July 27: Census on housing; taxes & home ownership; coastal state lending law changes; a really bad joke


For folks who like statistics, the U.S. Census Bureau recently released the 2018 Characteristics of New Housing Report, which provides annual statistics on the characteristics of new privately-owned residential structures. Some highlights of the 840,000 single-family homes completed in 2018 included: 84,000 had two bedrooms or less and 376,000 had four bedrooms or more. 31,000 had one and one-half bathrooms or less and 306,000 homes had three or more bathrooms. 778,000 were framed in wood and 59,000 were framed using concrete. And the median size of a completed single-family house was 2,386 square feet.

Of the 617,000 single-family homes sold in 2018: 548,000 were detached homes and 69,000 were attached homes. 461,000 were purchased using conventional financing and 39,000 were purchased using cash. 556,000 had wood framing. The median sales price of new single-family homes sold in 2018 was $326,400, while the average sales price was $385,000. And the median size of a new single-family home sold in 2018 was 2,435 square feet. Finally, of the 119,000 contractor-built single-family homes started in 2018, the median contract price was $281,200.

Current environment

Williston Financial Group CEO Steve Ozonian weighed in, asking, “Where is the help for today’s homebuyer? We’re told people are still buying homes despite losing homeowner benefits during the last round of tax changes, but I wonder how long it can last. People forget how important these tax benefits are, but we need them today more than ever. The latest National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index showed housing affordability has fallen to nearly a 10-year-low. It is one of several signs of trouble.

“Housing is going through an adjustment phase, but rising prices in a growing number of markets are pushing out first-time buyers. When the market flattens or declines, as it eventually will, tax credits and other incentives will be needed to give people a reason to continue investing in the American dream. Our industry must push harder to help buyers, too. I’m hopeful they will, but the current trend is worrisome, to say the least.”

Coastal state law changes

Jordan Moskowitz, Director of the NJ Housing and Mortgage Finance Agency, wrote to me saying, “The NJ Senate Bill 362 update regarding deed restrictions not being extinguished at foreclosure may not accurately represent the changes. I asked our policy manager here at the HFA (you could consider him the Agency’s liaison to the legislature), and he told me that this language was all bracketed in the most recent amendments to the foreclosure provisions. In NJ, the bracketed sections are removed from the most recent official copy, similar to a “strike-through” of text in reviewing mode in MS Word.

New Jersey amended its provisions relating to foreclosure with Senate Bill 362 to require that whenever a debtor is given notice that a foreclosure is pending on residential property that is a unit of affordable housing subject to affordability controls, notice must be given to the municipal clerk, the municipal housing liaison and the Commissioner of Community Affairs. The foreclosing lender is also required to furnish the debtor with the address and phone number of the municipal affordable housing manager and the New Jersey Housing and Mortgage Finance Agency.”

Hawaii recently enacted provisions regarding the temporary authority of certain individuals to engage in business as a mortgage loan originator (MLO) effective on November 24, 2019.

House Bill 988 implements section 106 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, P.L. 115-174, by providing a 120-day temporary authority to originate loans in Hawaii for loan originators moving from a depository institution to a non-depository institution and for state-licensed loan originators moving to Hawaii from another state.

Temporary authority will allow qualified mortgage loan originators to originate mortgage loans in Hawaii without complying with state licensing laws for 120 days.  During these 120 days, the mortgage loan originator can complete the state-specific pre-education or continuing education, the financial responsibility review, and the criminal background review.  During this transitional authority period, the MLO will be held responsible for any origination errors caused by the MLO.  This supervisory oversight will protect consumers from harm caused by MLOs under transitional authority.

Oregon amended its provisions relating to foreclosure(s) effective on January 1, 2020.

Section 1 of the amendment provides that the Department of Veterans’ Affairs and the Housing and Community Services Department shall jointly submit a written report on veterans’ housing programs to the interim House committee related to veterans on or before December 1st of each year.

