Wednesday, June 30, 2010

Nassau tax assessment changes

A new fine will be imposed on commercial property owners of $4,000 if they challenge their assessments without an appropriate appraisal.

Assessments are now required every four years, instead of every year.

To learn more, click here.

Nassau approved plan to overhaul commercial property tax assessment system

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Tonight's Class - Mold is Money

Free CE Class Tonight in Center Moriches.

Course: Mold is Money

Instructors: Andrew Lieb (Managing Attorney of Lieb at Law, P.C.) and Shawn Lopez (Owner, PuroClean)

Summary: Health, law, and safety. Mr. Lopez brings his hands-on experience as a professional mold remediator, while Mr. Lieb offers both his background as an Adjunct Health Professor at Nassau Community College and his legal expertise as we delve into this complex field from 3 angles. You will be introduced to spores like you have never seen them before, as a profit center for transactions, leasing, and property management. You will also learn to minimize your own exposure to liability.

For more information about registration. Visit www.liebatlaw.com/realestateschool

Tuesday, June 29, 2010

Nassau commercial property tax assessment system may be changing

Stay tuned to news 12 for updates and this blog for comments. The legislature is currently voting, to learn more click here.

Monday, June 28, 2010

July 7th Mortgage Mania Course Waiting List

Instructors: Andrew Lieb, Esq., MPH (Managing Attorney, Lieb at Law, P.C.) and Karen Laurence (Mortgage Loan Officer, Bethpage Federal Credit Union)
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 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.

Friday, June 25, 2010

Its time to buy

Everyone talks about the first time homebuyer tax credit & that home prices are at record lows, thats nice, but I am interested in this headline in Newsday from today: "Mortgage rates plummet to record lows". In the article its reported that the "30-year fixed interest rate fell to 4.69 percent". That makes borrowing money so cheap. To illustrate I went to http://www.mortgagecalculator.org/ and plugged in borrowering $350,000 on a $400,000 purchase at 4.69% and than at 5.69%. This illustrates the difference in 1% interest on a 30 year loan.

At 4.69% the monthly payments are $2,323.55 and the total payment would be $836,476.53. At 5.69% the monthly payments are $2,539.60 and the total payment would be $914,256.26. To be clear, that is a difference of over $200 per month and over $77,000 paid over the life of the loan. Thats a reason to buy now.

Home Schematic

Thank you to all who attended our course, Discovering the Home Inspection, last evening. Here, as promised you can find the Home Schematic thanks to Housemaster.

Tuesday, June 22, 2010

Truth In Lending Act (TILA) continued explanation about servicer safe harbor

I posted yesterday about my story from a Foreclosure Settlement Conference where the Referee wanted to learn more about the safe harbor for servicers that protects servicers from liability to investors when they participate in HAMP regardless of the investors desires. Since my post, I have received some questions on the topic and feel that reading the congressional findings may help the reader to understand my position.

Congressional Findings
Servicer safe harbor for mortgage loan modifications; congressional findings. Act May 20, 2009, P.L. 111-22, Div A, Title II, § 201(a), 123 Stat. 1638, provides:


"Congress finds the following:

"(1) Increasing numbers of mortgage foreclosures are not only depriving many Americans of their homes, but are also destabilizing property values and negatively affecting State and local economies as well as the national economy.

"(2) In order to reduce the number of foreclosures and to stabilize property values, local economies, and the national economy, servicers must be given--

"(A) authorization to--

"(i) modify mortgage loans and engage in other loss mitigation activities consistent with applicable guidelines issued by the Secretary of the Treasury or his designee under the Emergency Economic Stabilization Act of 2008 [Div A of Act Oct. 3, 2008, P.L. 110-343]; and

"(ii) refinance mortgage loans under the Hope for Homeowners program; and

"(B) a safe harbor to enable such servicers to exercise these authorities.".

Quirky local laws require careful reading

Yesterday Newsday ran an article about issues with fences in Southampton, which can be found by clicking here. While I found the entire article an interesting read, the part of the article that cought my eye was the definition of front yard and rear yard used by the Town. Specifically, the front yard faces the water if the house is on a pond, lake or bay. Yet, if the house is on the Ocean, the rear yard faces the water. Talk about crazy. The point is that a person interested in looking up anything in a law and more specifically in a Town Code must always look to the definitions and not assume that a provision applies until a complete understanding of the terms is achieved. Navigate carefully my friends.

Monday, June 21, 2010

Truth in Lending Act (TILA) and Helping Families Save Their Homes Act of 2009

TILA is a federal statute that is often ignored in a residential loan modification, but its of particular importance and should be studied at length by any person facing foreclosure. While there are many ways to utilize TILA with respect to predatory lending, which can resolve many foreclosure problems, today we are going to discuss its importance in terms of the Helping Families Save Their Homes Act of 2009. This Act amended TILA and enables servicers to make modifications of homeowner's mortgage terms without facing liability from investors if the modification maximizes the investor's value under a qualified loss mitigation plan (AKA The TILA Safe Harbor). Importantly, HAMP (primary mortgage federal modification program), 2MP (second mortgage federal modification program) and HAFA (federal short sale and deed in lieu program) have all been designated as qualified loss mitigation plans by Treasury.

