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									       R E P O RT

        Real Estate Report - a monthly update from the Kentucky Association of REALTORS®              December 08 Issue

HUD announces new, permanent FHA mortgage loan limits
U.S. Department of Housing and Urban Development Secretary Steve Preston announced the new Federal Housing
Administration (FHA) mortgage loan limits for single-family homes as prescribed by the Housing and Economic
Recovery Act of 2008.

Beginning January 1, 2009, FHA will insure single-family home mortgages up to $271,050 in low cost areas and up to a
maximum of $625,500 in high cost areas. The February 2008 Stimulus Package temporarily raised the FHA maximum to
$729,750 through December 31, 2008. The new $625,500 maximum, however, represents a significant increase over the
                                                                $362,790 limit that was in effect prior to the Stimulus

Fannie, Freddie suspend foreclosures                              “In today’s environment where access to credit is
                                                                  being restricted, we need to make mortgage loans
December is here and the saying “home for the holidays”           readily available to households throughout the
may hold more meaning to those facing foreclosure right           country, and especially in high-cost areas,” said
now, and that spirit, Fannie Mae and Freddie Mac have             Preston. “These new loan limits will ensure FHA can
announced a suspension on foreclosures and evictions              to continue help struggling homeowners refinance
through January of 2009.                                          into safe, affordable government-insured loans, and
                                                                  allow many first-time buyers take advantage of
The two mortgage giants have issued a notice to its loan          today’s buyers market”
servicing organizations and retained foreclosure attorneys
directing them to suspend foreclosure sales on occupied           For several years, FHA’s loan levels were below the
single-family properties as well as the completion of             cost of the average home in communities across the
evictions from occupied single-family properties                  nation. As a result, families who needed FHA
scheduled to                                                       mortgage insurance to qualify to buy a home were
occur from                                                         effectively locked out of the process. In some cases,
November 26,                                                       borrowers turned to exotic subprime loans.
2008 until
January 9, 2009.                                                   FHA mortgage insurance makes home financing
The effort was                                                     more available to low-income and first time
made to support                                                    homebuyers. This is because the mortgage is backed
the streamlined                                                    by the full faith and credit of the government,
modification                                                       freeing lenders from assuming the risk of default.
program that
was announced                                                      Higher FHA loan limits do not cost the government
on Nov. 11.                                                        any money because the FHA Insurance Fund is fully
                                                                   supported by premiums paid by borrowers who
The suspension                                                     receive FHA-insured mortgage loans.
will help servicers implement the Streamlined
Modification Program recently announced by Freddie                The Housing and Economic Recovery Act pegs the
Mac, Fannie Mae, the Federal Housing Finance Agency               national conforming mortgage loan limit to a house
(FHFA), HOPE Now and 27 mortgage servicers,                       price index chosen by the new Federal Housing
scheduled to launch December 15. The temporary                    Finance Agency (FHFA). For 2009, the national
suspension is also expected to give servicers more time to        conforming limit will remain at the current level of
help borrowers avoid foreclosure.                                 $417,000.

Source: RIS Media                                                 For more information, visit www.hud.gov.

                                               161 Prosperous Place, Lexington, KY 40509 · 263-7377
                                                                                         (859)              www.kar.com
R E P O RT                  Real Estate Report - a monthly update from the Kentucky Association of REALTORS®       Page 2

REALTOR.com sets record straight on erroneous FSBO claims
A press release issued on Wed., Nov. 12, by ForSaleByOwner.com contained inaccuracies and misleading statements
about its ability to place unlisted for-sale-by-owner information on REALTOR.com, the official Web site of the National
Association of REALTORS® operated by Move Inc. NAR and REALTOR.com are setting the record straight with the
following clarifications:
         · The settlement agreement between NAR and the U.S. Department of Justice made no provision to allow unlisted
         properties, such as "for-sale-by-owner," to be posted on REALTOR.com.
         · ForSaleByOwner.com does not in any way enable home sellers to advertise their home on REALTOR.com
         without broker representation; every property on REALTOR.com must be listed by a licensed real estate broker.
         · REALTOR.com has not authorized ForSaleByOwner.com to resell REALTOR.com's Showcase Listings
         Enhancement package.
         · There is no relationship between ForSaleByOwner.com and REALTOR.com.
         · There are no unrepresented homes on REALTOR.com. Every property on
         REALTOR.com must be listed by a licensed real estate broker, and unrepresented
         properties would not qualify to be submitted to a REALTOR®-owned and
         operated MLS.

