Legislation Launches the New Energy Economy
More than 20 energy-related bills passed the legislature and were signed into law. Several of these new laws provide a critical boost to energy efficiency and renewable energy efforts in Colorado. A recent Governor's Energy Office newsletter summarized the key bills and explained how they are setting the foundation for the vision of the New Energy Economy Governor Ritter established for Colorado during his campaign last year.
House Bill 1281 doubled the Amendment 37 renewable standard passed by the voters in 2004. Investor-owned utilities must now generate 20% of their electricity from renewable energy by 2020. And the municipal and rural co-op utilities must achieve 10%.
House Bill 1279 extends the sales tax exemption on manufacturing equipment to renewable energy generation, saving millions of dollars for companies investing in Colorado and also reducing costs of electricity for all Coloradans.
House Bill 246, Clean Energy Fund, will provide a steady stream of revenue ($7m in 2008) to the Governor's Energy Office for the purposes of advancing energy efficiency and renewable energy throughout the state.
House Bill 1087 creates a grant program to place wind turbines on schools.
House Bill 1228 requires biofuels be used in state fleet vehicles.
The Greening of Government Executive Order set a goal of a 25% reduction in petroleum fuel usage by 2012 in the state fleet through the use of biofuels or by increasing efficiency.
House Bill 1146 raises the baseline for local building codes to the 2003 International Energy Conservation Code.
House Bill 1037 requires investor owned gas utilities to invest in energy efficiency, and directs the Public Utility Commission to set new goals for electric energy efficiency.
Wednesday, September 26, 2007
Monday, September 17, 2007
The Latest FHA News from DC
THE LATEST FROM DC:
1) FHA LEGISLATION TAKES A MAJOR STEP FORWARD
On late Friday afternoon, Senate Banking Committee members struck a deal on FHA modernization legislation. This is the key step on the road to enactment of the legislation in the next 30 days assuming the deal holds. The Committee is scheduled to mark-up the bill on Wednesday, September 19th. The FHA bill can now move expeditiously through the Senate because of the bi-partisan support. The key provisions are: (We will provide an in-depth analysis of the provisions after the mark-up)
a. Higher mortgage limits
The Senate bill will increase the FHA limits as follows:
FHA floor increases from 48% to 65% of the GSE limit (i.e. from $200,160 to $271,050)
The new floor will likely be effective upon signature by the President.
FHA ceiling will increase to $417,000
This provision will likely not be effective immediately. FHA will need to analyze local markets to determine whether an increase is justified. We do believe that FHA will move to increase limits ASAP.
b. Lower and more flexible down payment
The compromise will require 1.5% borrower cash investment. There will be a cap of 100% loan-to value ratio. However, the upfront MIP will apparently be required to be included in the 100% LTV effectively capping the loan amount at 98.5% assuming an upfront MIP of 1.5%. At first glance, our thoughts on this provision are:
1. The reduced cash investment (1.5% instead of the current 3%) provides flexibility in helping the borrower to qualify. For example, it would permit the seller to pay closing costs or the homebuyer to pay closing costs through premium pricing. Gifts from acceptable sources will certainly continue to be allowed.
2. If FHA does implement risk-based pricing administratively as they have indicated, the inclusion of the MIP in the 100% LTV calculation would likely require higher down payments from higher risk borrowers. For example, if FHA implemented a 3% upfront premium for a category of borrowers, the maximum LTV would effectively become 97% (100% -3% upfront premiums.
While some would like a lower down payment/cash investment requirement, this provision is probably the best we could hope for in light of current market conditions.
c. No mention of risk-based pricing
We understand there will be no mention of risk-based pricing in the bill. However it will permit a maximum upfront premium of 3% instead of 2.25% as well as an increase in the annual premium.
What is next and when the bill be enacted?
The compromise indicates that a bill is likely. In fact, we would now be shocked if an FHA bill is not passed this year. We would expect the process to be completed and signed by the President in the next 30 days barring some unforeseen circumstance.
That being said, there are several steps to go. First, the House will vote on the legislation on Tuesday. On Wednesday, the Senate Banking Committee will mark-up its bill (highlights above) and then its bill will be sent to the full Senate for action. That should be completed quickly assuming there are no problems at the mark-up.
Probably the most critical step remaining will occur when the FHA bill goes to a conference of House and Senate Committee leaders to reconcile differences in the two bills. Because of the nature of Senate rules (i.e. minority has considerable power), we would expect most controversial provisions to be resolved along the lines of the Senate bill although changes are possible. For example, there will be a House amendment to raise the FHA mortgage limits significantly in high cost areas (as high as $700,000). While it may pass in the House, its odds of inclusion in the final bill are much more questionable at this time. However, market events over the next several weeks could also have a significant impact on this provision and possibly others.
