tag:www.thehomeownerblog.com,2009-02-10:/1 2011-04-08T12:42:47Z The American Homeowners Grassroots Alliance is a nonpartisan consumer advocacy organization dedicated to assisting homeowners understand significant policy issues affecting homeowners and homeownership, and helping them make their voices heard by state and federal officials. Movable Type 4.25 tag:www.thehomeownerblog.com,2011://1.65 2011-04-08T12:34:54Z 2011-04-08T12:42:47Z

American homeowners are the beneficiaries of the 6th district federal court's April 6 opinion affirming the Federal Trade Commission's earlier decision prohibiting multiple listing services from blackballing competitors who charge home sellers less than the prevailing real estate sales commission...

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In her decision Circuit Judge Karen Moore concluded that "substantial evidence supports the Commission's findings that: 1) Realcomp's website policy gave rise to potential genuine adverse effects on competition due to Realcomp's substantial market power and the website policy's anticompetitive nature; 2) the website policy in fact caused actual anticompetitive effects; and 3) Realcomp's proffered precompetitive justifications were insufficient to overcome a prima facie case of adverse impact. These findings establish that Realcomp's website policy unreasonably restrained competition in the market for the provision of residential real-estate-brokerage services in southeastern Michigan and the Realcomp MLS area."

American Homeowners Grassroots Alliance President Bruce Hahn thanked Judge Moore for her wisdom and the FTC for it's diligent defense of American homeowners. "This decision means that the issue is dead. Many other MLS's have tried the same tactic, and the NAR invested heavily in this appeal. They have lost every case. It is time for MLS's and industry leaders to put this issue behind them and stop wasting their members' dues money on lost causes that  only offend their customers and tarnish the profession's reputation. Instead they should focus instead on how to better serve their clients and their members."  ]]> tag:www.thehomeownerblog.com,2010://1.64 2010-11-11T15:36:52Z 2010-11-11T15:38:28Z

On November 10 the bipartisan Federal Deficit Commission proposed a massive change in federal spending and the tax code. The plan would save $3.8 trillion by 2020 and balance the federal budget by 2040. We congratulate the Deficit Commission for...

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Everybody can find parts of the proposal they oppose, and most of us can find parts that we like. What's critical is that we support the bottom line. If you don't like specific parts of the plan's tax increases and/or budget cuts you should offer specific alternatives to minimize the pain and/or make up for the difference. For example we're concerned about the Commission's proposed $500,000 cap on the mortgage interest deduction. At minimum it should be indexed to housing values. A flat $500,000 cap would have little impact in many rural areas where you can buy one of the largest and nicest homes in the county for that amount. In pricey cities like Washington DC that will barely buy you a small starter home. A cost of housing index could be applied that would lower the cap in the areas when home prices are lowest and raise it in the more expensive areas.

We'll look at how such a refinement might work out. If it leaves a large share of middle class homeowners unable to deduct all of their mortgage interest costs, then at minimum we'll propose some alternative revenue sources that would fund an increase in the caps. We would like to keep all mortgage interest fully deductible, but that may not be possible in the give and take of the political debate. It may mean that the future owners of a $2 million, 6,000 square foot McMansion can't deduct all of their mortgage interest. This is unfortunate, but perhaps it would help accelerate the trend towards building smaller homes, which are inherently more energy efficient.

Some of the plan's other provisions concern us as well, but we'll also suggest other budget cuts and/or revenue sources to cover other modifications we might suggest to Congress or the Deficit Commission.

This debate will test the mettle of consumers, business interests and politicians. Many will speak out against cuts in their favorite programs or tax deductions, but will not offer alternative sources for revenue to make up the difference. We all owe it to the future of our country and future generations not to take such a gutless approach. Voters should certainly express their views on specific programs and taxes to their legislators, but at the same time they should insist that legislators support the Deficit Commission's bottom line, and come up with alternatives that are least painful to their constituents and most consistent with their own ideology to get there.

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Currently there is no tax on estates. However next year the estate tax reverts to previous levels - a $1 million tax exemption per estate. Congress is trying to decide whether to let the estate tax revert to this previous...

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Most estate tax avoidance tools are used to maximize the amount left to children or preserve the family business. In the latter case, Congress should exempt family farms and businesses up to a reasonable size from the estate tax. We should also remove the inequities in the current estate tax with respect to the number of heirs and their circumstances. Some people have no heirs, others have quite a few kids, and in some cases one or more of the latter children may be handicapped and unable to work and/or care for themselves.

