Assistance Available to "Green" Homeowners of Long Island

The Federal Government is now rewarding those homeowners on Long Island who choose to “go green” by offering assistance in the form of low-cost loans for energy-efficient home improvements. The pilot federal program, PowerSaver, will provide loans of up to $25,000.00 at low interest rates during its two-year pilot period. In addition, The New York State Energy Research and Development Authority will offer local assistance of up to $13,000.00 for similar renovations. The Town of Islip will open its office in Bay Shore shortly to assist local-area homeowners apply for loans. Be on the look-out for the announcement next week of its opening date.

Underground Oil Tank Test - EZY3 Locator Plus Test

There has been a recent discussion among some local attorneys about the validity of and mechanism of an EZY3 Locator Plus Test. Knowing what I don't know, I asked Matt Kaplan of Housemaster, who teaches home inspections at our real estate school to explain.

Here is his response:

EZY 3 Locator Plus is not new technology (10 years). It uses ultrasound to scan the ullage (empty) area of a tank and is generally used in conjunction with other testing devices, such as low pressure volumetric testing equipment. The testing model described below is completely inaccurate based on several levels.

For example, air intrusion is not a physical condition considered during a tank test. Pressure may be introduced to a bulk storage facility and monitored for changes in pressure, but there is no condition for 'sucking' or release determined during that testing cycle.

Petroleum bulk storage (PBS) testing is regulated within specific guidelines established by regulatory authorities. The simplistic language referred to below actually creates a question of liability based on misinformation.

Your client would be served better by understanding the nature surrounding petrochemical pollution and appropriate regulations.

Specially, Matt was addressing the attorneys statement that: "test appears to be the suggested step up insofar as testing from traditional soil sampling, but not sure that it actually applies "pressure" or the like. It seems, unlike an air pressure test of years back (blowing air INTO the tank to check for leakage of air out of it), the below may be a slight vacuum of air OUT of thetank, then seeking to determine if air is being sucked INTO the tank- thus holes for leakage."

I hope you now understand the EZY3 Locator Plus Test.

Credit & Credit Report Questions Answered By Christopher Lauria

For those of you who were at Tuesday’s Mortgage Mania CE course in Southampton – 2 questions that came up from local Real Estate Agents about credit have been answered by Christopher Lauria, President of Innovative Business & CO NY.

WHAT DOES ACCOUNT CLOSED AT CREDIT GRANTORS REQUEST MEAN?

On your credit report, some accounts might read "account closed at grantor's" request or "closed by grantor." This means your credit card issuer, or bank for some reason, had your account closed and reported to the bureaus to have that term added to your trade line.

The listing or the fact that your creditor closed your credit card (rather than you closing it) won't hurt your credit score but may sway an approval from another creditor. However, your credit score could be affected by a closed credit card if you still have the balance on the credit card or credit cards.

If this isn't true and you requested that your account be closed. You can dispute the credit report entry. You may contact my company any time for assistance with such matters.

DOES CHECKING YOUR CREDIT REPORT HURT YOUR SCORES?

This is a common myth and please don't let it be the reason that you don't know what your credit scores are. Checking your report on your own will absolutely not hurt your credit scores In fact, you could check your report every week and it wouldn't hurt your score one bit as long as they are self disclosure. There are services that provide free credit reports but they really are not free lol, in which you can view all three credit scores that purchase your credit profile directly from the 3 Bureaus, the one main issue with this is that most of these companies base your scores on a higher tier scoring system which goes up to 950 to where banking standard industry only goes up to 850. The problem with that is when you view your scores they appear 35-55 points higher and unfortunately that causes many misconceptions. Also you may request your credit reports once a year from the 3 major bureaus, these are the most accurate reports you can receive. However when you request your 3 for free once a year directly from the bureaus, they unfortunately do not provide scores just creditor information.

The only thing you want to be careful of is using a company that doesn't get your score directly from the three credit bureaus. Using an outside source could count as an inquiry by an outsider and could hurt your score because technically, the request to the bureaus isn't being made by you, in this case it's whats called a hard inquiry and can count for a few points on each bureau especially if your scores are being shopped to different banks, which occurs mostly when purchasing an automobile, credit card applications certain bank loans etc, but you can always ask the financial manager to please not shop your credit profile to multiple banks, But if you have poor credit they do this so that they can get you financed in which case you really do not have much of a choice so let them shop your credit profile.

Now The Good News:

Inquiries have little impact on your credit score. Credit scores have been redesigned in recent years to account for the fact that many people shop for credit.

The main factors in lowering a credit score are 1) making late payments or outright default and 2) level of credit balances.

Christopher Lauria

President

Innovative Business & Co NY Inc

998 C Old Country Road Suite 293

Plainview NY 11803

Telephone: (800) 422-8350

Office: (516) 960-7759

Mobile: (646) 644-9144

Fax: (800) 356-6506

E-Mail: libc1@optonline.net

CE on Short Sales & Foreclosure 5/10 in Melville * Only a few seats left!

Attention Real Estate Professionals: We have a few seats left for Foreclosure & The Economy: The Short Sale Class on May 10th at the Newsday Training Center in Melville. Register now before its full! 3 CE Credits! FOOD FUN AND FREE!
Foreclosure and the Economy: The Short-Sale Class
This seminar is very similar to the course that Mr. Lieb taught to the Suffolk County Bar Association as a Faculty Member of the Suffolk Academy of Law. Beginning with basic definitions, this course quickly jumps into providing the requisite skills to draft a Hardship Letter, negotiate with a Loss Mitigation Department, navigate The Mortgage Forgiveness Debt Relief Act of 2007, and much more. This course will get you ready to make money in this difficult economy.

Click Here to Register

Electronic Contracts

Good news! 15 USCS 7001(a)(1) says that a signature, contract, or other record relating to such transaction may not be denied legal effect, validity, or enforceability solely because it is in electronic form; and 15 USCS 7001(a)(2) declares that a contract’s validity may not be denied legal effect solely because an electronic signature or electronic record was used for its formation.

Naldi v. Grunberg (908 N.Y.S.2d 639 (2010)) interprets this statute according to NYS law, that electronically subscribed contract be given the same legal effect as a contract subscribed on paper, whether or not the transaction affected interstate or foreign commerce.

This means that contracts, including real estate contracts, may be signed and sent by either electronic mail or facsimile.

