Real Estate Broker and Salesperson violations are now published by the New York State Department of State and can be found by a search on their website. CLICK HERE for access.

In the past, licensing settlements, contained in consent orders, were kept private. Previously available for public viewing were decisions on adjudicated licensing issues, pursuant to a “hearing” with an administrative law judge on the same. Now, consent orders are also available for viewing, which are settlements between the broker/agent and the State. Yet, the initial complaints and other documents are still kept private and are unavailable to the public by way of an online search.

This newsworthy happening may create a benefit to New York State Brokers and Salespersons. The now-public consent orders make many more prototypes of licensing violations available. Specifically, brokers and agents should use the same to their advantage by reviewing such decisions and consent orders to enable them to know “what not to do” in practice.

The fee that Suffolk County charges for verifying that the description of real property being bought, sold, mortgaged, etc. corresponds to the tax map numbers to which it has been identified has been increased from $30 to $60 effective April 2, 2012.

This is a mandatory fee for recording and will increase the cost of all real estate transactions within the County. Previously, the fee was $30 for the first and $20 for additional verifications.

To learn more about what verification is in Suffolk County, click here.

In December of 2011, the previous County Executive vetoed this legislation. To read the veto and the legislation, click here. Now, its enacted.

As discussed below, commingling security deposits with personal funds can have great ramifications to both the tenant and landlord in actions involving disputes over the same.

In Band v. Peters, the tenant entered into a residential lease with the landlord and timely paid both the security and utility deposits pursuant to the terms of the lease. After vacating the subject premises according to the agreed term, the landlord did not return the security and utility deposits. The tenant then brought an action against the landlord alleging, among other claims, that the landlord commingled both deposits with his personal funds. Further, and in violation of the lease and General Obligations Law (“GOL”) §7-103, the tenant alleged that the landlord failed to notify him of the name and address of the bank into which both deposits were made pursuant to the terms of the lease. Additionally, the lease provided for the return of the security deposit within forty-five (45) days following the termination of the lease.

The landlord disputed the above claims and averred that the tenant breached the terms of the lease and therefore, forfeited the return of his security deposit. The tenant countered that even if the Court found that he breached the terms of the lease, there were no deposits that could be forfeited because the landlord commingled the deposits prior to any alleged breach.

The Court found that the landlord did in fact deposit the security and utility deposits into his personal account, rather than holding both deposits in trust for the tenant pursuant to GOL §7-103. Consequently, the Court ordered the immediate return of both deposits with interest, plus attorney’s fees (pursuant to the terms of the lease).

Landlords and tenants should be aware of the above as the two (2) relatively “minor” errors committed by the landlord, which no doubt will continue to occur in the ordinary course of business, can be of great significance to both parties.

The Gates Foundation is challenging engineers to reinvent the toilet into a more efficient, effective model with the following specifications:


"A stand-alone unit without piped-in water, a sewer connection, or outside electricity—all for less than 5 cents a day."

To read more about the future of flushing, click here.

Goldman Sachs offers a great chart breaking down America's 131.8 Million Homes into categories of occupied (listed / unlisted) or vacant (listed, season / recreational properties not listed, for rent, sold unoccupied, or held off market).

To view the diagram, click here.

In People ex rel Cuomo v. First American Corp, the Court of Appeals denies the argument that NY can't regulate appraisals and instead says, while ruling on alleged fraud and violation of real estate appraisal independence rules concerning the issuance of mortgages, that both Federal and State authorities may ensure that real estate appraisal reports comport with the Uniform Standards of Professional Appraisal Practice (USPAP).

The implication of this ruling is that appraisers should be mindful of increasing oversight by both Federal and State authorities. More so, Appraisers should be knowledgeable of the USPAP and continually review its interpretations and amendments. To review the USPAP, click here.