REALTOR.com® has asked ForSaleByOwner.com to issue a retraction.
ForSaleByOwner.com did not discuss in advance the statements in its press release with
REALTOR.com® nor did it request or receive permission to use the REALTOR.com®
name in its press release.

Consumers spend more time with                              NAR addresses re-listing practice
                                                            A white paper introduced during a National Association of
Consumer engagement on REALTOR.com continued                REALTOR® conference seeks to clear up the murky issues
to increase in September 2008 with 17 percent year-         associated with properties that are "re-listed" by
over-year growth in the total time visitors spent           REALTORS®.
searching real estate despite a 5 percent decline in
total minutes for the real estate category.                 The practice of re-listing for-sale homes - or temporarily
                                                            pulling them off of the market and then reintroducing them as
The September Score Media Metrics report also               "new" listings - has been a controversial topic in the industry,
shows consumers spent 10 percent more total                                        and the white paper offers guidance for
time on the Move Network, year-over-year,                                          REALTORS®' conduct while not
while minutes per unique user grew                                                 mandating any new policies.
dramatically by 30 percent and 27 percent on
the Move Network and REALTOR.com,                                                  The paper notes that a "new listing" can
respectively. Compared to the same month                                           have very different meanings for real
last year, September 2008 visitors looked at                                       estate professionals and consumers.
17 percent more pages on REALTOR.com as                                            Agents may refer to a home that they are
they searched for real estate.                                                     working to sell as a "new listing" even if
                                                                                   that home had previously been marketed
A redesigned REALTOR.com recently                                                  by another agent but did not sell, for
launched. The new site allows higher quality                                       example, while consumers may view a
super-sized photos that are 140 percent larger                                     new listing as a property that was
than on the old site, a dynamic photo carousel                                     offered for sale for the first time.
on the homepage and photo galleries, virtual tours and
videos that are easier to find. In addition, the site now   "In (a) broker's mind, 'listing' means house and contract. But
has neighborhood data that delivers hyper-local             to buyers, 'new listing' likely suggests a house that's just come
information on 55,000 communities and a newly               onto the market," the paper states. "That can result in
added home valuation feature that includes "sold data"      confusion and misunderstanding. And confusion and
directly from MLSs.                                         misunderstanding can mean trouble.”

December 08 Issue                                                                          (859)
                                                 161 Prosperous Place, Lexington, KY 40509 · 263-7377           www.kar.com
R E P O RT                  Real Estate Report - a monthly update from the Kentucky Association of REALTORS®       Page 3

RESPA changes coming soon
                                                                                     Final approval granted to
In order to make loan terms more clear to consumers, the U.S.                        DOJ-NAR settlement
Department of Housing and Urban Development recently issued
mortgage reforms that will help consumers to shop for the lowest cost                U.S. Federal District Court Judge
mortgage. Lenders and mortgage brokers must                                          Matthew F. Kennelly on Nov.18
now provide consumers with a standard Good                                           gave final approval to the
Faith Estimate (GFE) that clearly discloses key                                      settlement announced earlier this
loan terms and closing costs. HUD estimates its                                      year between NAR and the U.S.
new regulation will save consumers nearly                                            Department of Justice over the
$700 at the closing table.                                                           display of MLS listings on
                                                                                     brokers' virtual office Web sites.
Last March, HUD proposed reforms to the
longstanding regulatory requirements of the                                          The final judgment, which affirms
Real Estate Settlement Procedures Act                                                the favorable provisions agreed to
(RESPA) by improving disclosure of the loan                                          by NAR and DOJ on May 27,
terms and closing costs consumers pay when                                           preserves the MLS as a means of
they buy or refinance their home. Last May,                                          broker-to-broker cooperation.
HUD extended the rule's comment period to
allow for more opportunity for comment on the                                        “This compromise will ensure
Department's proposed GFE form.                                                      that MLSs are used for what they
                                                                                     were originally intended, to help
The Department made modifications such as discarding a proposed                      real estate professionals find
closing script in favor of a new page on the HUD-1 Settlement                        buyers for people who want to
Statement that allows consumers to compare their final loan terms and                sell their homes," says NAR
closing costs with those listed on their Good Faith Estimate.                        General Counsel Laurie Janik.

