ORLEANS CITIZENS FORUM
Draft press release September 8, 2008
FOR IMMEDIATE RELEASE
Orleans Citizens Forum Public Information Event
Tuesday Oct. 27 at the Orleans Elementary School, at 6 p.m.
Contact: Abby Summersgill
508 240-6778, avdh@comcast.net
Ed Maas, President of OCF, is available for interviews at info@orleansinn.com
or 508 255-2222
What Wastewater Management
Means to Orleans Residents
ORLEANS: The Orleans Citizens Forum will present a comprehensive, independent review of the key wastewater management issues facing Orleans voters and taxpayers at a public symposium Tuesday, October 7, at the Orleans Elementary School at 6 p.m.
Experts from local and state government, the local real estate industry, and citizen committee members planning wastewater systems will report on all the issues surrounding the Special Town Meeting vote Oct. 27 on wastewater management conceptual plans. Open to everyone, the meeting will allow plenty of time for audience questions.
Orleans citizens have had several opportunities this year to learn about the towns wastewater management needs, including seven public information sessions and a formal public hearing Oct. 2. The Orleans Citizens Forum (OCF) event Oct. 7 brings together all the information voters need to know presented by an independent, non-partisan, volunteer organization that focuses on public participation in the issues important to town affairs.
Major issues explained
Managing Orleans? wastewater is likely to produce significant financial, public health, infrastructure and cultural demands on the town. The October 27 Special Town Meeting will ask voters whether they will ratify the broad concept of a Comprehensive Wastewater Management Plan that could cost more than $150 million over 20 years. Although voters will not be voting Oct. 27 on actual financial appropriations, wastewater management is expected to eventually become the largest public project in Orleans history.
Panelists at the Oct. 7 forum presenting their perspectives and answering audience questions include:
· Brian Dudley, Massachusetts Dept. of Environmental Protection
· Andrew Gottlieb, Executive Director, Cape Cod Water Protection Collaborative
· Augusta McKusick, Chair, Cape Cod Water Protection Collaborative and Chair, Orleans Wastewater Management Steering Committee
· Paul Ammann, Orleans? Wastewater Management Validation and Design Committee
· Walter Bennett. Chair, Orleans Finance Committee
· George Meservey, Orleans Planning Director
· Jeffrey Karlson, Owner, The Real Estate Company
Richard Hartman, OCF member, has volunteered to be the moderator.
Panelists are likely to discuss issues such as these:
? Why the presented plan was chosen.
? Alternative methods of removing excess nitrogen from the environment.
? The impact the plan will have on the environment and conformance with state and federal law.
? The likely costs to the town of nitrogen removal pursuant to the plan.
? How costs will be shared by sewer system users and non-users.
? How much homeowners might be charged for wastewater management.
? How sewering will impact public health, zoning, and population growth.
? How sewering will impact property values.
? How sewer construction might be phased-in over 20 years.
Please come by and get informed!
Showing posts with label REALTOR. Show all posts
Showing posts with label REALTOR. Show all posts
Wednesday, September 17, 2008
Wednesday, August 27, 2008
Public Rights / Private Property: FAQs on Beach Access brought to you By Trisha Daly-Karlson
Summertime. The living is easy. Fish are jumpin'. And right now somewhere along the Massachusetts coast, two people are arguing over whether one of them may walk along the other's beach.
Few issues in Massachusetts can be counted on as such a regular source of conflict. One reason for this is that in the face of the overwhelming desire for people to use our beaches, our laws are not very "friendly" toward beach access. This is because, some 350 years ago, our forefathers gave away much of the public's rights to use the coastline in an attempt to spur the development of wharfs and maritime commerce. On top of that, our laws in this area are complex, confusing, and- to an extent that is surprising in light of centuries of court battles- uncertain.
The result is conflict. Those who own property along the coast clash with those who want to walk along it, often without either really knowing what their rights and obligations are. Indeed, sometimes police officers and other public officials called in to deal with this conflict are themselves unclear about the respective rights and responsibilities.
