Tuesday, July 28, 2015

Here’s Why to Secure Your Original Will

Having an Attorney prepare your Will allows you to control the way your assets are distributed upon death. If you have a Will prepared, it is imperative that you secure your original Will in a safe location so that it may be produced for the Court following your death. Failing to do so may result in a Court making the rebuttable presumption that your Will has been revoked or terminated. See In re Fox’s Will. In other words, unless it is proven otherwise, the Court may conclude that you intentionally destroyed your Will while you were alive so that the Will could no longer be enforced.

Recently, the Courts reminded us why this principle is important in the Matter of the Estate of Robyn R. Lewis. In that case, the decedent (i.e. the person who passed away) had more than one original Will but not all of the original Wills were produced for the Court. As a result, the Court found that the decedent may have revoked the Will, even though that may not have been the decedent’s intent.  

Therefore, it is wise to only have one original Will, so that you only have to worry about securing that one Will for later production in Court. Options to secure a Will include, but are not limited to, leaving your Will at your Attorney’s Office, keeping your Will at your home, or filing the Will with the Court pursuant to Surrogate’s Court Procedure Act §2507. Do not keep your Will in a safety deposit box because it may be difficult or even impossible to access it after your death.

A person spends time and money to have a Will prepared, and all of that work may be undone due to a simple mistake, such as neglecting to tell someone where the original Will is located. If you want your friend to get that piece of jewelry you promised her in your Will, then you need to make sure you secure your original Will so that it may be enforced upon your death. 

Friday, July 24, 2015

Top 5 Real Estate Lawsuits Aspiring Landlords Need to Know

There are so many get-rich-quick schemes for investing hard-earned savings in real estate to generate a huge passive income through rentals. Wake up--nothing in life is always roses, and not everyone can be Kiyosaki's Rich Dad. This is the list of the Top 5 litigation issues that income-producing property owners face incident to living the landlord's dream.

Full article in The Huffington Post, written by Andrew Lieb, Esq. here. 

Wednesday, July 22, 2015

2 Month Extension for New Mortgage Disclosure Rules

The rules for how lenders are required to disclose mortgage information to home buyers are about to change dramatically. In the interest of a smoother transition, The Consumer Financial Protection Bureau has delayed the effective date of these rules, known as the TILA-RESPA Integrated Disclosure Rules, from August 1, 2015 to October 3, 2015.

Mortgage lenders will face new requirements for providing financing information to home buyers during the mortgage application process. These rules will also affect how real estate attorneys and brokers manage the conclusion of a transaction because lenders will be required to send home buyers specific disclosures before a closing can occur and certain financial details of a transaction cannot be altered without a new disclosure form being issued.

Real estate professionals are encouraged to advise their clients who are close to choosing a home and applying for a mortgage to inquire with their lender about how these new rules may affect their mortgage application.

For more information about the new disclosure rules, please visit the Consumer Financial Protection Bureau website

Voice Your Support for Debt Relief for Underwater Homeowners

The Mortgage Forgiveness Debt Relief Act of 2007, which provided tax breaks to homeowners who were forgiven debt resulting from loan modifications, short sales, or deeds in lieu, was not extended through 2015. Though legislation has been introduced in Congress to extend the Act through 2016, it is incumbent on the people, especially on Long Island, where foreclosure rates are still higher than the national average, to contact their representatives and voice their support for the bill.

If you want to speak to your representatives to push for an extension for this bill, there is now an easy-to-use Web app called Democracy.io that allows its users to email their House representative and senators in a group and on a simple platform instead of having to fill out clunky forms for each representative on outdated government websites. Since easy access to the government is an important way of ensuring that the people’s concerns are heard by the government, Democracy.io will soon allow its users to send letters, call, and schedule meetings with their representatives as well.

