Wednesday, September 28, 2011

HUD's RESPA Settlement Agreements

We are often asked at the Long Island Education Board how we know HUD's position with respect to potential RESPA violations. We know from reading their previous settlements & decisions.

Here is a great link to see how HUD has previously settled RESPA issues. Learning from the past is a great way to enhance the future. Click here to see the settlements.

Thursday, September 22, 2011

Sleeping Epiphany of Last Night's Course

As discussed at last night's course - Conflicts of Interest - us attorneys often wake in the middle of the night and fear we gave inaccurate advice or need to revisit a topic with a client. Well, I realized while sleeping, awaking at 3am to email myself a note that I may have discussed the wrong term of art concerning HUD's Regulation X & RESPA. The proper term at issue is "required use". Although alluding to the term in the class, I awoke to realize I may have said something otherwise, while nonetheless addressing the very same topic.

This topic was originally blogged about on July 26, 2010 & addressed HUD's request for comments. The request can be found at this link, but has long since expired.

Currently, the regulation reads as follows, but as you can tell the regulation greatly impacts the job of a real estate agent & you should not only remain informed, but have your voice heard on any future changes to the definition.

Required use means a situation in which a person must use a particular provider of a settlement service in order to have access to some distinct service or property, and the person will pay for the settlement service of the particular provider or will pay a charge attributable, in whole or in part, to the settlement service. However, the offering of a package (or combination of settlement services) or the offering of discounts or rebates to consumers for the purchase of multiple settlement services does not constitute a required use. Any package or discount must be optional to the purchaser. The discount must be a true discount below the prices that are otherwise generally available, and must not be made up by higher costs elsewhere in the settlement process.

Obtaining a Certified Copy of your Deed in Suffolk County

An important warning about companies defrauding consumers with between $50 to $100 of unnecessary fees for a document you may not need right now.

The letter has been redacted to protect the privacy of its recipients.

All should know that the letter comes with a slip to fill-out and to enclose $5 in order to receive a certified copy of your deed. Its that easy. If you didn't receive the letter, simply utilize the secure online site, discussed in the letter, to order a copy of your deed.

Friday, September 16, 2011

The Biggest Title Company or the BEST

While at BB Kings this week I got into a heated discussion about the largest title companies & it got me thinking is bigger always better?

Before we get to that thought, a great resource to learn about title companies & their respective market shares is the American Land Title Association's website - http://www.alta.org/industry/financial.cfm. There you will learn that many of the title companies are just subsidiaries of larger parent companies. For example, during my conversation someone argued that Chicago Title is the largest and therefore the best. Well it turns out that Chicago is only the largest when its included with Fidelity, Commonwealth and Alamo within the Fidelity Family of Companies. Nonetheless, First American Title Insurance Company has 24.6% market share standing alone while Chicago only has 16.9%. This renders First Am the largest. So, the numbers can be skewed to your liking.

Yet, is bigger better? In a way it is. You see in title companies, which are insurance companies size does matter. Except we are not concerned with market share, but instead assets. The reason is the company with the largest assets has the greatest ability to meet its insured's needs. Although this may also be skewed to your liking because assets may be compromised by risk. Therefore, one should really look at a company's Best's Capital Adequacy Ratio (BCAR), which evaluates and qualifies the adequacy of a company's risk-adjusted capital position. To learn more about rating title insurance companies see information about Best's Rating Methodology by clicking here.

Monday, September 12, 2011

Real Estate Opportunities from Natural Disasters

While reading a study out of the University of Chicago entitled "Payday Lenders: Heroes or Villains?", I was struck by the following statistical fact - foreclosures rise in communities faced by a natural disaster by 4.5 per 1,000 homes. Now this is obviously a bad thing, people getting foreclosed upon, but its also a fantastic opportunity for real estate investors. If you recall the TV pictures of the ski towns in Vermont and upstate New York following Hurricane Irene, its clear a natural disaster struck these areas very hard.

Now, I wonder would if this statistic for foreclosures after a natural disaster would be even higher if the community affected relied upon seasonal rental income to sustain. Meaning, in a ski town without a ski lodge wouldn't less people rent a ski house, causing even more foreclosures or distressed homeowners than the 4.5 per 1,000.

Regardless, the team at Lieb at Law always lives by the motto "don't dwell on the past but enhance the future". So, speaking of enhancing, all of you real estate investors out there should be focusing on seizing the opportunity of the Hurricane Irene natural disaster. Yes, no one wants a storm, a fire or a flood, but we cannot control these occurrences. Yet, we can control how we respond. I suggest responding with investment in the hardest hit towns. Seize the opportunity. Now go make a fortune.