Section 2 requires notice be provided to the seller by a purchaser of residential real property after a complaint has been filed to foreclose a lien on the real property and before the end of the redemption period. The form of the notice is laid down under the amendment.

Section 3 requires a sheriff post a notice of the sale on a website that was established under ORS 18.92 before conducting an execution sale of real property to. The notice on the website must include the notice to debtor and notice to prospective bidders. The amendment lays down the forms for each of the notices.

Section 4 provides that a complaint in a suit to foreclose a residential trust deed on the lien debtor must include a copy of a notice to lien debtors as an attachment. The amendment lays down the form of the notice to lien debtors and provides that the person filing the complaint should insert in the notice the telephone contact numbers and website addresses prescribed by the Department of Consumer and Business Services by rule under ORS 86.756.

The amended provisions are applicable to (a) purchases of residential real property occurring on or after the effective date of this 2019 Act; (b) notices posted on or after the effective date of this 2019 Act; and (c) complaints filed on or after the effective date of this 2019 Act.

Oregon HB 2530 passed the Senate on June 3 and the House concurred with Senate amendments on June 5. The bill is awaiting delivery to Governor Kate Brown. If enacted, the bill would require notice related to termination of tenancy, forcible entry or detainer and residential foreclosure to include certain information regarding assistance that may be available to veterans of the armed forces. Once received, Governor Brown will have five days, not including Saturdays and Sundays, to act on the bill or it becomes law without signature.

And Oregon amended its provisions regarding security breaches that involves personal information effective on January 1, 2020.

The amendment defines a “vendor” is defined as “a person with which a covered entity contracts to maintain, store, manage, process or otherwise access personal information for the purpose of, or in connection with, providing services to or on behalf of the covered entity.”

The amendment requires vendors that provide services to covered entities, to notify the covered entity of a breach of security as soon as is practicable but not later than 10 days after discovering a breach of security or having reason to believe that the breach of security occurred. Notification to the Attorney General is required, in writing or electronically, if the vendor was subject to a breach of security that involved the personal information of more than 250 consumers or a number of consumers that the vendor could not determine.

The amendment also provides that a covered entity or vendor in an action or proceeding may defend against an allegation that the covered entity or vendor has not developed, implemented and maintained reasonable safeguards to protect the security, confidentiality and integrity of personal information by showing that the covered entity or vendor developed, implemented and maintained reasonable security measures that would be required for personal information.

California AB 1018 was amended and retained by the Senate Business, Professions and Economic Development Committee on June 3. If enacted, the bill would prohibit a home inspector from giving an opinion of valuation on a property. The bill would specify that the law regulating home inspectors does not exempt a home inspector from law regulating real estate appraisers. The bill would prohibit a licensed real estate appraiser performing a real estate appraisal from acting as a home inspector performing a home inspecting except as required to comply with professional standards.

California AB 1399 was referred to the Senate Housing and Judiciary Committee on June 6. If enacted, it would clarify that landlords may not withdraw accommodations from the rental market and then re-enter the market by simply paying punitive damages.

Louisiana HB 466 was amended on the Senate floor on May 30 and passed by the Senate on June 3. The House rejected Senate amendments on June 4, and the bill was referred to conference committee on June 5. The conference committee reached agreement and issued a committee report, which was approved by both chambers. The bill was enrolled on June 6 and is currently awaiting delivery to Louisiana Governor John Bel Edwards. If enacted, it would require a tax collector to demonstrate a reasonable effort to provide a debtor with notice of a tax sale when the debtor has not received actual notice. Its legislative digest can be read here. Governor Edwards will have 20 days following delivery to act on the bill or it becomes law without signature.

Louisiana SB 42 was delivered to Governor John Bel Edwards on June 4. If enacted, it would amend current law to exempt a director, officer, or salaried employee of a commercial bank, savings bank, credit union, or savings and loan association, when engaged in evaluation activities for and on behalf of such financial institutions from licensing requirements for real estate appraiser activity. Once received, Governor Edwards will have 20 days to act on the bill or it becomes law without signature.

