Author: cvarlaurie

CVAR in REALTOR® Party

Citrus Valley AOR joined 2,500 REALTORS® who descended on Sacramento on Legislative Day to stump for homeownership and property rights. You too can have a say, go to http://www.cvarrac.net to find out more!

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*AB 71 (Chiu) – Mortgage Interest Deduction for 2nd Homes – OPPOSE

*C.A.R. Opposing Bill that Would Eliminate Mortgage
Interest Deduction on Second Homes

* CALL TODAY! VOTE COULD BE TOMORROW!

C.A.R. is OPPOSING UNLESS AMENDED AB 71 (Chiu) a bill that would eliminate the mortgage interest deduction for second homes to fund an increase in low-income housing tax credits. While C.A.R. supports increasing the amount of tax credits available for low-income housing, the association is opposed to doing so at the expense of the mortgage interest deduction for second homes. AB 71 will be voted on by the entire Assembly as soon as TOMORROW – Wednesday, May 31st.

Action Item

Urge your Assembly Member to Vote NO on AB 71

Call 1-800-798-6593

Enter your NRDS ID (or the Red Alert PIN number in the chart below)

followed by the # sign to be connected to your legislator’s office.

When staff answers the phone, you can use the following script:  

“Hi, this is (insert your name). I’m a constituent and a REALTOR®. Please ask the Assembly Member to Vote No on AB 71.”

Also, if you use Twitter™, please Tweet the following:

Govt shouldn’t change the rules. , please protect the MID.  #NoAB71

 

Assembly Member PIN Number Twitter™ Handle
Chris Holden 3446 @ChrisHoldenNews
Blanca Rubio 5455 @Blanca_E_Rubio
Freddie Rodriguez 8335 @AsmRodriguez52
Ian Calderon 4670 @IanAD57

 

*Background and Talking Points

While C.A.R. supports increasing the amount of tax credits available for low-income housing, we are opposed to doing so at the expense of the mortgage interest deduction for second homes.

AB 71 (Chiu) would eliminate the mortgage interest deduction (MID) for second homes to fund an increase in low-income housing tax credits. If the MID were eliminated for second homes, 2,152 home sales would be lost in the first year after implementation. The potential impact of the MID elimination is an economic loss of $180.2 million to the state of California in the year following the implementation.

C.A.R. opposes changing the mortgage interest deduction because:

The state shouldn’t change the rules after the fact. People made significant financial decisions, trusting that the mortgage interest deduction would be there to make the property affordable.

The MID is already capped. The amount of the mortgage interest deduction is already capped regardless of whether the taxpayer has one home or two homes.  It’s not right for government to dictate to homeowners how they can allocate their housing dollars!

Second homes are not necessarily “vacation homes.”  Someone faced with a one-way commute of an hour or more may choose to purchase a small condo near where they work in which to live during the workweek.

Local economies and communities will suffer. The economic health of the recreational areas of the state will be harmed by elimination of the mortgage interest deduction on second homes. Homeowners in those areas of the state are going to be hard pressed tofind a buyer if the mortgage interest deduction on second homes is eliminated.

Using the MID as a piggybank sets a dangerous precedent. 

Another C.A.R. Win!

C.A.R. Amendment Included in AB 1381

C.A.R. successfully pressed amendments to AB 1381 (Weber) only minutes before the bill’s scheduled hearing in the Senate.

C.A.R. opposed the bill because it contained surprise amendments added during the last allowable day in the Senate, its second house. Those amendments would have created a new exemption to the real estate license and would have permitted unlicensed agents to broker leases, sales and easements for the placement of outdoor advertising.

After considerable lobbying by both sides, which involved administration officials and the entire Senate, the bill was called back to the Business and Professions Committee. C.A.R.’s member mobilization effort forced the proponents to accept the limiting amendments. The amendments ultimately agreed to make the advertising agents’ rule essentially the same as the existing “principals’ exemption” – that is, a corporation can use its own employees to work on its own transactions without having to have them licensed. Any agency or brokerage on behalf of another or a third party still requires a licensee.

Thank you to all the REALTORS® who contacted their state senators to voice their concerns about AB 1381. Your calls made the difference!

New Regulations Protect Widowed Homeowners

New Regulations Protect Widowed Homeowners

The Consumer Financial Protection Bureau has issued new rules aimed at protecting widowed homeowners from a red-tape nightmare that has caused them to lose their homes to foreclosure.

The regulations, announced Aug. 4, 2016, generally give surviving spouses who are not on a mortgage note the same protections that borrowers have. Those include a ban on so-called dual tracking, in which mortgage servicers negotiate with clients to modify a mortgage while simultaneously pursuing foreclosure.

The rules, which expand and clarify existing guidance from the agency, were long awaited by consumer groups that are pushing similar regulations in a pending California Senate bill 1150.

Advocates say survivors — who already owned their homes or inherit them after a death — face considerable resistance from servicers when they seek loan modifications after losing their spouse’s income.

The office of California Atty. Gen. Kamala D. Harris, who sponsored the California Homeowner Bill of Rights, said the passage of SB 1150 would “provide accountability and an enforcement mechanism that ensures California homeowners reap the benefits from these [new federal] rules.”

Often companies won’t allow a modification until the surviving spouse assumes the loan, which can’t happen until the owner is current on the mortgage — something of a Catch-22.

Advocates also say servicers give them inaccurate information or require unnecessary documents to prove ownership of the home when applying for a modification as a foreclosure proceeds.

The new rules, which take effect in about 18 months, seek to address those issues. In addition to banning the dual tracking of survivors, the rules stop servicers from mandating survivors first get current on payments before receiving a loan modification.

Applicants, however, must still show they can afford even a smaller loan payment and servicers are not required to give a modification.

Consumer groups praised the new rules, but expressed concern that they lack a strong enforcement mechanism.

Critics say that servicers have routinely flouted existing requirements for borrowers, but added companies have performed better in California.  Critics attribute the better performance to the California Homeowner Bill of Rights, which gives borrowers the right to sue to stop a foreclosure or for economic damages after one occurs if servicers don’t follow state requirements.

The Homeowner Bill of Rights, however, does not apply to survivors or other so-called “successors in interest” who aren’t on the mortgage note.

A bill that would extend those rights to such individuals passed the state Senate earlier this year. The full Assembly is expected to take up the bill, SB 1150, this month.

While the new federal consumer rules give survivors some rights to sue servicers, the ability to bring lawsuits is far more expansive under the pending state bill.