The estate tax exemption should be tied to the number of children. Give everyone an exemption of $1 million per child (out of fairness the childless or those with no surviving children should also get a $1 million exemption). This would enable a parent to provide a good retirement nest egg for each child in an era where economic conditions make it unlikely that most able bodied, hard working, and  thrifty children are going to be able to save enough for even a modestly comfortable retirement. Give another $1 million exemption for every child that is handicapped and unable to work and/or care for themselves, in order to provide additional support for their special needs. Then eliminate the trusts and other estate tax avoidance tools and apply the estate tax to whatever is left. The exemption should be indexed to 2010 dollars so we don't have to keep revisiting the issue.

This approach aligns well with the primary estate planning goals of most people and would effectively eliminate taxes on most estates. There is no such thing as a "good" tax, but such a structure would reduce concentrations of wealth which have proved destabilizing in many societies. We do need to reduce the deficit, by spending reductions insofar as possible, but we will still need to tax individuals to bring it into balance. This may not be a "good" tax, but it would be a is a less onerous  tax on individuals compared to many of the other alternatives.

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On August 29, Shaun Donovan, Secretary of Housing and Urban Development, said that the housing market's July was "worse than expected" and that the Administration may support a new homebuyer tax credit. His statement follows similar recent expressions of concern...

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With U.S. unemployment stuck around 10%, a further erosion of the economy could be devastating. On the other hand, the bailout and stimulus funding approved by Congress at the request of Presidents Bush and Obama in recent years has resulted in a dramatic federal deficit increase that itself is posing a growing risk to the nation's long term economic stability. In fairness, those steps may have prevented an economic depression, but the net result is that we face a policy dilemma.
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Clearly Congress and the Administration would need to anticipate such a threat and act in time to prevent it from happening. Whether a buyer tax credit is the best tool to stabilize the market is the next question. It might be more efficient for the government to simply buy the mortgages from lenders at distressed prices, then lease the homes back to any current owners that could still afford market priced rents, with a buyback option at the government's cost.  If the government gets the properties cheap enough, market rents may then cover the government's cost of borrowing the money. Homeowners would not have to leave their homes and could buy them back when they got back on their feet. This will be a very difficult judgment call, and President Obama, his housing/economic team, as well as Congress, need to keep a sharp eye on the economy over the coming months and remain prepared to act quickly and decisively if they see signs of more rapid and serious economic deterioration. 
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We applaud Congress for passing comprehensive financial services reform legislation. While the legislation is imperfect in the view of most proponents and opponents, until now there has been no new measure in place that would preclude another massive financial meltdown...

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The outcome clearly reaffirms the analogy of the Congressional legislative process to the making of sausage. In the view of many, the legislation does not address all the problem areas. In the view of others much of it is unnecessary and/or harmful. There is probably some truth in both views. Clearly the legislation's effectiveness in many areas will depend on the process of developing the numerous implementing regulations, where the outcomes in each case can range from strong and effective new rules to unintended consequences, and/or a waste of everyone's time.

Based on the history of major reforms, we will probably see some of all three. The legislation will also be revisited many times both to address loopholes and overkill. Both lie in the eyes of the beholders, and will certainly be influenced public opinion regarding financial services sector practices after the regulations have been implemented. Nevertheless there is today less likelihood of a future financial services meltdown than there was yesterday. For that we should be grateful, and thank the sausage makers for all the time and effort they put into the process.

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The Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, is urging both to avoid participating in the Property Assessed Clean Energy (PACE) program. PACE lets homeowners borrow money from their local governments to finance the high upfront...

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Nevertheless, the Federal Housing Finance Agency has a point. Sometimes hoped-for energy savings don't fully materialize. Unfortunately some energy saving investments, such as solar panels, return far less in energy savings per dollar of investment compared to other alternatives, such as adding insulation to older homes that have little or none. It is understandable that the FHFA would not want to subrogate its mortgages to other debts, when many of those energy saving alternatives will leave the homeowner with less money for their mortgage after they have paid their PACE special tax assessment.
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According to FTC Chairman Jon Leibowitz, 200,000 homeowners who defaulted on mortgages serviced by Countrywide may receive refunds under the settlement. This was an appropriate settlement, and should discourage similar gouging by mortgage lenders and servicers in the future. Eligible homeowners will receive instructions on how to apply for the refunds in coming months. More information is available at http://www.ftc.gov/countrywide.

