News
Federal Court Gives Final Approval for NAR’s Settlement of the Sitzer/Burnett Case
The $418 million settlement by the National Association of Realtors (NAR) of the Sitzer/Burnett case received its final approval in federal court.
The New York Times reported Judge Stephen R. Bough of the Western District of Missouri gave his final sign-off on the settlement, which NAR agreed to on March 15. Today’s final approval was a legal formality, as Judge Bough gave his preliminary approval to the agreement on April 23 and the trade group enacted the settlement’s call for rule changes regarding commissions on Aug. 17.
“This is an important moment for NAR members, home buyers and sellers, and the real estate industry,” said NAR President Kevin Sears, broker-associate of Sears Real Estate/Lamacchia Realty in Springfield, Massachusetts. “As consumer champions, NAR’s members have been working tirelessly to implement the practice changes required by the settlement and shepherd consumers through this period of transition. The principles of transparency, competition and choice are core to the settlement agreement and empower real estate professionals and consumers to negotiate the services and compensation that work for them.”
On Sunday, the U.S. Department of Justice issued a Statement of Interest on the settlement, declaring that it “does not address whether the proposed settlement prevents and restrains current antitrust violations, remedies past violations, or contains revised policies and practices that comply with the antitrust laws.” However, the DOJ stated that the settlement’s provision requiring written agreements between buyers and brokers prior to home tours “may harm buyers and limit how brokers compete for clients.”
Trump Names Scott Turner for HUD Secretary
President-elect Donald Trump announced his appointment of Scott Turner to become Secretary of Housing and Urban Development (HUD) in his upcoming administration.
The 52-year-old Turner is chief visionary officer at JPI, an Irving, Texas-based developer, builder, and investment manager of Class A multifamily assets. He also serves as CEO and founder of the Community Engagement & Opportunity Council and is the chairman of the Center for Education Opportunity at America First Policy Institute. During the first Trump administration, he was the executive director of the White House Opportunity and Revitalization Council.
Turner first gained national prominence as a cornerback in the NFL, playing nine seasons from 1995 through 2003 for the Washington Redskins, San Diego Chargers and Denver Broncos. In 2012, he was elected to the Texas House of Representatives, where he served a single term.
“Scott will work alongside me to Make America Great Again for EVERY American,” said Trump in a press statement.
Turner is the highest-ranking Black member of the incoming administration.
Survey: 1 in 5 Renters Put All of Their Income into Paying Rent
A new survey from Redfin (NASDAQ: RDFN) has determined that just over one in five (22%) renters are funneling all of their regular income directly into paying their rent.
As a result of this hefty paycheck absorption, 20% of renters are working a second job to cover their housing costs, while 19% complained they are working at a job they hated to afford rent. The survey’s respondents cited other strategies for covering their rent, including cash gifts from family (14%), pulling money out of retirement funds early (13%) and contributing less to their retirement savings (12%).
The new Redfin-commissioned survey was conducted by Ipsos in September and polled 1,802 adults. The survey’s respondents might be happy to learn of another study from Realtor.com that found the median asking rent was down by $14 or -0.8% to $1,720 in October, marking their fifteenth consecutive month of year-over-year declines.
“New multifamily construction projects started in the last two years have hit the market in 2024, with a greater supply of units helping to soften rents and bring renters some relief,” said Danielle Hale, chief economist at Realtor.com. “While we expect fewer multifamily homes to be finished in 2025, we still anticipate enough to increase supply, which will keep downward pressure on rents.”
Redfin CEO to Trump: We Need More Homes Now!
Glenn Kelman, the CEO of Redfin (NASDAQ: RDFN), has a message for President-elect Donald Trump: Start powering the push for new home construction.
Neither Kelman nor Redfin publicly endorsed Trump’s campaign. But in a blog posting on the Redfin website titled “Way-Too-Early Take: What Trump’s Re-Election Could Mean for Housing,” he observed that Trump’s victory has already sparked greater interest among prospective homebuyers.
“Donald Trump’s re-election seems to have had immediate consequences for housing in America,” he wrote. “Demand from homebuyers requesting service through Redfin’s site, which was already stronger since the Federal Reserve’s September 18 rate cut, was about 25% higher this weekend than the same weekend last year, the largest year-on-year gain since the downturn began in 2022. Some buyers are undoubtedly enthusiastic about a Trump economy; others may have been waiting to make major decisions until after the election.”
Kelman credited Trump’s return to the White House to younger Americans who were unhappy with the current housing market – and he added Trump need to repay this electorate support.
“The young voters who, after years living in their parents’ basement, swung right in this election, will expect President Trump to act as America’s real estate developer in chief, and build the housing that they need,” Kelman wrote. “He can do this by setting aside well-meaning regulations on home-building that limit construction and make housing less affordable: local comment periods, traffic studies, parking requirements, environmental reviews in already well-settled areas, and limits on apartment buildings in neighborhoods of single-family homes. These rules are set by state and local governments, but the federal government could create a strong incentive for states to adopt simplified and consistent housing regulations, just as it does with the drinking age.”