The purpose of this guide is to try to help people understand the law in this area, to the extent that it has been settled. We have tried to provide simple answers to commonly-asked questions about the ownership of the coast. Our hope is that by informing the public of the law, we can move beyond needless conflicts and toward more consensual solutions to the beach access issue. In particular, we have highlighted ways that coastal owners who want to let the public gain access through or along their property can do so while avoiding liability and at the same time preserving their own property rights.
Of necessity, we can state what the public's rights are only in general terms. There are many complications that may arise in individual circumstances.
Questions & Answers
Q: "Someone told me that beaches are privately owned in Massachusetts all the way down to the low tide line. How can that be?"
A: Each state has its own laws regarding who owns the beach. In most coastal states, the public owns the land seaward of the high tide line, and in some states public ownership extends even higher. Massachusetts is different, however. The Massachusetts courts have consistently ruled that in the 1640s, we gave away title to the land between the mean high tide line and the low tide line to the adjacent upland owners. Therefore, this area- known as the "intertidal zone" or "wet sand area" is- generally privately owned in Massachusetts.
Q: "So you're saying that if I own the adjacent upland land, I therefore own the adjacent wet sand area?"
A: Probably, but not necessarily. It is possible that the interest in the wet sand area was separately conveyed ("severed") from the uplands parcel at some time in the past. A final answer to this question may require a complete title search, and even then you might not have a definitive answer. If this issue cannot be resolved by the available evidence, the upland owner is presumed to own the adjacent wet sand area. The boundary issues can be resolved in Land Court.
Q: "You said that I can own down to the 'low tide line,' but the low tide line changes every day. What low tide line are you talking about?"
A: Because the precise tide lines change daily, the average or mean low tide line is used. There is an ongoing dispute, however, as to whether you should use the so-called "mean low tide" line or the "mean extreme low tide line." The former is the average of all low tides, while the latter is the average of extreme low tides "resulting from usual causes and conditions."
Q: "How do you deal with the fact that over time the coastline builds up in certain areas and washes away in others?"
A: The short answer to this question is that the property lines move with the low tide line. Therefore, as land is extended by the natural buildup of sand (known as "accretion"), the private property owners generally enjoy a windfall. But when the opposite happens ("reliction"), the private property owners generally lose ownership of that portion of the land taken by the sea. The fact that property lines change with the whims of the oceans is one of the things that makes private ownership of this area different from private ownership of inland property.
Q: "If I own the wet sand area, why are members of the public claiming they can use it?"
A: Private ownership of the wet sand area is subject to certain public rights that were reserved when the land became private in the first place. Because the public-at-large retains a property interest in the wet sand area, the private owners' property interest in this area is similar to that of people who own private property in other areas subject to public easements (for example, people who abut town roads typically own to the middle of the road, subject to the public's right of passage).
Q: "What are the rights that were reserved to the public?"
A: The original laws that granted private ownership reserved the rights of "fishing, fowling, and navigation." Court cases have also held that reserved public rights include the "natural derivatives" of these uses. There are hundreds of years of court cases that attempt to flesh out precisely what these various words mean.
Q: "Does 'fishing' include shellfishing?"
A: Yes. That means that members of the public may take shellfish from the wet sand area of privately owned property and they may walk along the wet sand area to gain access to the shellfish.
Q: "Does the public's right to use the wet sand area for fishing include the right to do aquaculture, such as quahog farming?"
A: The Massachusetts Supreme Judicial Court concluded that the public. s right to fish in the wet sand area does not include a right to occupy such areas with aquaculture pens. As a result, someone who wants to perform these aquaculture activities in wet sand areas must obtain the permission of the private owner in addition to applicable state and local licenses.
Q: "What is 'fowling'?"
A: "Fowling" certainly includes the hunting of birds. Our office takes the position that the term also includes other ways that birds can be "used," such as birdwatching. This issue has not yet been addressed by the courts.
Q: "Does 'navigation' include swimming?"