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A section in an early version of the Senate's financial services reform bill would have imposed a fiduciary duty on all financial advisers. It has been replaced by language that would require a study to determine if the current standards...

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A fiduciary duty requirement is not that onerous. Real estate brokers owe a fiduciary duty toward their toward their clients, as do attorneys and many other professionals. It's not that complicated or hard to do, nor have fiduciary duty obligations resulted in excessive numbers of lawsuits or other serious problems in other sectors.
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It's time for investment advisors who care about their clients and financial services executives who care about their reputation to join consumers on this issue and help get rid of investment advisors who don't. ]]> tag:www.thehomeownerblog.com,2010://1.55 2010-05-15T10:58:55Z 2010-05-15T11:00:19Z

Up until a recent court decision it was assumed that the Federal Communications Commission had the necessary authority to make sure consumers had the right to access legal websites and use legal applications. The FCC has needed to use that...

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We believe that there must be a mutually acceptable middle ground somewhere in this debate. The telecoms all say they continue to support network neutrality, but are concerned that some future FCC may not adhere to its light regulatory approach. The companies claim that the Internet were to be heavily regulated, it could undermine continued private investment that is critical to achieve universal broadband availability. This is a credible argument - infrastructure  investment in this sector continues to be impressive despite middling profit levels, and continued federal budget realities are such that universal broadband availability will not be achieved anytime soon without that investment. With these factors in mind it would seem that there must be some formula that would give the FCC just enough authority to protect maintain network neutrality should some company violate Network Neutrality principles in the future, but not so much authority that investors or consumers need fear that private sector investment might be threatened by a heavy-handed regulatory approach by a future FCC. ]]> tag:www.thehomeownerblog.com,2010://1.54 2010-05-02T13:32:23Z 2010-05-02T13:34:35Z

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Acoustic switches are mandated on offshore oil rigs by Norway and Brazil, and some major oil companies install them even where they are not required. The Mineral Management Service (MMS) of the U.S. Department of the Interior, which regulates U.S. offshore oil rig safety procedures, concluded that the $500,000 devices are not necessary in light of other existing emergency shut-off alternatives. The oil industry has raised doubts about the effectiveness of acoustic switches, which fortunately have not yet been put to a real life test. The MMS was clearly wrong about the need for additional backups, but the oil industry could be right about the effectiveness of the as yet untested  acoustic switches. The solution is to ban all new U.S. offshore oil exploration and oil production rigs until independant rigorous testing confirms that acoustic switches are fail safe, and to require their installation (or the installation of a fail safe alternative), on all new exploratory and working offshore oil rigs in the future. MMS should also re-inspect all existing U.S. offshore oil rigs and require the installation of additional safety measures as appropriate. ]]> tag:www.thehomeownerblog.com,2010://1.53 2010-04-15T16:40:17Z 2010-08-30T21:05:53Z

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Opinions on the latter vary greatly, and those opinions are mainly conjecture no matter which side they fall on. In the opinion of the financial services sector, all substantial regulatory changes are risky. If we heed their opinion, there will very little protection against another meltdown in the future. We've seen the results of the meltdown, and we would rather risk over-regulation than leave ourselves exposed to another financial meltdown. Besides, any regulatory excess will soon be corrected anyway. We can trust the financial services sector to get right to work on correcting any such excesses, even before President Obama signs the bill! That would be a productive use of their time and money. For that matter, even if the bill was virtually toothless, we can also count on the financial services sector to get right to work on watering it down further before President Obama signs the bill. Better that they productively spend their time and money bringing the measure back to neutral rather than gutting a weak bill entirely. At least that way we'll buy ourselves a couple extra years before the next meltdown.
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Many rural and other homeowners either do not have access to broadband or don't have Internet access at fast enough speeds and affordable costs to support home-based businesses or sophisticated healthcare applications that would allow them to remain in their...

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The proposed National Broadband Plan is the first step to reaching a common agreement on the specifics and priorities of those goals. Once we reach a consensus on the goals, we will face significant challenges regarding the mechanics of its implementation. Those challenges will involve complicated decisions between alternative ways to achieve the nation's broadband goals. Policymakers will have to make those tough choices, but the Plan is the critical precursor to the day when all American homeowners and other consumers can fully realize the benefits of broadband.