Kelman pointed to data that placed the nation’s housing shortage at being between 2 million and 5 million homes. But he insisted the incoming president can address this shortfall.
“Many of America’s problems are hard to solve, but this one isn’t, especially for a president who loves construction,” he continued.
FICO Rolls Out Tool to Simulate Credit Score Impacts
FICO (NYSE: FICO) has released the FICO Score Mortgage Simulator as a new analytic tool for mortgage professionals.
According to the Bozeman, Montana-headquartered company, the new tool simulates the potential impacts to a consumer’s FICO Score with various simulated changes to their credit report data, such as reducing credit card balances or deleting a collection account. With this data, mortgage brokers and lenders can help potential borrowers gauge how the changes could affect their FICO Scores and show them how different credit decisions could open up more loan options and favorable interest rates.
The company added that the tool can run credit event scenarios from an applicant’s credit report data, such as paying off a car loan, and determine the potential impact to that individual’s actual FICO Score.
“FICO is continuously working on innovative product offerings that can responsibly expand credit access to more people,” said Geoff Smith, vice president and general manager of consumer scores at FICO. “Even a few additional points in a potential borrower’s FICO Score can have a material impact on the mortgage loan terms offered. Ultimately, the FICO Score Mortgage Simulator will prove to be a powerful tool that can enable more people to achieve the dream of homeownership.”
Invitation Homes Agrees to $48 Million Settlement with FTC
The Federal Trade Commission (FTC) has announced Invitation Homes, the country’s largest landlord of single-family homes, has agreed to a settlement where the company will turn over $48 million to refund consumers harmed by its deceptive actions.
The company was accused of deceiving renters about lease costs, charging undisclosed junk fees that could total more than $1,700 yearly, failing to inspect homes before residents moved in, and unfairly withholding tenants’ security deposits when they moved out. Consumers looking for rental houses owned by the company paid mandatory nonrefundable fees – including application fees up to $55 and reservation fees up to $500. Since 2019, Invitation Homes has collected more than $18 million in application fees alone for deceptively priced houses.
According to the FTC complaint, Invitation Homes’ marketing materials promoted that every home the company rents passed a “quality assurance inspection” before renters moved in and that the company provided “24/7 emergency maintenance.” However, there were numerous instances in which renters arrived at a home to find it in significant disrepair, and the FTC noted that residents in 33,328 properties submitted at least one work order within the first week after they moved in between 2018 and 2023.
Furthermore, Invitation Homes was accused of unfair eviction practices, including during the Covid-19 pandemic when both national and many state restrictions on evictions were in place. When the Centers for Disease Control and Prevention (CDC)’s eviction moratorium was in place, Invitation Homes intentionally steered its renters away from filing the CDC declaration required to prevent renters from being evicted, instead encouraging renters to complete the company’s own “Hardship Affidavit.” Despite its name, this document provided no eviction protection to renters.
“Invitation Homes, the nation’s largest single-family home landlord, preyed on tenants through a variety of unfair and deceptive tactics, from saddling people with hidden fees and unjustly withholding security deposits to misleading people about eviction policies during the pandemic and even pursuing eviction proceedings after people had moved out,” said FTC Chairwoman Lina M. Khan. “No American should pay more for rent or be kicked out of their home because of illegal tactics by corporate landlords. The FTC will continue to use all our tools to protect renters from unlawful business practices.”
NAR INTERIM CEO NYKIA WRIGHT NAMED PERMANENT CHIEF EXECUTIVE
The National Association of Realtors (NAR) has announced the appointment of interim CEO Nykia Wright as its new chief executive. Wright became interim CEO last November. Her appointment makes history as the organization’s first woman and first Black chief executive. Wright was formerly CEO of the Chicago Sun-Times and is co-founder of SonicMessenger, a software-as-a-service startup designed to measure audience engagement by leveraging smart audio. She serves on the boards of the American Cancer Society and the Better Government Association and is a member of the Dean’s Advisory Council at the Tuck School of Business at Dartmouth, her alma mater. Wright succeeds Bob Goldberg, who announced his retirement in June 2023. “I am thrilled Nykia is staying on board to lead us through this time of transformation,” said 2024 NAR President Kevin Sears, broker-associate of Sears Real Estate/Lamacchia Realty in Springfield, Massachusetts. “She has been instrumental in leading us up to this point, and her unwavering commitment to our members make her the ideal steward for guiding our association through the evolving real estate landscape.” NAR RIVAL AMERICAN REAL ESTATE ASSOCIATION BEGINS MEMBERSHIP DRIVE
Two days before the changes brought by the National Association of Realtors’ (NAR) settlement are slated to go into the effect, the start-up rival American Real Estate Association (AREA) has announced the launch of its membership drive. Jason Haber, a New York City-based agent with Compass, and Mauricio Umansky, the Los Angeles-based founder of the luxury brokerage The Agency and a celebrity from his appearances on several reality television shows, first announced their plans for AREA as a NAR alternative in January, but to date they mostly kept a low profile on their endeavor. Today, Haber and Umansky sent out an email alert inviting real estate professionals to apply for 2024-2025 membership in AREA. “We’ve been busy behind the scenes these last few months building the foundation for your new trade association,” said the co-founders in their email alert. “During this building phase, we also began ramping up our advocacy efforts, starting with the successful push for changes at the VA to help protect our veteran home buyers. We are currently expanding our advocacy efforts and working around the country on key policy issues that affect your business.” Haber and Umansky reminded their potential members they are self-funding the launch of the nonprofit AREA. The pair offered two introductory price tiers – a basic membership of $20 for 2024 and all of 2025 with $20 off the 2026 renewal plus 20% off all AREA events through 2025, and a founding membership of $1,500 that covers dues for the next 10 years. |
