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Call To Action

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Real Estate Agent with Bob Leigh & Assoc., LLC

Call To Action
by Pam Simpson
The Kudzu Vine

coffeeThis post has been brewing for some time now.  All that was needed was for something to spur me into action and I got that "something" yesterday from reading Kevin Sandridge's post on H.R. 600.  I found Kevin's blog by way of Jeff Belonger in his Mortgage Pro Week in Reviewpost.  H.R. 600 is a bill to reinstate downpayment assistance.

There has been endless debate over whether these seller funded DPA programs should be allowed.  The main point of this blog is not to debate them further; however, I will say that I have not had a single buyer who used a downpayment assistance program default on their mortgage loan.  I know there is some statistic out there that says otherwise, but you could not prove it by my experience.  Many states have their own form of "downpayment assistance" in the way of bond programs and there are also VA and USDA $0 down loans.  I see no difference.

After reading Kevin's post on H.R. 600, I paid a visit to the U.S. Congress website.  I found out that this bill is presently in the House Committee on Financial Services.  I found my Congressman's website and sent an email to let him know how I felt about this issue.

Then, it occurred to me that I have not seen a "Call To Action" email that NAR (National Association of REALTORS) sends out when it wants its members to contact their Representatives.  That's when the brewing really picked up.  Why are they not informing their members about proposed bills that affect the housing industry? 

sheepThe last time I blindly followed a NAR call to action, I later found out it contained an item with which I strongly disagree - abolishing the downpayment assistance programs.     

The old saying comes to mind:  Fool me once-shame on you.  Fool me twice-shame on me.

 

 

I am not a NAR basher.  I think they have done a lot of good for the real estate profession and the housing industry, but I feel I can no longer trust them to look after MY best interests.  If anyone from NAR happens to stumble upon this, please get with the program!  This is not the 1970s.  Your membership is no longer a bunch of blue-haired old ladies who got into real estate to socialize.  Some of us have chosen this as a profession.  We are running a business.  We are serious and we expect more out of the organization that claims to be the voice of REALTORS.  The more NAR, as an organization, shows its irrelevance and out-of-touch attitude, the quicker its dues paying membership will dwindle.

I debated about making this post "Members Only", but decided it would be good for the general public to see some of the issues we deal with.  Real estate is not all about flashing a smile and driving people around.  SomeMost of us really care about our clients, and the housing industry as a whole.  We want to stay informed about legislative issues and regulations that affect us and our clients.  Thank goodness for networks like Active Rain.  We certainly can't rely on NAR to keep us informed.    

So, here is my own Call To Action.  Whether you are for downpayment assistance programs or against; Megaphonewhatever the issue, contact your representative and let them know how you feel.  They are supposed to be working for us.  Let them hear our voices!
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About the author:
 
Pam Simpson is an Assoc. Broker with Bob Leigh & Associates, LLC in Northwest MS.  Copyright©  2009 by Pam Simpson.  All rights reserved...***Call To Action***

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Comments (40)

Gena Riede
Riede Real Estate, Lic. 01310792 - Sacramento, CA
Real Estate Broker - Sacramento CA Real Estate (916) 417-2699

Pam, I agree. No matter what your stand is, it is important to let our voices be heard and contact our representatives.  Thanks for reminding everyone.

Jan 28, 2009 01:26 PM
Roland Woodworth
Blue Cord Realty - Clarksville, TN
Blue Cord Realty

The Down Payment Assistance program in many cases will raise the actual sales price by 3.25% Many homes will not carry the additional amount as seller like to max the listing price to maximize their profits.

Jan 28, 2009 01:33 PM
Kevin Sandridge
Signature Home Funding - Winter Haven, FL
Winter Haven Mortgage Broker

Hey Pam!  Wow, I was surprised to see my name pop up here.  I'm so glad you're helping to get the word out re: DPA and the revised / reformed version of it promised by HR 600.  Keep spreading the good word!  :)

 

Kevin Sandridge
Winter Haven, FL

Jan 28, 2009 01:36 PM
Anonymous
Mikey

Seller funded DPA is a horrible idea. It rams the market with marginal buyers before they are ready to buy. You'll get a short term boost but it will all blow up at tax payer expense eventually. If a buyer can't scrape up 3.5% for FHA they really aren't ready for the responsibility of home ownership. Plus with valuation being such an inexact science it is much easier to get an inexperienced borrower in way over their head (equity-wise) while the realtors and sellers make out. The dirty secret is appraisals are an inexact science and are only protection for lenders from large-ish mistakes in valuation.

