Reacting to the “sub-prime lending debacle,” Governor Napolitano announced three steps to address issues related to home ownership in Arizona. Her declaration of a "Bill of Rights" and proposed legislation go much further than addressing sub-prime issues, and that's probably a good thing in the view of this Flagstaff real estate agent. The first is her declaration of an Arizona Home Buyers’ and Renters’ Bill of Rights. This document is a nice single page summary, with internet links, to some disclosures that are already required by the Arizona Residential Home Purchase Contract and Arizona Vacant Land Purchase Contracts used by Arizona Realtors®. The Buyer’s Advisory, published by the Arizona Department of Real Estate, and modified by me to add items directly applicable to Flagstaff real estate, covers all the same material, but the highlights may be lost in the Advisory’s nine single-spaced pages. Still, the new “Bill of Rights” leaves out many important issues for buyers and may simply add weight without substance to a stack of paper that is already nearly overwhelming for many buyers. The “Bill of Rights” applies to all buyers and renters in Arizona, whether or not they are part of the “sub-prime debacle.” The second step is a proposal by the Governor for legislation called the Arizona Home Equity Theft Protection Act, to license “equity purchasers.” I had to think about this one for a minute because the Gov gave it rather short-shrift in her remarks. Apparently, the proposal is designed to target the sleazy industry of people who promise to “save” homeowners from foreclosure by buying their homes before the 90-day foreclosure period rolls around after the last mortgage payment the homeowner made. But the legislation will have to be carefully crafted to avoid over-regulating legitimate safety nets for homeowners in trouble. The bottom line is that anyone facing foreclosure needs careful counsel from a qualified tax advisor (regarding the huge tax consequences of debt forgiveness) and from a knowledgeable Realtor® (regarding the actual market value of their home), AND the homeowner needs to know that their own lender is probably the best place to start trying to short-sale the home. The Governor’s third step is to propose legislation requiring the licensing of home loan officers. This is long overdue. Real estate sales people, home inspectors, even pest inspectors, in Arizona are licensed. But the people to whom home buyers turn over their social security numbers, bank account numbers, and all their financial secrets are not licensed. Has this ever made sense? |
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