We will, of course, follow this process through the remaining steps that hopefully will end at a bill signing ceremony by the President. While there are still some issues to be resolved, we do believe that it is appropriate to start planning for implementation of major changes to the FHA program including higher mortgage limits and changes to the down payment calculation. By the end of this week, we should have more certainty as to the likely provisions.
2) RISK-BASED PRICING
HUD has indicated that they will be proposing a risk-based price premium structure in a notice early next week. HUD will be soliciting comments before making a final decision. They had wanted to implement this proposal in January 2008. However, based on feedback they are receiving about the time needed to implement such a change, we are hopeful that HUD will delay implementation for at least several more months.
1) FHA LEGISLATION TAKES A MAJOR STEP FORWARD
On late Friday afternoon, Senate Banking Committee members struck a deal on FHA modernization legislation. This is the key step on the road to enactment of the legislation in the next 30 days assuming the deal holds. The Committee is scheduled to mark-up the bill on Wednesday, September 19th. The FHA bill can now move expeditiously through the Senate because of the bi-partisan support. The key provisions are: (We will provide an in-depth analysis of the provisions after the mark-up)
a. Higher mortgage limits
The Senate bill will increase the FHA limits as follows:
FHA floor increases from 48% to 65% of the GSE limit (i.e. from $200,160 to $271,050)
The new floor will likely be effective upon signature by the President.
FHA ceiling will increase to $417,000
This provision will likely not be effective immediately. FHA will need to analyze local markets to determine whether an increase is justified. We do believe that FHA will move to increase limits ASAP.
b. Lower and more flexible down payment
The compromise will require 1.5% borrower cash investment. There will be a cap of 100% loan-to value ratio. However, the upfront MIP will apparently be required to be included in the 100% LTV effectively capping the loan amount at 98.5% assuming an upfront MIP of 1.5%. At first glance, our thoughts on this provision are:
1. The reduced cash investment (1.5% instead of the current 3%) provides flexibility in helping the borrower to qualify. For example, it would permit the seller to pay closing costs or the homebuyer to pay closing costs through premium pricing. Gifts from acceptable sources will certainly continue to be allowed.
2. If FHA does implement risk-based pricing administratively as they have indicated, the inclusion of the MIP in the 100% LTV calculation would likely require higher down payments from higher risk borrowers. For example, if FHA implemented a 3% upfront premium for a category of borrowers, the maximum LTV would effectively become 97% (100% -3% upfront premiums.
While some would like a lower down payment/cash investment requirement, this provision is probably the best we could hope for in light of current market conditions.
c. No mention of risk-based pricing
We understand there will be no mention of risk-based pricing in the bill. However it will permit a maximum upfront premium of 3% instead of 2.25% as well as an increase in the annual premium.
What is next and when the bill be enacted?
The compromise indicates that a bill is likely. In fact, we would now be shocked if an FHA bill is not passed this year. We would expect the process to be completed and signed by the President in the next 30 days barring some unforeseen circumstance.
That being said, there are several steps to go. First, the House will vote on the legislation on Tuesday. On Wednesday, the Senate Banking Committee will mark-up its bill (highlights above) and then its bill will be sent to the full Senate for action. That should be completed quickly assuming there are no problems at the mark-up.
Probably the most critical step remaining will occur when the FHA bill goes to a conference of House and Senate Committee leaders to reconcile differences in the two bills. Because of the nature of Senate rules (i.e. minority has considerable power), we would expect most controversial provisions to be resolved along the lines of the Senate bill although changes are possible. For example, there will be a House amendment to raise the FHA mortgage limits significantly in high cost areas (as high as $700,000). While it may pass in the House, its odds of inclusion in the final bill are much more questionable at this time. However, market events over the next several weeks could also have a significant impact on this provision and possibly others.
We will, of course, follow this process through the remaining steps that hopefully will end at a bill signing ceremony by the President. While there are still some issues to be resolved, we do believe that it is appropriate to start planning for implementation of major changes to the FHA program including higher mortgage limits and changes to the down payment calculation. By the end of this week, we should have more certainty as to the likely provisions.
2) RISK-BASED PRICING
HUD has indicated that they will be proposing a risk-based price premium structure in a notice early next week. HUD will be soliciting comments before making a final decision. They had wanted to implement this proposal in January 2008. However, based on feedback they are receiving about the time needed to implement such a change, we are hopeful that HUD will delay implementation for at least several more months.
