Monday, November 29, 2010

Email from Department of State on Dual Agency

Dear Real Estate Education Coordinator,

Please be advised that the recent amendments to Article 12-a of the Real Property Law, regarding agency disclosure requirements, have been added to the real estate qualifying course curriculum.

Effective January 1, 2011, the amendment will permit real estate licensees to obtain advance consent to dual agency from consumers. This consent would be obtained at the time of the first substantive contact between the agent and consumer. The amendment is clear that advance consent to dual agency must be ‘informed’.

Accordingly, the Department is of the opinion that the bill would require real estate licensees to disclose the benefits and detriments of providing advance consent prior to the form being executed and to provide later disclosure when the dual agency relationship has actually been consummated. Not providing this follow-up disclosure would be a violation of the broker’s fiduciary duties of full disclosure and reasonable care to the consumer and would be a demonstration of untrustworthiness pursuant to section 441-c of the Real Property Law.

Additionally, condominium and cooperative apartments in buildings containing more than four units are currently exempt from the disclosure form requirements of section 443 of the Real Property Law. This amendment eliminates this exemption.

Attached to this communication are the statutory amendment, the updated real estate sales and broker syllabus, learning objectives and the amended agency disclosure form which take effect on January 1, 2011. Although the new agency disclosure form will not be required to be used until January 1, 2011, it is recommended that you immediately begin including this new curriculum in your qualifying course lesson plan.

The attached new agency disclosure form will be posted on our website at in the near future.

Please feel free to contact me if you have any questions.


Marc Mastrobuono

Department of State

Division of Licensing Services

Bureau of Educational Standards

Friday, November 26, 2010

There are approximately 78,000 pending foreclosure cases in NY

To read a fascinating report on the current state of foreclosures in NY brought to you by the Chief Administrator of the Courts click here.

Some highlights include the following:
  1. Over 20,000 more foreclosure cases were pending in 2010 than 2009;
  2. 40% of the total cases pending in Supreme Court Suffolk County are foreclosures;
  3. This year through October 42,536 foreclosure cases had settlement conferences;
  4. In 2010, the default rate on appearing at any point during a foreclosure case was 20% by homeowners;
  5. Only 27% of homeowners have representation during foreclosure settlement conferences; and
  6. This year through October only 4,062 settlements occurred in foreclosures. 

Sunday, November 21, 2010

Your License = Your Livelihood

We get many questions at our school about the process that happens when someone makes a complaint to the Department of State about your actions as an agent. To learn about the Licensing Complaint Resolution Process, click here.

Department of State Update - For Real Estate License Renewal


Beginning February 1, 2010, Licensees will no longer be sent a paper renewal in the mail. In accordance with New York’s Green Initiative, the Division of Licensing Services will be requiring that all real estate licensees renew their licenses online. When a license is due for renewal, the licensee will be notified in two ways: a postcard reminder will be sent to the licensee’s business address and an email reminder will be sent to the email address provided in the licensee’s eAccessNY account. In addition, brokers will be included in the email reminders(a “cc” copy) for any salespersons and associate brokers who are employed by their office. Both of these renewal reminders will include instructions on how to renew a license online utilizing eAccessNY.

The online renewal process is a much quicker and more efficient process. Online renewal applications that meet the requirements will be approved immediately and licensees will receive their License and Photo ID Card within two to three weeks.

Instructions for Completing an Online Renewal

To renew your license online you must have an active eAccessNY account and follow the directions below:

• Go to the Department of State website,, and select the eAccessNY link (to the right of the screen)
• Select “access” link under item 3, “Access My Account” and log into your account
• Select list of licenses/select the license number you wish to renew
• Select the “Renew License” link and complete the online application

If you have not yet activated your eAccessNY account, NOW is the time. Please email us at to obtain a password for your account.

Further updates will be posted as we move forward with this new requirement.

Home Inspection - Code of Ethics

On October 27, 2010, the Code of Ethics for Home Inspectors was adopted. Click here to read the Code.

Debt-to-Income ratios get tougher by FANNIE MAE

At the beginning of our recent class, entitled Mortgage Mania at Bethpage FCU, I was asked a question, which was more like a statement, inquiring if a lower Loan to Value (L/T) ratio (more money down) was a key predictor of default risk.

IN ENGLISH - If a borrower puts down more money (has more equity) shouldn't that imply they won't default? I took issue with this statement by saying that I believe that back-end Debt to Income (DTI) ratio mattered a hell of a lot more. My rationale was that even if you had a lot of skin in the game, your inability to make your mortgage payments trumped your desire to make your mortgage payments. The student took issue with my sentiment throughout the class thereafter by defending his position.

It’s true that both L/T ratio and DTI ratio are relevant and evaluated by lenders in making a loan. Yet, my message was that DTI ratio is much more important in making the determination to provide funding. 

It turns out that FANNIE MAE agrees. They just changed, effective December 13, 2010, their requirements with respect to each of the above discussed ratios. Specifically, maximum DTI ratios for a conventional mortgage change from 55% to 45% under the new guidelines. Additionally, borrowers can now utilize gifts and grants to satisfy their minimum down payment, which impacts the L/T ratio. To read a great New York Times article that summarizes these changes, click here. Remember, that FANNIE MAE sets the standards for the rest of the industry because they are the largest secondary market purchaser, so this will likely become the standard.

The takeaway for students reading this blog is that a lender cares more about your ability to pay (how much money you have left at the end of the month after paying your other bills) as opposed to your desire to pay (how much equity you have to lose if you don't pay).

