NAR Urges Congress, Administration to Approach Changing FHA Slowly

The National Association of Realtors® urged Congress and the administration to move cautiously before making changes to the Federal Housing Administration program that has served the needs of millions of American families for more than 75 years without needing a federal appropriation.

FHA remains financially strong because it has taken steps to ensure solid underwriting standards and responsible lending practices, said Charles McMillan, NAR immediate past president, in testimony before the House Subcommittee on Housing and Community Opportunity today.

“As the leading advocate for housing issues, NAR believes that one of the best ways Congress can help strengthen FHA is to quickly consider and pass legislation that would make current loan limits permanent,” McMillan said. “It’s important to note that higher balance FHA loans perform better than lower balance ones. While some argue that higher balance loans put taxpayers at risk, such loans actually strengthen the program and reduce risk to the fund.”

NAR strongly supports H.R. 2483, the “Increasing Homeownership Opportunities Act.” Current FHA loan limits are as high as $729,750 in high-cost areas, and are set to expire at the end of the year and revert to lower amounts, greatly hindering the housing recovery process. A decrease of current limits would adversely affect 612 counties in 40 states and the District of Columbia.

Explaining that FHA has played an important role in the recent housing and economic crisis by filing the gap left by private lenders, McMillan said FHA insured almost 30 percent of single-family mortgages in 2009 and more than 50 percent of first-time buyer loans. “Historically, FHA’s market share has hovered between 10 and 15 percent of all loans. And when the private market is strong enough to return, we welcome a reduced FHA market share,” he said.

McMillan said NAR strongly opposes H.R. 3706 that would raise the FHA downpayment. “While that would increase an individual’s investment in the home, it would not add a penny to FHA’s reserves and would disenfranchise many FHA borrowers,” he said.

NAR also opposes a new FHA initiative that increased the up-front mortgage insurance premium (MIP) from 1.75 percent to 2.25 percent because it adds to the closing costs home buyers already face. NAR supports legislation to reasonably increase the annual MIP to replace FHA capital reserves, but in turn, FHA should reduce the up-front premium due at the closing table.

McMillan said NAR was also concerned that FHA wanted to decrease seller concessions to 3 percent. Reducing seller concessions could put homeownership out of reach for many buyers, he said, because it could require buyers to pay more at closing.

McMillan applauded FHA’s stepped up enforcement and oversight of lenders making FHA loans. In 2009, FHA removed approval of or suspended 274 lenders. “Realtors® support adding more tools to help FHA protect borrowers and taxpayers,” he said.

2-10 Home Buyers Warranty

Starting January 1, 2010, a new Environmental Protection Agency (EPA) mandate will change the way your clients' home air conditioners are serviced and repaired. At that time, manufacturing HVAC equipment that primarily utilizes Freon® (also known as R-22 and HCFC-22) will be banned, and the nation will begin using products such as Puron® (also known as R-410A) as the standard refrigerant for air conditioners. This change will affect your buyers and sellers in many ways. Costs will increase
A variety of factors will lead to increased costs:

•R-22 parts may no longer be available.
•Since R-410A parts are not always interchangeable with R-22 parts, replacement of the entire system might be necessary.
•Physical changes to your system may be needed to accommodate the larger equipment required in air conditioners using R-410A refrigerant.
•The supply of R-22 refrigerant will be limited, causing the price to increase.
•Repairs may take longer because you may want to explore your options and wait for less expensive parts, if they are available.
•New HVAC equipment may be more expensive to purchase and install

Manufacturers' warranties may not provide full coverage
Typical manufacturers' warranties only cover parts for one year, in most cases. Labor is a significant part of any repair. Each manufacturer may take a different position if an R-22 system cannot be repaired or parts are not available.
System and appliance warranties/ service contracts typically exclude coverage resulting from government-mandated changes

Most system and appliance home service contracts/warranties contain language that effectively excludes the additional costs resulting from this government-mandated change. Each home service contract may deal with this situation differently.
Your Disclosure Responsibility
You may want to consult a licensed real estate attorney to determine if there are specific disclosure requirements.

