STAR Credit Program Undergoes Two Critical Changes

The New York State School Tax Relief (STAR) program has changed. Rather than working with the local assessor, as was required in the past, homeowners will now need to register with New York State in order to apply for the program. Additionally, qualifying homeowners will receive a rebate check in the fall of every year rather than receiving a reduction directly on their school property tax bill.

There are two types of STAR benefits:

• Basic STAR: At least one owner must use the property as a primary residence and the total combined household income of the owners and owners’ spouses who use the property as a primary residence must be $500,000 or less.
• Enhanced STAR: At least one owner must use the property as a primary residence, all owners must be 65 years or older, and there must be a total combined household income of all owners (not just those who reside at the property) and any owner’s spouse who uses the property as a primary residence of $84,550. All owners do not need to be over the age of 65 if they are spouses, registered domestic partners or siblings so long as at least one owner is at least 65.

Starting this year, qualifying homeowners must register with New York State, which can be done online here or by phone at 518-457-2036, in order to apply for the STAR program. If the homeowners qualify, they will receive their STAR credit as a rebate check each September.

If homeowners are already receiving a STAR exemption and purchased their primary residence prior to May 1, 2014, they do not need to re-register to continue qualifying for the exemption, and they will continue to receive the exemption as a reduction on their school property tax bill. Only those who purchased their primary residence after August 1, 2015 or did not apply before the 2015 STAR application deadline are affected by these changes. 

Homeowners can check your local assessment roll to see if they are already receiving a STAR exemption. Understanding how the STAR credit program works and what changes have been implemented can help save time and money into the future. 

New Making Home Affordable Handbook Released: Program to End in 2016

The U.S. Department of Treasury recently released Supplemental Directive 16-04 (Making Home Affordable Program – Handbook for Servicers Version 5.1).  This Supplemental Directive announces the release of Version 5.1 of the Making Home Affordable (“MHA”) Handbook (the “Handbook”).  This newest version of the Handbook consolidates the “sunset” provisions provided by the U.S. Department of Treasury in Supplemental Directive 16-02 (MHA Program Termination and Borrower Application Sunset) and Supplemental Directive 16-03 (MHA Program Termination and Borrower Application Sunset II) into one location for ease of reference.

Distressed homeowners who are facing foreclosure must submit their request for mortgage assistance under the MHA program by December 31, 2016.  After that date, lenders will no longer be required to comply with the MHA guidelines set forth in the Handbook.  This will leave many distressed homeowners with few remaining options and most will face the possibility of foreclosure.

The MHA program was announced in 2009, by the Obama Administration, as a relief to distressed homeowners.  The MHA program’s objective is to provide guidelines to lenders to modify the terms of eligible mortgages so that “at-risk” homeowners would be able to reduce their monthly mortgage payments and to avoid foreclosure.  According to the most recent MHA Program Performance Report, during the last 7 years, the MHA program has only helped 2.5 million of the 7 to 9 million homeowners that were identified as “at-risk” by the Obama Administration in 2009.  This means that the remaining 4.5 to 6.5 million “at-risk” homeowners who do not submit their request for borrower assistance by December 31, 2016, will be faced with foreclosure.

Congress’ decision to abandon the MHA program seems misguided because of the time and resources it has invested in the program.  Most importantly, the termination of the program on December 31, 2016, leaves up to 6.5 million “at-risk” homeowners scrambling to submit requests for assistance of face the possibility of foreclosure. 

Saving on Real Estate Brokerage Commission

You may think that you can save money in real estate by not using a Buyer’s Agent. On the contrary, it is often argued that there is no savings because the secondary benefits of using a Buyer’s Agent surpass any costs of such a Buyer’s Agent. Nonetheless, the only factor that can actually save you money in brokerage commission in a real estate transaction is if it’s a Direct Deal.

Read the full article by Andrew Lieb, Esq. here.

Agency Disclosure Simplified - A Must Read

Finally, an article that simplifies this extremely complicated agency disclosure topic.

Buyer’s Agent. Seller’s Agent. Direct Deal. The terms may sound familiar, but do you or your clients or customers really know what they mean? That knowledge is essential for all sides in real estate dealings, particularly in understanding commissions and not violating license laws.

