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Dick Hargis Presentation June 2011 Legal Update

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Dick Hargis Presentation @ HAR Management Central Legal Update June 2011

Dick Hargis Presentation @ HAR Management Central Legal Update June 2011

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  • 1. Har Management CentralLegal Update
    Dick Hargis
    Vincent Lopez Serafino Jenevein, PC
    June 22, 2011
  • 2.
    • THE NEW, IMPROVED DTPA
    • 3. (At Least For Real Estate Licensees)
    • 4. Important Federal Issues
    • 5. Ethics Citation Program
  • The New DTPA
  • 6. The New DTPA
    Exempts real estate brokers and salespersons from DTPA claims except for claims of:
    • A) an express misrepresentation of a material fact that cannot be characterized as advice, judgment, or opinion;
    • 7. B) a failure to disclose information in violation of Sec. 17.46 (b)(24); or
    • 8. C) an unconscionable action or course of action that cannot be characterized as advice, judgment, or opinion.
  • The New DTPA
    The below laundry list items typically form the bases of a DTPA claim against brokers.
    • (5)  representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has a sponsorship, approval, status, affiliation, or connection which he does not;
    • 9.  (7)  representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another;
    • 10.  (12)  representing that an agreement confers or involves rights, remedies, or obligations which it does not have or involve, or which are prohibited by law;
    • 11. (24)  failing to disclose information concerning goods or services which was known at the time of the transaction if such failure to disclose such information was intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed;
    New law knocks out (5) (7) and (12). That’s something, but not the whole ball of wax.
  • 12. The New DTPA
    So, What’s left?
    • A) an express misrepresentation of a material fact that cannot be characterized as advice, judgment, or opinion;
    • 13. B) a failure to disclose information in violation of Sec. 17.46 (b)(24); or
    • 14. C) an unconscionable action or course of action that cannot be characterized as advice, judgment, or opinion.
  • Important Federal Issues
    Issue 1 – Reauthorization of the National Flood Insurance Program (NFIP)
    • NAR’s top priority issue for HAR
    • 15. Urge passage of H.R. 1309 - The Flood Insurance Reform Act  of 2011(Biggert, R-IL; Waters, D-CA)
    • 16. Extends for 5 years, NFIP’s authority to issue flood insurance which is not available in the private insurance market, except for the wealthiest property owners.
    • 17. Reform the NFIP to strengthen participation and put the program back on the path to fiscal solvency.
  • Important Federal Issues
    Issue 2 – Qualified Residential Mortgage (QRM) Standard
    • Dodd-Frank and Consumer Protection Act
    • 18. Requires financial institutions to retain at least 5% of the credit risk.
    • 19. Exempts qualified residential mortgages (QRMs) from the requirement
  • Important Federal Issues
    Issue 2 – Qualified Residential Mortgage (QRM) Standard (cont’d)
    • Now federal banking regulators have released a proposal to create qualified residential mortgages or QRMs.  The proposed standards
    • 20. would require an 80% loan-to-value, which requires a 20% down payment
    • 21. would limit the mortgage payment to 28% of gross income and limit all debt to 36%
    • 22. Federal Regulators are accepting comments on the proposed rules through August 1, 2011
    • 23. 39 U.S. Senators signed a letter to regulators expressing the Senatorial intent on QRM and opposing the imposition of a sizable down payment
    • 24. 163 House Members signed a similar letter
  • Important Federal Issues
    Issue 3 – Preserve the Mortgage Interest Deduction (MID)
    • Urge Members of Congress to Co-Sponsor H.Res. 25, expressing the sense of Congress that the current MID should be preserved AS IS
    • 25. The following Houston-area Members of Congress have signed on:
    • 26. John Culberson
    • 27. Al Green
    • 28. Gene Green
    • 29. Shelia Jackson Lee
    • 30. Ron Paul
    • 31. Ted Poe
    • 32. Average MID per home owner is $2,489 in Texas
    • 33. Estimates of a loss of 19% of home value in Texas
    • 34. Curtailment of MID is a new tax on home owners
  • Important Federal Issues
    Issue 4 – Government Sponsored Enterprise (GSE) Reform
    • Major issue on the horizon
    • 35. Preservation of 30-year fixed rate mortgage, requires some federal government role
    • 36. NAR supports the objectives, though not all the specifics, of H.R. 1859 – The Housing Finance Reform Act of 2011
    • 37. Preserves the 30-year fixed rate mortgage
    • 38. Unwinds Fannie Mae and Freddie Mac, replacing them with private companies
    • 39. Maintains federal-government backed securities
    • 40. NAR opposes H.R. 1182 (Hensarling, R-TX) and S. 693 (McCain, R-AZ) – The comprehensive GSE reform bills would effectively shut down Fannie Mae and Freddie Mac.    
  • CITATION PROGRAM
    • Effective January 1, 2011
    • 41. Faster Resolution of Ethics Complaints
    • 42. Anonymous Complaints an Option
  • CITATION PROGRAM (cont’d)
    • What articles are bases for citation
    • 43. Art. 3 - Cooperation with other brokers except when not in best interest of client
    • 44. Art. 4 - Disclose ownership interest when buying or selling property
  • CITATION PROGRAM (cont’d)
    • Art. 5 - No professional services for property
    REALTORS have a present or
    contemplated interest without full
    disclosure
    • Art. 6 - No commission, rebate or profit on expenditure for client without client knowledge or consent
    • 45. Art. 12 - Present true picture in advertising
  • CITATION PROGRAM (cont’d)
    • Art. 14 - REALTOR must cooperate in professional standard proceedings
    • 46. Art. 16 - REALTOR shall not interfere with
    exclusive representation agreement
    that other REALTORS have with
    clients
  • 47. CITATION PROGRAM (cont’d)
    • REALTOR who receives citation can ask for full hearing
    • 48. Salesperson’s Designated REALTOR is notified of citation
    • 49. Fines
    • 50. 1st offense - $300 and NAR Ethics Course
    • 51. 2nd offense - $600
    • 52. 3rd offense - $900