From the desk of Zack Rubin-McCarry, NAR Political Representative to Ohio:
FHA Performing Well Above Requirement
On Friday, November 13, 2020, the Federal Housing Administration (FHA) released its annual report to Congress on the financial status of the FHA Mutual Mortgage Insurance Fund. This report is based on the findings of an independent actuarial audit. For the sixth year in a row, the Fund is well above its statutory minimum of 2% capital reserve ratio at 6.10%, an increase of 1.26% from last year. More than 83% of its homebuyers were first-time buyers, an increase from 2019. The number of minority borrowers increased by roughly 30,000. NAR continues to urge FHA to reduce the premiums paid by buyers and eliminate the-of-loan mortgage insurance requirement. With the reserve ratio stronger than ever, FHA is now providing income to the US Treasury, and funding other non-housing related programs. FHA homebuyers should not be paying more than is needed to cover the risk to the taxpayer.
2020 FHA Mutual Mortgage Fund Press Release (link is external)
2020 FHA Mutal Mortgage Fund Annual Report (link is external)
FinCEN Renews Real Estate Geographic Targeting Orders (GTOs)
The Financial Crimes Enforcement Network (FinCEN) recently renewed its Geographic Targeting Order (GTOs) on November 6, 2020, and the order ends on May 4, 2021. This order imposes data collection and reporting requirements on companies involved in certain residential real estate transactions.
This GTOs were initially started issued by FinCEN in 2016, and a new order has been issued every six months. The orders impose data collection and reporting requirements on title companies for all cash purchases of residential real estate in certain jurisdictions throughout the country. The purpose of the GTOs is to assist law enforcement and federal regulators with tracking bad actors engaged in financial illicit crimes involving real estate.
The latest GTO covers the following geographic areas listed below, which remain unchanged from the last order for residential, non-financed transactions of $300k or more:
- California: San Diego, Los Angeles, San Francisco, San Mateo, or Santa Clara Counties
- Florida: Miami-Dade, Broward, or Palm Beach Counties
- Hawaii: City and County of Honolulu
- Illinois: Cook County (Chicago)
- Massachusetts: Suffolk or Middlesex Counties (Boston)
- Nevada: Clark County (Las Vegas)
- New York: the Boroughs of Brooklyn, Queens, Bronx, Staten Island, or Manhattan
- Texas: Bexar County (San Antonio), Tarrant County (Fort Worth), or Dallas County
- Washington: King County (Seattle)
To learn more about the recent order, view FinCEN’s Geographic Target Order (link is external), and the FAQs (link is external).
NAR continues to monitor changes to the GTOs, and continues to advocate for pragmatic, risk-based anti-money laundering reforms.
NAR Comments on DOL Independent Contractor Proposed Rule
In late September, the U.S. Department of Labor (DOL) issued a notice of proposed rulemaking revising its interpretation of independent contractor status under the Fair Labor Standards Act (FLSA) with a streamlined economic reality testing to promote certainty for stakeholders, reduce litigation, and encourage innovation in the economy.
In determining a worker’s status as an employee or independent contractor, the proposed rule examines a workers’ economic independence based on: (1) the nature and degree of workers’ control over the work (i.e. setting your own schedule; selecting your own projects; ability to work for others); and, (2) the workers’ opportunity for profit and losses based on workers’ investment (i.e. individual management of investment or capital expenditure on material to further work). Should additional analysis be needed, DOL proposed three additional guideposts for deciding a worker’s status based on: (1) the amount of skill required for work; (2) the degree of permeance of the working relationship between the worker and the potential employer; and, (3) whether the work is part of an integrated unit of production.
NAR submitted a comment (link is external) on the proposed rule, advocating for minimal disruption to the real estate industry that greatly benefits from the ability to be classified as an independent contractor. Many states and some federal laws have codified the ability of real estate professionals to be classified as independent contractors, but there continues to be ongoing scrutiny and challenges to this status. NAR supports DOL’s efforts to provide a clear and consistent standard for evaluating a worker’s status, while preserving existing worker classification authority that allows real estate professionals to be independent contractors.
More than 1,700 comments were submitted on the proposed rule during the public comment period that closed on October 26, 2020. DOL will now analyze this feedback and work to issue a final rule based on those comments by the end of the year. Depending on how long this takes, a final regulation could be subject to repeal under the Congressional Review Act or by a change in the Administration. Stay tuned to nar.realtor for the latest information.
NAR and AARP Announce Agreement to Educate Members on Community Livability
WASHINGTON (November 17, 2020) – The National Association of Realtors® and AARP have teamed up to create a new relationship intended to better assist and engage older Americans.
The collaboration – announced Monday during the fully virtual 2020 Realtors® Conference & Expo – seeks to inform NAR members of the various community factors that best support people as they age. AARP Livability Index data will be integrated into the REALTORS Property Resource® website and mobile app.
“Understanding and better assisting older Americans in their real estate transactions has been a priority of NAR for some time, and partnering with AARP is a continuation of that focus,” said Bob Goldberg, CEO of the nation’s largest trade association. “Highlighting AARP’s Livability Index to Realtors® through the REALTORS Property Resource® will provide valuable insight to our members while positioning them to better safeguard and advise home and property buyers.”
The AARP Livability Index offers vital insight into various community factors that impact property owners of all ages, including transportation and health care. Realtors® will be able to access robust national data, broken down by ZIP code, and pass that information along to clients.
“One of our goals is to help people better understand their housing needs over a lifetime,” said AARP CEO Jo Ann Jenkins. “Clearly, homebuyers and other movers can use more information to help them make choices that meet their needs.
“We want to address the barriers that prevent people from living in their desired communities as they age and I know this relationship with NAR will help us better accomplish that goal.”
The NAR/AARP collaboration builds upon NAR’s existing Seniors Real Estate Specialist® program. The SRES® designation is conferred to Realtors® who complete in-depth training in a wide variety of topics related to homebuyers and sellers over the age of 50.
“Realtors® are put through a rigorous course to earn their SRES designation and upon completion, they’re equipped with expertise on counseling senior clients through major financial and lifestyle transitions,” said Goldberg. “This collaboration with AARP will take Realtors’® efforts in serving older Americans to the next level.”
The National Association of Realtors® is America’s largest trade association, representing more than 1.4 million members involved in all aspects of the residential and commercial real estate industries.
#ACARNews
#IssuesandLegislation