LIEB BLOG

Legal Analysts

Wednesday, April 10, 2013

Upcoming 2013 New York Real Estate Expos and Conferences

Real Estate Expos , Real Estate Tips
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.



                       
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Tuesday, April 09, 2013

TITLE WAVES - Free CE on 4/30 (Nassau County) and 5/3 (NYC)

Free CE , Lieb School
TITLE WAVES - Free CE on 4/30 (Nassau County) and 5/3 (NYC)
FREE Continuing Education

April 30th at First American in Uniondale 
& 
May 3rd at Chase Plaza in NYC. 

Sign Up Today at www.liebschool.com 
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Monday, April 08, 2013

Freddie Mac Streamlined Modification

Mortgage Industry , Mortgage Trouble
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. 
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Saturday, April 06, 2013

Consumer Financial Protection Bureau - Regulation Update Signup Available

Lieb School , Mortgage Industry
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!!!
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Mortgage Modifications - Supplemental Directive 13-02

Mortgage Industry , Mortgage Trouble
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.
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Thursday, April 04, 2013

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

Fair Housing , Real Estate Tips
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.


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Wednesday, April 03, 2013

Your Home's Price Today - The Calculator

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

Divorce Deals ,
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. 
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Tuesday, April 02, 2013

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

Zoning ,
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. 

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Mortgage Modifications: Introducing The Hope Loan Port

Foreclosure Defense , Mortgage Industry
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!

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