People are going for short term easy money (increase the buying pool via Seller funded DPA) at the expense of long term growth. This impact will be seen 10 to 15 years down the road and people will be saying nobody could possibly have seen this coming. When you wonder why sales are slow in the future and people are soured on real estate, remember this post.

Jan 28, 2009 07:09 PM
#24
Russ Ravary ~ Metro Detroit Realtor call (248) 310-6239
Real Estate One - Commerce, MI
Michigan homes for sale ~ yesmyrealtor@gmail.com

Down Payment assistance programs helped fuel the mess we are in. If you can't afford to put 3 1/2 % down then you shouldn't be buying a house.  How are you ever going to pay for repairs if you can't save 3 1/2%.

Jan 28, 2009 08:42 PM
Mark Watterson
Salt Lake City, UT
Utah Real Estate

Down payment assistance with sane underwriting and mortgage insurance.  That don't create expense for the taxpayer because mortgage insurance covers the defaults.  I don't have any issue with them.  

The negative amortization loans, no doc, stated income and unlimited non-owner occupied loans that are creating liability for taxpayer with the bailouts.  I do have a problem with those and the fact they we allowed to happen until they destroyed the financial system because there was no sane regulation of the industry.

Jan 28, 2009 11:29 PM
Pam Simpson
Bob Leigh & Assoc., LLC - Senatobia, MS
GRI, Broker-Assoc.

Margaret-it is encouraging to hear that the association recognizes there is a problem.  I was not aware of the meeting.  I am certainly not young by any stretch of the imagination, but am not so inflexible that I can't rethink the way I do business.  I have tried to voice my concerns to the local chapter about legislative issues.  Their answer is to give more money to the PAC.  I did sign up to serve on a local committee  which required taking a special class on ethics and procedures.  I acknowledge that NAR has a lot on its plate.  My gripe is that with all the dues we pay and all the PAC money they get, why are the so terrible when it comes to legislative issues?    

Jan 28, 2009 11:48 PM
Pam Simpson
Bob Leigh & Assoc., LLC - Senatobia, MS
GRI, Broker-Assoc.

Gena-thanks for the comments.  That is exactly MY call to action-to get involved. 

Roland - I do understand that argument against DPA - I have certainly heard it before, but that has not been my experience.  The house is only going to appraise for so much and nothing more.  

Kevin-thanks for stopping by and for writing about this in the first place.

Mikey-This is the same argument used by most who are against DPA.  As I stated in my original post, that has NOT been my experience and that is all I have to go on.  DPA was used widely in my area.  There has not been a single default on the loan in any of the DPA transactions I have been involved with.  If you really believe that a buyer is not worthy of home ownership because they don't have 3.5% saved for a downpayment, are you advocating the abolition of VA loans, or USDA, or state bond money programs?

Jan 28, 2009 11:58 PM
Pam Simpson
Bob Leigh & Assoc., LLC - Senatobia, MS
GRI, Broker-Assoc.

Russ-thanks for your point of view.  As I commented previously, my experience with these programs have been positive.  I purchased my first home with state bond money because I did not have the funds for downpayment.  I paid my mortgage on time every single month, made repairs, lived there for about 10 years then sold it.  I will never believe that just because one does not have the funds for downpayment it makes them unworthy of home ownerhsip.

Jan 29, 2009 12:03 AM
Pam Simpson
Bob Leigh & Assoc., LLC - Senatobia, MS
GRI, Broker-Assoc.

Mark- thanks for the comments.  Sounds like the voice of reason.  I totally agree about needing prudent guidelines and restrictions. 

Jan 29, 2009 12:05 AM
Jeff Bonham
The Real Estate Masters Institute - Springfield, MO
CEO

Pam-

I always love reading posts from people with a well thought out point of view.  As a professional organization we have many things to thank NAR for, as well as many things we would like to improve.  It is critical that as professionals we get involved and let our voice be heard at the local, state and national levels as to what our current needs are and to also say that we are here to help it get done.  Raising standards within our industry and attracting more people, like yourself, who operate from a high degree of integrity, passion, sincerity, and professionalism is just what the doctor ordered.  If the caliber of the constituency is raised, the level of leadership will be required to rise with it.

As a newly relocated person to NW MS, I am thrilled to see there are other high minded Realtors in the area:-)

Best wishes in your success.