HUD will require the new standardized GFE and HUD-1 beginning                        To read more, visit realtor.org.
Jan. 1, 2010.

Citigroup plans to rescue 500,000 homeowners
On the heels of JPMorgan Chase & Co.'s loan modification program, Citigroup Inc. is putting a moratorium on most
foreclosures as it reaches out to 500,000 homeowners who are not currently behind on their mortgages but who are
deemed to be a potential risk. The company will assign 600 salespeople to assist the targeted borrowers by adjusting their
rates, reducing principal, or increasing the term of the loan.

Citigroup reported losses in the last four quarters. The moratorium is designed to stem the flow of red ink. "Typically the
lender loses the most money when a house goes into foreclosure," says Barry Zigas, director of housing policy at the
Consumer Federation of America.

Source: The Associated Press

        ck          October existing home sales fall by 3.1 percent
     Lin           Nationwide sales of existing homes fell more than expected last             Click here to learn more.
                   month, as economic fears made buyers leery even though prices
      plunged to the lowest level in more than four years.

      See what Lawrence Yun, chief economist at NAR said about buyers in this market.

December 08 Issue                                                                         (859)
                                                161 Prosperous Place, Lexington, KY 40509 · 263-7377            www.kar.com
R E P O RT                  Real Estate Report - a monthly update from the Kentucky Association of REALTORS®      Page 4

Rise in first-time buyers, long-term plans                                            Foreclosures drop in Kentucky

                                                                                      New foreclosure filings dropped by
The latest consumer survey of homebuyers and sellers shows first-time
                                                                                      one-third in Kentucky in October
buyers have risen in market share and plan to own their homes longer than
                                                                                      compared with September,
buyers in the past. The 2008 National Association of Realtors® Profile of
                                                                                      RealtyTrac reported Thursday. The
Home Buyers and Sellers is the latest in a series of large national NAR
                                                                                      decline of 33.5 percent caused
surveys evaluating demographics, marketing, preferences and experiences
                                                                                      Kentucky to improve to 43rd in the
of homebuyers and sellers.
                                                                                      ranking of states with the most
                                                                                      foreclosures. Kentucky ranked 38th in
                            Lawrence Yun, NAR chief economist, said a
                            higher share of first-time buyers makes perfect
                            sense, and it's a trend he expects to grow.
                                                                                      Kentucky also had a 35 percent
                            "First-time buyers are much more flexible in
                                                                                      decline in filings in October
                            entering the market because they aren't
                                                                                      compared with October 2007, the
                            concerned about selling an existing home," he
                                                                                      California foreclosure tracking firm
                            said. "Given low home prices, plentiful supply
                            and affordable interest rates, it's been an
                            optimal time for entry-level buyers with a
                                                                                      The state fared far better than the
                            long-term view.
                                                                                      nation, which saw a 24.5 percent
                                                                                      increase in October, compared with
"Considering the temporary first-time buyer tax credit and improvements
                                                                                      October 2007, and a 5.1 percent
to the FHA loan program, we expect stronger entry-level activity as the
                                                                                      increase from September 2008.
flow of credit improves-that, in turn, should free more existing owners to
make a trade in 2009."
                                                                                      RealtyTrac said 279,561 properties -
                                                                                      one for every 452 households - went
The number of first-time buyers rose to 41 percent from 39 percent of
                                                                                      into foreclosure nationwide in
transactions in last year's survey and 36 percent in 2006. "Although
                                                                                      October. The rate in Kentucky, which
modest, this is a meaningful gain for the 12-month period ending at the
                                                                                      had 528 new filings last month, was
close of June, and more recent independent data show a stronger uptrend in
                                                                                      one foreclosure for every 3,576
first-time buyers who are helping to reduce excess inventory," Yun said.