A: Yes, but. According to the courts, swimming in the intertidal zone is included within the reserved public right of navigation, but only so long as your feet don't touch the bottom! And you don't have a right to walk along the wet sand area solely for the purpose of gaining access for swimming.
Q: "What about walking below the low tide line?"
A: Private property owners cannot interfere with the public's right to walk along the submerged lands that lie seaward of the low tide line. With few exceptions, they don't own that land; the public does.
Q: "Since members of the public have the right to fish, fowl, and navigate in the wet sand area, then they can do whatever fishing, fowling, and navigation they want to do there, right?"
A: So far, we've just been talking about ownership issues. Just as a private property owner's rights are subject to reasonable regulation, the same is true of the public's reserved rights. Thus, for example, the government may require shellfishermen to obtain all applicable state and local permits and to comply with applicable shellfishing regulations. And, of course, members of the public who exercise their public rights to use the wet sand area must comply with other laws, such as the prohibition on littering and the creation of nuisances.
Q: "I've heard people say that all I really need to do to 'be legal' is to carry a fishing line in my pocket?"
A: Carrying a fishing line or a fishing pole would render your walking along the wet sands area legal only if you actually intended to fish.
Q: "Does the public have a right to use off-road vehicles over the wet sand areas to gain access for fishing?"
A: The Supreme Judicial Court has never ruled on whether driving an off-road vehicle across private wet sand areas for the purposes of gaining access to fishing areas is included within the public's right to fish. In any event, the use of off-road vehicles may be regulated by the government.
Q: "Like many of my fellow property owners, I don't mind the public walking along my wet sand area even if they are not 'fishing, fowling, or navigating,' so long as by allowing this, I don't lose any property rights in the process. Is there some way that I can be a 'good citizen' and still retain my property rights?"
A: Yes. What you appear to be worried about is the legal concept known as "prescription" or "adverse possession." This is the idea that if someone uses your property for a sufficiently long time, they may be able to claim a property interest in it. For someone to be able to make this claim, however, their use has to be without your permission. Therefore, openly allowing the public to walk across your land (e.g., by "posting" such permission) is perhaps the best way of defeating someone's ability to accrue such a right. Posting the land in this manner, of course, would not affect any access rights that anyone had already obtained before the posting.
Q: "O.K., that may solve one problem, but how about liability?"
A: Under existing state law, a property owner who allows the public to use his or her land for recreational purposes without charging for such use is shielded from liability for injuries sustained during that use so long as the property owner did not bury hidden boobytraps or otherwise act with such "fault" that his or her conduct constituted "wilful, wanton or reckless conduct." Here again, the best way for coastal property owners to protect themselves may be to allow the public to walk across their land.
Q: "Wasn't there a state law passed a few years ago that gave the public a right to walk along the wet sand area even if they weren't fishing, fowling, or navigating"?
A: Not exactly. You're referring to chapter 176, section 4 of the Acts of 1991. That law states that the public is to have a general right to walk along the wet sand area during dawn to dusk hours. Such a right is not effective, however, unless the state Department of Environmental Management (DEM) acquires it on behalf of the public through formal eminent domain proceedings involving the specific properties affected, where the private property owners from whom the right was acquired would be compensated.
Q: "How much compensation would a private landowner be due if the state "took" a general easement right pursuant to the 1991 law?"
A: The property owner would be owed the amount, if any, that the market value of his or her land was reduced by the fact that the public now had a general right to walk across the wet sand area, not just to do so for fishing, fowling, and navigation.
Q: "You've talked so far about access along the beach. How about access from inland areas to the beach?"
A: Generally speaking, the land inland of the mean high tide line is owned by private parties, just like other land. Members of the public therefore do not have a right to walk across this land unless they individually or collectively have obtained such a right, or if, in particular circumstances, such rights were reserved when the land was initially granted to a private party. Rights of access can be purchased or taken by eminent domain, or they may be acquired by long term use (e.g., by the doctrine of "prescription" mentioned above).
Q: "How can I resolve whether the public has a right to cross a particular parcel of private property to get to the sea?"