To illustrate the importance of the aforesaid facts, I will share my experience this past Thursday at a Foreclosure Settlement Conference in Ronkonkoma, NY. I walked in and a discussion was had about the investor not participating in HAMP and opposing counsel said no modification was available. The Referee disagreed and said that by accepting federal monies, the servicer must participate. Opposing counsel disagreed and I perked up to support the Referee who had taken my side. I said "Not only should you offer a modification if its in your investor's best interest, but you cannot be liable to your investor if they are not happy with your decision, basically its your choice, so don't blame it on the investor". Now opposing counsel took issue with me, but the Referee wanted more, she cut him off and asked the source of my knowledge and I disclosed that I lecture on this topic to both attorneys at CLEs and to real estate agents at CEs. The Referee was intrigued and said that she was always looking for lectures on these topics as the rules keep changing and the lectures for Referees/Judges aren't often available. I responded that I was glad to learn of her interest and I wish that I knew last month because she would have been my guest at the lecture. Than the Referee asked why I hadn't invited her to the CLEs and I responded that they were in Nassau County, but that we would be having more CLEs in September in Suffolk County. The next thing I knew, the Referee's staff was handing me her card and asking for her to be invited to future classes. I than turned to my right and saw opposing counsel dumbfounded and white, he seemed confused on how our conference had turned into the Referee inviting herself to my class. I guess she agreed that TILA and Helping Families Save Their Homes Act of 2009 are immensely important to forcing a lender (servicer) to give a modification. At the end of the conference the Referee and I both said to opposing counsel that we expect a modification and we are satisfied if they don't want to call it HAMP, but its terms better be substantially similar to a Home Affordable Modification Program (HAMP) result.

To study Treasury’s position regarding the applicability of the servicer safe harbor set forth in Section 129A of the Truth In Lending Act, 15 U.S.C. 1639a (TILA), to residential loan modifications under HAMP and 2MP, the reader is directed to review Supplemental Directive 10-05, which can be found by clicking here.

Monday, June 7, 2010

Mortgage Borrowers receive $108 million from Bank of America

According to the Associated Press, Bank of America has settled federal charges that Countrywide Financial Corp. (which it acquired about 2 years ago), collected excessive fees from about 200,000 borrowers in foreclosures. Now those borrowers will get a huge refund, which is very much deserved. The fees at issue were charged against borrowers who were behind on their mortgage (who obviously couldn’t afford the charges without these nasty fees) and they were substantial fees of thousands of dollars. Moreover, Countrywide misstated the fees to borrowers and misrepresented the amount borrowers owed.

Lieb at Law always recommends that borrowers in foreclosure closely examine their statements and we routinely order Reinstatement Packages to determine how much the bank is charging. It is our position that if borrowers & their representatives do not stand up for themselves they will face abuse. Here is an example of big banking abusing the little guy yet again. Hopefully, lenders will learn the tail of Countrywide and will choose to work with a struggling homeowner rather than charge them more once they are already behind. Otherwise, lenders will keep facing lawsuits. Keep your eyes open & if you believe your lender is maintaining abusive practices contact an attorney immediately.

Thursday, June 3, 2010

Short Sale after Bankruptcy

What is the advantage of doing a Short Sale after a Bankruptcy?

It’s true that the Bankruptcy (Ch 7) will already hurt a borrower's credit score to a significant degree and that a Discharge in the Bankruptcy will prevent the lender from seeking a deficiency from the borrower (how much is owed more than how much the home sells for in foreclosure), which are the 2 main advantages of a Short Sale (less credit impact and also avoiding a deficiency). Yet, the advantage of a Short Sale after a Bankruptcy is that on a future Uniform Residential Loan Application, Fannie Mae Form 1003 (when seeking a mortgage for a future home), there are 2 "Yes No" questions that state as follows (and require additional details for a Yes answer):

"c. Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?"

"e. Have you directly or indirectly been obligated on any loan which resulted in foreclosure, transfer of title in lieu of foreclosure, or judgment?"

Therefore, a Short Sale can avoid being Red Flagged pursuant to either of these questions and it can avoid the hassle of attempting to get a future loan. Please note that there is also a question about Bankruptcy in the last 7 years (question “b.”), but question “e.” above survives for the lifetime of the applicant. Therefore, Bankruptcy will only be an issue on applications for 7 years, while a foreclosure is an issue forever.

Wednesday, June 2, 2010

One month left to close for first time homebuyers

Remember that closings must occur before July 1, 2010 to receive up to $8,000 in tax credit, so the clock is ticking.

I was at a wedding this weekend and a friend (who used a different attorney for the closing) was asking me about the credit because he has not received a commitment from the bank to date and he was getting very worried that he would miss the deadline. The fact is that he has time. Usually closings happen within a week of receiving a commitment and usually the commitment is the last step in being clear to close. Therefore, he should only start panicking during the week of June 21, 2010 if he has not yet received his commitment.

A great source for information about the first time homebuyer tax credit can be found by clicking here.

There you will learn about the necessary tax filing to receive the credit, inclusive of the need to file a paper return and attach Form 5405 and new homebuyers must attach a copy of a properly executed settlement statement used to complete such purchase. If the home is newly constructed, where a settlement statement is not available, the purchaser must attach a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate. Purchasers of mobile homes who are unable to get a settlement statement must attach a copy of the executed retail sales contract showing all parties' names and signatures, property address, purchase price and date of purchase.

Good luck and go get that credit.

Tuesday, June 1, 2010

A foreclosure way of life, it might work for you

I just finished 2 foreclosure defense consults and picked up a newspaper only to read exactly what I had just advised. You can stay in your home. No, the sheriff is not showing up tomorrow. You have time. My point is that if they banks start to learn how expensive foreclosure is by way of court / attorneys costs, the time value of their money that we are locking up, the depreciation in the value of the home, and the transactional costs of eventually selling a home they didn't want in the first place, maybe, just maybe they will learn that a modification is in their best interest.

To read a reassuring New York Times article on the topic, click here.