, Confirmation of Agency, etc.? Does the seller have to sign and date new ones, or are the originals sufficient?

ANSWER: We would recommend completing new paperwork across the board. This is because information could have changed on the Property Condition Disclosure form, and the other documents are generally transaction-specific. In other words, the Confirmation of Agency Status form concerns that particular agency relationship. If the listing agreement expired or was terminated, then the new listing period creates a new agency relationship.

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


6. Upcoming GRI & Other Courses

Aug. 22: TransactionDesk Basic (3 hrs. CE) – MAAR Office, Memphis. For more information or to register, call 901-818-2421.

Aug. 19: 2011-2012 Residential Core Course (6 hrs. CE) – RCAR Office, Cleveland. For more information or to register, call 423-476-5912.

Aug. 25 – Sept. 28: GRI 3, Financing the Successful Transaction (16 hrs. CE) – An E-Class distance-learning course. For more information or to register, CLICK HERE.

Aug. 25: 2011-2012 Residential Core Course (6 hrs. CE) – EMTAR Office, Mt. Juliet. For more information or to register, go to: http://www.emtar.com/2011educationSchedule.htm

Aug. 31: Quadrennial Ethics Course (3 hrs. CE) – RCAR Office, Cleveland. For more information or to register, call 423-476-5912.

Aug. 31: Agency in Tennessee (4 hrs. CE) – RCAR Office, Cleveland. For more information or to register, call 423-476-5912.

Sept. 1: 2011-2012 Residential Core Course (6 hrs. CE) – GNAR Office, Nashville. For more information or to register, call 615-254-7516.

The complete 2011 schedule of GRI courses (both Classroom and E-Class) is online HERE.

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


7. Rates Keep Dropping

Mortgage borrowing costs continued a downward trend this past week, according to Freddie Mac, as 30-year fixed rates dipped to the lowest point of the year and 15-year fixed interest fell to an all-time low. Freddie Mac said interest on the former averaged 4.32 percent, while the latter settled at 3.5 percent. The favorable rates sent loan applications up more than 20 percent, the Mortgage Bankers Association indicated, with refinance activity climbing 30 percent.

[SOURCES: Freddie Mac; Information, Inc.]


8. Useful Internet Links

Click on any of the following to access:

Back Issues of the TAR DIGEST
Tennessee Assn. of REALTORS
TAR Education
TAR on LinkedIn
TAR on Facebook
Follow TAR on Twitter
Online Risk Reduction Resources
Online Resources for Association Leaders
Tennessee Real Estate Commission