VI. Report of the Visa Working Group a. Working Group Recommendations In an effort to stimulate the housing market, some members of congress have proposed legislation that would ease visa requirements different ways, including the purchase of real estate. Under some proposals, if a non-U.S. resident purchases one or more homes using a minimum amount of cash and stays in the property for a minimum number of days per-year they would qualify for a visa. The alien would not be allowed to work under this specific visa, nor would they be eligible for any form of assistance or benefits.
b. Visa Reform Legislative Developments o S. 1746, VISIT-USA Act (Schumer, D-NY; Lee, R-UT) o S. 2233, JOLT Act (Schumer, D-NY; Lee, R-UT) At the current time, S. 1745, the VISIT-USA bill, introduced in November 2011, has been set aside by its sponsors. Introduced by Senators Charles Schumer (D-NY) and Michael Lee (R-UT), the bill is a comprehensive bill that amends the Immigration and Nationality Act and the U. S. visa process. The legislation includes a number of visa reforms, as well as two specific real estate-related visa provisions of interest to the real estate community. Specifically, the bill creates (1) a Canadian retiree visa that would allow Canadians older than 50 years of age who own a U. S. home or have a signed lease for the time of their proposed stay to obtain a non-immigrant resident visa and spend up to 240 days living in the U. S., and (2) a non-immigrant resident visa for those individuals who make a cash purchase of a principal residence or a principal residence plus residential rental properties that total at least $500,000 in the U. S. and agree to live in the U.S. for at least 180 days a year.
Attracting a group of bipartisan cosponsors to the bill proved difficult; as of March, S. 1745 had only 4 additional cosponsors, all of whom were Democrats. As a result, in late March, Senators Schumer and Lee introduced S. 2233, the Jobs Originated through Launching Travel (JOLT) Act. The bill was the subject of a March hearing in the Judiciary Committee's Immigration, Refugees and Border Security Subcommittee chaired by Senator Schumer.
VII. Report of the Federal Technology Subcommittee a. Data Privacy, Security & Breach Legislation Public concern about the confidentiality of personal medical, financial and consumer data has put pressure on policy makers to increase regulation on the uses of this information. The recent popularity of marketers to use online advertisng targeted to individual consumers has also concerned members of Congress. To date, more than 16 data privacy and security bills have been introduced in Congress. Many of these measures would: apply privacy regulations to both online and offline data collection, storage and flow; require privacy notices and impose other information safeguards.Some bills would also permit industry to develop their own self-regulatory privacy programs that, if endorsed by the Federal Trade Commission, would create a safe harbor from regulation. o NAR Cybersecurity/Data Breach Letters o NTIA Consumer Privacy Comment Letter
b. Network Neutrality Net neutrality is shorthand for the concept that Internet users should be in control of what content they view and what applications they use on the Internet. More specifically, net neutrality requires that broadband networks be free of restrictions on content, sites, or platforms. Networks should not restrict the equipment that may be attached to them, nor the modes of communication allowed on them. Finally, networks should ensure that communication is not unreasonably degraded by other communication streams.
c. Distracted Driving
VII. New Issues to Report a. Proposed Gift Rules for Federal Employees NAR has signed on to a letter by ASAE, The Center for Association Leadership, which urges Congress to make changes to legislation approved in late April that places severe restrictions on government employee attendance at meetings and conferences, including those held by trade associations. Approved as amendments to the Digital Accountability and Transparency Act (DATA) in the House and the Senate’s 21st Century Postal Service Act, the amendments were added to the bills in the wake of the General Services Administration scandal (regarding a 2010 GSA conference in Las Vegas that cost taxpayers $823,000).
NAR supports the goal of the amendments – creating more transparency and accountability in government spending – but is concerned that their language will chill government employees’ participation in non-governmental meetings and conferences, which is essential to the development of informed policymaking. For example, the language implies that if one HUD employee attends an NAR event, no other employee from that agency may attend any other NAR sponsored event in that fiscal year.