Washington has modified its provisions, effective as of March 1, 2020, regarding security breaches of personal information with Substitute House Bill 1071.

The previous version of the provision stated that organizations affected by a breach only had to notify its customers after a hacker obtained the consumer’s name in combination with certain elements of personal information. Under the new provision, the list of personal information types has been expanded.

Additionally, the previous requirement to notify the Attorney General within forty-five days of a breach has been reduced to thirty days.

A new provision adds that if a breach involves a consumer’s username or password, an organization may provide notice to the consumer via email. The notice must inform the affected consumer that he or she should promptly change his or her email password and security question or answer, and take any other appropriate steps to protect the online account.

Another added provision requires that an organization provide to an affected consumer a time frame of exposure of the breached personal information, if known, including the date of the breach and the date the breach was discovered.

Under new Florida notarial provisions, any document requiring notarization may be notarized electronically. In performing an online notarization, an online notary public must verify the identity of a principal at the time the signature is taken by using audio-video communication technology and must record the entire audio-video conference session between the notary public and the principal and any subscribing witnesses.

In addition, a notary public is required to use an electronic signature that is unique to the notary public, capable of independent verification, retained under the notary public’s sole control, and attached to or logically associated with the electronic document so that any subsequent alteration to the electronic document displays alteration evidence.

An online notary public can perform an online notarization regardless of the physical location of the principal at the time of the notarial act, provided the notary public is physically located in Florida while performing the online notarization.

The bill also authorizes the use of an electronic will.  The requirement that a will be signed is satisfied by an electronic signature.  An electronically signed will is deemed to be executed if the document states that the person creating the document intends to execute and understands that he or she is executing the document in and pursuant to Florida laws.

Maryland has passed House Bill 1154 which modifies provisions of its Personal Information Protection Act. HB 1154 changes the applicability of some investigation and notification requirements for the owner or licensee of computerized data, and prohibits the charging of fees to an owner or licensee of data for information they require to comply with the notification requirements of the act.

Section 14-3504 of the Annotated Code of Maryland has been modified to require a business that maintains computerized data that includes personal information to conduct an investigation to determine the likelihood that personal information has been or will be misused as a result of the breach. Previously only a business that owned or licensed the data was required to conduct such investigation.

Additionally, the modifications to 14-3504 prohibit a business that incurs a data breach, but who is not the owner or licensee of the data, from charging the owner or licensee of the data a fee for providing information that the owner or licensee needs in order to make a notification of the breach pursuant to 14-3504(B)(2).  The owner or licensee may only use the information obtained for the purpose of providing a notice of the breach, protecting or securing personal information, or providing notification to appropriate national information security organizations.

Maryland has passed Senate Bill 512, an act relating to protections for government employees during a government shutdown. The provisions of SB 512 are effective immediately.

SB 512 adds Section 7-105.1(b-1) to the Real Property Article of The Annotated Code of Maryland. This new section provides protections for an employee of the federal, state, or local government in the State, in the event of the foreclosure of an owner-occupied residential property of an employee who is involuntarily furloughed without pay due to a government shutdown.  The new provisions provide for a stay of a foreclosure action during the period of the employee involuntary furlough. The stay, however, will not extend more than 30 days after the end of the government shutdown without a showing of good cause.

SB 512 also adds Section 8-401(b-1) to the Real Property Article of The Annotated Code of Maryland. Likewise, this section provides for the protection of a tenant who fails to pay rent during a government shutdown where the tenant is an employee of the Federal, State, or local government in the State, and is involuntarily furloughed without pay due to the government shutdown. Under Section 8-401(b-1) a court shall stay a proceeding for repossession of residential property until the end of the government shutdown; such stay shall end no more than 30 days after the end of the government shutdown absent a showing of good cause.

“Ladies, if he can’t appreciate your fruit jokes…you need to let that mango.”

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Residential Lending, Banks, and Market Share.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

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Rob Chrisman