A: Unfortunately, resolving whether the public . or some subset of the public . has a right to use a given path can often be very difficult, requiring an intensive examination of the particular facts and evidence at issue. It can also be very expensive for both sides, especially if a full trial is needed to resolve the issues. As with the wet sand area discussed above, private property owners who want to protect their property rights, but who otherwise don't mind others walking across their land, can accomplish this by "posting" their permission. This would not, of course, affect any access rights that the public had already obtained before the posting.
Q: "What if I want to try to resolve a coastal access dispute through mediation?"
A: One resource to consider is the Massachusetts Office of Dispute Resolution (MODR), an institute of the University of Massachusetts Boston (formerly a state agency). MODR promotes and facilitates the use of dispute resolution by public agencies, municipalities, businesses, non-profit organizations and citizens of the Commonwealth. MODR works with these groups to resolve disputes collaboratively and to create effective programs to prevent and manage conflict. MODR services include mediation, facilitation, public participation, consensus building, systems design and skill-building training. Services are provided on a fee-for-service basis, through highly-experienced qualified conflict resolution practitioners who are staff or affiliates of MODR. To learn more about MODR, log on to MODR’s website: at www.umb.edu/modr or contact MODR: (617) 287-4040; fax: (617) 287-4049.
Few issues in Massachusetts can be counted on as such a regular source of conflict. One reason for this is that in the face of the overwhelming desire for people to use our beaches, our laws are not very "friendly" toward beach access. This is because, some 350 years ago, our forefathers gave away much of the public's rights to use the coastline in an attempt to spur the development of wharfs and maritime commerce. On top of that, our laws in this area are complex, confusing, and- to an extent that is surprising in light of centuries of court battles- uncertain.
The result is conflict. Those who own property along the coast clash with those who want to walk along it, often without either really knowing what their rights and obligations are. Indeed, sometimes police officers and other public officials called in to deal with this conflict are themselves unclear about the respective rights and responsibilities.
The purpose of this guide is to try to help people understand the law in this area, to the extent that it has been settled. We have tried to provide simple answers to commonly-asked questions about the ownership of the coast. Our hope is that by informing the public of the law, we can move beyond needless conflicts and toward more consensual solutions to the beach access issue. In particular, we have highlighted ways that coastal owners who want to let the public gain access through or along their property can do so while avoiding liability and at the same time preserving their own property rights.
Of necessity, we can state what the public's rights are only in general terms. There are many complications that may arise in individual circumstances.
Questions & Answers
Q: "Someone told me that beaches are privately owned in Massachusetts all the way down to the low tide line. How can that be?"
A: Each state has its own laws regarding who owns the beach. In most coastal states, the public owns the land seaward of the high tide line, and in some states public ownership extends even higher. Massachusetts is different, however. The Massachusetts courts have consistently ruled that in the 1640s, we gave away title to the land between the mean high tide line and the low tide line to the adjacent upland owners. Therefore, this area- known as the "intertidal zone" or "wet sand area" is- generally privately owned in Massachusetts.
Q: "So you're saying that if I own the adjacent upland land, I therefore own the adjacent wet sand area?"
A: Probably, but not necessarily. It is possible that the interest in the wet sand area was separately conveyed ("severed") from the uplands parcel at some time in the past. A final answer to this question may require a complete title search, and even then you might not have a definitive answer. If this issue cannot be resolved by the available evidence, the upland owner is presumed to own the adjacent wet sand area. The boundary issues can be resolved in Land Court.
Q: "You said that I can own down to the 'low tide line,' but the low tide line changes every day. What low tide line are you talking about?"
A: Because the precise tide lines change daily, the average or mean low tide line is used. There is an ongoing dispute, however, as to whether you should use the so-called "mean low tide" line or the "mean extreme low tide line." The former is the average of all low tides, while the latter is the average of extreme low tides "resulting from usual causes and conditions."
Q: "How do you deal with the fact that over time the coastline builds up in certain areas and washes away in others?"