Reminder-Tax Grievance Time!

Tax grievance time is just around the corner. All grievances for the Town of Brookhaven must be filed between May 1^st and May 17^th (the third Tuesday in May).

Grievances may be filed by mail, or in person, but remember to bring an extra copy to have stamped as filed. There is no fee for filing your tax grievance complaint in the Town of Brookhaven.

This year’s equalization rate in the Town of Brookhaven is .86. To get the assessed value, the property value is divided by .86%.

Example: My house is valued at $190,000.00 and I divide that by .86% (remember to press the percent button) which turns out to be $1634.00.

Southold Historical Society Art Auction on April 30

The Southold Historical Society is holding its annual Art Auction on Saturday April 30th, 2011 at Castello di Borghese Vineyard in Cutchogue. Event starts at 4:30pm and the auction will be begin at 6:00pm.
* Wine & cheese will be served.

For a preview of the paintings visit 2011 Fine Art Auction

* For questions about the event email the committee chair -  Nicholas Planamento (nplanamento@1townandcountry.com)

Titleserv Closes

With operations in 47 states, Titleserv has closed leaving a gap in the market for title insurance, appraisal and settlement services. Go grab some market share.

Land Use in the Town of Brookhaven

There is a lot of information required to obtain a variance in the Town of Brookhaven. Thankfully, the staff at the Town of Brookhaven can be really helpful in giving you the necessary documentation and information in order to do so.

If one is trying to obtain a variance for a structure in or on their property that is a violation of the local zoning ordinances, there are several steps one might want to take.

The Town of Brookhaven has several documents listing the requirements needed in each situation (for a setback situation, fences, garages, animals, etc.). The instructions are clear and they provide forms.

But, as an example, here are general steps to take. First, it might be a good idea to FOIL property around yours to find out if your neighbors have applied for and received (or been denied for) a variance that may or may not be similar to the one that you are trying to obtain. In order to do that, you need a FOIL application that can be found in the law department on the third floor of the Town of Brookhaven, or on the Town of Brookhaven’s website. In order for the Town to search for these records (only the past 10 years are on their computers, and more specific information is needed if you are searching for records from before then), you must give them the address, name, and section block and lot of the property. First, one might drive around the neighborhood and write down their neighbors addresses. Then, a call can be made to the Town of Brookhaven’s Tax Assessor’s office in order to obtain section, block, and lot numbers, as well as names for those properties. Beware because they will only allow you to ask for two addresses per day, and beyond that you must either call back on a later day, or go to the Town of Brookhaven’s tax assessor’s office to use their computers and search the database. This cannot be done from your home computer. You can send the FOIL request in online or by mail, and will receive a response in about 30 days (no promises), and will be charged .25 cents per page. Another helpful hint is to ask for documents, not information, because they can only give documents, not information, pursuant to a FOIL request.

After getting the appropriate information from your FOIL request, the next step is to fill out an application for a building permit, which will be denied, but is a necessary step in obtaining a variance. Of course, it is by some miracle not denied, then you are in an even better position and will not need to proceed. The building permit department is on the first floor in the Town of Brookhaven, and the clerk at the front desk in the back can furnish you with those. If you need to speak with a representative, you must take a number and a seat to be helped, similar to the system at the DMV. The application and paperwork call for the required information to be submitted with such.

Once an application has been denied, one can apply for a variance. This requires several steps and a lot of information is needed, depending on specifically which type. Again, the Town of Brookhaven’s land use department (on the right when you walk in) is very helpful and will give you the necessary forms and paperwork, and even explain to you what you will need in each situation.

After applying for the variance, and taking all of the necessary steps, the zoning board will have a hearing. Part of the process is giving notice to your neighbors so they can present themselves at the hearing to give their input (ie if they are adamant about you not having roosters on your property). The hearing is where it might be helpful to have your FOIL’ed information on your neighbors as evidence.

All in all, the process may take time and be tedious, because of the several steps, but because of the Town of Brookhaven’s amazing staff and explanatory paperwork, it may not end up being as bad as it seemed.

Evidence in Tax Grievances

Tax Grievance Day for many Suffolk county municipalities is coming up. The Town of Brookhaven’s Tax Grievance Day will be on Tuesday, May 17^th, 2011 (always on the third Tuesday in May). Here is some important information concerning Commercial Properties for those of you choosing to file a grievance on such.

Note that villages sometimes use different dates and if you do live in a village that law governs, so check their website or call to find out.

Nassau County Grievances are filed with the Assessment Review Commission and can be filed during January 3^rd to April 23^rd by mail or on the website.

New York State Tax Certiorari proceedings are governed by the Real Property Tax Law (RPTL) Article 7. However, these are also in the purview of CPLR 408 discovery rules.

Disclosure is generally only allowed by leave of the Court. The only two devices that are allowed without leave of court under CPLR 408 are CPLR 3123 Notice to Admit facts, and the admission of ratio under RPTL 716. This allows petitioner to serve upon the respondent a demand to admit the ratio at which other real property in the assessing unit is assessed. This is also referred to as the equalization rate or the level of assessment. Standard rules apply to this Notice to Admit, so if the respondent does not deny that the ratio is correct within 15 days, it is deemed admitted for trial, as long as it is not in excess of 95%, in which case it is not allowed.

Information not normally subject to disclosure in tax certiorari cases is business information and related financial information because it is generally not directly related to the value of the realty. Also excluded is information relating to the petitioner’s business plans and production figures for factories, as well as studies prepared in connection with past, current, or future development, alteration, and demolition. This information has been denied as immaterial, because the courts decided it was not relevant to the present valuation. “Valuation of property is determined by its condition as of a valuation status date pursuant to local and state law---not a future contemplated use.” NYS Bar Journal, Discovery, and its Absence, in Tax Certiorari Proceedings, May 2010 (David C. Wilkes and Nicholas J. Connolly).

Depositions are subject to the same rules under RPTL Article 7 and are therefore not allowed without a court order. Rarely are they allowed in order to ensure there was a competent valuation. In fact, it has been held that to subject these assessors to EBTs would severely impede the proper performance of their statutory duties. Id. EBTs have been allowed for the limited purpose of deposing the State Board of Equalization and Assessment (SBEA), but only for the limited purpose of information concerning the allegedly voluminous and complex facts forming the basis of the agency’s assessments so as to simplify the issues for trial in the interests of judicial economy. Id. Not discoverable are the mental processes and formulas used in arriving at their determinations. Id.

