June is National Homeownership Month and HUD and the FHA have been sponsoring activities across the country. The theme this year, “Promoting and Protecting Homeownership,” emphasizes consumer education about loans and the lending process. Homebuyer Education is the first and one of the most important step towards successful homeownership

 This week, Rich and Steve spoke with Christine Hannifan, executive director of The Housing Network of Rhode Island. 10 of its Associate members run the Homeownership Connection, A homebuyer education training program   In addition to promoting National housing Month, June marks the 15,000^th graduate completing the education program at The Connection.

No matter what stage of homeownership you are in, from just thinking about it to homeowners looking for help to stay in their home, The Homeownership Connection offers a range of classes, counseling and workshops to low and moderate income residents throughout the state.  

The Homeownership Connection offers a range of pre- and post-closing programs including:

• Homebuyer education
• Counseling
• Home repair and maintenance
• Landlord training
• Lead law informational training
• Financial Fundamentals
• Foreclosure prevention
• Predatory lending prevention and awareness campaign
• How to Buy a Foreclosed Property
• Foreclosure Prevention Workshops 

This Week’s Real Estate Insight:

Teaching prospective homebuyers about the home buying process and basic financial literacy skills creates more mortgage-ready buyers and helps those buyers become successful long-term owners.  Freddie Mac states that education and counseling help lower mortgage delinquency by 19% and improve most borrowers’ credit picture.

 The National Association of Realtors continues a lobbying push for the an 18 month moratorium on the Home Valuation Code of Conduct , arguing that they produce deal-killing appraisals and  encourge the use of appraisers unfamiliar with local conditions. Adopted to curtail corrupt appraisal practices,  it has caused quite a bit of problems as well.

Under the HVCC, neither a mortgage broker nor a real estate agent may selects an appraiser,  A lender may select the appraiser, but the person who does the selecting can have nothing to do with the loan production staff.  Many have opted to enlist a third party Appraisal Management Company (AMC).  An AMC  receives a request from a lender and then assigns an appraiser from its  approved list of appraisers. Too often the appraiser does not live in the area of the subject property; he or she may not  be a member of the local MLS and does not have access to relevant comparable information.  If all real estate is local, how does it make sense to use an appraiser who does not have specific local-market knowledge?

The Federal Housing Administration (FHA) announced it  will not implement the HVCC for its mortgage insurance programs.  Although they are currently reviewing its appraisal policies and may adopt changes that take HVCC into account.