A: The short answer to this question is that the property lines move with the low tide line. Therefore, as land is extended by the natural buildup of sand (known as "accretion"), the private property owners generally enjoy a windfall. But when the opposite happens ("reliction"), the private property owners generally lose ownership of that portion of the land taken by the sea. The fact that property lines change with the whims of the oceans is one of the things that makes private ownership of this area different from private ownership of inland property.
Q: "If I own the wet sand area, why are members of the public claiming they can use it?"
A: Private ownership of the wet sand area is subject to certain public rights that were reserved when the land became private in the first place. Because the public-at-large retains a property interest in the wet sand area, the private owners' property interest in this area is similar to that of people who own private property in other areas subject to public easements (for example, people who abut town roads typically own to the middle of the road, subject to the public's right of passage).
Q: "What are the rights that were reserved to the public?"
A: The original laws that granted private ownership reserved the rights of "fishing, fowling, and navigation." Court cases have also held that reserved public rights include the "natural derivatives" of these uses. There are hundreds of years of court cases that attempt to flesh out precisely what these various words mean.
Q: "Does 'fishing' include shellfishing?"
A: Yes. That means that members of the public may take shellfish from the wet sand area of privately owned property and they may walk along the wet sand area to gain access to the shellfish.
Q: "Does the public's right to use the wet sand area for fishing include the right to do aquaculture, such as quahog farming?"
A: The Massachusetts Supreme Judicial Court concluded that the public. s right to fish in the wet sand area does not include a right to occupy such areas with aquaculture pens. As a result, someone who wants to perform these aquaculture activities in wet sand areas must obtain the permission of the private owner in addition to applicable state and local licenses.
Q: "What is 'fowling'?"
A: "Fowling" certainly includes the hunting of birds. Our office takes the position that the term also includes other ways that birds can be "used," such as birdwatching. This issue has not yet been addressed by the courts.
Q: "Does 'navigation' include swimming?"
A: Yes, but. According to the courts, swimming in the intertidal zone is included within the reserved public right of navigation, but only so long as your feet don't touch the bottom! And you don't have a right to walk along the wet sand area solely for the purpose of gaining access for swimming.
Q: "What about walking below the low tide line?"
A: Private property owners cannot interfere with the public's right to walk along the submerged lands that lie seaward of the low tide line. With few exceptions, they don't own that land; the public does.
Q: "Since members of the public have the right to fish, fowl, and navigate in the wet sand area, then they can do whatever fishing, fowling, and navigation they want to do there, right?"
A: So far, we've just been talking about ownership issues. Just as a private property owner's rights are subject to reasonable regulation, the same is true of the public's reserved rights. Thus, for example, the government may require shellfishermen to obtain all applicable state and local permits and to comply with applicable shellfishing regulations. And, of course, members of the public who exercise their public rights to use the wet sand area must comply with other laws, such as the prohibition on littering and the creation of nuisances.
Q: "I've heard people say that all I really need to do to 'be legal' is to carry a fishing line in my pocket?"
A: Carrying a fishing line or a fishing pole would render your walking along the wet sands area legal only if you actually intended to fish.
Q: "Does the public have a right to use off-road vehicles over the wet sand areas to gain access for fishing?"
A: The Supreme Judicial Court has never ruled on whether driving an off-road vehicle across private wet sand areas for the purposes of gaining access to fishing areas is included within the public's right to fish. In any event, the use of off-road vehicles may be regulated by the government.
Q: "Like many of my fellow property owners, I don't mind the public walking along my wet sand area even if they are not 'fishing, fowling, or navigating,' so long as by allowing this, I don't lose any property rights in the process. Is there some way that I can be a 'good citizen' and still retain my property rights?"
A: Yes. What you appear to be worried about is the legal concept known as "prescription" or "adverse possession." This is the idea that if someone uses your property for a sufficiently long time, they may be able to claim a property interest in it. For someone to be able to make this claim, however, their use has to be without your permission. Therefore, openly allowing the public to walk across your land (e.g., by "posting" such permission) is perhaps the best way of defeating someone's ability to accrue such a right. Posting the land in this manner, of course, would not affect any access rights that anyone had already obtained before the posting.