Also undiscoverable are the formulas, policies, and mental processes by the assessors that were used by either the petition or the respondent. On that same note, discovery is not allowed for computation sheets, guidelines, or reports showing fractional assessment rates used by assessors.

One thing that is allowed, even required, pursuant to Court Rule 202.59(g) is an appraisal by both parties. The appraiser’s reports must include a statement in which they give information regarding the method of appraisal relied on as well as the conclusions reached, “together with the facts, figures, and calculations by which the conclusions were reached.” This report also needs to include photographs of the properties and photographs of the comparable property that is relied on in making the report.

In conclusion, most discovery in tax certiorari cases is not permitted without leave of court, and is not encouraged. The most important piece of information, that is allowed, and even required, is appraisal reports.

On or about?

A highly contested question in the transactional area of law. Does “on or about” mean on that date, around that date, within thirty days of that date?

Unless a contract of sale specifically states that “time is of the essence”, then either party may adjourn the closing date by requesting a reasonable adjournment. Zev v. Merman, 134 A.D.2d 555, 521 N.Y.S.2d 455 (2d Dept. 1987), aff’d 73 N.Y.2d 781 (1988). Whether the adjournment is reasonable or not is for the courts to decide.

In cases where there is no “time of the essence” or “law date” are explicitly stated, once the date passes, a seller may not retain the contract deposit and the buyer cannot immediately sue for specific performance. Once that occurs, that party must make a good faith effort to attempt to schedule a second closing date, and if this does not occur, they may set a closing date.

If the contract specifically states that time is of the essence or has a “law date”, then the closing must happen on that date, and either party is in breach for non-compliance.

Contracts commonly read “on or about”, “on”, or “on or before” which essentially mean the same thing: on or about. These only become “time of the essence” contracts if a letter is subsequently sent, from either party’s attorney, declaring that time is of the essence, and setting a date for the closing.

CLE 3/30/2011 - Robo-Registrations

Andrew M. Lieb, Esq. will be providing a 2 hour CLE this evening sponsored by First American Title Insurance Company of New York at the Hyatt in Hauppauge, NY. The CLE will cover Robosigners & MERS in the Foreclosure Mess. The following links and citations will be utilized during the course for your future reference:

1. Recording discharge of mortgage - Real Property Law Section 321


2. Bankruptcy Court MERS decision - In re Ferrel L. Agard, 2011 WL 499959 (ED NY, 2011)


3. Foreclosure Settlement Conferences: (1) Uniform Civil Rules of the Supreme Court & County Court Section 202.12-a; (2) CPLR Section 3408; (3) Indymac v. Yano-Horoski, 890 NYS 2d 313 (Sup Ct, Suf. Cty., 2009); & (4) Indymac v. Yano-Horoski, 912 NYS 2d 239 (2nd Dept, 2010).


4. MERSCORP, INC. Rules of Membership - http://www.mersinc.org/files/filedownload.aspx?id=172&table=ProductFile


5. First MERS Case - MERSCORP v. Romaine, 861 NE 2d 81 (2006).


6. Ways Home - http://www.knowyouroptions.com


7. The State of the Judiciary 2011 - www.courts.state.ny.us/ctapps/news/SOJ-2011.pdf


8. Robosigning Admitted in Testimony - Indeymac v. Machado, Florida, Case No. 50 2008 CA 037322XXXX MB AW


9. Justice Winslow's Congressional Testimony - http://www.propublica.org/documents/item/ny-state-supreme-court-justice-dana-winslows-testimony-on-foreclosure-probl


10. Certificate of Conformity - CPLR Section 2309(c)


11. Deceptive Practices Act - GBL Section 349


12. National Association of Attorneys General - http://www.naag.org/joint-statement-of-the-mortgage-foreclosure-multistate-group.php


13. Attorney Affirmation Requirement - Adiministrative Order 548, 2010


14. Affirmation Template - http://www.courts.state.ny.us/attorneys/foreclosures/Affirmation-Foreclosure.pdf


15. Qualified Written Requests (RESPA) - http://www.hud.gov/offices/hsg/ramh/res/reslettr.cfm


16. Affirmation Requirement Precedent - Citibank v. Murillo, 2011 NY Slip Op 21004, (Sup Ct Kings Cty., 2011)


17. Standing issues - Wells Fargo v. Mastropaolo, 837 NYS 2d 247, (2d Dept, 2007)


18. MERS Authority: (1) LaSalle v. Lamy, 824 NYS 2d 769 (Sup Ct Suf Cty., 2006); (2) US Bank v. Flynn, 897 NYS 2d 855 (Sup Ct Suf Cty., 2010)


19. Standing Explained - US Bank v. Collymore, 890 NYS 2d 578 (2d Dept, 2009).


20. 2010 Report of the Chief Administrator of the Courts - www.courts.state.ny.us/publications/pdfs/foreclosurereportnov2010.pdf

Federal MARS Rule on Loan Modification and Short Sale Providers

The MARS Rule

This year, the FTC enacted a new rule called MARS (Mortgage Assistance Relief Services) that puts several obligations on anyone negotiating on behalf of a homeowner for a loan modification or short sale. Several disclosures are required about the services and fees.

MARS is defined as a “service, plan, or program offered or provided to the consumer in exchange for consideration, that provides services in relation to a consumer’s mortgage, including negotiating a possible loan modification.”

Most notably, the MARS rule will ban advance fees. Now, fees will be unavailable for MARS providers that negotiated a loan modification or short sale until the mortgage lender or servicers has provided written documentation describing the key changes to the mortgage, which the consumer accepts. The consumer also has the right to reject this offer without any charges, and must be reminded of this.

Loan modification companies or other MARS providers must make certain disclosures about the agreement between them and the homeowner, such as the fact that they can stop doing business at any time, that they can reject offers the lender or servicer makes, and that they need not pay a fee if they reject the offer. A fee is only payable once the homeowner accepts an offer they deem to be acceptable, and the fee amount must be disclosed from the beginning. MARS also bars these companies from encouraging or preventing homeowners from communicating with their lenders and/or servicers on their own. Providers often suggest to consumers that they should stop paying their mortgage. If they do so, they must also disclose that because of that, they could lose their home and damage their credit scores in the process. They also must disclose that lenders may not agree to modify the loans at all. The following should be provided as a memo to the homeowner, that is conspicuously a disclosure statement, with language similar to the following:

IMPORTANT NOTICE (in two point-type larger than the font size of the disclosure): You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender [or servicer’. If you reject the offer, you do not have to pay us. If you accept the offer, you will have to pay us (insert amount or method for calculating amount) for our services. (NAME OF COMPANY) is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating.

