On Sunday, Robert J. Shiller wrote a must read article in the Times, Why Home Prices Change (or Dont').

Every type of real estate professional should understand the economics behind residential housing and this article objectively lays out the facts. Plus, if you don't know, Mr. Shiller's credentials include being a Professor of Economics at Yale - so pay attention to what he has to say.

The article looks at the economics of residential housing and compares this investment vehicle to stocks. Most importantly, it looks at last year's gains in housing and explains that its not a predictor for the next 10 years in growth and should only be viewed in terms of just being a growth for last year.

As the article states: "Over the 100 years ending in 1990- before the recent housing boom - real home prices rose only 0.2 percent a year, on average". Mr. Shiller explains that while it may psychologically feel like prices keep going up, one must look at prices after correcting for inflation. In such, there is not much growth in the long term.

So, real estate professionals, houses are a good buy if you want to live there. They may be good if you add money to the house through construction. Yet, if you want to buy, hold and not invest in a product, do not buy a house.

Brookhaven has added a great feature to its website called House Rental Search.

With this tool, the user can "see all of the active accessory apartment and house rental permit on the street you selected in the hamlet chosen". Remember, Villages control their own rental permits, so users in Villages must contact their Village.

This feature is going to make it completely transparent to tenants if the Town has permitted their rental. Remember, without a permit, a landlord cannot enforce a lease and is subject to many fines as well.

Now Brookhaven only needs to make getting a permit as easy as looking up if one exists. This way, safety can be the paramount concern over enforcement, which this tool will greatly increase.

Landlords and real estate agents - MAKE SURE YOU HAVE PERMITS. The Town has enabled tenants to really crackdown on your illegal rentals and be sure that they will.

Today, the Consumer Financial Protection Bureau (CFPB) issued a Small Entity Compliance Guide to the new Ability-to-Repay regulations, which are scheduled to commence effectiveness on January 10, 2014.

To remind our readers, the Ability-to-Repay regulations require loan originators to "make a reasonable, good-faith determination before or when [they] consummate a mortgage loan that the consumer has a reasonable ability to repay the loan, considering such factors as the consumer’s income or assets and employment status (if relied on) against:

• The mortgage loan payment
• Ongoing expenses related to the mortgage loan or the property that secures it, such as property taxes and insurance you require the consumer to buy
• Payments on simultaneous loans that are secured by the same property
• Other debt obligations, alimony, and child-support payments"

As stated within the Guide: "The purpose of this guide is to provide an easy-to-use summary of the ATR/QM rule."

Remember, ATR stands for Ability-to-Repay and QM stands for Qualified Mortgages.

So, real estate professionals, you should know that lenders will have to independently verify a borrower's Ability-to-Repay starting in January of next year and you should start now to become familiar with these new rules to effectively represent your clients. This Guide is a great starting place.

Here is a list of some upcoming events in our area.

Lieb School is not currently involved as a sponsor or otherwise in any of these events beyond providing the list with links to our friends and students. Yet, we always encourage real estate professionals to learn and want to provide you with a resource of some places to get educated.

• April 11, 2013:  The “New Normal” for REIT M&A
• April 15 - 16, 2013:  RealShare Net Lease
• April 16, 2013:  New York City Development Finance Conference
• April 17, 2013:  CRE Investment Summit 2013
• April 19, 2013:   NY Retail Summit
• May 8, 2013:  Real Estate Mezzanine Financing Summit
• May 29-30, 2013:  US Real Estate Opportunity & Private Fund Investing Forum
• October 8, 2013:  NYC Real Estate Expo

At our course at Chase Plaza this past Friday, 4/5/13, on Mortgage Mania we referenced the Consumer Financial Protection Bureau (CFPB) and its increasing function of regulating mortgages under the Conforming Loan Limit.

To receive the latest and greatest regulatory updates, each real estate professional should sign-up for email updates on their site, by clicking here.

The best way to add value to your clients is being in the know. So, sign-up NOW!!!

On Friday, 4/5/13, Treasury issued new directives to the mortgage modification process.

To read the Supplemental Directive, click here.

Of note in this directive was a change in the categories for denial that give rise to a servicer's (lender's) inability to conduct a foreclosure sale following a denial. To clarify, a servicer cannot conduct a sale within 30 calendar days of a Non-Approval Notice to theoretically give the borrower an opportunity to correct their submission. The traditional five categories for Non-approval were:
(1) ineligible mortgage, (2) ineligible property, (3) offer not accepted by borrower/request withdrawn, (4) previously modified under HAMP Tier 2, and (5) borrower not a natural person.

However, what does ineligible mortgage or ineligible property really mean?

To clarify this confusion this directive deletes these categories and replaces them with the following clear reasons for denial of a modification:
(1) loan originated after January 1, 2009, not a first lien, or unpaid principal balance above program

limit, (2) loan paid off, or charged off and borrower released from liability for repayment, (3)
property condemned or more than four dwelling units, (4) loan subject to involuntary transfer to
a non-participant,

This change is another step in improving the Making Homes Affordable Program. By providing clearer understandings to borrowers and lenders for the framework to achieve a mortgage workout, the parties can intelligently negotiate a resolution.

On April 3, 2013, the US Department of Housing and Urban Development kicked off Fair Housing Month with the launch of a national media campaign.

HUD's press release states: "The campaign, titled “Fair Housing Is Your Right. Use It,” includes English, Spanish, and Chinese radio and print public service advertisements (PSAs) that feature examples of actions which violate the Fair Housing Act and let the public know what to do if they experience housing discrimination."

To read the full press release, click here.
To see video from the campaign, click here.
To see the Public Service Announcements, click here.

While Fair Housing is nothing new, it will be on consumers mind this Fair Housing Month, so its important for brokerage managers to be more vigilant in reminding their agents to respect protected classes in housing. Also, remember that your local municipality: State, County, Town and Village may have additional Fair Housing statutes to protect citizens as the national Fair Housing Act is merely a floor of protected rights, not a ceiling. Also, agents in NYC should pay careful attention because the NYC Human Rights Law is the most protective of its kind in the nation.