On May 9, 2012 we blogged about the importance in extending the Mortgage Forgiveness Debt Relief Act of 2007. To read that blog, click here.

On November 20, 2012, the National Association of Attorneys General joined the cause by writing this letter to the Congressional Leadership of our Federal Government.

Additionally, the Real Property Committee of the Suffolk County Bar Association also drafted a similar letter to our local leadership in the region.

Its imperative that this act is extended to protect those vulnerable community members who have underwater homes. Additionally, there are many secondary and tertiary effects on our local economy that will be realized if this act is not extended.

Please contact your representative and stress why this Act should be extended.

During this Thanksgiving I was spending time with some good friends who recently purchased a house. They are great people, but not particularly knowledgeable about the real estate industry.

My friend said to me that his wife and him were discussing setting up automatic payments for their mortgage, which I thought was a good idea so they would never miss a payment.

Then, my friend said that once they got situated in their new house that they would switch to paying every other week to cut down their interest and make the mortgage term shorter. My response was simple, "So you are going to make an additional payment a year on your mortgage?". He responded with "No, I am just going to pay every other week and we will save money, everyone does that", as if I was some sort of fool who had no idea how mortgages worked - thanks for the lesson. I thought that I may share with him why he doesn't understand what he is talking about, but on second thought I thought it is Thanksgiving and he didn't ask me for my professional advice, so I should keep my mouth shut.

To be clear, paying every other week as opposed to monthly is not a magic trick. The bank is not happy to merely receive payments in partial amounts more frequently than in full amounts monthly. Instead, paying bi-weekly results in 26 half payments throughout the course of a year. 26 half payments equals 13 full payments. Math not magic is what matters. So, the result is that a bi-weekly payor is making 1 extra payment a year and that is the SOLE reason that a loan's term is accelerated by expeditiously reducing the loan's principal balance. Moreover, as you reduce the principal, the amount of interest paid is reduced. This is actually what my friend was saying; albeit confusedly. In fact, it works the same if you simply make 13 payments a year as opposed to 12.

However, mortgagors (borrowers) should not EVER unilaterally decide to make bi-weekly payments. Instead, they must discuss their desire with their lender first. Many lenders want a one-time setup fee for this service and require online payments as opposed to checks.

Or, instead, mortgagors (borrowers) can simply send an extra payment annually and they are set.

Enjoy the holidays. I've learned that when I keep my mouth shut I enjoy the holidays too.

On November 16, 2012, we blogged about the Making Home Affordable Program's forbearance program for victims of Hurricane Sandy.

Today, Treasury issued Supplemental Directive 12-08, which addresses Federally Declared Disasters, such as Hurricane Sandy, and specifically directs Non-GSEs (servicers) with respect to the following topics:

• Flexibility with Borrowers in Federal Emergency Management Agency (FEMA) Designated FDD Areas
• Forbearance Plans
• Borrowers in a Home Affordable Modification Program® (HAMP) or the Second Lien Modification ProgramSM (2MP) Trial Period Plan
• Borrowers in a HAMP or 2MP Permanent Modification
• Handbook Mapping

To read Supplemental Directive 12-08, click here.

At our recent continuing education course, The Fair Housing Act, a student challenged our slideshow, which showed the list of protected classes. Specifically, they adamantly argued for the inclusion of age as a protected class. As explained then and reiterated now, there are multiple fair housing and discrimination laws of which real estate agents must be mindful. The course taught was the federal law, which does not expressly protect age. Nonetheless, New York has a law called the Human Rights Law that makes it unlawful to discriminate on the basis of age, among many other classes. However, the law does not apply the class of age to those under the age of 18, instead the class of familial status applies in those situations. Additionally, the law doesn't apply to housing restricted to those 55 years of age or older. Moreover, publicly assisted housing for the elderly is also exempted.

The message for real estate agents out there is that they need to consider a multitude of laws from Federal to State to Local (County, City, Town or Village) prior to practicing in a particular area.

According to Ad Age, the leading publication in the advertising industry, the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) are jointly investigating deceptive ads concerning mortgage modifications, short sales and workouts.

Pursuant to the General Business Law, residential buildings and other dwellings must use safety glass in sliding glass doors, storm doors, shower doors, bathtub enclosures and "fixed glazed panels immediately adjacent to entrance and exit doors which may be mistaken for doors". 

Today, NY's Attorney General, Eric T Schneiderman, warned Wells Fargo to immediately recommence reviewing mortgage relief applications after the servicer / lender suspended its review process until it receives instructions from FEMA. Unfortunately for Wells Fargo, it has a settlement with 49 State Attorney Generals, that its new policy is now likely breaching.

To read the AG's press release, inclusive of his letter to Wells, click here.

While its not clear that Wells Fargo's policy was intended to hurt homeowners seeking a mortgage modification and instead was a response to the storm, it is clear that NY's Attorney General is quite serious about protecting struggling homeowners in his State and helping them to stay in their homes.

This is a good sign for homeowners seeking a modification.

Last evening we instructed our continuing education course Foreclosure Filibusters at Newsday's Corporate Headquarters for approximately 100 real estate agents. It was so gratifying to instruct this particular group of professionals as they continuously focused our course on their expressed concern for those who were devastated by Hurricane Sandy. They expressed concern for those presently in foreclosure proceedings and for those who will now likely default on their mortgage. They cared about their community, their friends and relatives. They wanted to help.

Last evening, I hosted our monthly meeting for the Real Property Committee of the Suffolk Bar Association where we discussed municipal zoning violations, among other topics. In our company were some Assistant Town Attorneys who clearly articulated that real estate agents should always be mindful, and advise their clients, that hosting an open house also invites law enforcement into the house for Code Inspection.

Therefore, if you are showing a property with illegal structures or occupants - DO NOT HAVE OPEN HOUSES!!!

VA loans are available to veterans, active duty personnel, certain reservists and national guard members, surviving spouses of persons who died on active duty or died as a result of service-connected disabilities, and certain spouses of active duty personnel who are missing in action, captured in line of duty by a hostile force or forcibly detained by a foreign government or power.

While VA loans are available through private lenders, the VA guaranties loan payments and thereby provides an incentive to lenders to make loans. The key advantages to a VA loan are as follows:

You can buy a home without a down payment - as long as the sales price doesn’t exceed the appraised value. (Of course, you have to qualify in terms of income and credit.)

You won’t need to buy private mortgage insurance.

VA rules limit the amount you can be charged for closing costs.

Closing costs may be paid by the seller. (You should keep this in mind when negotiating the sales price.)

The lender can’t charge you a penalty fee if you pay the loan off early.

VA may be able to provide you some assistance if you run into difficulty making payments.

To learn about eligibility FAQs, click here.

Lets pay our respect to our veterans on this Veterans Day!!!