Additionally, the rule requires certain disclosures from these providers, such as disclosures about their services in any communications to potential customers. For example, they must disclose that they are not in fact associated with the government. They must also disclose: the consumer’s payment and mortgage obligations; the company’s refund/cancellation policies’ whether the company has performed the services it promised; whether the company will provide legal representation; the availability or cost of any alternative to for-profit mortgage assistance relief services; the amount of money a consumer will save by using their services; or the cost of the services. If they are going to make claims regarding benefits, performance, or effectiveness of services, they must have reliable evidence to back up these claims.

The following is an example of the disclosure that must be made by the agent who promises to perform negotiation, counseling, or other services regarding Short Sales:

IMPORTANT NOTICE (in two point-type larger than the font size of the disclosure): (NAME OF COMPANY) is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating.

Who is subject to MARS Rules?

Most obvious is that loan modification companies are subject to MARS regulations. Along with that can be real estate brokers and professionals, and sometimes attorneys as well.

Attorneys are exempt from the MARS statute as long as they are engaged in the practice of law, are admitted in the state of the property; and they are complying with the state’s rules on attorney conduct and regulations. They must also place any collected fees in an IOLA account, and follow regulations related to such, if they are to collect a fee without the applicable fee ban. However, this does not apply to circumstances where fees are collected in connection with preparing or filing documents in bankruptcy, court, or administrative proceedings.

Real Estate Professional who represent buyers or sellers in Short Sales are also subject to the new rules. They made need to make certain disclosures up front, and their fees are affected as well. Once they become aware that the transaction may be a Short Sale, they must comply with the disclosure requirements.

When is a real estate professional subject to MARS?

There are several situations that real estate professionals may find themselves in which may lead to Short Sale Listings, and therefore fall under the purview of MARS as a provider.

First, and most obvious, is where the real estate professional negotiates a short sale with a lender on behalf of a homeowner client. Exact compliance with the statute depends on the broker’s business.

A disclosure is required when providing an offer for mortgage relief, at the time that the homeowner is presented with the lender’s short sale approval letter. This disclosure must be provided on a separate page as follows:

IMPORTANT NOTICE: Before buying this service, consider the following information (in two point-type larger than the fnot size of the disclosure): This is an offer of mortgage assistance we obtained from your lender [or servicer]. You may accept or reject the offer. If you reject the offer, you do not have to pay us. If you accept the offer, you will have to pay us [same amount as disclosed previously] for our services. If you stop paying your mortgage, you could lose your home and damage your credit rating.

Along with this must be a notice providing for the material differences between the seller’s current loan and the lender’s proposed modifications to the loan, if the short sale offer is accepted (which may lead to a deficiency against the seller). This information will likely be included in the lender’s short sale approval letter to the homeowner as well.

MARS in Adveritising

If a real estate professional advertises as a MARS provider, full compliance is necessary. If a particular entity specifically markets MARS services to homeowner, then they need to make full disclosure in any advertisements, which includes telephone solicitations.

In a situation where a broker only does limited transactions involving short sales, and it is not the primary purpose of their business, then the MARS rules must be complied with for these transactions, and the necessity for these disclosures occurs once the real estate professional realizes it may become a short sale transaction situation. If a real estate broker that does not exclusively do MARS transactions advertises for themselves and includes in this advertisement the ability to do MARS transactions, then the FTC reviews these advertisements on a case by case basis, taking into account whether the ad gives a certain impression to a “reasonable consumer”.

Buyer’s representatives also may become a MARS provider if they negotiate the terms of a short sale on behalf of the seller with the lender. They would then need to make disclosures to sellers where they negotiate short sales on behalf of the seller while trying to acquire a purchase for the client, the buyer. Where there is no specific arrangement with the Seller, the real estate professional may not charge a separate fee to the seller. If he does make such an arrangement, it must be done in compliance with MARS.

Referrals made to a MARS provider in exchange for a fee will be subject to MARS requirements if it could be viewed as “arranging mortgage relief services” so one must be careful in that situation. This is a factual determination made on a case by case basis. To avoid MARS regulation, it must be clear that the client is not required to use the MARS providers offered by the real estate professional. Fee arrangements must be disclosed upfront.

Things to keep in mind regarding fees

If a broker customarily takes fees upfront, then they need to be cognizant of potential short sale situations because they would be in violation if they took a fee upfront and it turned out to be a MARS transaction.

----

As an aside, the FTC is placing a stay on enforcing the MARS rules against a licensed real estate agent who is working on a short sale. To read the FTC's press release, click here. Nonetheless, NY real estate agents should be mindful of the Real Property Laws Distressed Property Consultant provisions and the impact this plays on their direct negotiation of a debt with a lender and how this may also constitute the unauthorized practice of law. Its therefore recommended that real estate agents abstain from direct negotiations on a release of the deficiency judgment, the lien and the notice of pendency incident to a short sale transaction. 

Notes from meeting with Suffolk County Zoning Board Chairs

• Generalized community opposition should not be considered by the ZBA although it exists as a political reality


• Lawsuits in an Article 78 Proceeding should be brought with the ZBA Chairman being named as the defendant and they do not want to be publically overturned

• Attorney for applicant:

o Is expected to have made a personal inspection of the site at issue

o Should meet with civic associations to garner community perspective and amend plan to accommodate oppositions concerns

• In Huntington, a letter is utilized to start the process, not a building permit application

• Always bring a complete narrative articulating your position and submit to the ZBA as they may try to cut the applicant off

• Using social media is a new way to ascertain community sentiment for the project

• Do not friend a page on Facebook if you are not friends, as this is an ethical violation

• Application should distinguish the present application on why it will not create precedent by showing the unique factors at issue

• Planning Board will submit a memorandum to the ZBA and they can be questioned about this

• Experts are sometimes allowed to do a narrative, but in other Towns required to be questioned

• Huntington requires experts in all commercial case

• Before proceeding, FOIL request the tax lot on the area of the case; read through the cards and then pull previous similar decisions

• Be sure to touch on Town Law §267b every element

• For the financial component of a nonconforming use application, you will need an expert (accountant) detailing financials for each and every available use

• “Self-created hardship” used to be enough to defeat an application, but not any more

Each Town is very different & the applicant should attend hearings before pursuing theirs even if they have done this before!!!!