Q: "O.K., that may solve one problem, but how about liability?"
A: Under existing state law, a property owner who allows the public to use his or her land for recreational purposes without charging for such use is shielded from liability for injuries sustained during that use so long as the property owner did not bury hidden boobytraps or otherwise act with such "fault" that his or her conduct constituted "wilful, wanton or reckless conduct." Here again, the best way for coastal property owners to protect themselves may be to allow the public to walk across their land.
Q: "Wasn't there a state law passed a few years ago that gave the public a right to walk along the wet sand area even if they weren't fishing, fowling, or navigating"?
A: Not exactly. You're referring to chapter 176, section 4 of the Acts of 1991. That law states that the public is to have a general right to walk along the wet sand area during dawn to dusk hours. Such a right is not effective, however, unless the state Department of Environmental Management (DEM) acquires it on behalf of the public through formal eminent domain proceedings involving the specific properties affected, where the private property owners from whom the right was acquired would be compensated.
Q: "How much compensation would a private landowner be due if the state "took" a general easement right pursuant to the 1991 law?"
A: The property owner would be owed the amount, if any, that the market value of his or her land was reduced by the fact that the public now had a general right to walk across the wet sand area, not just to do so for fishing, fowling, and navigation.
Q: "You've talked so far about access along the beach. How about access from inland areas to the beach?"
A: Generally speaking, the land inland of the mean high tide line is owned by private parties, just like other land. Members of the public therefore do not have a right to walk across this land unless they individually or collectively have obtained such a right, or if, in particular circumstances, such rights were reserved when the land was initially granted to a private party. Rights of access can be purchased or taken by eminent domain, or they may be acquired by long term use (e.g., by the doctrine of "prescription" mentioned above).
Q: "How can I resolve whether the public has a right to cross a particular parcel of private property to get to the sea?"
A: Unfortunately, resolving whether the public . or some subset of the public . has a right to use a given path can often be very difficult, requiring an intensive examination of the particular facts and evidence at issue. It can also be very expensive for both sides, especially if a full trial is needed to resolve the issues. As with the wet sand area discussed above, private property owners who want to protect their property rights, but who otherwise don't mind others walking across their land, can accomplish this by "posting" their permission. This would not, of course, affect any access rights that the public had already obtained before the posting.
Q: "What if I want to try to resolve a coastal access dispute through mediation?"
A: One resource to consider is the Massachusetts Office of Dispute Resolution (MODR), an institute of the University of Massachusetts Boston (formerly a state agency). MODR promotes and facilitates the use of dispute resolution by public agencies, municipalities, businesses, non-profit organizations and citizens of the Commonwealth. MODR works with these groups to resolve disputes collaboratively and to create effective programs to prevent and manage conflict. MODR services include mediation, facilitation, public participation, consensus building, systems design and skill-building training. Services are provided on a fee-for-service basis, through highly-experienced qualified conflict resolution practitioners who are staff or affiliates of MODR. To learn more about MODR, log on to MODR’s website: at www.umb.edu/modr or contact MODR: (617) 287-4040; fax: (617) 287-4049.