Veterans Affairs Removes Compensation Hurdle for Military Buyers
The Department of Veterans Affairs officially announced Tuesday a temporary policy allowing VA home buyers to compensate their real estate agent directly. The department says it will determine whether a formal rulemaking process is necessary. The move brings relief to VA home buyers, whom the National Association of REALTORS® has been working feverishly to support in recent months. NAR launched an “all-hands” effort earlier this year to change the department’s previous rule, which prohibited VA borrowers from paying a “brokerage fee or commission in connection with the services” of a real estate professional. The rule presented a potential hardship for VA buyers under NAR’s proposed settlement agreement. Under the VA’s new temporary policy, “eligible veterans, active-duty service members and surviving spouses who use their VA home loan benefits can pay for certain real estate buyer broker fees when purchasing a home,” the VA said in a statement Tuesday. “This update is intended to ensure VA’s programs continue to promote access to homeownership for veterans.” Housing for veterans remains a top advocacy issue for NAR. “NAR launched an all-hands advocacy effort on this issue, meeting with VA officials, engaging with lawmakers and rallying our industry partners to ensure this prohibition was lifted,” says NAR Chief Advocacy Officer Shannon McGahn. “Without this change, thousands of veteran buyers could be denied access to professional representation in their pursuit of the American Dream of homeownership. Taking this extra step ensures veterans have the same opportunity as others to compete in a tight housing market. We applaud the VA for recognizing this danger and acting swiftly to protect veterans.” The VA home loan guaranty program is a vital homeownership tool that provides military veterans with a centralized, affordable and accessible method of purchasing homes with no down payment as a benefit for their service to the nation. It’s also the only program that explicitly banned buyers from directly paying for professional real estate representation, NAR President Kevin Sears said in a statement. “We applaud the VA for revising this policy and allowing veterans and active-duty service members the same advantages as other buyers in a competitive real estate market,” Sears said. “We look forward to continuing this conversation, and our 1.5 million members stand ready to support the VA in whatever way possible to protect the brave men and women who serve this country and ensure they are given the equal opportunity to achieve the American Dream of homeownership.” The VA and NAR say they will continue to monitor the evolving homebuying market, as practice changes take effect Aug. 17, and will issue updates as they occur. The VA adds that it “encourages veterans to negotiate buyer broker fees with their real estate professional. VA buyers can also still ask sellers to cover the buyer broker’s compensation at closing.” |
FOR IMMEDIATE RELEASE
April 1, 2024
Recent National Association of Realtor Settlement Will Set Back Black Homeownership
Once again, we, the Consolidated Board of Realtists believe The National Association of Realtors (NAR) is on the wrong side of history. Just as they stood against the 1968 Fair Housing Act, Friday’s settlement stands as an affront to Black and other underserved homebuyers and the predominantly minority real estate agents who represent the homebuyers.
“The biggest impediment to Black homeownership is down payment and closing cost funds. This settlement serves to shift the buyer’s agent commission payment directly to the homebuyer when industry tradition and practice is that the listing agent shares the selling commission with the agent who is helping the homeowner sell the home. This change is devastating to Black homebuyers,” said Mark Alston, Legislative Committee Chair, Consolidated Board of Realtist.
For Black homebuyers, this is bad news. In this country, the average net wealth of Black households is $27,000 which represents over nine times less than the $250,000 average net wealth of White households. Black families have 68% less in liquid assets than their White counterparts along with fewer opportunities to receive financial assistance from family members. Down payment and closing costs are hard enough of to save. Adding the buyer’s agent commission to the ledger puts homeownership out of reach.
According to The National Association of Realtors the average Black Realtor earns $16,700 per year which is three times less than the $49,400 a White Realtor averages. Historically, Black people are buyers’ agents. U.S. White homeownership is almost 74%, Black homeownership is 45%. The opportunity to be the seller’s agent is less for Black agents just based upon the overall ownership percentages.
“We believe this settlement will most assuredly have a racially disparate impact upon Black homeownership,” said Lyric Armstrong, 44th President, Consolidated Board of Realtists, Los Angeles, CA.
The American dream of homeownership is not dead in the Black community, it just keeps getting pushed farther away. We are disappointed the NAR did not fight for us. It would have been better to lose with the dignity of being right and representing all of your membership, than to settle in shame.
Contact: Mark Alston, Legislative Committee Chair Lyric Armstrong, President
(310) 908-0070 (213) 444-6336
Malston55@yahoo.com Lyric@LJAestates.com
MESSAGE FROM THE PRESIDENT