You may also want to:
•Consider adding a disclosure form that details the potential impact of the new refrigeration requirements with all home sales.
•Offer a home service contract/ warranty on each transaction that includes R-410A coverage from a company that covers the transition.
•Have the parties to the transaction sign the disclosure form as evidence that they were made aware of the R-410A issue and were offered a home service contract/ warranty.
•Select a company with R-410A coverage in the base plan. This can be far too costly for your home buyers, to leave to chance or options

2-10 Home Buyers WarrantySM has taken proactive steps to address this change by upgrading our coverage to include R-410A covering costly upgrades, reducing your liability and eliminating risk to homeowners. Visit www.R410ASolutions.com to answer all your questions concerning the impact of this new government mandate to you and your clients or call 877-777-3188 to deliver real time answers to agents and homeowners.

Restaurant Wednesday

Although PM could be considered Thai-fusion, most of the fare created by chef/owner Arnold Myint incorporates flavors from all around the globe. From creative cocktails, boutique wines and speciality beers to curries, burgers and sushi, the menu has something to offer everyone.

location:
2017 Belmont Boulevard
Nashville

615.297.2070
pmnashville.com

Tennessee foreclosure rate ranks No. 26

Residential foreclosures in Tennessee jumped 6.8 percent in January, and the state ranked No. 26 for its overall foreclosure rate.

There were a total of 3,911 foreclosure filings in the Volunteer State in January, an increase of 6.8 percent compared to January 2009 but a decrease of 17.8 percent compared to the previous month, according to RealtyTrac Inc.’s U.S. Foreclosure Market Report.

One in every 705 Tennessee homes received some type of foreclosure filing — default notices, scheduled auctions and bank repossessions — during the month. That ratio is lower than the national average of one in every 409 U.S. homes receiving a filing in January.

Nationally, foreclosure filings fell 9.7 percent from the previous month, but rose 15 percent compared to January 2009.

“January foreclosure numbers are exhibiting a pattern very similar to a year ago: a double-digit percentage jump in December foreclosure activity followed by a 10 percent drop in January,” said James J. Saccacio, chief executive officer of RealtyTrac, in a statement. “If history repeats itself we will see a surge in the numbers over the next few months as lenders foreclose on delinquent loans where neither the existing loan modification programs nor the new short sale and deed-in-lieu of foreclosure alternatives works.”

Topping the list with the highest foreclosure rates are Nevada, Arizona, California and Florida.

Mississippi ranked No. 45 and Arkansas No. 20.

Realtors® Partner with National Community Stabilization Trust to Revitalize Neighborhoods Wracked by Foreclosures

The National Association of Realtors® has joined forces with the National Community Stabilization Trust to help rebuild American communities devastated by the foreclosure crisis.

The collaboration will bring Realtors and the more than 1,400 state and local Realtor® associations into a side-by-side relationship with leading national nonprofits, as well as with state and local leaders, to develop comprehensive and targeted plans to rebuild communities. The partnership was made possible by the new federal Neighborhood Stabilization Program, which provides $6 billion to reclaim neighborhoods wracked by high levels of foreclosed and abandoned property, property disinvestment, extremely low prices and low resident confidence.

“Realtors® build communities and have the market expertise and property transaction tools to help local housing organizations understand local market conditions and how to put foreclosed houses back into the hands of stable homeowners,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz. “Working in this partnership with NCST gives Realtors® a seat at the community table to perform a leadership role in restoring vitality to communities across this great nation.”

“Neighborhoods across America have been decimated by high concentrations of abandoned and foreclosed homes. To reverse neighborhood decline, we need the Realtor® community working hand in hand with other housing providers,” said Craig Nickerson, president of NCST. “This ambitious new campaign will harness the unique abilities of Realtors® to remarket newly renovated homes and to rebrand the tarnished image of hard-hit neighborhoods.”

Through a nationwide network of state and local associations, Realtors® have been engaged in foreclosure prevention efforts since early 2009 as part of the NAR’s Foreclosure Prevention & Response Program.

“The outstanding leadership of many state and local Realtor® associations over the past year to become active participants in community problem-solving has proven that Realtors® are a valuable local community partner,” said Golder.

She cited strong efforts by the leadership in the Chicago Association of Realtors®, the North Metro Realtors® (Minn.) Association and the Realtor® Association of Great Fort Lauderdale (Fla.) as examples of Realtors® working through NSP to revitalize neighborhoods.