Thursday, September 13, 2007
Boulder County Housing Size
Be on notice that Boulder County has proposed a revision to the Land Use Code, if enacted, may substantially reduce the value of your home and land.
The reduction in the value of your property will result from a mandatory square footage reduction in the construction of new residences, or additions to existing residences. The current regulations provide for maximum building sizes of 25,000 sq. ft. The officials of Boulder County propose to substantially reduce residence sizes to no more than 4,500 sq. ft. in the mountains and 6,500 sq. ft. on the plains. Your family will feel its detremental effects at the time of construction or future sale of your residence.
We believe that our forefathers meant it when they said that a citizen may use his or her land in any reasonalbe matter so long as it does not create a nuisance for the neighbors. The proposed policy constitutes the taking of private property by the government, but it claims that such taking is justified because it is not taking too much property from too many people. History demonstrates that the erosion of the rights of citizens by government is successful where it is accomplished piecemeal, and only if citizens do not speak out against the denial of their rights in a timely manner.
The County's proposed policy also allows people who are wealthy to avoid the reduction in the value of their property, but effectively precludes people of moderate means from preventing the reduction in the value of their property.
The Boulder Area Realtors Association, which has expertise and experience in maintaining the values of the realty of citizens, recommends the establishment of an unbiased Blue Ribbon Study Panel and Survey to determine the economic impact the proposed revision to the Land Use Code to your property. The Land Use Coalition (http://www.landusecoaltion.org/) agrees with this sensible approach, and requestes the citizens of Boulder County to speak out against the denial of their rights in a timely manner.
Time is short. Now is the time to act to protect your rights. Notify the Boulder County Commissioners and the Boulder County Planning Commission that you will not tolerate the County enacting the proposed revision that is likely to substantially reduce the value of your home and land.
The Boudler County Planning Commission will meet to consider the proposed revision at 6 pm on September 19th, at the Boulder County Courthouse. For additional information, to to http://www.landusecoalition.org/.
Wednesday, September 05, 2007
Congress Ready to Tackle Mortgage Crisis
With Congress set to reconvene, the mortgage crisis is among lawmakers' top priorities.
Among some of the expected measures to be considered:
> A bill that would lift Fannie Mae and Freddie Mac's portfolio restrictions in an effort to add liquidity to the mortgage market.
> An anti-predatory lending bill that would federally regulate mortgage brokers and make mortgage-backed securities investors partially liable for problem loans. House Financial Services Committee Chairman Barney Frank (D-Mass.) is expected to propose the bill.
> Housing counseling to help curtail foreclosures. Sen. Charles Schumer (D-N.Y.) plans to propose that $100 million be earmarked in an appropriations bill for housing counseling.
> Meanwhile, President Bush has proposed enabling the Federal Housing Administration to back refinances of adjustable-rate mortgages in default or close to default.
> Kurt Pfotenhauer, Mortgage Bankers Association senior vice president of government affairs, says the trade group is in favor of uniform national lending standards. While he has no comment on the legislation to be introduced by Frank on anti-predatory lending, he does not think investors should be held liable for problem loans. Pfotenhauer also expresses concerns about an overreaction on the part of federal lawmakers, noting that "if we go too far in passing rules to protect people in the mortgage market, we could end up denying them access to credit."
Source: Daily Real Estate News
Among some of the expected measures to be considered:
> A bill that would lift Fannie Mae and Freddie Mac's portfolio restrictions in an effort to add liquidity to the mortgage market.
> An anti-predatory lending bill that would federally regulate mortgage brokers and make mortgage-backed securities investors partially liable for problem loans. House Financial Services Committee Chairman Barney Frank (D-Mass.) is expected to propose the bill.
> Housing counseling to help curtail foreclosures. Sen. Charles Schumer (D-N.Y.) plans to propose that $100 million be earmarked in an appropriations bill for housing counseling.
> Meanwhile, President Bush has proposed enabling the Federal Housing Administration to back refinances of adjustable-rate mortgages in default or close to default.
> Kurt Pfotenhauer, Mortgage Bankers Association senior vice president of government affairs, says the trade group is in favor of uniform national lending standards. While he has no comment on the legislation to be introduced by Frank on anti-predatory lending, he does not think investors should be held liable for problem loans. Pfotenhauer also expresses concerns about an overreaction on the part of federal lawmakers, noting that "if we go too far in passing rules to protect people in the mortgage market, we could end up denying them access to credit."
Source: Daily Real Estate News
Subscribe to:
Posts (Atom)