While the economic decline does not appear to have bottomed out yet, there seems to be some improvement in home sales.
Some Housing Improvement
While the economic decline does not appear to have bottomed out yet, there seems to be some improvement in home sales.
While the prices are lower than most sellers would like, any positive movement is welcomed by everyone.
Certainly, local governments need to have a stable housing market because the Virginia tax system only gives the property tax as the major local revenue source.
The federal stimulus package contained a tax credit for first time home buyers that should be useful.
At the state level, our tax rate is so much lower than the federal tax bite that incentives are not as meaningful.
But, the General Assembly did take action on some of the abusive lending practices that led the nation into the subprime loan calamity.
Mortgage Abuses Targeted
As a member of the Virginia Housing Commission, I was active in a work group that met last year to fashion legislation to prevent mortgage abuses.
When the General Assembly convened in January, I was the chief co-sponsor of legislation to license mortgage loan “originators.”
These are the people who take applications for residential mortgage loans or negotiate the terms of the loan.
The legislation spells out educational requirements as a prerequisite to obtaining a license and continuing education requirements once a license is obtained.
Applicants for licenses will be tested, must secure a bond of at least $25,000, and also undergo a criminal background check.
Tough Standards
There are also standards that a licensed loan originator must meet or their license will be revoked.
Such standards include a criminal conviction that involves deception, misrepresentation, or fraud.
The standards also include the entry of a civil judgement or administrative order based upon similar deceptive actions.
What will really make the standards and the licensure requirement have teeth is that a loan originator who obtains a license must also report to a national database.
Therefore, people who lose their license in Virginia will not be able to travel to another state and obtain a new license and vice versa.
We delayed the effective date of the legislation to July of next year in order to allow the training classes to be developed.
This new licensure requirement will, hopefully, help get rid of the few unscrupulous mortgage lenders out there.
Hurricane Tax Holiday
Starting this Monday and continuing until Sunday, May 31, there is a sales tax holiday on items useful during and after hurricanes.
There are 22 items that the Virginia Tax Commissioner has designated to be exempt from the 5-percent sales tax.
These include big items like generators valued up to $1,000 and small items like batteries and flashlights. It also includes bottled water.
The law creating this tax holiday also allows retailers to pay the sales tax on any other item themselves and pass the savings to you.
Keep in mind that two hurricanes and one tropical depression since 2003 have killed 49 people and caused over $2 billion in damage in Virginia.
It is better to be prepared. For more information about how to deal with natural disasters, you can go on-line to Ready Virginia.
You can also go on-line to tax.virginia.gov to get a list of items that qualify for the sales tax holiday.