While NAR and the NCST will be working nationwide on this new initiative, a focus will be placed on enhancing capacity in states experiencing the highest levels of foreclosure and abandonment.

Beginning January 27, NAR will initiate contact with targeted state associations, based on severity of foreclosure problems. In addition, NAR will provide in-depth training and education materials developed and provided by NCST on www.realtor.org/foreclosure.

The National Community Stabilization Trust is a nonprofit organization that facilitates the transfer of foreclosed and abandoned properties from financial institutions nationwide to local housing organizations, and provides access to financing in order to promote productive property reuse and neighborhood stability. In collaboration with state and local governments, the Stabilization Trust builds local capacity to effectively acquire, manage, rehab and sell foreclosed property to ensure homeownership and rental housing are available to low- and moderate-income families. Visit www.stabilizationtrust.com to learn more about the National Community Stabilization Trust.

MBA buys last house on Brighton

A project 14 years in the making is likely to come to fruition this summer.

Montgomery Bell Academy has bought the last of 15 houses along Brighton Road, becoming the sole owner of a strip of land that could eventually serve as tennis courts and parking.

Metro Traffic and Parking Commission recently approved the all-boys school’s request to seal off Brighton Road, a city street about a quarter of a mile long that runs between MBA’s sports fields and acquired properties.

The school now needs the final OK from Metro Council to close the street, a process that requires three rounds of votes, expected in March.


“It does look positive, largely because we’ve spent a lot of time with the neighbors over 15 years, and people trust us a little more and know that we’re doing some things to improve the neighborhood,” said Brad Gioia, headmaster at the school.


Brighton Road closure is an integral piece of a larger, multimillion-dollar project to build underground parking with a soccer field atop it off Wilson Boulevard, make environmental upgrades in a creek buffer zone, add parking and relocate tennis courts.


The second phase of the initiative calls for a new classroom building and a new dining hall in the middle of campus, Gioia said.


But, like most major development projects, this one, too, has involved numerous meetings with neighbors, whose concerns range from projected increase in traffic to aesthetics.


“One concern has to do with screening the activities that go on campus from the residents of properties. MBA has been agreeable to build a berm,” said Irwin Venick, president of Woodlawn West Historic Neighborhood Association.


His house on Kimpalong Avenue backs into the almost vacant strip of land along Brighton Road that will be converted into tennis courts and parking spaces.

“One of our feelings is that MBA should be treating the back of its property as well as it treats the front of its property, and a berm goes a long way in that regard, and we appreciate them moving in this direction.”

May Town lands back on Metro Council agenda

The Metropolitan Clerk’s office has confirmed that District 1 Metro Councilman Lonnie Matthews Jr. has asked that the controversial May Town proposal be placed on the council’s March 2 public hearing agenda.

The $4 billion, 500-acre May Town development proposed a dense and walkable commercial and retail office project in the peninsula of the Cumberland River called Bells Bend.

The Metro Planning Commission rejected proposed changes for the area’s land use plan in June, and the council, which has final say on the proposal, subsequently delayed its own consideration.

Tony Giarratana initially considered proposing a smaller version of the plan, but later reconsidered. Bells Bend developers, including Jack May, whose family owns the property, announced in November that Giarratana would walk away from the project.

The project will need approval from two thirds of the council to go forward.

Nashville Business Journal - by Eric Snyder Staff Writer

Home prices still expected to fall

Nashville home prices dropped 3.9 percent in the third quarter of 2009 compared to one year ago, according to data released today by Fiserv and its Case-Shiller Index.

Nationally, home prices dropped 8.9 percent in the same time period.

However, Fiserv said national home prices increased 2 percent in the third quarter, on top of another 2 percent increase in the second quarter. According to Fiserv, it’s “the first back-to-back quarterly price gains the U.S. housing market has seen since 2005.”

However, Fiserv said “the housing market will continue to be buffeted by strong headwinds in 2010 due to large supplies of distressed properties, rising interest rates and high unemployment rates.”

Fiserv Case-Shiller reaffirmed its estimate that home prices will decline 11.5 percent in 2010.

“It appears that most of the housing demand from first-time buyers was pushed forward to 2009 in anticipation of the November expiration of the homebuyer tax credit,” said David Stiff, Fiserv’s chief economist. “So, it seems unlikely that the extension and expanded eligibility of the credit through April 2010 will substantially boost demand this year.”

