Don Faught, a 25-year veteran of the real estate business, is this year's California Association of Realtors president.
A second generation real estate professional and vice president and managing broker at Alain Pinel Realtors' Livermore Valley office in Pleasanton, Faught has also been a director of the National Association of Realtors since 2002, currently serving on its finance committee. He's also a past president of the Bay East Association of Realtors.
In an interview, Faught talked about the housing crash and nascent recovery and his plans as the association's president this year. He took office in November.
Q What do you hope to accomplish during your year in office?
A We're working on professionalism and ethics. This distressed property market seems to have brought out some bad actors. We have a task force working on changing the licensing laws.
Q What are these bad actors doing?
A There are so many answers to that one. Consumers are just desperate. You have people who are pushed out of their houses because of short sales and foreclosures who are susceptible to the evildoers on Craigslist. Scammers will find a home that's for sale and tell people it's for rent. They tell people, "Send me some cash and I'll hold the property for you."
There are loan modification scams, where people ask for payment upfront. You can do it for free by going through your lender. Attorneys are even coming in from Texas and New York, contacting Californians. They claim to have these inside connections with Bank of America, Wells Fargo or Chase. People are so desperate for a life ring to save them from drowning they will succumb to it. Sometimes they don't even hear back from these people.
Q We've come through the worst housing crash in memory. Are there any lessons to be learned from it?
A I don't know that the downturn was such a bad thing. In 2006, about 11 percent of homebuyer could afford a median price home. Today, we're at 48 percent affordability. Now with historic low interest rates and low prices, for the first time many Californians can afford to buy a home.
In 2006 you could buy a house for 100 percent down. You had no skin in the game. When Wall Street finally blew up, it was easy to walk away from your home. To me that was the problem. What we have going for us now is good underwriting. They are looking at your credit worthiness, actually verifying you have a job.
Q If you could wave a magic wand and fix one thing about the market, what would that be?
A I'm not completely, 100 percent happy with Dodd-Frank (congressional legislation that addressed the fiscal and housing crisis). It's 1,100 pages of new regulations, all put together to have more accountability, more transparency. But, unfortunately, it had some unintended consequences, too. We've had issues with appraisals. We're still getting appraisers from outside the area, 30 miles away. There's a big difference between the housing markets in Pleasanton and Stockton.
Q Is credit still too tight?
A It's still too tight. That's why we need Fannie Mae and Freddie Mac (government-backed companies that buy mortgages from banks, enabling the banks to charge lower interest rates). We'd like to see more private capital flow into the market, but we need both. Especially in the San Francisco Bay Area, prices are so high compared with the rest of country, that not every one can save up for a 20 percent down payment. Fannie and Freddie are great because they are a low-down-payment source of funds if you have a high credit worthiness.
Q You think Fannie and Freddie should stick around?
A We have to have them, especially here in California We're one of most expensive places in the country. We want people to come to California. But people won't take jobs here because they can't afford a house.
Q What's at the top of your legislative agenda?
A We want the mortgage interest deduction to stay. It is not only a way to make housing affordable, it has also kept people in their homes during the downturn because they didn't want to give up their tax deduction.
The other thing we're working on is supporting Senate Bill 30 in the Legislature. This is for mortgage debt forgiveness following foreclosures and short sales. SB30 is a very popular piece of legislation, so it will probably end up getting passed.
Q Any advice for homebuyer?
A I would tell the buying public, be cautious. Buyers who are waiving inspections and doing anything they can to get into properties may wake up with a huge hangover the next day. Do your due diligence. Buying a home is a wonderful thing, but you don't want any regrets.
Contact Pete Carey at 408-920-5419 Follow him on Twitter.com/petecarey
Born: Bethesda, Md.
Education: Bachelor's degree in business, University of Oklahoma, 1977
Career: Pillsbury, marketing; real estate business for 25 years, beginning with his mother's Security West Realty in Fremont; Alain Pinel Realtors for the past 10 years
Family: Married, two children
five things to know about don faught
1. He worked for Playboy Magazine after he graduated from college.
2. He's a member of the Women's Council of Realtors.
3. He's "a pretty decent cook."
4. He was a member of the Boy Scouts Order of the Arrow.
5 He plays golf whenever he can.