What’s in a Name? In Real Estate It Could Be the Difference Between a Great Deal & No Deal, is written by Andrew Lieb, Esq. one of the premiere lecturers on this topic. 

Making Home Affordable Program to End in 2016

The U.S. Department of Treasury (Treasury) recently released Supplemental Directive (SD) 16-03 (MHA Program Termination and Borrower Application Sunset II) to the Making Home Affordable (MHA) handbook, containing “sunset” provisions for its MHA program. The release of this Supplemental Directive signals that there will be no further extensions of the program.

The Making Home Affordable program was announced in 2009, by the Obama Administration, as a relief to distressed homeowners. The MHA program’s objective is to provide guidelines to lenders to modify the terms of eligible mortgages so that “at-risk” homeowners would be able to reduce their monthly mortgage payments and to avoid foreclosure. According to the most recent MHA Program Performance Report, during the last 7 years, the MHA program has only helped 2.5 million of the 7 to 9 million homeowners that were identified as “at-risk” by the Obama Administration in 2009. This means that the remaining 4.5 to 6.5 million “at-risk” homeowners who do not submit their request for borrower assistance by December 31, 2016, will be faced with foreclosure.

SD 16-03 provides the following modifications to the MHA handbook for winding down the program:

• All borrower requests for assistance under MHA must be submitted by December 31, 2016;
• On December 1, 2017, MHA Help and the Home Affordable Modification Program (HAMP) Solution Center will no longer accept new cases, nor escalate cases to servicers;
• All cases that have been escalated prior to December 1, 2017 must be resolved by May 1, 2018;
• After December 30, 2016, servicers will no longer be required to assign relationship managers to borrowers;
• Effective May 1, 2018, servicers will no longer be required to follow Section 3 of Chapter 1 of the MHA Handbook; however, the Treasury suggests that servicers continue to follow the best practices that have been established by MHA;
• After September 1, 2016, servicers are no longer required to satisfy the Reasonable Effort standard set forth in Section 2.2.1 of Chapter II of the MHA handbook; and
• Servicers will not be required to suspend a scheduled foreclosure sale if a borrower submits an Initial Package after December 30, 2016.

After continuously developing and expanding the MHA program over the last 7 years, it is surprising that Congress has refused to extend its life. Since 2009, the Treasury has issued 5 versions of its MHA handbook and has issued over 80 Supplemental Directives, including SD 16-03, refining the guidance it has provided to participating servicers. Congress’ decision to abandon the MHA program seems misguided because of the time and resources it has invested in the program. Most importantly, the termination of the program on December 31, 2016, leaves up to 6.5 million “at-risk” homeowners scrambling to submit requests for assistance or face the possibility of foreclosure.

Real Estate Brokerage Regulatory Updates - 5/3/16 NYS Board of Real Estate meeting summary

On 5/3/16 the NYS Board of Real Estate continued its mission of optimizing the regulation of real estate brokers in our state by holding its meeting in NYC, Buffalo and Albany. To remind real estate brokers and salespersons, the public is welcome at these meetings where the public can bring comments from the floor. It's encouraged that Lieb School students attend these meetings to have your voices heard. 

"[T]he Board has general authority to promulgate rules and regulations affecting real estate brokers and salespersons in order to administer and effectuate the purposes of Article 12-A of the Real Property Law."

A complete video of the meeting is available on youtube.

In summary, the following was discussed:

1. Enforcement activity report;
2. Equalizing points for salespersons seeking a real estate broker's license for acting on the selling and listing sides of deals;
3. Updates on the continuing education topics of agency and diversity;
4. The new broker's curriculum; and
5. Fair Housing regulations, which were passed.

Most interestingly, the enforcement report claimed that while 317 complaints were fielded by the Department of State from January through April of this year, only 2% were referred to the Administrative Department to pursue charges. Agents should translate that statistic as meaning that while a lot of complaints come into the Department of State, a lot of effort is exerted in weeding out the legitimate complaints from the lot. This is quite reassuring.