ZipRealty allows real estate agent ratings
It's all about transparency in the transaction. After years of reviews on everything from electronics and makeup to
physicians and plumbers, ZipRealty is now allowing users to post real estate agent ratings in addition to ratings and
reviews of MLS-listed homes online.

Customer satisfaction scores will appear for all of its agents who have closed at least three
transactions with the company. Ratings appear in a one-to-five star ranking according to an
average score tabulated via a customer satisfaction survey clients complete post-closing and
are updated monthly.

"Buyers and sellers have told us that customer satisfaction ratings are No. 1 or No. 2 on their
list of things they want to know about a potential agent," says ZipRealty President and CEO
Patrick Lashinsky.

ZipRealty uses a third-party vendor to administer surveys to each client who buys or sells a
home with any of the company's 2,800 agents in the 35 U.S. markets where the company
operates. Agent scores are translated to rankings from one star (completely dissatisfied) to five (completely satisfied),
based on the answer to the question, "how satisfied were you with the service you received from your agent(s)?" Agents
without a rating have not yet received three completed surveys.

Source: Real Trends

December 08 Issue                                                                         (859)
                                                161 Prosperous Place, Lexington, KY 40509 · 263-7377           www.kar.com
R E P O RT                  Real Estate Report - a monthly update from the Kentucky Association of REALTORS®       Page 5

Join KAR on Facebook,                                     Help your home buyers: tips to maintain
LinkedIn and ActiveRain                                   good credit
Join now and become a member of the KAR                   If you are working with a client who is planning on buying a
groups! KAR has added additional sites to its list        new home in the near future, there are some things
of social networking outlets.                             they need to do to keep their credit
                                                          looking as good as possible.
If you are not currently on these sites, getting
started is easy. Just log on to www.facebook.com,         - Check their credit report. Find
www.linkedin.com or www.activerain.com and                out if there have been changes to
set up a profile.                                         their account limits, and make
                                                          sure there aren’t any errors. Have
Joining is free and once you become a member,             them look for any negatives on the
you can request to be added to the KAR groups.            report-many negative items should be
That’s all there is to it.                                removed after seven or 10 years.

To locate the KAR groups, use the search feature          - Don’t get close to card limits. About 30% of a FICO score is
or go directly to the group:                              based on the ratio of the amount that is owed on active cards to
                                                          available credit. But utilization on individual cards is important
Facebook                                                  too; getting close to the limit on one card will also reflect
www.facebook.com/group.php?gid=9244727021                 negatively on a score. Pay down balances as much as possible.

LinkedIn                                                  - Keep accounts active. Accounts get closed when there hasn’t
www.linkedin.com/groups?gid=1323837                       been activity on them for a while. Make small purchases on
                                                          cards a couple of times a year-then pay them off right away-to
ActiveRain                                                keep accounts active and available credit up.
                                                          - Pay bills on time. This should be an easy one, but could prove
                                                          challenging for people who could lose their jobs in the months
                                                          ahead. Remaining proactive, and contacting the credit card
                                                          company if problems arise in paying a bill is crucial. Payment
                                                          history counts for about 35% of a credit score.

                                                          - Don’t apply for new cards. Store cards are tempting when they
                                                          offer discounts at the register, but don’t bite. Applying for that
                                                          card will have a negative effect on a score in the short term.

            At        What buyers prefer in their home buying decision
     Fa cts
      A Gl a          A survey by Harris Interactive and Move, Inc., ranked the top three factors for a buyer to
                      choose a neighborhood. They are:

     Crime rates - 53%
     Proximity to daily conveniences - 47%
     Property taxes - 46%

     The same survey said that home buyers are more willing to sacrifice cultural and recreational amenities (18%)
     than green features (16%) like solar heating and more care about green features (49%) than luxury amenities
     (31%). Women rate green features higher than men (52% to 46%).