Suffolk County Permit Portal

Suffolk County recently unveiled a portal to streamline the building permit process for each of the 10 towns and 33 villages in Suffolk County. This is only Phase One of the portal & the prospects of this into the future are endless. A great move by the County and we should read this as Suffolk County's endorsement of future development for the County. To utilize the portal, click here.

Post by our friend, KAREN LAURENCE from BFCU

Things will be changing-the new high for the jumbo fixed product is going down to $625,500 from $729,750 by September if no government action is taken.


FHA loans are raising their charges for the third straight year in a row. And may raise the down-payment requirement up from 3.5%.

Fannie is requiring that all condominiums be inspected to check on the cash reserves held by the Board- and increasing that from 10-20%-that is why fewer are on the approved lending list.

It is getting harder to close loans due to title issues-Lenders from 20 years ago have not closed and given satisfactions of mortgages to their clients. Open mortgages are appearing on credit reports.

There is now a .25% add-on for a loan sold to Fannie Mae-no matter what your credit score is-if the down-payment is not 25% on a purchase.

First thing I do is check and fix the credit. Then put the loan in and get it approved through the Desk Top underwriter used by Fannie Mae. Then you still need experience and knowledge to get the loan through due to issues that crop up during the loan process. New rules and regulations are everywhere.

Make sure you use an experienced lender. I like having in -house processing so I can ask the underwriters questions as the loan progresses and so can overcome the problems to get the loan closed.

Full Class Tomorrow - Commercial Real Estate

Tomorrow's Commercial Real Estate Class at Briarcliffe College is at full capacity with a waiting list. We're looking forward to the course!

Tax Grievance Deadline in Nassau Extended

You now have until April 23, 2011, instead of until yesterday. To learn more, read the County Executives Press Release. To file a grievance, your first stop should be here or hire a professional. Good luck and go reduce your taxes.

Employment Opportunity: Attorney for Lieb at Law

Lieb at Law is Hiring!

We are seeking an innovative and career-oriented Attorney with transactional and litigation experience for a management position within our production department. The firm's legal concentrations are plaintiff’s personal injury and real estate litigation / transactions inclusive of bank representation. Our new hire's responsibilities will include overseeing the firm's processing team in court applications, contract preparation, legal research and strategy.


Requisite qualifications: Legal research skills with Westlaw and Lexis, excellent legal writing experience and a high degree of computer literacy. Must want to be the best, Must have swagger.

Email resume and writing sample to careers@liebatlaw.com.
 
* Must be willing to work out of Center Moriches office location

SCHOOL UPDATES

Continuing Education Registration Updates:

• The Commercial Real Estate Course - Scheduled on March 8th in Patchogue is now full. If you would like to be put on the waiting list email realestateschool@liebatlaw.com
• Mortgage Mania - Scheduled on March 24th in Bethpage has seats available. REGISTER HERE.

Coming Soon:

• April Course Calendar will be posted soon!
• The Real Estate School will be announcing a new and exciting School Sponsor.
• Brand NEW 3 Credit Continuing Education Course awaiting DOS Approval. We anticipate offering this course in April & May in Nassau County and the Twin Forks. Course entitled -Conflicts of Interest: A Course on Real Estate Ethics

***Lieb at Law will be launching a brand new website. Stay tuned for more updates!

Wells lowers credit score requirement

The bank is now shifting focus from a high scredit score to a larger down payment requirement & a lower debt-to-income ratio. Now, an FHA borrower who comes up with a minimum 10% down payment & has a maximum debt-to-income ratio of 31% can qualify for a loan if their credit score is over 500.

It seems that this may be related to the administration's housing report, which discussed a need for higher down payments & discussed establishing more federal oversight of credit scores. Regardless, the key takeway is that the bank cares more about how much the borrower has to lose if they do not pay their mortgage and how much money they have available to pay their mortgage, rather than what the borrower's previous borrowing habits indicate.

To learn more about Wells' new move, click here.

Legal Aid to provide FREE representation in foreclosures

For the 3rd time this past week the real estate world has been hit with a whopping change for the better. To learn more about the announcement made during Chief Judge Lippman's State of the Judiciary 2011, you can either read a New York Times article by clicking here or the text of the speech by clicking here.

Coupled with the other changes, this change signals that we are in a homeowner / mortgagor / borrower friendly world where the government is going to influence lenders to agree to mortgage workouts.

In the speech, the Chief Judge took time to call out robosigners and the affect at curtailing robosigners that the new attorney affirmation requirement has had, topics that I will be discussing at a CLE sponsored by First American Title Insurance Company of New York on March 30, 2011. To be invited to this free seminar, please contact First American at 516-832-3263.

The striking part of the speech was when the Chief Judge said that "63% of homeowners appearing for mandatory court settlement conferences are unrepresented". The Chief Judge than promulgated a new program providing homeowners who cannot afford a lawyer with legal assistance at the foreclosure settlement conference stage of a foreclosure. Yet, the program's great ambitions were limited when the Chief Judge said "these legal services attorneys will provide legal assistance or representation to unrepresented homeowners at the initial conference in as many cases as possible. Thereafter, the attorney will either keep the case and continue with representation or refer the homeowner to a network of legal services, pro bono or law school clinic counsel who will be standing by to provide additional legal assistance in support of this project."

Of note, the project will be piloted in Queens and Orange Counties and is expected to be expanded thereafter.

My take is that this is an excellent move by the Judiciary. Nonetheless, this program has issues that must be addressed in order for it to be succesful including the following:

1. There is no constitutional right to representation here as there is in the criminal arena and therefore when this program fails homeowners cannot cite the lack of representation to keep their homes while they (lay individuals) will interpret this program as establishing a fundamental right. Therefore, the legislature must follow with creating a right to give this program real teeth or clearly articulate in public service announcements how it does not.
2. Introducing homeowners to attorneys at the conference stage means that the homeowners likely already defaulted in the matter because the time to Answer the Summons and Complaint will have expired by this stage. Therefore, the homeowner is left to negotiate a workout while the tides are against them and will also have difficulty defending the action on the merits.
3. Private attorneys with large hourly fees and budgets have a hard time making it financially viable to perform a forensic analysis of all of the mortgage documents to red flag violations of statute and case law in order to change the bargaining positions of the parties in negotiating a workout (modification, short sale, or deed in lieu), I cannot fathom how the State can afford to provide what theoretically is included in proper legal services, particularly in the face of the major budget cuts being made every day by the Governor.

