It’s not subprime mortgages or liar loans or even rate resets, according to the author, who lays out some compelling research conclusions; instead, it’s “whether or not the homeowner has or ever had an important financial stake in the house.” That being the case, he goes on to assert that the Obama Administration’s efforts to stanch the bleeding is focused on the wrong things. Lowering obligation ratios, he writes, isn’t the issue: “A significant reduction in foreclosures will happen when and only when housing prices stop falling and unemployment stops rising.”

Although the government is throwing money — almost $2 trillion and counting — at the mortgage markets with the intent of stabilizing house prices, its methods are poorly targeted. While Federal Reserve actions have succeeded in reducing mortgage interest rates, low interest rates induce refinancings more than they do home purchases.

To be sure, refinancings may put money in peoples’ pockets, but it is home purchases that directly impact house prices. Nevertheless, housing prices are likely to stop falling fairly soon with or without government policies. That’s because current prices are approaching their long-term, inflation-adjusted pre-bubble level. These pre-bubble prices appeared to be a long-term equilibrium, meaning that prices would be expected to return to those levels once the government’s efforts to artificially increase homeownership receded. Unfortunately, recent attempts by politicians such as Barney Frank (D., Mass.) to again artificially increase homeownership levels might delay this return to sustainable equilibrium prices.

Read it here.

Previously, homeowners with an LTV greater than 105 percent could not refinance under HARP. This often lead to financial hardship and even foreclosure for many of those homeowners who saw their mortgage payments increase once their rate reset up.

With the LTV raised to 125 percent, many of those who did not previously qualify now do. Those who now qualify under the raised ceiling may be able to lower their mortgage payments and/or better budget their money with a new (lower) fixed mortgage rate. This should help keep more people in their homes.

There are some restrictions:

• The loan mush be currently owned or guaranteed by Fannie Mae or Freddie Mac
• The homeowner(s) must be current on their mortgage payments
• The homeowner(s) must meet all HARP criteria

Here’s the official Federal Housing Finance Agency press release and fact sheet (click here if you don’t see the document below):

Fannie Freddie Raise Refi LTV to 125% 7-1-09 –

Like most things coming from Washington over the past, oh, nine to 15 years, in order to get the votes it needed, it throws lots of money around. But it does do some good — capping greenhouse-gas emissions for the first time, requiring the use of renewable energy, and putting money into clean energy.

So what does this have to do with real estate? (Aside from maybe buying those shoreline homes a bit more time before they’re under water?)

The part of the bill that’s causing some consternation is section 204: Building Energy Performance Labeling Program. It requires the establishment of

…a building energy performance labeling program with broad applicability to the residential and commercial markets to enable and encourage knowledge about building energy performance by owners and occupants and to inform efforts to reduce energy consumption nationwide.

That had some folks worried. If all homes had to have an energy rating, well, who would pay for it? Who would do it? How much would homeowners have to spend to improve their ratings? Would homeowners be required to meet new efficiency standards? How would it affect sales? What other ripple effects would it have? And so on.

Enter NAR and its lobbying effort, which amended the bill — no small feat!

Meet subsection (m):

(m) New Construction- This section shall apply only to construction beginning after the date of enactment of this Act .

That doesn’t answer all the questions, of course, but it at least reduces the effect and reduces the number of things for Realtors to worry about.

We’ll of course be tracking the bill as it winds its way through the Senate, and — assuming it passes — will give you a detailed analysis on how it affects you and your clients.

1. Read all these instructions carefully before proceeding.
2. You have five answers from the magazine. Take the first letter of each.
3. Give those letters a numeric value using the traditional A=1, B=2, etc.
4. You now have five numbers. Add the first four.
5. Take that number and subtract the page number last month’s contest appeared on.
6. Of that number and the last of your five original numbers, take the smaller of the two.
7. Turn to that page in the magazine.
8. In the main text (i.e., not the boxes), write down the first italicized word.
9. Take the middle letter of that word.
10. Take its numeric value (again, A=1, etc.).
11. Double it.
12. Note what letter has that value. (I.e., if you end up with 5, the letter is "E.")
13. Turn to the masthead on page 1 of the magazine.
14. Only one person on the masthead has a last name that begins with that letter. Write down all of this person’s designations (e.g., CAE, GRI, whatever) without punctuation.
15. Add the numeric value of each of those letters.
16. Take the square root of that number.
17. Ignore the previous instructions.
18. Curse yourself if you didn’t read all these instructions first.
19. Turn to the back cover of the magazine.
20. Note the person wearing a name badge in the photo.
21. E-mail that person’s name to the editor of the magazine.

