Tuesday, April 30, 2013

Mold Facts from Mold is Money


Thank you to all of our students who attended last week's continuing education course, Mold is Money.
At the class we were asked two (2) questions that we promised a blog follow-up so here goes:

1. Drywall has an overlay on both sides of the sheetrock to allow for taping and spackling, but remember to keep the treated side pointed toward the outside of the structure to avoid mold.
2. There are many different mold remediation certifying bodies and types of certifications out there.  Below are what we believe to be the top 3 certifications.

- American Council for Accredited Certifications (ACAC).  They have:
  - Certified Indoor Microbial Remediator (CMR)
  - Certified Indoor Environmentalist (CIE)  ( I have this cert.)

- Professional Mold Inspection Institute
  - Certified Residential Mold Inspector (CRMI)
  - Certified Commercial Mold Inspector (CCMI)
  - Certified Mold Remediator (CMR)

- Institute of Inspection Cleaning & Restoration Certification (IICRC)
  - Mold Removal Specialist (MRS)

If there are any other questions please feel free to contact our Mold Instructor, Scott Perry, CIE at (516)983-6841 or iaqtec@aol.com

Monday, April 29, 2013

Lieb at Law is Hiring a Real Estate Litigation Associate (May Law School Grads Should Apply)

Are you ambitious, meticulous and competitive? Do you thrive with technology and despise books and dictaphones? How does Hamptons living with NYC cases sound for your days? Lieb at Law is looking for a candidate who challenges the old-boys-club with hard-work, facts and confidence. We want someone who puts their money where their mouth is and will prove themselves first before asking for entitlements. If your writing is sometimes sloppy with typos, you need not apply. The firm is seeking the right attorney to join our collaborative team. Is that you?  

To Apply: Email cover letter, resume and legal writing sample to careers@liebatlaw.com

*no phone calls or faxes will be considered
*May 2013 Law School Grads Should Apply
www.liebatlaw.com


Friday, April 19, 2013

The Check's in the Mail: Settlements for Wrongful Foreclosures

Some information on foreclosure defendants receiving money in the mail, which is being shared by an Assistant Case Manager at Lieb at Law, P.C., Laura Palermo:     


Recently a few clients received a check from their current or former mortgage lender. Perplexed by this, my clients were a bit hesitant to run down to the bank to cash it. They asked “what is this for?” and “are there terms attached to this check I should know about?”

I directed them to a deal struckback in January of this year between Fannie Mae and the ten major banks to settle allegations that the banks had wrongfully foreclosed on thousands of homeowners between 2009 and 2010. The result of the deal was an $8.5 billion settlement which was to be allocated among the homeowners (or now former homeowners) who were wrongfully or prematurely foreclosed on or denied a loan modification resulting in foreclosure. The foreclosures which are considered as wrongful include those which were “robo-signed” or automatically entered into foreclosure proceedings without proper review for work out options such as modification, deed-in-lieu, or short sale.

The settlement amounts range anywhere from $100 to $125,000 per qualifying person. The settlement is thought to be disbursed among hundreds of thousands of people. There is no way in which to apply to be a part of the payout, the recipients of the settlement are to be determined by the banks. The settlement has been criticized by many for being too soft on the banks as it releases them from their responsibility for these foreclosures for a relatively low price.

The first wave of checks were mailed out this week, so if you fit the description of a person who was wrongfully foreclosed on or attempted to be foreclosed on between 2009 and 2010, and you find yourself with a check in hand from your former or current mortgage lender, go ahead and cash it, there are no special terms attached to it, it is simply your pay out from a billion dollar settlement you probably didn’t know you were a part of.

I’ll leave you off with some advice from my Grandma: “Don’t spend it all in one place!”


Mortgage Contingency Clauses - Deal Killers Follow-Up

Last evening, Lieb School came back to Newsday to start out 2013 lineup of courses. The first topic up was Deal Killers, which is my favorite course of all of our 15 licensed courses offered in our Course Catalog.

A large section of Deal Killers is devoted to not letting your deal die through understanding mortgage contingency clauses and how real estate agents should negotiate the shift of risk from the buyer to the seller when such a clause is added.

While discussing the topic last evening, we addressed a mortgage denial and explained the burdens of good faith and diligent efforts on a buyer. Next, we explained that even if  a buyer engages in some breach of the clause in bad faith, they may still prevail in cancelling the contract and having their down-payment returned if their breach is not the basis upon which the denial occurred.