Chairman Genachowski  and the staff of the Federal Communications Commission deserve our thanks for taking this first step. ]]> tag:www.thehomeownerblog.com,2010://1.51 2010-03-09T15:37:31Z 2010-08-30T21:06:50Z

Colorado last week joined a growing list of states that are expanding Internet sales tax collection. North Carolina and Rhode Island last year passed similar laws. We sympathize with the need of many states to raise money in this troubled...

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E-commerce helps the environment in several ways. Odd items (and sometimes really, really odd items) that might otherwise end up in a landfill, find a home with a consumer in another state who always wanted one of those. E-commerce also saves a lot of gas and wear and tear on our transportation infrastructure, and reduces traffic jams. Instead of individually driving their vehicles to the mall, the UPS or FedEx trucks, or your postal carrier can drop off your purchases, and they go down your street every day anyway.  

An e-commerce state sales tax exemption would be consistent with other sales tax exemptions for worthy purposes (back to school sales tax holidays, sales tax exemptions on prescription drugs, etc.). State legislators should consider the wishes of their constituents and repeal sales tax collections on Internet purchases. They should pursue alternative sources of revenue more palatable to their constituents if the state needs additional funds. ]]> tag:www.thehomeownerblog.com,2010://1.50 2010-03-05T12:06:05Z 2010-03-05T12:11:20Z

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Blogger Congress is considering financial-system-overhaul legislation. Right now there are no laws in to prevent another financial meltdown. It's clear that major reform is necessary. The problems are complex, and there are many complicated proposals out there. Sometimes someone comes up with a fairly simple solution to a complicated problem.  One of them came from the famous investor and "Oracle of Omaha" Warren Buffet. His recent suggestion: "In my view a board of directors of a huge financial institution is derelict if it does not insist that its CEO bear full responsibility for risk control," Buffett wrote. "If he's incapable of handling that job, he should look for other employment. And if he fails at it -- with the government thereupon required to step in with funds or guarantees -- the financial consequences for him and his board should be severe."

Buffet's concept can be formalized in federal legislation by requiring that the CEO and any other senior staff or board members who had been active proponents of the company's irresponsible policies be asked to seek new career opportunities elsewhere as a precondition for future federal bailouts of companies that substantially contributed to the financial crisis. This policy should provide for an orderly executive transition, and it should not apply to any employees or board members who weren't involved in the decision making process regarding these policies, or who only provided staff support. In most of the offending companies, you would be talking about only a small handful of employees, and in the last crisis probably only in the low hundreds.

Creating a career hazard for those who created the current moral hazard in the financial services sector would discourage their successors and potential imitators from such  choices in the future. ]]> tag:www.thehomeownerblog.com,2010://1.49 2010-02-26T16:11:57Z 2010-08-30T21:07:59Z

The political math on this issue is really very simple. The public supports a health care bill, but believes the current Democratic alternatives are too expensive and the current Republican alternatives are too stingy. The public wins if both sides...

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Democrats will certainly lose a lot of seats this fall if they game the reconciliation process in order to pass a bill that the public perceives is too expensive. Republicans will hammer them mercilessly on both the cost of the measure and the unfairness of the process. Moderates will desert the Democratic party in droves, whether the healthcare bill passes or not. Conversely the Republicans risk losing their current polling advantage on this issue if they refuse to meet the Democrats in the middle and the Democrats then take the more moderate approach in order to pass a health care bill without gaming the process. The risk for Republicans is that the Democrats might voluntarily reduce the cost and coverage of their bill as much as it takes to get 60 votes in the Senate, which would require the vote of one moderate Republican and make it a "bipartisan bill" in Washington parlance. The bill would only have to be affordable and just a little better that the Republican alternatives to achieve wide public support, and that is not a big challenge.  If the Democrats took the latter approach and succeeded, the current Republican polling advantage on this issue would evaporate.
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The risk for Republicans of betting on Democratic self destruction is that the Republicans then have no control over the outcome. If the Democrats do manage to pass a bill that is broadly perceived as both affordable and better than the Republicans are offering, they will recapture public support on this issue. The polling advantage could turn against the Republicans if the public also perceives the failure to reach a compromise in the current discussions was more because of Republican inflexibility than Democratic inflexibility.  

As the Olympic games in  Vancouver wind down, the health care policy game finals are starting in Washington. Step right up and place your bets, folks. The final score will be announced this November.]]>