Wednesday, August 20, 2008
Housing Stimulus Bill from NAR by Rosa Wright
National Association of REALTORS®Summary of Key Provisions of H.R. 3221 - The Housing Stimulus Bill (as of 7/30/08)
H.R. 3221, the “Housing and Economic Recovery Act of 2008,” passed the House on July 23, 2008, by a vote of 272-152. On Saturday, July 26, 2008, the Senate passed the bill by a vote of 72-13. The President signed the bill on July 30, 2008. The bill includes the following provisions:
GSE Reform – including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).View 2009 FHA and GSE loan limit estimates (PDF)
FHA Reform – including permanent FHA loan limits at the greater of $271,050 or 115% of local area median home price, capped at $625,500; streamlined processing for FHA condos; reforms to the HECM program, and reforms to the FHA manufactured housing program. The downpayment requirement on FHA loans will go up to 3.5% (from 3%). The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).View 2009 FHA and GSE loan limit estimates (PDF)FHA Reform Chart (PDF)
Homebuyer Tax Credit - a $7500 tax credit that would be would be available for any qualified purchase between April 9, 2008 and June 30, 2009. The credit is repayable over 15 years (making it, in effect, an interest free loan).First-time homebuyer tax credit chartFrequently asked questions about the first-time homebuyer tax credit
FHA foreclosure rescue – development of a refinance program for homebuyers with problematic subprime loans. Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide. Program is effective on October 1, 2008.FHA Foreclosure Rescue Chart
Seller-funded downpayment assistance programs – codifies existing FHA proposal to prohibit the use of downpayment assistance programs funded by those who have a financial interest in the sale; does not prohibit other assistance programs provided by nonprofits funded by other sources, churches, employers, or family members. This prohibition does not go into effect until October 1, 2008.More about the seller-funded downpayment assistance provisionTips to finding downpayment assistance programs (PDF)
VA loan limits – temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.
Risk-based pricing – puts a moratorium on FHA using risk-based pricing for one year. This provision is effective from October 1, 2008 through September 30, 2009.
GSE Stabilization – includes language proposed by the Treasury Department to authorize Treasury to make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae could not fail.
Mortgage Revenue Bond Authority – authorizes $10 billion in mortgage revenue bonds for refinancing subprime mortgages.
National Affordable Housing Trust Fund – Develops a Trust Fund funded by a percentage of profits from the GSEs. In its first years, the Trust Fund would cover costs of any defaulted loans in FHA foreclosure program. In out years, the Trust Fund would be used for the development of affordable housing.
CDBG Funding – Provides $4 billion in neighborhood revitalization funds for communities to purchase foreclosed homes.More about the CDBG funding provision
LIHTC – Modernizes the Low Income Housing Tax Credit program to make it more efficient.
Loan Originator Requirements – Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate). Federal bank regulators will establish a parallel registration system for FDIC-insured banks. The purpose is to prevent fraud and require minimum licensing and education requirements. The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state, unless they are compensated by a lender, mortgage broker, or other loan originator.
H.R. 3221, the “Housing and Economic Recovery Act of 2008,” passed the House on July 23, 2008, by a vote of 272-152. On Saturday, July 26, 2008, the Senate passed the bill by a vote of 72-13. The President signed the bill on July 30, 2008. The bill includes the following provisions:
GSE Reform – including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).View 2009 FHA and GSE loan limit estimates (PDF)
FHA Reform – including permanent FHA loan limits at the greater of $271,050 or 115% of local area median home price, capped at $625,500; streamlined processing for FHA condos; reforms to the HECM program, and reforms to the FHA manufactured housing program. The downpayment requirement on FHA loans will go up to 3.5% (from 3%). The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).View 2009 FHA and GSE loan limit estimates (PDF)FHA Reform Chart (PDF)
Homebuyer Tax Credit - a $7500 tax credit that would be would be available for any qualified purchase between April 9, 2008 and June 30, 2009. The credit is repayable over 15 years (making it, in effect, an interest free loan).First-time homebuyer tax credit chartFrequently asked questions about the first-time homebuyer tax credit
FHA foreclosure rescue – development of a refinance program for homebuyers with problematic subprime loans. Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide. Program is effective on October 1, 2008.FHA Foreclosure Rescue Chart
Seller-funded downpayment assistance programs – codifies existing FHA proposal to prohibit the use of downpayment assistance programs funded by those who have a financial interest in the sale; does not prohibit other assistance programs provided by nonprofits funded by other sources, churches, employers, or family members. This prohibition does not go into effect until October 1, 2008.More about the seller-funded downpayment assistance provisionTips to finding downpayment assistance programs (PDF)
VA loan limits – temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.