To illustrate, I suggest our readers review the recent Appellate Division case of Ettienne v. Hochman where this precise scenario unfolded just this month. Therein the contract called for the buyer to apply for a "no-income-check mortgage", which the buyers failed to do and it seemed as if they were in breach. However, the Court looked to their basis of denial and found that "it would have been futile for them to additionally apply for a no-income-check mortgage" because they were denied based upon "their credit history" and not the type of mortgage applied for.

The takeaway for our readers is that while it matters that the buyer applies for precisely the mortgage called for in the contract of sale, a breach may not result in the buyer sacrificing his down-payment (assuming it is the liquidated damages for breach), if the buyer's failure to apply for the precise mortgage is unrelated to the basis for denial.

This case illustrates the exception to the rule where one would ordinarily have to follow the terms of the contract to the letter to be in compliance.

Thursday, April 18, 2013

Last Chance To Enroll in Mold is Money - Free CE in Hauppauge on 4/24






Mold is Money (3 CE Credits)
April 24th, 2013 in Hauppauge


Remediation, your health and the law. Mr. Perry brings over 15 years of hands-on experience as a mold remediator and water investigation and restoration specialist, while Mr. Lieb offers both his background in public health and his legal expertise as we delve into this complex field from 3 angles; remediation, your health and the law. You will learn how to minimize your exposure to liability as a property manager and agent while maximizing your opportunity with mold infested properties in sales. This course will introduce you to spores like you have never seen them before, as a profit center for transactions and leases. Also, to be discussed is the leading case today on personal injuries caused by mold exposure, Cornell v. 360 West 51st Street Realty, LLC. Get ready to combine moisture with organic materials - its mold time. 


Instructors: Andrew M. Lieb, Esq., MPH and Scott Perry





Food & Refreshments provided by Citibank

Monday, April 15, 2013

Great NY Times Article - Why Home Prices Change (or Don't)

On Sunday, Robert J. Shiller wrote a must read article in the Times, Why Home Prices Change (or Dont').

Every type of real estate professional should understand the economics behind residential housing and this article objectively lays out the facts. Plus, if you don't know, Mr. Shiller's credentials include being a Professor of Economics at Yale - so pay attention to what he has to say.

The article looks at the economics of residential housing and compares this investment vehicle to stocks. Most importantly, it looks at last year's gains in housing and explains that its not a predictor for the next 10 years in growth and should only be viewed in terms of just being a growth for last year.

As the article states: "Over the 100 years ending in 1990- before the recent housing boom - real home prices rose only 0.2 percent a year, on average". Mr. Shiller explains that while it may psychologically feel like prices keep going up, one must look at prices after correcting for inflation. In such, there is not much growth in the long term.

So, real estate professionals, houses are a good buy if you want to live there. They may be good if you add money to the house through construction. Yet, if you want to buy, hold and not invest in a product, do not buy a house.

Rental Permit / Accessory Apartment Search Tool by the Town of Brookhaven

Brookhaven has added a great feature to its website called House Rental Search.

With this tool, the user can "see all of the active accessory apartment and house rental permit on the street you selected in the hamlet chosen". Remember, Villages control their own rental permits, so users in Villages must contact their Village.

This feature is going to make it completely transparent to tenants if the Town has permitted their rental. Remember, without a permit, a landlord cannot enforce a lease and is subject to many fines as well.

Now Brookhaven only needs to make getting a permit as easy as looking up if one exists. This way, safety can be the paramount concern over enforcement, which this tool will greatly increase.

Landlords and real estate agents - MAKE SURE YOU HAVE PERMITS. The Town has enabled tenants to really crackdown on your illegal rentals and be sure that they will.

Wednesday, April 10, 2013

Ability-to-Repay and Qualified Mortgage Guide Issued by CFPB

Today, the Consumer Financial Protection Bureau (CFPB) issued a Small Entity Compliance Guide to the new Ability-to-Repay regulations, which are scheduled to commence effectiveness on January 10, 2014.

To remind our readers, the Ability-to-Repay regulations require loan originators to "make a reasonable, good-faith determination before or when [they] consummate a mortgage loan that the consumer has a reasonable ability to repay the loan, considering such factors as the consumer’s income or assets and employment status (if relied on) against:

  • The mortgage loan payment
  • Ongoing expenses related to the mortgage loan or the property that secures it, such as property taxes and insurance you require the consumer to buy
  • Payments on simultaneous loans that are secured by the same property
  • Other debt obligations, alimony, and child-support payments"

As stated within the Guide: "The purpose of this guide is to provide an easy-to-use summary of the ATR/QM rule."

Remember, ATR stands for Ability-to-Repay and QM stands for Qualified Mortgages.

So, real estate professionals, you should know that lenders will have to independently verify a borrower's Ability-to-Repay starting in January of next year and you should start now to become familiar with these new rules to effectively represent your clients. This Guide is a great starting place.

