In an interesting appeal before the Second Circuit Court of Appeals, captioned as Scholz Design, Inc. v. Sard Custom Homes, LLC, Prudential Connecticut Realty, & Coldwell Banker Residential Real Estate, LLC, the Court held that the Copyright Act's protection of 'pictorial, graphic, and sculptural works' also protects architectural works from infringement. Therefore, graphical renditions of architectural work, before they are made into final construction drawings, which  have sufficient detail to enable constructions of homes based upon them, also contain protected expression.

The pictures at issue in this case were front elevation drawings showing the appearance of the front of the houses surrounded by lawn, bushes, and trees.

This decision is huge for the architectural industry as it greatly expands our understanding of protected works for architects. Moreover, the decision highlights the risks that real estate companies face by promoting protected works on their sites without express permission. All brokerage houses should carefully perform due diligence on the sketches of buildings that they post on their websites before approving such a posting.

To read a copy of the decision, click here.

We had a great course last night at Newsday for our local real estate agents called Mortgage Mania, where the students each earned 3 continuing education credits. While the slideshow was visible on the projected screen, some students inquired if I could re-post the links onto the blog as they couldn't see them on the handout.

So here goes:





I also wanted to thank Todd Triolo, our friend and mortgage expert, for his insights that he shared with the class as we learned. 

Todd can be reached at DE Capital Mortgage, LLC | 124 E Main St | Babylon, NY 11702
MAC M6652-011 Phone (631)422-8288| Cell 631-834-9283| Fax 866-917-0776 

Confidence for "newly built, single-family homes improved for a fourth consecutive month" says the National Association of Home Builders/Wells Fargo Housing Market Index when discussing the national trend.

To read the NAHB's press release, click here.

Unfortunately, the Northeast did see a significant decline in the same period. So we are left with mixed news at the Long Island Education Board. Let's hope that the national growth trend comes to town.

A great article on Business Insider about the future of showers, click here, to read. This shower cuts water consumption by 70% by automatically filtering the used water. It is estimated that the shower's cost can be recouped in 3 to 4 years of savings on your water bill. Real estate professionals who are interested in being green should read this article as this technology is estimated to be less than a year away from stores & now is the time to start talking about this great advancement. Soon home purchasers will want to know if the listing has such a shower. What's next?

For all those interested, the Suffolk Bar's Real Property Committee will be joined by Peter Johnson, Esq., the Town of Smithtown Town Assessor to discuss the tax grievance process within the Town.

As a real estate professional I am often faced with many people in foreclosure. I experienced the housing market slump live and in person. I know of the decline in the real estate industry in Main Street and I have a few thoughts about Wall Street. So, as you can tell, I have spent a lot of time thinking about how a recovery can be achieved and I have realized that the answer lies in the sewers. No, not as a metaphor for failure or as a depository for a magic bullet, but instead, I believe that the answer actually lies within the sewers. You see many businesses would like to open throughout Suffolk County, but they are stopped because of our lack of sewers. Just across the street from my law firm is vacant space that would make a perfect Starbucks or Hamptons Coffee Shop, but for the fact that the lack of waste water permits will prevent their opening. To solve this problem and enable economic growth locally we as a County need more sewers. In fact, to protect the water supply and to provide for generations to come we need more sewers. So, I point you all to the Suffolk County Sewer Study, click here, to learn more about the development of sewers in our County. I ask you all to contact your legislator and support the increase of sewers. I charge you with checking out the Village of Patchogue's model of development where sewers are ever expanding and to ask yourself, is the answer to our economic recovery in the sewers?

http://www.nyc.gov/html/hpd/downloads/pdf/Foreclosure-Notification-Rules-Proposed.pdf

We will continue to monitor if other jurisdictions follow suit, but for now, be guided accordingly.

In Bank of America v. Lucido, Justice Spinner, Supreme Court, Suffolk County found in his equitable powers that the bank's bad faith misrepresentations on their appraisal, ability to offer a principal reduction pursuant to the pooling and servicing agreement in the face of their denial of the same, inability to have an individual with settlement authority appear at the conference, prior counsel's inappropriate conduct, and 34 months of bad faith negotiations should result in punitive damages.

The decision is particularly interesting because Justice Spinner had previously been reversed on appeal when he cancelled a mortgage following similar conduct in Indymac Bank v. Yano-Horoski. It appears the Judge is  testing the authority of the Supreme Court to impact settlement conferences pursuant to CPLR 3408. This is a very important measure for all settlement conferences in the macro because it gives practitioners a clearer idea of what the ramifications for bad faith negotiations can be. Now lets see if the decision is modified on appeal.

To read the Lucido decision, click here.

All attendees are requested to fill out a business questionnaire:
  tiny.cc/southold. 

I encourage you to send this invite to all your agents and look forward to seeing you there.
For details please see attached invite.

Sincerely,

Joan Bischoff van Heemskerck
Managing Director North Fork & Shelter Island
Associate Broker, Town and Country Real Estate
O: 631 765 0500 C: 631 948 0234 F 631 765 0400
jbischoff@1townandcountry.com

Yesterday, the Federal Housing Finance Agency (FHFA), which administers both Fannie & Freddie, issued a statement that HARP modifications will not include principal reductions. To review the statement, click here.

The Principal Reduction Alternative (PRA) is a program under the Making Home Affordable umbrella designed for assisting homeowners whose home values are less than the amount they owe on their mortgages. PRA was launched in 2010 for loan-to-value ratios above 115%, in which principal forgiveness was the first step in the modification process to lower the loan payment, before reducing the interest rate or extending the term.

According to FHFA, PRA "would not make a meaningful improvement in reducing foreclosures in a cost effective way for taxpayers". In fact, FHFA was concerned with the moral hazard that PRA would cause in furthering strategic default by borrowers who sought to obtain a principal reduction.

To read the Acting Director, Edward J. DeMarco's letter to Congress explaining this announcement, click here.

It appears that this announcement will kill most principal reductions offered by non-GSEs (not Fannie / Freddie loans) as well. The analysis is thorough and Fannie / Freddie have always set the benchmark for the mortgage industry. The takeaway from this announcement is that modifications are going to focus on reducing interest rate and extending the loan term as opposed to reducing principal, which was the way the programs worked prior to the implementation of the PRA option in 2010. To be clear, the reason that the 2010 program was just analyzed by FHFA is that Fannie & Freddie were only recently requested to follow a program utilized by non-GSEs. Yet, this announcement has given lenders an iron wall to hide behind should they also not wish to follow the program, but they were following the program anyway because they were worried about having a public relations backlash.

Do you think that principal reduction should be part of helping struggling homeowners? Or better yet, as Mr. DeMarco's letter states do you think that principal reduction will create more artificial struggling homeowners? I guess we will never know if the chicken or the egg came first when it comes to principal reduction.