I am very interested to learn of other peoples thoughts on this topic, so please share either on this blog or offline.

50% of foreclosed homeowners can defend

In a great decision for defaulting borrowers, In re Ferrel L. Agard, which can be found by clicking here, the United States Bankruptcy Court for the Eastern District of New York claims to be setting precedent whereby Mortgage Electronic Registration System (MERS) lacks the authority to assign or foreclose a mortgage.

Prior decisions seemed to state that where MERS was granted the appropriate authority it could assign or foreclose a mortgage. This decision seems to intentionally and expressly state otherwise.

Citing the Court: "MERS and its partners made the decision to create and operate under a business model that was designed in large part to avoid the requirements of the traditional mortgage recording process. This Court does not accept the argument that because MERS may be involved with 50% of all residential mortgages in the country, that is reason enough for this Court to turn a blind eye to the fact that this process does not comply with the law".

For those who are unaware of MERS and its role in our mortgage system, Judge Grossman's point is that MERS was designed to provide a database which allowed its member banks to electronically self-report transfers of the Note in an effort to circumvent governmental real estate recording systems and therefore should not be afforded anything, but a strict interpretation of its authority. You mess with the government and the government will win.

For the lawyers who read this blog, the key words used by the Court are as follows: "MERS admits that the very foundation of its business model as described herein requires that the Note and Mortgage travel on divergent paths. Because the note and mortgage did not travel together, Movant must prove not only that it is acting on behalf of a valid assignee of the Note, but also that it is acting on behalf of the valid assignment of the Mortgage."

WOW!!! - I'm betting this goes to the Supreme Court.

Of note, the Court in this case ruled in the lender's favor on a different argument, but made this decision nonetheless for the stated purpose of defining MERS' authority.

Winding down Fannie Mae and Freddie Mac

On February 11, 2011, the Obama Administration (through the Department of the Treasury and the Department of Housing and Urban Development) delivered a report to Congress that provides a path forward for reforming America’s housing finance market - LOANS WILL NEVER BE THE SAME.

To read the report, click here.

Key in the report is the need for:

1. More rental options through lending to the multifamily market
2. Increased coordination between governmental finance options
3. Increased availability of low income housing
4. Consumer protection
5. Lowering the maximum LV Ratios
1. Minimum of 10% down payment for governmentally backed loans
2. Lower conforming loan limit (highest loan amount for governmentally backed loans)
3. Decreased maximum loan size that can qualify for FHA insurance (goal - lowering market share of FHA from 30% to 15%)
6. Transparancy for investors through disclosure of information on the credit, geographic, and demographic characteristics of the underlying loans that are packaged into securities
7. Higher capital retention by lenders (originators retaining 5% of loan risk in securitization)
8. More conservative underwriting standards
9. Regulation of mortgage originator and servicer standards
10. Private guarantees of mortgages and public guarntees with increased cost to reflect risk

Interestingly, this is a small government report coming from a democratic administration. Yet, remember this is just the administration's views and will require legislation from the Congress before its enacted. In fact, it only offers 3 options into the future, not a clear direction. Nonetheless, real estate professionals should start hedging their strategies based upon this report as those who leverage change in market principles will get ahead financially.

My takeaway is to concentrate on the rental markets because the administration's plan is ultimately to eliminate a homeownership option for speculators - individuals without the means to afford a mortgage without appreciating home values. Therefore, many potential homeowners will be pushed out of the market to purchase and placed into the rental market.

Of note, the report makes frequent mention of the The Dodd-Frank Act as the first steps towards the administration's goals. Therefore, a careful review is required by real estate professionals.

Lastly, the report discusses loan steering and a new requirement that loan originators will have to perform due diligence of borrowers' claimed finances to determine a borrower's ability to repay a loan. These are many of the topics that are being heavily litigated in the foreclosure world today and I believe that this report will strengthen the position of homeowner who seek a modification in foreclosure. If nothing else, the report requires national standards for loan servicing, which is the entity charged with negotiating a mortgage workout with a borrower - this will HELP!

Short sale professionals; the report also addresses working with second liens in mortgage workouts, this is a must read.

TIPS: RENEWING NEW YORK STATE REAL ESTATE LICENSES

HELPFUL TIPS FROM THE DEPARTMENT OF STATE (DOS) FOR RENEWING NY REAL ESTATE SALESPERSON & BROKER LICENSES.

***  Renewal must be completed online. http://www.dos.state.ny.us/licensing/eaccessny.html

TIP: Quoted directly from the DOS  "They need to renew online and make sure they answer “YES” to the continuing education question.  If they mistakenly answer “NO”, we will not renew their license until we see their original course completion certificates.    They also need to hold onto their original course completion certificates in the event we audit them."

The below Q&A is taken from the Department of State website.

Renew My License

Q: Why should I renew online?

In accordance with New York’s Green Initiative to reduce paper use, all Real Estate Licenses must be renewed online.



Q: Why must I renew my license?


If you do not renew your expired license, you cannot conduct any real estate activities that require a New York State real estate license in accordance with Article 12-A of the Real Property Law. There are no grace periods that allow you to continue working while not licensed. You have two years from the date your license expires to renew your license. If you fail to renew within that period, you will be required to pass the state written examination and submit a new salesperson/broker application and fee. No continuing education will be required to repeat the licensing process again.



Q: How do I know when I should renew my license?


Your license expiration date is printed on the license. You are eligible to renew your license three months prior to the expiration date.



Three months prior to your license expiration date, you are sent an email and post card reminder that it’s time to renew your real estate license. Both reminders provide you with written instructions on how to renew your license online through your eAccessNY Account.



Q: How do I renew my real estate license?


After you logon, from the Main Menu page click on “List of Licenses (Access your license here).” A listing of all your License(s) and License Number(s) (UID#’s)will be listed. If you have more than one license, click on the license you wish to renew.