December 08 Issue                                                                         (859)
                                                161 Prosperous Place, Lexington, KY 40509 · 263-7377            www.kar.com
R E P O RT                   Real Estate Report - a monthly update from the Kentucky Association of REALTORS®       Page 6

Growing the leaders of tomorrow: LeadershipKAR - apply now
Through the LeadershipKAR program, KAR identifies emerging REALTOR® leaders in the state, encourages them with
motivational activities, and assists in sharpening their leadership skills with the hope they will have a strong influence on
Kentucky's REALTOR® organization and profession.

Objectives of the LeadershipKAR Program are:
 - To identify Kentucky REALTORS® who have demonstrated leadership potential through
   job-related and community activities.
 - To train participants by developing leadership skills.
 - To motivate participants by:
         - Increasing awareness of real estate and association management issues and challenges.
         - Involvement in problem-solving activities on issues of current interest; and
         - Providing a network of leaders across the state who are actively involved in improving our profession and their
            local and state Associations.

Participation in LeadershipKAR is open to REALTOR® members of KAR. A maximum of 15 individuals will be
appointed to participate in the program. The deadline to submit an application is December 1, 2008. To download an
application, click here.

Homeowners acknowledging their values have declined
A new poll from Zillow shows that 51 percent of homeowners believe the value of their property fell over the past year,
while 49 percent believe the value either stayed the same or increased.

Zillow said the poll reflected a more realistic attitude of consumers than indicated in a poll taken earlier this year, when
only 38 percent of owners believed their homes had lost value and 62 percent believed it had either gone up or stayed the
same. According to third quarter market reports, 78 percent of U.S. homes have lost value in the past year.

Online CE courses available
It is now possible to earn CE credit for your real estate license             GRI Courses
renewal without leaving your home or office. These courses may
be entered and exited at your convenience.                                    The entire 2008 GRI schedule is now
                                                                              available on KAR’s website.
Two courses are available:                                                    Click here for the entire pdf.

Enviromental Issues in Real Estate - 6 hours (3 hours law credit              December 4 & 5
& 3 hours elective credit)                                                    GRI 3: Financing the Successful...
                                                                              Bowling Green, KY
Real Estate Finance Today - 3 hours (3 hours elective credit)                 270.781.1623

Click here to learn more
                                                                              An updated GRI schedule
                                                                              for 2009 will be available
   2008 Education Calendar                                                    soon and posted to the
                                                                              KAR website.
   Visit the KAR website for an updated
   list of courses or call 800.264.2185.

December 08 Issue                                                                          (859)
                                                 161 Prosperous Place, Lexington, KY 40509 · 263-7377            www.kar.com
R E P O RT           Real Estate Report - a monthly update from the Kentucky Association of REALTORS®           Page 7

           Where are you going
                  to be in February?


                                                                                        (here, we hope)

                      After an historic national election, REALTORS® remain focused on revitalizing
                      the housing market. By attending KAR’s Legislative & Business Meeting,
                      members have the opportunity to encourage legislators and policymakers to take
                      steps that will continue to benefit the housing market in Kentucky. Your voice in
                      Frankfort can help advance the industry and the Association.

                      A key component of the Legislative & Business Meeting is legislative advocacy
                      and fighting for the rights of homeowners in Kentucky. KAR strongly encourages
                      REALTORS® from across the state to participate in the efforts to promote the
                      Association’s legislative agenda. You can make a difference! Share your housing,
                      community and real estate concerns with members of the Kentucky legislature.

                      Show your support for issues important to REALTORS® in Kentucky by attending
                      the Legislative & Business Meeting in February.

                                    Registration is FREE to all KAR members. Hotel arrangements
                                    can be made by calling 502.227.5100.

                                    For more information about the Legislative & Business Meeting,
                                    visit www.kar.com.

               February 10 12
             February 10 - -12
                                                    Register online
               Capital Plaza Hotel
             Capital Plaza Hotel                       Register online
          October 08 Issue                          at www.kar.com
                                                       at www.kar.com (859)
                                           161 Prosperous Place, Lexington, KY 40509 · 263-7377   www.kar.com
               Frankfort, Kentucky
             Frankfort, Kentucky

December 08 Issue                                                                  (859)
                                         161 Prosperous Place, Lexington, KY 40509 · 263-7377              www.kar.com

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