We will take all entries received by 11:59 PM tonight, June 30, 2009, and randomly draw one winner of the Flip Mino HD camcorder.

Good luck!

Form 600 (Residential Contract of Purchase) has been updated. Section 18 has been revised to include statutorily required Consumer Real Estate Settlement Protection Act (CRESPA) disclosure language. Section 22 dealing with lead paint issues has been amended slightly to bring it into compliance with EPA requirements.

The Virginia Real Estate Board has updated the Residential Property Disclosure Statement to reflect a statutory notice requirement concerning stormwater detention facilities. VAR has amended the SUM1 Form (Summary of Rights and Obligations of Sellers and Purchasers Under the Virginia Residential Property Disclosure Act) to conform to changes in the Residential Property Disclosure Statement.

Form 200 (Lease) has been amended to modify Section 30 as to a tenant’s holding over. The new section incorporates a recent amendment to the VRLTA that permits landlords to elect, as liquidated damages from a tenant’s holding over, a rent in the amount of 150% of the current rent.

These changes will be effective July 1.

We’re hearing from all over the Commonwealth, but particularly in Northern Virginia, that short sales are causing all kinds of issues. Everyone seems to have gotten past the fact that it takes the banks a looooooooooong time to consent to these transactions. Realtors also seem to understand very well that there’s a possibility that a bank will refuse to act on an offer, even if the offer seems to be a strong one.

Knowing this, some Realtors have been skirting, exploiting gray areas of, or outright defying certain sections of the Code of Ethics and MLS rules in order to hedge their bets and keep their clients’ options open in the unpredictable realm of “subject to third party approval.” Because the banks are held to a different ethical standard, sometimes the banks’ actions (or in many cases, inaction) can cause the Realtor to violate NAR’s Code.

So when it comes to distressed transactions, how can you make sure you’re on the right side of your obligations to the Realtor Code of Ethics and Virginia laws?

• For starters, watch this 30 minute video with VAR’s Special Counsel Lem Marshall called “Ethical Considerations in Short Sales.”
• Also, check out VAR’s Legal Resources Center, where you’ll find over 100 articles about legal and ethical issues especially for Realtors.
• Finally, agents should be talking with their brokers about these dilemmas. And brokers: If you don’t know how certain situations should be handled, call VAR’s Legal Hotline. Authoritative legal information is just a phone call away.

The hottest links this month were all about the new stuff going down. At the top, the VARbuzz post “A handy flyer from VAR to explain to your clients how to apply the $8000 first time homebuyers credit to closing costs.”

Then came the link to VHDA because of its new Homebuyer Tax Credit Plus loan product — you know, the one with the built-in bridge loan.

Following close behind were links to VARealtor.com’s information on those 2009 laws, and VARbuzz posts on the Home Valuation Code of Conduct and the new Residential Disclosure Statement.

Sure we love the traffic, but even better we love to see everyone wanting to keep up with all the changes.

My conundrum when writing this: Do I focus on the good news, even though the year-to-year numbers are what really count? After all, there’s a lot to be said for keeping a positive outlook.

Besides, there are a couple of major caveats. First, these are national, not Virginia numbers, so they’re sullied by Arizona, California, Florida, and Nevada. Second, I don’t know yet whether the April-May jump was bigger in 2009 than in 2008. If it was, that’s another good sign.

So take the numbers as you see fit. They’re just numbers.

Why? Aggressive marketing for one, but also for a simple reason: The BlackBerrys are available on all the major cellular networks, but the iPhone is only on AT&T. (Consumer Reports is pretty rough on AT&T. “[It and Sprint] might be an option if they’re competitive in the Ratings for your city or if their exclusive phones or plan features appeal to you.”)