Risk-based pricing – puts a moratorium on FHA using risk-based pricing for one year. This provision is effective from October 1, 2008 through September 30, 2009.
GSE Stabilization – includes language proposed by the Treasury Department to authorize Treasury to make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae could not fail.
Mortgage Revenue Bond Authority – authorizes $10 billion in mortgage revenue bonds for refinancing subprime mortgages.
National Affordable Housing Trust Fund – Develops a Trust Fund funded by a percentage of profits from the GSEs. In its first years, the Trust Fund would cover costs of any defaulted loans in FHA foreclosure program. In out years, the Trust Fund would be used for the development of affordable housing.
CDBG Funding – Provides $4 billion in neighborhood revitalization funds for communities to purchase foreclosed homes.More about the CDBG funding provision
LIHTC – Modernizes the Low Income Housing Tax Credit program to make it more efficient.
Loan Originator Requirements – Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate). Federal bank regulators will establish a parallel registration system for FDIC-insured banks. The purpose is to prevent fraud and require minimum licensing and education requirements. The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state, unless they are compensated by a lender, mortgage broker, or other loan originator.
Thursday, January 3, 2008
What is a "Short Sale" and "Sub Prime Loan"
In 2007 we met with the inevitable rewriting of the "Variable Interest Mortgages" which were most often written for one, three or five years. The term "sub prime loan" comes from the mortgages that were written to persons having less than perfect credit, or no verification of income along with some other categories that put the borrowers at risk of not being able to pay back the note or mortgage even at the rate that was first quoted.
Now that the term of these notes is over the rates have gone up, many from 4% to 7% or higher if the borrow has had any late payments. If they have late payments they may not even be able to write a new note at any interest rate and of course are unable to pay the entire balance of the loan. The difference between a $300,000.00 loan at 4% and a $300,000.00 loan at 7% is approximately $565.00 per month.
With property values going down over the past two years many of the borrowers are faced with the fact that the home they purchased is now worth less than when the acquired it three years to five years ago in a hot investors market.
This brings us right to the "Short Sale". When faced with an inability to make mortgage payments or to rewrite the loan people are forced to sell their property for less money than they bought it for. Banks are well aware that these situations exist and are not anxious to own real estate in a declining financial market. The government is requiring strict lending guides and programs to get people out of the current debt. With this in mind bank and mortgage companies will take less to pay off the note then is owed.
Some of these require a note to pay the difference over time and some are a clean walk a way but credit is affected.
The use of a Realtor and legal council to negotiate this with the bank is absolute. The average person, even those with some knowledge of fiance should not attempt this negotiation on their own. Be sure that the professionals you work with in this instance have done this before and are confident with their relationship with the bank or mortgage company. For anyone this is stepping into the deep end of the pool and we need the best life jacket we can find.
Now that the term of these notes is over the rates have gone up, many from 4% to 7% or higher if the borrow has had any late payments. If they have late payments they may not even be able to write a new note at any interest rate and of course are unable to pay the entire balance of the loan. The difference between a $300,000.00 loan at 4% and a $300,000.00 loan at 7% is approximately $565.00 per month.
With property values going down over the past two years many of the borrowers are faced with the fact that the home they purchased is now worth less than when the acquired it three years to five years ago in a hot investors market.
This brings us right to the "Short Sale". When faced with an inability to make mortgage payments or to rewrite the loan people are forced to sell their property for less money than they bought it for. Banks are well aware that these situations exist and are not anxious to own real estate in a declining financial market. The government is requiring strict lending guides and programs to get people out of the current debt. With this in mind bank and mortgage companies will take less to pay off the note then is owed.
Some of these require a note to pay the difference over time and some are a clean walk a way but credit is affected.
The use of a Realtor and legal council to negotiate this with the bank is absolute. The average person, even those with some knowledge of fiance should not attempt this negotiation on their own. Be sure that the professionals you work with in this instance have done this before and are confident with their relationship with the bank or mortgage company. For anyone this is stepping into the deep end of the pool and we need the best life jacket we can find.
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