1. Click on “Renew License” and then “Next Step” to renew the license.

If the Office/Sponsorship information listed is incorrect, DO NOT continue with this renewal until your new broker has submitted a change of association for you. If you are changing association or the business address, those changes must be performed, by the principal broker, prior to renewing your license online. Proceed with this online renewal ONLY if the information listed is correct.



2. Answer the questions and press “Next Step” to continue.



3. Affirm the application by checking the “I Agree” box and press “Next Step” to continue. When you affirm your application, you are indicating that you have met the requirements for renewal. Therefore, your continuing education must be completed prior to submitting your online renewal.



4. Enter your credit card details and press “Submit” ONLY ONCE to submit your payment. Your card will be charged with the total amount displayed.



5. You will get a “Confirmation” page indicating your renewal has been submitted. Print the page for your records. Submission does not constitute an approval. Your renewal application will be reviewed by the Department to make sure it is complete and meets the qualifications for renewal.



Q: What if I don’t have a printer? Can I save a “confirmation page” to my computer?



Yes, you can save any web page to your computer. For most browsers, click on “File” in the menu bar, then click on “Save As.” When the “Save As” dialogue box appears, save the page as a web page or as a text file, to the location on your computer you choose. After you save it, you can open the file at any time without being connected to the Internet.



Q: What if I answer no to the continuing education question when renewing my real estate salesperson/broker license in eAccessNY?





If you answer no to this question, your renewal application will not be approved. You will receive notification from the Department acknowledging receipt of your renewal application. This notice will inform you that approval of your renewal application will not be granted until original certificate(s) of completion evidencing successful completion of the required continuing education or proof satisfactory to this division that you are exempt from this requirement is submitted to the Bureau of Educational Standards for review and approval.



You must submit this proof even if you have answered no to this question in error. By answering NO when submitting your on line renewal, you have affirmed that you have not completed the required education and that you are not exempt from this requirement.



Q: How do I know my license was renewed successfully online?





After completing all of the steps on your renewal check list (including payment), you will submit your online renewal for processing. At the end of the renewal process you will get a Confirmation page indicating that your renewal has been submitted. This does not mean your license is renewed. Your renewal application will be reviewed to make sure it is complete and meets the qualifications for renewal.

You should access your account to see if the license shows as current. If you check “Application Status Display” and that license is still showing “in progress”, then your renewal application is still waiting to be reviewed by the Department of State. If anything additional is required, you will be contacted by the Department.

Despite the Snow - EVENT IS STILL ON TONIGHT

If you are registered for Tonights Fair Housing Class at Long Island National Golf Club - the event will still go on. The roads are clear around the club - and the chef is preparing as we speak!

Don't take the kitchen sink after foreclosure

If you are being foreclosed upon and are angry as hell, you should nonetheless think twice before destroying the house to get your revenge. The reason is that destroying the house may prevent you from avoiding the deficiency judgment, in its entirety, in a subsequent bankruptcy. This is talking about the amount of money your house is upside down that you may otherwise owe for 20 years because the sale of your house at a foreclosure auction fell short of the number.

The reason is that Bankruptcy Code section 523(a)(6) states as follows:
A discharge under section 727, 1141, 1228 (a), 1228 (b), or 1328 (b) of this title does not discharge an individual debtor from any debt—for willful and malicious injury by the debtor to another entity or to the property of another entity;


To read a great article on the topic, I refer you to a great local bankruptcy practitioner's blog by clicking here

New Home Purchase after Foreclosures

Fannie Mae & Freddie Mac Guidelines:

Foreclosure = 6 years
Short Sale = 3 years
Bankruptcy = 2 to 3 years

Special Treats Served at Next Week's Fair Housing Class! (Dont Forget to Register)

There are seats open in next weeks Fair Housing Class in Riverhead on 1/27. THIS SPECIAL EVENT IS FREE and course is 3 Continuing Education credits!

Long Island National Golf Club our new sponsor will be serving delectable treats from their dining banquette!

Included:
Gourmet Fish, Veggie Pot Stickers, Pigs in blanket with spicy mustard, Chicken Wing Dings (hot & mild dipping sauce), Fried Cheesecake rolled in brown sugar and drizzled with raspberry & caramel sauce, Choc Chip Cookies.

Draft Beer, wine (first hour)

Soda, coffee, tea & water

 
REGISTER TODAY

New HAFA Short Sale rules for 2/1/11

Treasury has released amendments to the HAFA program effective February 1, 2011. To review the amendments, click here.

Most interestingly, Front-End Debt-to-Income Ratio analysis is no longer required and new rules for vacant properties are provided.

Now: A property vacant for less than 1 year can be considered, which is a lot more time than the 90 days that was previously allowed. Also, the applicant no longer needs to justify their relocation based upon employment requirements.

This new vacant property rule brings the program close to reality where many distressed homeowners simply leave their home when times get tough. Its a great move by Treasury because now more abandoned homes can be brought back to life with new homeowners.

Bankruptcy Chapters Explained

The following information is provided by the US Trustee Program. I thought it was such a good explanation, I am providing it rather than reinventing the wheel. For other great Bankruptcy Information, click here.

Chapter 7 – A trustee is appointed to take over your property. Any property of value will be sold or turned into money to pay your creditors. You may be able to keep some personal items and possibly real estate depending on the law of the State where you live and applicable federal laws.

Chapter 13 – You can usually keep your property, but you must earn wages or have some other source of regular income and you must agree to pay part of your income to your creditors. The court must approve your repayment plan and your budget. A trustee is appointed and will collect the payments from you, pay your creditors, and make sure you live up to the terms of your repayment plan.

Chapter 12 – Like chapter 13, but it is only for family farmers and family fishermen.

Chapter 11 – This is used mostly by businesses. In chapter 11, you may continue to operate your business, but your creditors and the court must approve a plan to repay your debts. There is no trustee unless the judge decides that one is necessary; if a trustee is appointed, the trustee takes control of your business and property.

If you have already filed bankruptcy under chapter 7, you may be able to change your case to another
chapter.

Your bankruptcy may be reported on your credit record for as long as ten years. It can affect your ability to receive credit in the future.

Ways Home - Are having trouble making mortgage payments?