The median home price nationally currently sits at $178,200. The median monthly mortgage payment in the 2009 third-quarter jumped to 15 percent of median family income, an increase of 1 percent over the second quarter.

According to data released today by RealtyTrac, foreclosure rates slowed in the Nashville-Davidson-Murfreesboro-Franklin area in 2009, dropping 1.92 percent compared to 2008. However, the 9.253 properties with foreclosure filings in 2009 were 75 percent more than in 2007.

Nashville Business Journal - by Eric Snyder Staff Writer

Music City Center enters home stretch

As the proposed Music City Center convention hall enters a final week of debate, activists on both sides of the issue are fortifying their positions.

Also, Metro Council members continue to educate themselves on the $585 million project that would replace Nashville Convention Center with a new downtown venue.

Both the Music City Center Coalition and opposition group Nashville’s Priorities have sent e-mails in an effort to galvanize their troops. In a message this morning, the coalition urged supporters to attend a rally on the steps of the Metro Courthouse today “to show community wide support for the Music City Center.”

“The Music City Center will create thousands of new jobs and strengthen our local tax base at no cost to local taxpayers,” the e-mail states.

The latest study of Music City Center predicts the proposed new downtown convention hall would generate $134.9 million in new annual spending in Nashville by 2017 and support 1,524 jobs.

In a Friday evening e-mail, Nashville’s Priorities President Kevin Sharp seized on the results of a public opinion poll commissioned by WSMV-TV. The poll of 401 Davidson County registered voters found that 26 percent support the project, 50 percent oppose it, 21 percent are undecided and 3 percent are unfamiliar with the proposal.

In addition to noting the poll results, Sharp encouraged Music City Center opponents to sign a petition urging a public vote on the proposal, contact their council members and attend a public hearing tonight to voice their concerns.

Related upcoming events:
Today, 3 p.m.: The Nashville Area Chamber of Commerce and the Nashville Convention & Visitors Bureau are holding a briefing for their members at the DoubleTree Hotel downtown. Mayor Karl Dean and Metro Finance Director Rich Riebeling will speak and take questions.

Today, 4:45 p.m.: The Music City Center Coalition’s rally begins at 4:45 p.m. on the Metro Courthouse steps.

Today, 5 p.m.: A joint meeting of the budget and finance committee and convention, tourism and public entertainment facilities committee of the Metro Council at the Metro Courthouse. The meeting will begin with a question-and-answer session for council members. That will be followed by a public hearing on the project that is scheduled to begin at 6:30 p.m.

Tuesday, 6 p.m.: Souncil members Frank Harrison, Jamie Hollin, Mike Jameson, Erik Cole and Karen Bennett will host a community discussion of the project at the Metro Police Department East Precinct.

Tuesday, 7 p.m.: Council members Kristine LaLonde, Jason Holleman and Sean McGuire will hold a community discussion of the project at West End Middle School.

Thursday, 5 p.m.: at the Metro Courthouse, Metro Council’s budget and finance committee and convention, tourism and public entertainment facilities committee will deliberate the proposed financing package for Music City Center.

Jan. 19: A final vote on the financing package is scheduled for a full council meeting.

Nashville Business Journal - by Brandon Gee Staff Writer

Nashville-A Great Place to Live!

Corporate relocations, industry growth define decade of transformation for Middle Tennessee
Nashville Business Journal - by Brandon Gee Staff Writer

From an economic development perspective, the first decade of the 21st century in Middle Tennessee was marked by blue-collar losses and corporate relocations. Could the next 10 years be defined by solar energy and electric cars?

Recent years have been dominated by bad economic news. Middle Tennessee has lost jobs in nearly every occupational category. In this final year of the decade alone, the metropolitan area lost about 30,000 private sector jobs. The metro area’s unemployment rate, which stood at 3.4 percent when the decade began, now hovers above 9 percent.

But despite a gloomy close, local officials say the decade overall was a good one for the region and has left Nashville well positioned for the future.

“I think you would have to say, overall, Nashville’s story has been a very positive story,” Nashville Mayor Karl Dean said. “... There is a strong story to tell, and I love doing it.”

