Unchartered Territory: The New Normal?
"Be thankful we're not getting all the government we're paying for."
"Buy land. They ain't making any more of the stuff."
Dear Friends, Clients and Colleagues,
Both quotes are from the eminent social critic and comedian Will Rogers (1879-1935), who in his heyday was the Great Depression Era’s George Carlin (or is it vice versa). George Carlin didn’t quite make it to the Great Recession; however, the biting humor from both commentators offers a welcome antidote to the current unchartered territory our industry is facing.
Two months into what may be considered the new normal with RESPA reform we are wondering what the changes accomplish. Click here for the new HUD settlement booklet, FAQs, procedures and more. Our perspective on RESPA reform is more work, same fees, same deck reshuffled, and settlement costs set high so as to not get caught short. This is not really about consumer protection; rather, it is about maximizing or forcing better efficiencies in the settlement agent industry – both financial and product. Those who can afford to upgrade or work with greater efficiencies will survive, maybe even benefit. The settlement agent industry will need to embrace technology to make itself more efficient (i.e. lower operating costs and faster delivery time). We deal with real estate information. That is our widget. Delivering the product in an efficient and meaningful manner will be the key. Will the consumer have a better understanding of the transaction, now that the Settlement Statement and GFE are both 3 pages, instead of 2? The jury is still out deliberating this question.
On another front, New Jersey recently passed legislation authorizing the counties to establish Homelessness Trust Funds as a means of eliminating homelessness throughout the state. The method of funding is to tack on a $3.00 charge to virtually every document that we now have to send for recording. Four counties have enacted ordinances that establish their Funds: Middlesex, Passaic, Bergen and Hudson, with another one, Somerset, coming on line on June 1, 2010. Click here for details on these developments per county. The real estate industry is one of the few shining stars of New Jersey. Over the last decade, however, our state legislature has sought to ride the back of the real estate product by increasing transfer fees (twice); tacking on so called mansion taxes and now a Homelessness Trust Fund charge, as a means of attempting to balance the out of control State Budget. Talk about killing the Golden Goose, or maybe it should be Goosing the Golden Goose . . .
The Pew Charitable Trusts recently conducted a sobering study, "Beyond California . . ." covering nine states (including New Jersey) experiencing extreme financial pressures. Click here for a summary and the full report by Pew Center on the States. So when is the NJ State Legislature going to break the camel’s back on the real estate industry? Hopefully, never!
Finally, stay tuned on the COAH front. The regulatory aspects of affordable housing in New Jersey are about to change. Click here for a very recent preview.
"Everything is changing. People are taking their comedians seriously and the politicians as a joke." - Will Rogers
"No one knows what’s next, but everybody does it." - George Carlin
Read. Enjoy. Use the news.
Check out the Title Village website.
Richard L. Eland
President, Title Village
100 Overlook Center, 2nd Floor
Princeton, NJ 08540