Though it is still difficult for Congressmen to filter through the millions of messages that are received every day, Democracy.io is nonetheless a step forward in the right direction. As technology becomes simpler on the constituents’ sides, Congress will need to match on its side in order to keep up with the increased flow of communications. For now, all underwater homeowners should take advantage of Democracy.io and contact their representatives about The Mortgage Forgiveness Debt Relief Act of 2007. The more support behind the bill, the more likely it will be pushed through.

You can also track the bill here

Monday, July 20, 2015

Foreclosure: Borrowers - it's not just you, the banks ignore practically everyone

New York County, Supreme Court, recently published a case opinion by initially referencing the plight of many homeowners in the first paragraph as follows:

"They have been thwarted by unresponsive loan servicers, unprepared lawyers, boilerplate form letters, and the banks' or servicers' often-changing and repetitive demands for financial information."

Sound familiar?

In the case, the Court reduced interest to 2% during the time that it found the lender acted in bad faith. This opinion is legally important because it expands the time of its interest sanction to pre-settlement conferences, but more so, its functionally important for borrowers because the opinion represents a terrific explanation of the current law governing mortgage modifications.

The law is set forth in detail below:

In reaching its decision, the Court, laid out the law as follows:

Duty Post-Default:
"3 NYCRR 419.2 establishes a "duty of good faith and fair dealing" by mortgage loan servicers in connection with their transactions with borrowers. This duty requires that servicers "make borrowers in default aware of loss mitigation options and services offered by the servicer in accordance with section 419.11" (3 NYCRR 419.2 [e]). This duty also requires servicers to "provide trained personnel and telephone facilities sufficient to respond promptly to borrower inquiries regarding their mortgage loans" (id., 419.2 [f]), and to "pursue loss mitigation with the borrower whenever possible in accordance with section 419.11" (id., 419.2 [g]). Part 419.11 creates an obligation on the part of servicers to make reasonable and good faith efforts to pursue appropriate loss mitigation options, including loan modifications as an alternative to foreclosure. Notably, section 419.11 (d) requires that servicers must complete their review of a borrower's eligibility for a loan modification or other loss mitigation options and advise the borrower or their representative of the determination in writing within 30 days of receiving all required documentation. Finally, section 419.11 (i) creates a good faith presumption on the part of servicers if they offer loan modifications in accordance with HAMP guidelines."

Duty Post-Commencement of Mortgage Foreclosure Action:
CPLR 3408 (a) and (f) read, in pertinent part, as follows:
"(a) In any residential foreclosure action involving a home loan . . . in which the defendant is a resident of the property subject to foreclosure, the court shall hold a mandatory conference . . . for the purpose of holding settlement discussions pertaining to the relative rights and obligations of the parties under the mortgage loan[*8]documents, including, but not limited to determining whether the parties can reach a mutually agreeable resolution to help the defendant avoid losing his or her home, and evaluating the potential for a resolution in which payment schedules or amounts may be modified or other workout options may be agreed to, and for whatever other purposes the court deems appropriate.
(f) Both the plaintiff and defendant shall negotiate in good faith to reach a mutually agreeable resolution, including a loan modification, if possible."

To conclude that a party failed to negotiate in good faith pursuant to CPLR 3408 (f), a court must determine that "the totality of the circumstances demonstrates that the party's conduct did not constitute a meaningful effort at reaching a resolution" (US Bank N.A. v Sarmiento, 121 AD3d 187, 203 [2d Dept 2014]). Following the adoption of CPLR 3408, the Chief Administrator of the Courts promulgated regulations setting forth the rules and procedures governing CPLR 3408 settlement conferences (see 22 NYCRR 202.12—a). This regulation requires that "[i]f the parties appear by counsel, such counsel must be fully authorized to dispose of the case" (22 NYCRR 202.12-a [c] [3]).