Jeff Bonham

Jan 29, 2009 02:27 AM
Emily Lowe
RE/MAX Homes and Estates, Lipman Group - Nashville, TN
Nashville TN Realtor

I agree with you - I am in favor of down payment assistance programs - especially for the first time buyer.  I think everyone deserves a chance to own a home. 

I am also wary of NAR and what I vote with them on and against them on!

Congrats on the feature and thanks for the post!

 

 

Jan 29, 2009 04:17 AM
Erick Blackwelder
Cell: 703-677-1120 - Woodbridge, VA
Text or call Erick now at 703-677-1120.

NAR is irrelevant.

NAR is so far out of touch with the movers and shakers in real estate, we 5% of agents who do 95% of the business.

NAR needs the bottom 95% of the members, the low producers, to keep their revenue stream strong.

Were NAR to shift gears and focus information and resources on we who do all the business, their topics and resources would go over the heads of the lame.

That's why I participate in Starpower, CRS, By Referral Only, and other groups who focus on helping us build better systems and staying on the leading edge.

Jan 29, 2009 04:27 AM
Pam Simpson
Bob Leigh & Assoc., LLC - Senatobia, MS
GRI, Broker-Assoc.

Jeff - thanks for the positive comments and welcome to Northwest MS!  I read your profile and wow - you have moved around a lot.  I am a transplant from across the state line in TN.  Best wishes and continued success!

Jan 29, 2009 06:51 AM
Pam Simpson
Bob Leigh & Assoc., LLC - Senatobia, MS
GRI, Broker-Assoc.

Emily - thanks for your input.  This has taught me to take it upon myself to look into the matters that NAR wants me to take action on.  It may take a little more time to investigate the issue myself, but I know I will be better for it.

Erick - interesting observations.  I appreciate your comments.  I still have hope that NAR will turn around and get it together.  I think it would help if they would have younger, more broad-minded thinkers making decisions.

Jan 29, 2009 06:57 AM
Amanda Harstine
Century 21 Integrity Real Estate Group - Syracuse, IN

Amen Sister! Good thoughts in my opinion.

Jan 29, 2009 06:57 AM
Kathleen Lordbock
Keller Williams Realty Professionals - Baxter, MN
Keller Williams Realty Professionals

Thanks for getting out there and tooting your horn - here is some help I recruited for you.

horn

Jan 29, 2009 08:03 AM
Pam Simpson
Bob Leigh & Assoc., LLC - Senatobia, MS
GRI, Broker-Assoc.

Amanda-thanks for stopping by and adding your thoughts.

Kathleen - Hee Hee Hee.  I'm just quirky enough to like something like that.

Jan 29, 2009 08:29 AM
Anonymous
Mikey

"This is the same argument used by most who are against DPA.  As I stated in my original post, that has NOT been my experience and that is all I have to go on."

FHA has released statistics regarding DPA, Nemeiah and other DPA providers dispute those statistics. My money is on the people who are losing money on the program statistic over those trying to make money off of it. Do you really think the FHA wants to squash a program that works? It is losing money so it is getting squashed.

"If you really believe that a buyer is not worthy of home ownership because they don't have 3.5% saved for a downpayment, are you advocating the abolition of VA loans, or USDA, or state bond money programs?"

Kind of funny, You made my point that I already made. **IF** you want taxpayers to subsidize these buyers because they are defaulting too much then keep DPA. The 3 programs you mention are taxpayer subsidized programs. Quite simply they couldn't exist as a sell funding entity. The FHA is much bigger than any of those other programs and so it has to be conservative. It also is self funding unless they make some big horrible mistake in underwriting for a few years (like letting seller funded DPA programs in). They have already had to request money because of losses and should be tightening guidelines not expanding them. The money involved is enormous. 3.5% down is not an unreasonable amount to ask. It is short term gain for some which will result in a long term loss for all. 100% financing in large quanties is very dangerous to the market. Sure it's fun while everything is going good, but when things go South they are downright toxic.

Jan 29, 2009 03:23 PM
#39
Pam Simpson
Bob Leigh & Assoc., LLC - Senatobia, MS
GRI, Broker-Assoc.

Mikey-I understand your oppostion.  We will just have to agree to disagree.  If you feel so strongly about this issue, I urge you to contact your representaive and tell them to vote "no" to this bill. 

Jan 30, 2009 12:36 AM