Fannie Mae has launched a new interactive video website where homeowners can role play scenarios to learn their options when struggling with mortgage payments. As an attorney, I fully endorse this product and hope that every individual in pre-foreclosure will go to this website and check it out. The video translates scary legal terms into plain English and offers a great explanation of a homeowner's choices when facing a financial hardship. Additionally, the video appears to be Fannie Mae's attempt to employ public health behavior change techniques into our country's mortgage epidemic. The key takeaway for me is that homeowners should not be ashamed by their situation and should proactively seek out help in taking control of their mortgage problem.

Click here to try it out.

WARNING - This video dissuades anyone from using any professional instead of a HUD Housing Counselor. While I agree that HUD Housing Counselors do offer a lot of great help, which should be taken advantage of by individuals in pre-foreclosure, if you receive a Summons in the mail you must Answer the Summons and you do require legal advice. Go see a lawyer immediately.

Like-Kind Property in a 1031 Exchange

Here's a great article from Jennifer Pendzick about Like-Kind Property in a 1031 Exchange.

http://bit.ly/eCaNYz

You can learn more from Jennifer at our Commercial Real Estate Course - We will be opening registration later this month.

Southampton Press - Underwater Mortgage Options by Brandi Buchman

To read a very well written article about different perspectives on facing foreclosure click here. In full disclosure, I am quoted in the article.

Top 10 Real Estate Laws of 2010

Top 10 Real Estate Laws of 2010
By Andrew M. Lieb, Esq., MPH

1. Bankruptcy Exemption:

The Homestead Exemption, which allows a bankrupt individual to preserve their home equity while filing for Bankruptcy, has increased from $50,000 for an individual and $100,000 for a married couple to $150,000 for an individual and $300,000 for a married couple throughout Long Island. Be mindful that outside of Long Island different exemption amounts apply by County.

2. Real Estate Agency Disclosure:

Real Estate Agents are now required to provide additional informed consent to their customers concerning the nature of their representation, particularly in the dual agency scenario. The new law provides for advanced consent with continual reminders to customers. It also extends the disclosure requirements to Condominiums and Cooperative Apartments, which were previously exempt.

3. Foreclosure Requirements:

a. Defendant’s Attorney’s Fees – The Access to Justice in Lending Act now provides defendants with a right to make a claim for attorney’s fees in a foreclosure action if they are successful in defending the foreclosure, but this right only exists if the lender could have recouped attorney’s fees pursuant to the mortgage agreement if the lender was successful; almost always the case.

b. Plaintiff’s Affirmation Requirement:
Combating the prevalence of robo-signers and shabby documentation, New York became the first State to require lenders to vouch for the accuracy of their mortgage documents prior to a foreclosure sale. In fact, the assurance must come from the lender’s attorney who will be very careful to perform the requisite investigation in order to protect their license.

4. Distressed Property Consultant Advertisements:

In addition to the many consumer protection laws that already regulate this industry, now individuals acting as consultants for mortgage workouts (Loan Modifications and Short Sales) must provide information about the availability of free state-funded services and the number of the New York State Banking Department as part of a consumer disclosure statement in their advertisements. Remember that a Distressed Property Consultant is an individual or business entity that undertakes employment to provide consulting services to a homeowner for compensation with respect to a distressed home loan or a potential loss of the home for nonpayment of taxes. Real estate brokers and salespersons are not exempt from this law, but attorneys practicing law are not so regulated.

5. Title Insurance Tax:

Title related services, inclusive of all relevant searches, which are not used in the course of preparing a title insurance policy, are now subject to New York State and Local Sales and Compensation Use Taxes.

6. Lead Paint Contractor Certification Requirement:

The Federal Environmental Protection Agency now requires contractors who preform renovations involving lead paint to be certified by the Agency following extensive training and to employ certain work practice standards similar to what is done with respect to asbestos. Among other requirements, contractors are now required to construct containment zones, wear protective clothing, and utilize HEPA vacuums.

7. Carbon Monoxide Alarm Requirement:

New York now requires essentially all residences, both new and existing, to have carbon monoxide alarms installed as follows:
a. Constructed before January 1, 2008 - must have one alarm installed on lowest level with a sleeping area.
b. Constructed after January 1, 2008 - must have an alarm installed on each level with a sleeping area or where a carbon monoxide source is located.

8. New Power of Attorney Form:

In real estate, this mainly affects a transaction where the buyer or seller is unavailable. Now, many of the sloppy changes made by the Legislature just over a year ago have been corrected. Most importantly, a Power of Attorney no longer automatically revokes all prior Power of Attorneys.

9. Home Inspector Code of Ethics:

Home inspectors must now provide a written contract to clients prior to performing the home inspection. This contract must clearly and fully describe the scope of service to be provided and the costs associated therewith. Additionally, this contract must include specific language, including:
a. Home inspectors are licensed by the NYS Department of State. Home Inspectors may only report on readily accessible and observed conditions … Home inspectors are not permitted to provide engineering or architectural services.; and
b. If immediate threats to health or safety are observed during the course of the inspection, the client hereby consents to allow the home inspector to disclose such immediate threats to health or safety to the property owner and/or occupants of the property.

10. Federal Estate / Gift Tax Exemption Increase:

After continuous Congressional debate, the Exemption is now set at $5,000,000 for 2011 and 2012. While 2010 had an unlimited Exemption, there was speculation that 2011 could see anything from $1,000,000 to $3,500,000. This new Exemption means that families can easily transfer ten million dollars through the generations by way of a minor estate planning vessel called a Credit Shelter Trust.

NAR Code of Ethics Quadrennial Requirement

Yes, Realtors must take an ethics course approved by NAR every 4 years. The Quadrennial Requirement must be a minimum of 2 1/2 hours & must focus on the NAR Code, not NYS Ethical Rules. No, the course has nothing to do with the 22.5 hours of continuing education that is required by the DOS. In fact, NAR has nothing to do with your license, which is maintained by the DOS. Sometimes courses satisfy both requirements; meaning a course can count towards your 22.5 hours & satisfy the NAR Code of Ethics Quadrennial Requirement. Nonetheless, if you have completed your 22.5 hours from the New York DOS to maintain your license & need the 2 1/2 hour NAR course, NAR offers a free course on their website.

Click here to take the NAR course.

3 Tools Realtors Can Use to Increase Sales on the Web

I'm passing along an interesting article about 3 recommendations that Real Estate agents can leverage to increase sales and customer experience on the web.

http://bit.ly/gypZiC