Fire insurance policies were just addressed by NY’s highest Court. Real estate agents should get familiar with these policies because value-add agents are successful agents, particularly in the commercial setting where fires often spur relocations and the availability of multiple brokerage commissions.

In the case before the Court, the insurance company disclaimed coverage because its policy had a time limit for claims, but required that the cost of replacement be known in order to recover for a loss. However, the cost wasn't known until construction was complete, which didn't happen until after the time limit for the claim. Hence the predicament for the insured building owner.   

Specifically, in Executive Plaza LLC v. Peerless Insurance Company, it took the building owner over 3 years to renovate over one million dollars in damages to its property, but the policy only gave the owner 2 years to submit its loss.

Great news – the Court ruled that “such a contractual limitation period, applied to a case in which the property cannot reasonably be replaced in two years, is unreasonable and unenforceable.”

So, the policy’s purpose of insurance except where you need it was negated by the Court.

Now, you understand a predicament faced by your commercial building owners and you understand that in NY, insurance companies can no longer play the game of impossibility to avoid paying out a claim. So, go armed with knowledge when you help commercial tenants relocate after a fire and when you help a new building owner with their purchase and getting insurance.  

In his state of the union speech on January 28, 2014, Obama asked Congress to focus on mortgage finance reform in the upcoming year. He stated, “Since the most important investment many families make is their home, send me legislation that protects taxpayers from footing the bill for a housing crisis ever again and keeps the dream of home ownership alive for future generations.”

There have been proposals in the Obama administration to overhaul Fannie Mae and Freddie Mac, the mortgage giants which own or guarantee about 60% of all mortgages in the United States. These government-sponsored enterprises (GSEs) have prospered for decades by buying and selling mortgages to provide capital to lenders and borrowers. However, when the housing bubble burst in 2008, the federal government took ownership of the mortgage giants, costing billions of dollars in taxpayer dollars to bail the companies out of financial ruin.  The housing market is now in recovery and Fannie Mae and Freddie Mac are profiting once again, but many government officials fear that another financial crisis is still possible. The goal is to take away Fannie Mae and Freddie Mac’s monopoly on the mortgage market, limit the federal government’s role and risk, and to focus on private lending instead. However, it will take years before the current system is completely overhauled and replaced with one dominated by private lenders.

It is imperative that brokers understand that the housing market is on its path to recovery, but may be facing drastic changes over the next two to five years. Middle class consumers may have difficulty obtaining a 30-year mortgage in a market that is run by private lenders unless the reforms allow for some substantial governmental intervention. We may only be in the early stages, but these proposals in Congress will lead to one of the biggest reforms this country has seen in the last decade.

Have you applied for a loan modification and felt that your servicer did not properly review you for HAMP and other Making Home Affordable programs? Perhaps your servicer lost your documents or failed to provide you with the proper update on your file? Well, what are you waiting for? Escalate your case today and demand your servicer to be in accordance with the MHA guidelines!

Homeowners may contact the MHA Hotline at 888-995-HOPE to request assistance in the escalation of their cases. The MHA Support Center, acting as an intermediary between the homeowner and servicer, ensures that the servicer is complying with the MHA guidelines and is reviewing homeowners’ case escalations in a timely fashion. However, homeowners may also contact their servicers directly or authorize their attorneys to go through the HAMP Solution Center (HSC) to seek resolution. No matter what route is taken, it may take up to 30 or more days for an escalated case to be reviewed and resolved, so homeowners should act immediately if they believe to have been wrongly denied a MHA Program.

Case escalations give power to the homeowner and keep disorganized servicers in check. Please go here if you would like to know how to escalate your case today!