A few posts back we discussed the technique of government utilizing its Eminent Domain power to force mortgage restructuring by taking mortgages at their current fair market value (not face value) and thrn having investors push money into government in order to modify the terms of the borrower's payments.

Thereafter, the Real Property Committee to the Suffolk Bar Association discussed this topic at our monthly meeting and addressed the issue of if Eminent Domain could force the taking at the depressed value or if instead, the taking should be had at the pre-depressed value as Eminent Domain takings had occurred during the Great Depression - our most similar reference in case law. To be clear, there are Eminent Domain cases that dispute the value at which property should be taken during a depressed market and it is unclear if, in NY, Eminent Domain could even be utilized to take mortgages at their current market value instead of their pre-depressed value.

Well our Congress now has a bill, HR 5397, Defending American Taxpayers from Abusive Government Taking Act of 2012, which basically prohibits Federal Agencies from partaking in such restructuring through Eminent Domain. So even if local government did utilize Eminent Domain, if this bill passes, many many mortgages would be off limits.

Your author doubts the bill will pass because there has been so much push back on the use of Eminent Domain in the first place throughout our Country, the issue of valuation in the second place within NY and other States, and the history of not much really getting done in Congress these days.

Regardless, to view & track the bill, as it is intellectually interesting, click here.

Following up on previous blog posts about Regulation X & RESPA our latest chapter brings you a proposal by the CFPB to add new mortgage servicing rules. To be clear, servicing refers to the business of managing the billing, accounts & management of a note and mortgage.

Here are the proposed rules:

• Monthly mortgage statements
  Servicers would be required to provide clear billing statements including information on the loan, amount due, and application of past payments.
• Warnings before interest rate adjustments
  Servicers would be required to provide consumers with a new notice 6 to 7 months before the first rate adjustment, as well as earlier and improved notices before rate adjustments causing an increase in a consumer’s mortgage payments.
• Force-placed insurance
  Servicers can only charge borrowers for buying insurance on the property when they have a reasonable basis to believe that the borrowers have let their own insurance lapse and have given borrowers two notices estimating the cost of the “force-placed insurance.”
• Early outreach for delinquent borrowers
  Getting a delinquent borrower back on track requires early intervention and information about options available.
• Prompt crediting of payments
  Payments must be applied as of the day they are received, and the handling of partial payments is clarified.
• Accurate information management
  Servicers must have reasonable policies to ensure that when borrowers provide documents and information the servicers can find and use them.
• Error resolution and information requests
  Mistakes happen, but they need to get fixed. Servicers must address borrower concerns about possible errors within certain timeframes and provide the information they request.
• Direct and ongoing access to servicer personnel
  Delinquent borrowers will be able to contact the right people at their servicer to get information and take steps to avoid foreclosure.
• Evaluation for alternatives to foreclosure
  Servicers would be required to appropriately review borrower applications for loan modifications or other options to avoid foreclosure.

Make your voice heard - Comment by October 9:
For Regulation Z, click here
For Regulation X, click here

Yet, Real Estate Agents are Professionals, not business people. They are licensed by the Department of State and have certain ethical requirements to maintain their status as a professional. These professionals consist of Brokers and Salespersons. As a result, when these professionals aren't paid and they bring suit to collect their professional fees, they should not sue in the commercial division.