Upcoming 2013 New York Real Estate Expos and Conferences

Here is a list of some upcoming events in our area.

Lieb School is not currently involved as a sponsor or otherwise in any of these events beyond providing the list with links to our friends and students. Yet, we always encourage real estate professionals to learn and want to provide you with a resource of some places to get educated.



                       

Tuesday, April 9, 2013

Monday, April 8, 2013

Freddie Mac Streamlined Modification


Some information on Freddie Mac's Streamlined Modification program by an Assistant Case Manager at Lieb at Law, P.C., Laura Palermo:     

           As of July 1, 2013 Freddie Mac is going to temporarily offer a new type of mortgage modification called a Streamlined Modification. The Streamlined Modification differs from the Standard Modification by way of the application process. Traditionally a delinquent mortgage holder (a.k.a. “borrower”) would have to endure a drawn-out review process which requires the borrower to submit a Borrower Response Packet which includes financial documentation and proof that they are/were experiencing a hardship. During this process the lender may request any and all documents which they feel is necessary for proof that the borrower encountered a hardship and now is able to afford a loan modification should one be granted. The modification application process can be daunting depending on the lender and the elements of the borrower’s situation.

            The Streamlined Modification does NOT require the borrower to submit a Borrower Response Packet; meaning that the lender no longer has to verify the borrower’s income or hardship.  Similar to the Standard Modification, if the borrower is eligible, the borrower will be required to successfully complete a trial period of at least three months prior to being offered a permanent modification, which will be subject to the same terms as defined for the Standard Modification.

            The eligibility requirements for the Streamlined Modification are as follows:

1.      Mortgage must be a first-lien which is owned, securitized, or guaranteed by Freddie Mac.
2.      The pre-modified mark-to-market loan-to-value (MTMLTV) ratio (gross unpaid principal balance of the current loan, including any principal forbearance as a result of a prior modification, divided by the property value) must be greater than or equal to 80 percent.
3.      Mortgage must be obtained at least 12 months prior to modification.
4.      Borrower must occupy the property as their primary residence
5.      Borrower must be at least 90, but not more than 720 days delinquent on their mortgage payment.

While this does sound like a great alternative to the Standard Modification it can be a risky move on Freddie Mac’s part. For example, the Streamlined Modification review guidelines (i.e. no verification of income necessary) are very similar to a previously common practice by lenders and servicers called a “blind modification”. The blind modifications granted borrowers with a refinance or modification without ever reviewing their finances. For some borrowers it worked wonderfully, while for others they could still not afford their payments and then would find themselves again in default with no further options for modification.

Despite the potential risk, I have high hopes for the Streamlined Modification program as it will present many delinquent borrowers with the opportunity to bring their mortgage current and out of delinquency without having to incur as many fees. Also, this may present many borrowers who are ineligible for Standard Modification due to their inability to prove hardship or verify their income to keep their homes.  For further information on the new program check out Freddie Mac’s news brief, click here

Saturday, April 6, 2013

Consumer Financial Protection Bureau - Regulation Update Signup Available

At our course at Chase Plaza this past Friday, 4/5/13, on Mortgage Mania we referenced the Consumer Financial Protection Bureau (CFPB) and its increasing function of regulating mortgages under the Conforming Loan Limit.

To receive the latest and greatest regulatory updates, each real estate professional should sign-up for email updates on their site, by clicking here.

The best way to add value to your clients is being in the know. So, sign-up NOW!!!

Mortgage Modifications - Supplemental Directive 13-02

On Friday, 4/5/13, Treasury issued new directives to the mortgage modification process.

To read the Supplemental Directive, click here.

Of note in this directive was a change in the categories for denial that give rise to a servicer's (lender's) inability to conduct a foreclosure sale following a denial. To clarify, a servicer cannot conduct a sale within 30 calendar days of a Non-Approval Notice to theoretically give the borrower an opportunity to correct their submission. The traditional five categories for Non-approval were:
(1) ineligible mortgage, (2) ineligible property, (3) offer not accepted by borrower/request withdrawn, (4) previously modified under HAMP Tier 2, and (5) borrower not a natural person.

However, what does ineligible mortgage or ineligible property really mean?

To clarify this confusion this directive deletes these categories and replaces them with the following clear reasons for denial of a modification:
(1) loan originated after January 1, 2009, not a first lien, or unpaid principal balance above program

limit, (2) loan paid off, or charged off and borrower released from liability for repayment, (3)
property condemned or more than four dwelling units, (4) loan subject to involuntary transfer to
a non-participant,

This change is another step in improving the Making Homes Affordable Program. By providing clearer understandings to borrowers and lenders for the framework to achieve a mortgage workout, the parties can intelligently negotiate a resolution.

