Voice for Real Estate 44: Criminal Records, Reverse Mortgages

Voice for Real Estate 44: Criminal Records, Reverse Mortgages

Understand the nuances of selling a house
with a reverse mortgage Do you have a policy on people with a criminal
record? And NAR seeks to make rural loans more competitive
These stories and more on The Voice for Real Estate
Hi, I’m Stephen Gasque of the National Association of Realtors. It will come as a surprise to many that, in
the United States, one-third of the population—100 million people—has a criminal record and
that some 650,000 people are released from prison each year. For many of these people, the infraction was
relatively minor—possession of a small amount of marijuana, for example—or it happened
decades ago. This is important to you as a real estate
professional because the U.S. Department of Housing and Urban Development has just released
guidance on how the handling of this population could lead to scrutiny under federal Fair
Housing laws. Of course, people with a criminal record are
not a protected class under the Fair Housing Act, but minorities are, and minorities are
disproportionately represented in the share of Americans who have a criminal record. For that reason, a policy that imposes a blanket
rejection of persons seeking to rent or buy housing because of their criminal record could
be found to have a disparate impact on minorities, and that could be a violation of Fair Housing
laws.

NAR Associate Counsel Lesley Walker has more. [QUOTE]
NAR is sharing federal resources—including a chart of dos and don’ts—that can help
you analyze your housing policy to make sure it protects your business interests without
also creating a disparate impact on minorities. For example, it may be appropriate to exclude
people who were convicted of the illegal manufacture or distribution of a controlled substance,
but if the exclusion extends to people who were convicted of mere possession, the policy
may be deemed to have a disparate impact. [SWOOSH]
Close to 90 percent of all home loans today are backed by the federal government, either
through Fannie Mae, Freddie Mac, FHA, the U.S. Department of Veterans Affairs, or the
Rural Housing Service. But in only one of these programs—the Rural
Housing Service—does each and every loan have to get approved upfront by the federal
government. As you can imagine, that slows down the process
and puts buyers who are seeking these loans at a competitive disadvantage with other buyers. That’s why NAR has
been working hard to get Congress to pass legislation that would allow lenders to make
these loans the same way they’re made in all other programs: without upfront review.

Already the House has passed the bill, and
NAR is now working the Senate hard—most recently at a Senate hearing on rural development. NAR’s Megan Booth has more. [QUOTE]
NAR is also asking Congress to increase the number
of loans that can get rural mortgage assistance, because the government is on track to run
out of authority by this summer. [SWOOSH]
Did you know one million people have taken out a reverse mortgage since the federal government
started insuring them through FHA in 1988? That means the chances of you selling a home
with one of these mortgages—which homeowners 62 years or older can take out to access the
equity in their home—is pretty good. What you need to know, though, is selling
a home with a reverse mortgage is not a straightforward matter.

national association of realtors

FHA imposes rules on the pay-off of these
mortgages that aren’t applied to other types of mortgages. There are issues of timing and sales price. To help you learn about these issues, Realtor
Magazine is hosting a live webcast later this week with the National Reverse Mortgage Lenders
Association. The live webcast gives you an opportunity
to email questions to the experts during the program. NAR’s Jon Boughtin has more. [SWOOSH]
Foreign buyers of U.S. real estate are expected to pump an additional $20 to $30 billion into
the economy this year thanks to tax law changes Congress made at the end of last year, including
eased restrictions on foreign investors in U.S.

commercial property REITs. But the law also increased the amount of taxes
that buyers must withhold if they buy U.S. property—including residential property—that
has a foreign owner. That withholding is 15 percent of the seller’s
gain in the sale of the property, up from 10 percent. But the law includes several nuances that
determine whether the 15 percent or the 10 percent withholding applies. Linda Monaco, legal education attorney at
The Fund, a support organization for real estate attorneys, talks about these nuances
in a webinar NAR hosted last week [QUOTE]
You can learn all about the tax law changes that affect foreign buyers and sellers of
real estate in that webinar, which is posted on Realtor.org. [SWOOSH]
And that’s our show for the week of April 18. You can get more on everything we talked about
today at The Voice for Real Estate page on Realtor.org. Thank you for joining us and be sure to join
us again as we bring you the latest news on The Voice for Real Estate..

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