NAR has reached out to REALTOR® state and local associations to encourage them to sign on to the letter, along with the 800+ groups that have already done so. Additionally, NAR has been working with ASAE to set up Hill meetings with key offices whose Members are in a position to advocate for the needed changes.
b. NAR Letter to FHFA re: Use of E-signatures C.A.R. has worked closely with NAR to submit a Letter to Edward DeMarco, FHFA's Acting Director, requesting guidance on the acceptance of electronic signatures for the servicing of loans owned or guaranteed by Fannie Mae and Freddie Mac.
VIII. Update Items a. Freddie Mac Short Sale Affidavit On November 18, 2011, at the request of REALTORS® and the American Land Title Association (ALTA), Freddie Mac amended its policy regarding its mandatory short sale affidavits. The purpose of the affidavits is to prevent fraud by requiring the buyer, the seller, the real estate brokers, the escrow/closing agent, and any transaction facilitator to make various certifications (including that the short sale is an arm’s length transaction and the buyer will not resell within 120 days unless there are substantial improvements). Servicers were required to implement the changes by January 1, 2012. Each servicer covered by the policy must update its forms to comply with the revised policy. REALTORS® are encouraged to make sure they are signing an updated form and, if presented with an old form, are well-advised to request the servicer to update or allow amendments to the form before they sign, to avoid potential liability issues.
Here are the key changes:
• The certification is made based on “the best of each signatory’s knowledge and belief.” Freddie has retained the statement that a signatory making “a negligent or intentional misrepresentation” agrees to indemnify the servicer and Freddie Mac for losses. The addition of the knowledge standard significantly reduces this liability. • Only a signatory who makes a negligent or intentional misrepresentation, based on the best of his or her knowledge and belief, is responsible for indemnifying the servicer and Freddie Mac for any loss. No signatory is responsible for the certification of any other signatory. • Although Freddie Mac is requiring all signatories to sign one affidavit, the amended policy no longer allows the affidavit to be an addendum to the sales contract.
b. FTC Business Opportunity Rule The Federal Trade Commission’s (“FTC”) Business Opportunity Rule (“BOR”) is an outgrowth of the FTC’s Franchise Rule. A “business opportunity” is typically offered as a “turnkey” business, where the tools needed to operate the business are provided to the buyer by the seller in return for a payment. While the BOR isn’t likely to affect the operations of most real estate brokerages, brokerages that actively recruit new licensees need to be familiar with the BOR. The BOR takes effect on March 1, 2012.
c. Treasury Anti-Money Laundering Information The U.S. Treasury Department, as part of an international effort to combat money laundering and terrorist funding, recently issued regulations for the banking industry requiring anti-money laundering action plans and education as well as requirements to report suspicious activity, beyond simply reporting to Treasury the use of more than $10,000 in cash. Treasury indicated that rules for the real estate industry may be developed in the future after an analysis of real estate industry practices and potential vulnerabilities.
d. RESPA Updates i. H.R. 2446, Home Warranty Legislation Recent guidance by HUD has called into question whether and under what circumstances real estate professionals can be compensated for the sale of home warranty contracts. This has led to much confusion in the industry and numerous class action lawsuits.
ii. Truth-in-Lending/Good Faith Estimate Form Reform CFPB is continuing to fine tune its GFE/TIL which it refers to as the “Loan Estimate.” This process is becoming more controversial with jockeying between industry and consumer groups over what should and should not be included on the forms. NAR has repeatedly offered suggestions and made the point that CFPB should not forget that this is not just a mortgage transaction but in a large number of cases, it is also a real estate transaction. The other major issue with form changes is the costs to convert to new forms, adopt new software, and train staff to use it. Unlike HUD’s RESPA reforms which were largely done on HUD’s own authority, CFPB is using its full authority to harmonize RESPA and TILA under Dodd-Frank. So the question is not whether this will happen, it is will it happen in the most cost effective and least disruptive manner.