Thursday, April 4, 2013

HUD Launches Fair Housing Campaign - Brokerage Companies Need to Button Up

On April 3, 2013, the US Department of Housing and Urban Development kicked off Fair Housing Month with the launch of a national media campaign.

HUD's press release states: "The campaign, titled “Fair Housing Is Your Right. Use It,” includes English, Spanish, and Chinese radio and print public service advertisements (PSAs) that feature examples of actions which violate the Fair Housing Act and let the public know what to do if they experience housing discrimination."

To read the full press release, click here.
To see video from the campaign, click here.
To see the Public Service Announcements, click here.

While Fair Housing is nothing new, it will be on consumers mind this Fair Housing Month, so its important for brokerage managers to be more vigilant in reminding their agents to respect protected classes in housing. Also, remember that your local municipality: State, County, Town and Village may have additional Fair Housing statutes to protect citizens as the national Fair Housing Act is merely a floor of protected rights, not a ceiling. Also, agents in NYC should pay careful attention because the NYC Human Rights Law is the most protective of its kind in the nation.


Wednesday, April 3, 2013

Your Home's Price Today - The Calculator


Curious what your house should be worth based upon market trends? Go to the Federal Housing Finance Agency and use the House Price Calculator. This cool calculator projects what a given house purchased at a point in time would be worth today if it appreciated at the average appreciation rate of all homes in the area. 

Click here to give it a try. 

How will the new amendment to divorce law affect real estate?


On January 30, 2013 22 NYCRR 202.16a was amended. What does this mean? How will this affect your divorce? And why am I writing about this? The answers are: Keep reading, keep reading, and this is important. In that order.

22 NYCRR 202.16a is the counterpart to DRL §236(B)(2)(b) and it requires the plaintiff in a matrimonial action to cause the defendant to be served with a “notice of automatic orders” which informs the parties, inter alia, that neither party may in any way dispose of any property without written consent of the other party or by order of the court, except in the regular course of business, for customary household expenses, or in order to pay reasonable counsel fees in the divorce. We’ll refer to these prohibitions as “automatic orders”.

This is a terrific directive as it ensures that your soon to be ex-spouse will not sell your vacation home without your written consent during your divorce. You love that home, it has the biggest pool on the block, your kids learned to swim in the pool and your friends are openly jealous of what you modestly call your “vacation home” (truth: it’s a castle). You are not ready to part with it. So what happens if your unloved one (we’ll kindly refer to the unloved one as your “soon to be ex”) during your divorce sneakily sells the house for half its value (possibly accepting the other half of the payment as a promissory note, transfer of stocks, benefit to his/her business, or cash, as this is just the type of transaction a sneaky person will undertake)? Your soon to be ex will earnestly explain to the court that this is really his separate property, he purchased it with his own money, his name is solely on the deed, and besides, the real estate market is terrible and he sold it for the best price he could, the proceeds were used to pay off debts, and there is simply no money from the sale proceeds to share with you. But you know in your heart that your soon to be ex is doing what he best does-suavely talking his way out of yet another questionable and downright unethical act. What is your remedy?

Until the recent amendment of the law, your remedy was unclear, as the courts were divided on the appropriate remedy for a violation of the automatic orders. Some courts ruled that the violation of the automatic orders is not subject to a punishment of contempt of the Court (see Buoniello v. Buoniello, No. 35948/09 [Sup. Ct. Suff. Co., May 7, 2010]), while other courts held that the automatic orders are in fact orders of the court and a violation of the automatic orders may be subject to contempt of the court (see Sykes v. Sykes, 2012 N.Y. Slip. Op. 22049 [Sup. Ct. N.Y. Co. February 29, 2012]).

As of January 30, 2013 the following provisions have been added to the body of the automatic orders:
1.      “Upon service of the summons in every matrimonial action, it is hereby ordered that…” (body of the automatic orders follows, see 22 NYCRR 202.16a) (This clearly designates the directive prohibiting transfers during the divorce as “Orders”).
2.      “These automatic orders shall remain in full force and effect during the pendency of the action unless terminated, modified or amended by further order of the court or upon written agreement between the parties.” (This clearly sets forth the timeframe of the applicability of the orders).
3.      “The failure to obey these automatic orders may be deemed a contempt of the court.” (Our favorite new provision in the automatic orders.)

