BTC Newsletter - November 2012

To: Realtors AND Loan Officers 

From: John M. Brennan, Attorney - President, Brennan Title Company



Our delay in sending you a newsletter since August has been a factor of a busy summer and a greater gap in the level of certainty of where we may be heading with the pending elections. Now that the elections are over, it is obvious that the outcome saw little change to the political landscape. Notwithstanding, over the past two months real estate has begun to show some real strength, thanks in some measure to the recent decision of the Federal Reserve to continue to support lower interest rates thru an aggressive and OPEN ENDED bond purchasing program.


Some favorable statistics thru August of this year showed significant improvement in housing construction, single and multi-family, existing home sales and prices! In fact, there is some support for the fact that renters, feeling the pinch of higher rents, are moving into buying a home at costs relatively equivalent to the rent they are being asked to pay.


It would seem that with the election now behind us, the Washington, D.C. market will experience a bump in sales based on pent up demand and the inevitable relocation that goes with changes in Congress and the Executive Branch!

BUT, there are some headwinds that could dampen this favorable trend and, possibly, even derail the real estate recovery! Stated simply and without explanation they are: 

  1. Europe
  2. Increases taxes on higher income earners (3.8% which are effective January 1- part of the Obama Health Care Bill).
  3. The expiration of the Bush Tax Cuts in December 31, 2012. The top tax rate will go to 39.?% in addition to the tax above!
  4. Sequestration-the automatic spending cuts which go into effect January 1, 2013 and which will force $110 Billion of spending cuts to domestic and defense programs.
  5. The expiration of the "elimination of tax on forgiven mortgage debt" to homeowners selling their homes by short sale or losing the home thru foreclosure!
  6. The expiration of the payroll tax reduction on Social Security.

CONGRESS may act in concert with the President on some or all of these issues during the "Lame-Duck" session between now and January 1 which will relieve a great deal of anxiety and make the Holidays more joyful. If, however, we do not see some movement on both sides of the aisle, the level of uncertainty could have a significant impact on consumer confidence which in turn will affect every aspect of our economy, including real estate!

THE CONSUMER FINANCE PROTECTION BUREAU will weigh in on the complete real estate loan and closing process when it issues its' new final regulations in January. As now proposed Lenders will have responsibility for the entire closing process, including title services. There will be more disclosure and even greater control over what can or cannot be changed once the disclosure is made to the consumer! Expect more closings to become victims of the three day re-disclosure requirements! More to come as the final rules are issued. You may recall the trauma of the new GFE several years ago, and you should expect more of the same.

One piece of good news for investors is that the rules for 1031 tax deferred exchanges have not been altered!! We remind you that we have a 1031 Tax Deferred Intermediary which is administered by our General Council, Susan Chartier. You can reach her at 202-537-1820

SHORT SALES - recent new rules promulgated by FNMA/FMAC will no longer allow servicers of these types of loans to pay the fee to the negotiator. Accordingly, many negotiators will only accept Short Sale cases when the seller pays our fee in advance or the selling or listing agents agree to allow the fee to be paid from the commission. 


We will still work with you on cases that you negotiate and provide the negotiation support you have been receiving from us!

BE AWARE - The new tax on higher income earners under the ObamaCare will be taxed on capital gains, interest and dividends and on RENTAL INCOME from real estate which exceeds expenses!!!

AS YOU CAN SEE we are heading into uncertain and unchartered waters. We are closely monitoring all of the areas I have mentioned in this newsletter and hope to alert you as they are resolved in whatever manner. Feel free to get back to me with any questions or information you may have or that I may not have mentioned!! I can be reached on my direct line at 301-261-8177.

OUR 2013 DESK CALENDARS (13 month including December 2012) have arrived along with a limited number of appointment books. If you would like to receive either of these (while supplies last), please reply to me by e-mail at  


For your information all Brennan Title offices will be open on November 23rd, the Friday after Thanksgiving and on December 31, 2012, New Years Eve. We will be closed on Monday December 24th


I want to thank you for making 2012 a very successful year for Brennan Title Company and wish you a wonderful Thanksgiving.




John M. Brennan



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