Proposals for a new convention center and a medical trade center downtown are being touted as boons to the existing health care and tourism industries going forward, and growth industries such as higher education, renewable energy and professional services have gained a foothold here as well.

Losses have centered around the manufacturing industry, including major downsizing at the General Motors Corp. plant in Spring Hill and the loss of Peterbilt’s truck assembly plant in Davidson County.

Those two losses alone represent about 9,000 jobs, but the long-term statistics back the positive assessment of the decade. From January 2000 to October 2009, the number of non-farm jobs in the metro area has increased from 683,700 to 727,500, a gain of 6.4 percent.

Manufacturing was the most glaring exception. Jobs in that category fell 33.4 percent, from 95,400 to 63,400. But manufacturing losses have been covered by gains in other sectors. Employment increased 39.4 percent in educational and health services, 20.4 percent in leisure and hospitality, and 9.8 percent in professional and business services.

By near consensus among officials interviewed by the Nashville Business Journal, the biggest economic development coup of the decade was the relocation of Nissan North America’s headquarters from California to Williamson County — if not in terms of jobs, then certainly in terms of notoriety.

“It’s marketing you could never pay enough for when a company makes that kind of decision,” said David Penn, director of the Business and Economic Research Center at Middle Tennessee State University.

The move was announced in 2005, and the relocation was completed in 2006. After working out of temporary facilities in downtown Nashville, the company opened its new Nissan Americas campus in Franklin in 2008.

Previously, in 2004, the Nashville area added 31 company headquarters and major facilities representing more than 11,000 new jobs. That list included two companies with annual revenue of more than $100 million: industrial filtration products maker Clarcor Inc. (NYSE: CLC) and Louisiana-Pacific Corp. (NYSE: LPX).

In the intervening years, Nashville twice was named the “hottest” city in the United States for business relocation or expansion by Expansion Management magazine, and the state ranked third on Site Selection magazine’s 2007 Governor’s Cup rankings.

Keith Herron, Mid-South region president for Regions Bank and co-chairman of the Nashville Area Chamber of Commerce’s Partnership 2010 economic development initiative, said the national attention was unprecedented.

“What’s happened is you have an economy that’s made up of really a bunch of industries across the board,” he said. “The city is attracting so many bright people with great ideas.”

Regional growth
Matt Largen, director of the Williamson County Office of Economic Development, said five corporate relocations alone — Nissan, Mars Pet Foods, Healthways, Community Health Systems and Verizon Wireless’ state headquarters — have created 5,700 jobs that didn’t exist in Williamson in 2000.

The county also has suffered some losses. Some examples include PlusMark, a wholly owned subsidiary of American Greetings Corp., closing a Franklin plant in 2004 that 750 people worked at; Worthington Precision Metals closing a manufacturing plant in 2006, idling 117 workers; and Plastech Engineered Products doing the same in 2008 at a plant that employed 220 people.

But overall, Largen said it was a great decade for Williamson County, and he agreed that Nissan’s move was the most important. In addition to the 1,300 high-paying jobs it brought to the county — which joined thousands more that already existed at the automaker’s Smyrna manufacturing plant — Largen said the high-profile move has put Williamson County on the lists of other companies evaluating relocations that it never could have attracted before.

Wilson County also experienced tremendous growth over the course of the decade. Its population grew from about 89,000 in 2000 to more than 110,000 today. The growth occurred despite the loss of 1,000 Dell Inc. jobs to Nashville and Toshiba America Consumer Products closing a 1978 plant that employed as many as 1,200 people at its height.

But losses have been offset by industrial announcements from the likes of Kenwal Steel, Leviton, TACLE Seating U.S.A. and Permobil Inc., and gains in other sectors.

Home prices continue decline

The average area home price moderated in October, but still declined compared to one year ago, according to data released today by First American CoreLogic and its LoanPerformance Home Price Index.

Home prices in the Nashville-Davidson-Murfreesboro-Franklin market declined by 4.7 percent in October compared to October 2008. That's compared to a 7.3 percent year-over-year decrease for September.

The declines are heavily impacted by distressed or emergency sales. When this data is excluded, October prices declined year-over-year 2.7 percent; September prices declined 5.4 percent year over year.

First American CoreLogic is predicting that home prices will rebound over the next 12 months, forecasting a 2.2 percent increase in October 2010, including distressed sales.