Next, the Court laid out its options in sanctioning violations of CPLR 3408(f) as follows: 

"barring of interest on the loan for the period of time that the servicer acted in bad faith and unduly prolonged the foreclosure proceedings (see U.S. Bank N.A. v Smith, 123 AD3d 914 [2d Dept 2014] [mortgagee barred from collecting interest on mortgage for 9-month period]; US Bank N.A. v Williams, 121 AD3d 1098 [2d Dept 2014] [court canceled all interest accrued on the subject mortgage loan between the date of the initial settlement conference and the date that the parties agreed to a loan modification]; US Bank N.A. v Sarmiento, 121 AD3d at 200 [interest tolled from date mortgagor began placing $2,000 per month in an escrow fund, at the court's direction]; see also Bank of America N.A. v Lucic, 45 Misc 3d 916 [Sup Ct, NY County 2014]; U.S. Bank, N.A. v Shinaba, 40 Misc 3d 1239[A], 2013 NY Slip Op 51484[U] [Sup Ct, Bronx County 2013]; Wells Fargo Bank, N.A. v Ruggiero, 39 Misc 3d 1233[A], 2013 Slip Op 50871[U] [Sup Ct, Kings County 2013]; Deutsche Bank Trust Co. of Am. v Davis, 32 Misc 3d 1210[A], 2011 Slip Op 51238 [Sup Ct, Kings County 2011]). Because foreclosure is an equitable remedy which triggers the equitable powers of the court (Notey, 41 NY2d 1055 supra; Norwest Bank Minn., NA, 94 AD3d at 836, supra), courts have not hesitated to toll interest when it is an appropriate remedy for a [*9]mortgagee's unconscionable delay in prosecuting foreclosure actions (see Dayan v York, 51 AD3d 964 [2d Dept 2008]; Danielowich v PBL Dev., 292 AD2d 414 [2d Dept 2002]; Dollar Fed. Sav. & Loan Assn. v Herbert Kallen, Inc., 91 AD2d 601 [2d Dept 1982]; South Shore Fed. Sav. & Loan Assn. v. Shore Club Holding Corp., 54 AD2d 978 [2d Dept 1976])."

Tuesday, July 14, 2015

Real Estate Attorneys as Real Estate Brokers

Attorneys don't need a real estate brokerage license to earn a commission. Yet, they can obtain a license by simply paying a fee without even taking the requisite 120 hour class or passing the exam. 

So, why should an attorney bother becoming licensed as a broker? The reason is that it both helps the attorney's clients to gain access to property and it also secures the attorney's ability to split a brokerage commission pursuant to a cooperative brokerage agreement.

Full article in The Suffolk Lawyer, written by Andrew Lieb, Esq. here. 

Monday, July 13, 2015

HAMP Streamlined Modifications

The U.S. Treasury Department has issued Supplemental Directive 15-06 “Making Home Affordable Program – Streamlined Modification Process”.

This new program is akin to the Streamlined Modifications already offered on GSE Loans. GSE or “Government-sponsored enterprise”, are privately held corporations for a public purpose such as Fannie Mae and Freddie Mac. These GSEs have had in place streamline modifications that Loan Servicers are mandated to offer to eligible borrowers. One draw-back in any type of modification with a GSE Loan is the fact that principal reduction is not offered.

This new directive is for Non-GSE Loans and the Loan Servicers and Lenders such as Chase, Citibank, Carrington Mortgage, Nationstar Mortgage and so many others. The streamline modification provides a modification opportunity to delinquent borrowers of Non-GSE Loans without the need to submit any docs or for any income verification. In fact, once a Loan Servicer has designated its pool of eligible borrowers a Streamline HAMP Trial Period Plan Offer will be issued to the Borrower. The only thing for the Borrower to do is make the first payment to enter into the trial period. This will greatly improve the approval process for those Borrowers that are directly designated and free up resources for those borrowers that may not be eligible by lessening the modification approval time frame. The bonus is that in Non-GSE modifications, principal reduction can, and may be included in the modification.

Eligible Borrowers will only learn of this from their Loan Servicers directly by mail. Be sure to keep an eye on all mail received from your Loan Servicer to see if you are in luck. Regrettably, if a Borrower does not fit within the specific eligibility pool they will be out of luck for streamline modifications.