The recent amendment will serve to resolve the courts’ division on the appropriate remedy for a violation of the automatic orders.  Now all the courts will have contempt of court at their disposal to punish violators of the automatic orders. Now your soon to be ex will think twice before sneakily selling your vacation home during the divorce. And if he doesn’t, then jail may be his new home. Thank you Administrative Board of the Court for your recent amendment to 22 NYCRR 202.16a. We love it! May justice reign uniformly in the Matrimonial Parts of the Supreme Courts of the State of New York. 

Tuesday, April 2, 2013

Zoning Regulations are Concerning with Use of Land, Not Identity of User - Per the Court of Appeals

In Sunrise Check Cashing and Payroll, Inc. v. Town of Hempstead, the State's Highest Court ruled that "a zoning measure that prohibits check cashing establishments in a town's business district is invalid, because it violates the principle that zoning is concerned with the use of land, not with the identity of the user". 


While the Court does state that adult entertainment and pawnshops can be regulated based upon their negative secondary effects on the surrounding communities, check cashing is not a similar category. The court did therefore provide for the possibility that adverse secondary effects could justify zoning, but said that such effects were not proven in this case regardless. 



This opinion is important for commercial real estate professionals because it provides support for occupants' discretion in their business enterprises and is very pro-business while reducing barriers to entry. 

Mortgage Modifications: Introducing The Hope Loan Port


Some information on a great new system for mortgage modifications which is being shared by an Assistant Case Manager at Lieb at Law, P.C., Laura Palermo:            

            Applying for a loan modification can be a very frustrating and trying process. For some people it can take years for their application to be properly reviewed and decided on. That’s why I was delighted to hear about the new platform in use by many of the big Lenders, the Hope Loan Port. I learned about the new system while trying to submit a loan modification application to Bank of America on behalf of one of my clients. I was informed by the lender that they are no longer accepting third party submissions via fax and instead, the new preferred method is the Hope Loan Port.

            Upon visiting the Hope Loan Port website ( https://www.hopeloanportal.org/ ) I learned that the website has been created as a “neutral, national, non-profit, e-commerce platform” as a way to provide more transparency and productivity to the process of foreclosure alternative review (i.e. loan modification, short sale, or deed in lieu).

            In order to access and use the Port you must first register as a Counseling Agency.  There are two types of counseling agencies that can register for this platform, the government sponsored not-for-profit agencies which are affiliates of the National Foreclosure Mitigation Counseling Program, and there are for profit counseling agencies, such as law firms. The registration requires you provide your company information and designate one person from your company to be the contact person. The contact person is in charge of managing and maintaining user profiles and the account. After submitting the company and contact information you must agree to the terms and conditions of the site, and then wait for verification.

            About 24 hours after submitting the information we received an e-mail stating that our company was verified by the Port along with our login information minus our password which was supposed to arrive in a subsequent e-mail. We waited for two days and still did not receive our password. I contacted the website by using their “Contact Us” tab and submitting an e-mail requesting the password information be re-sent. Finally, a few hours later I received the password and was able to log in to the actual portal.

            In order to submit a case you must first input information about the Borrowers, the first step requires you to disclose the loan information including the loan number, borrower names, and property address. The second step requires you to disclose financial information including gross and net income, rent, unemployment, monthly expenses etc. From there, you enter the information found on the Request for Mortgage Assistance (RMA) including if borrower would like to sell or keep the property, if the property is listed for sale, if the property is owner occupied, reason for hardship etc. After completing this information you must then upload the supporting documents including the signed and dated RMA, bank statements, pay stubs, profit and loss statement, 4506-T, rental income information, and any other supporting documents based on the Borrower’s situation. Upon submission the Lender gains access and then can review the file and inform you via the portal of information or documents still needed. The Counselor is able to view the pending status and communicate with Lender throughout the review process.
            The website is not entirely user-friendly but they do offer and encourage training webinars.  It still has its glitches to work out as well but overall I feel this is a step in the right direction for the modification application process. Many Borrowers and counselors who have applied for a modification can tell you that it is by no means an easy process. Much of the time spent on the modification application is wrapped up in the submission and re-submission of documents and following up with the Lender to ensure receipt and review of those documents. It is my hope that the Hope Loan Port will eliminate a lot of this back and forth and will also de-mystify the process by creating and maintaining more transparency during the application review.  

            I am interested to see how they will further adapt the website to be more user/Borrower friendly. At this point in time only Counseling Agencies and the Mortgage Lenders or Insurers may access and use the portal. I am curious to see if eventually they will develop an access point for Borrowers so they may submit their modification application online on their own. 

Laura Palermo will keep us in the loop as this program gets perfected, but in the interim, this is an exciting new program that will hopefully help to organize the chaos now existing in the loan modification process. Go check it out!