Just like they have been doing for at least a year in short sales, banks are now offering a portal for homeowners and/or their representatives to apply for a mortgage modification through an online, streamlined, organized and optimized application process. This should mark the beginning of the end of the fax shredder days of modifications where the lender says they never received anything and they blame the homeowner's neglect for the denial of a modification. While the short sale portal utilized is traditionally administered by a third party company, Equator, the modification portal appears to be administered in-house by way of the homeowner's existing online mortgage account, which should create more tailored offerings to the client's specific needs. We highly endorse this move by the banks and believe technology will eliminate much of the he said / she said about document transmission, which is the main crux behind most modification denials to date.

Settlement negotiations are in place with the nation’s five (5) largest mortgage servicers to compensate victims of Robosigners. These lenders include Ally Financial, Bank of America, Citigroup, JP Morgan Chase, and Wells Fargo.

Robosigners are lender representatives that signed several thousand documents without reading and reviewing them for accuracy, creating issues in foreclosure litigation as a result. This practice came to light as a result of the 2008 financial crisis because the number of foreclosures increased greatly as a result.

On the Upside: A portion of the estimated $25 billion settlement will be used to assist homeowners facing foreclosure in participating states. Compensation may also be available to homeowners that fell victim to Robosigning practices. The lenders would also be required to participate in an upgraded procedure for processing foreclosures in order to provide homeowners with greater protection.

On the Downside: After a final settlement, the participating lenders would be protected from future litigation by the participating states. This raises concern to several state Attorney Generals, such as in California and New York’s Eric Schneiderman.

Opponents to the agreement argue that although the number seems large, these lenders are “getting off too easy”.

This opposition is also fueled in part by the concern that there may be other, undiscovered predatory, deceptive, and/or illegal practices in place with these lenders that warrant further investigation and potentially prosecution. Since protection for the participating lenders is part of the package, this may prevent investigation, prosecution, and protection concerning such ongoing practices.

Likewise, President Obama announced that he anticipates creating a task force which will further investigate lenders’ wrongdoing. If such a task force is created prior to the execution of the settlement agreement, this could result in a failure of the settlement. The lenders are bargaining for protection from further litigation and may not be willing to pay such sums without that promise.

Further, compensation to the victims of foreclosure is limited to a small class of persons damaged within a restricted date range. Homeowners with Freddie Mac or Fannie Mae loans will be exempt.

To learn more about this potential agreement, CLICK HERE or CLICK HERE.

Following on the heals of the Silverberg decision by the Appellate Division, which basically denied lenders the standing to sue when MERS was utilized to record a mortgage, the NY AG has sued the banks for their use of MERS. If you remember Ed Romaines lawsuit with MERS, this has been a long time coming. The lawsuit alleges deceptive and fradulent practices on homeowners and the Courts as a result of MERS involvement in mortgages. Basically MERS involvement skews the ability of the Courts and Defendants in a foreclosure action to determine if the Plaintiff in the lawsuit actually has the right to sue. To learn more about the lawsuit, click here.

This week the administration announced that its program that provides the framework for mortgage services to provide modifications to distressed homeowners will be extended for an additional year and will now be available through December 31, 2013.

Additionally, the administration will modify the framework of the Making Home Affordable program to offer assistance to an increased target population of homeowners. To accomplish this goal, the Home Affordability Modification Program (HAMP) will shift its sole focus on front-end debt-to-income ratio, or the comparison of income to a homeowner's mortgages, taxes and insurance, to also evaluating back-end debt-to-income ratios, or the comparison of income to a homeowner's total debt, including non-real estate related debt. Its interesting that it took the administration so long to shift to this focus because back-end debt-to-income has traditionally been the primary focus of lenders when making a loan. Still further, the program will be extended to income-producing properties, with tenants, as well as vacant properties instead of being limited to owner occupied properties as it currently exists. Lastly, the administration has expanded its incentive offerings to services who offer principal reduction to underwater homeowners.

To read the administration's explanation of its new policies with respect to the Making Home Affordable Program, click here.