Saturday, November 20, 2010

Spinner overturned - enforcement of the CPLR 3408 Foreclosure Settlement Conferences' good faith requirement held unauthorized

Appellate Division, Second Department, held in an unsigned ruling that the "severe sanction…was not authorized by any statute or rule…nor was the plaintiff given fair warning that such a sanction was even under consideration." "The reasoning of the Supreme Court that its equitable powers included the authority to cancel the mortgage and note was
erroneous, since there was no acceptable basis for relieving the homeowner of her contractual obligation to the bank," - IndyMac Bank, F.S.B. v. Yano-Horoski, 17926/05.

Open Letter from the Bar to the Courts

Click here to read a letter from the chair of the Real Property Law Section of the New York State Bar Association to Mr. Paul Lawis of the New York State Office of Court Administration. This letter called for changes to the Affirmation Requirement in foreclosures. As can be seen from my previous post, many of the calls from the chair of the section went unanswered. More importantly, I disagree with many of the chair's statements, as do many other attorneys who question how such a letter could be written without a vote. Specifically, the chair discusses how this requirement violates the attorney-client privilege of confidentiality. Yet, if he would read the ethics rules for attorneys, click here to read, he would learn that not perpetrating a fraud on the court trumps that rule.

Foreclosure attorney affirmation modified

As I always advise to real estate experts, foreclosure defense requires being on top of the issues (they change all of the time). In less than a month after announcing an Affirmation requirement for foreclosure attorneys to hopefully weed out robosigners, the court system has already changed the affirmation requirement on November 17. The new affirmation requirement can be found by clicking here.

Monday, November 15, 2010

Nominee to head the Federal Housing Finance Agency

As has been discussed at length on this forum and others, public policy on foreclosures shifts between periods of pro-borrower and pro-lender. To predict the next move of public policy its important to follow who makes policy. Just recently it was learned that President Obama will nominate North Carolina's chief banking regulator, Joseph A. Smith Jr. to run the agency that oversees both Fannnie and Freddie. To learn more about Mr. Smith, click here. It seems that he will be pro-borrower. Hopefully this can strengthen a pro-workout / modification culture where people can stay in their homes.

Wednesday, November 10, 2010

Mortgage Mania - Free 3 Credit CE in Bethpage on 11/18

Attention Real Estate Agents: If you haven't taken the course Mortgage Mania, we are offering the class next week on 11/18 at 5:30pm at Bethpage Federal Credit Union. Advanced Registration is Required. Course is 3 Credits. To Register CLICK HERE

Mortgage Mania

Credits: 3 Hours

Instructors: Andrew M. Lieb, Esq., MPH; Karen R. Laurence

Summary: It's time to learn the secrets in order to qualify for a mortgage. This seminar will begin with the basics, discussing everything from the definition of a mortgage to types of mortgages. You will learn who the players are at the bank and how their respective roles impact your deal. Mr. Lieb will discuss the differences between a prequalification and a commitment and how to close your deal smoothly under the Real Estate Settlement Procedures Act. Mrs. Laurence (Mortgage Loan Officer) will share secrets that occur behind the scenes at the banks and let you know how to navigate through issues with credit scores. This course will enable you to weed-out high-risk clients and to advise average credit score clients on structuring their applications to get approved. Let's prevent mortgage contingency clauses from killing our deals.

About the Instructors:

Andrew M. Lieb, Esq., MPH

Andrew M. Lieb is the Managing Attorney at Lieb at Law, P.C., a family-owned law firm with offices in Center Moriches and Manhasset, New York. In such, Mr. Lieb is licensed to practice law in the Courts of New York State and the Eastern District of New York. Mr. Lieb is further licensed as a Real Estate Instructor in New York State by the Department of State, Bureau of Educational Standards.
Mr. Lieb is also the founder and lead instructor of the firm's New York State licensed Real Estate School, which serves as the Pro Bono arm of Lieb at Law offering certified continuing education (CE) courses to Real Estate Professionals.
Mr. Lieb actively instructs New York State continuing legal education (CLE) classes, holds a Masters of Public Health, and is an Adjunct Professor at Nassau Community College. He's served as a Faculty Member of the Suffolk Academy of Law, and as an Associate Instructor at Indiana University in Bloomington. Mr. Lieb currently sits on the Board of Directors for Colonial Youth and Family Services, is the Chairman of Center Moriches High School Business Advisory Board, and is a Contributing Editor for both Homes of the Hamptons and Homes of Eastern Long Island magazines.

Karen Laurence, Mortgage Loan Officer

Karen Laurence currently serves as a Mortgage Loan Officer at Bethpage Federal Credit Union, focusing in residential real estate. With over 13 years in the industry, Ms. Laurence offers additional expertise in commercial lending and maintains certifications and licenses in Mortgage, Insurance, Real Estate and is also a Notary.
Ms. Laurence excels with first time home-buyers and refinancers, while her specialty is foreclosures and short sales, reverse mortgages, new construction, mortgage originations and refinancing.
Prior to working at BFCU, Ms. Laurence was a Branch Manager at Countrywide Home Loans, a corporate Loan Consultant at GMAC Mortgage, and held further roles in private and public institutions.
Ms. Laurence's professional affiliations include: Women's Council of Realtors, Long Island Center for Business and Professional Women, Huntington Township Chamber of Commerce, Long Island Builder's Institute, Huntington and North Nassau Chapters of the Long Island Board of Realtors.
Ms. Laurence received her Bachelor of Arts from the University Of Miami, Florida, where she majored in Psychology and minored in Mass Communications.

Tuesday, November 02, 2010

Great resource for foreclosure fraud information

Learn about robo-signers, NY foreclosure cases, MERS, and Steven Baum. Read the depositions of robo-signers, the law on Regulation X, and RESPA. All available at

Monday, November 01, 2010

Great resources for FHA workouts

A number of documents by HUD providing guidelines for FHA workouts. Click here to view the page.