The following article was released by Crains New York Business.
By Amanda Fung
Published: December 16, 2009 - 2:39 pm
A landmark foreclosure law designed to help thousands of middle class New Yorkers keep their homes was signed into law Tuesday by Gov. David Paterson.
It is designed to protect property values by requiring lending institutions to maintain foreclosed homes and make them safe and habitable for tenants. The law also expands protections to homeowners with all types of loans. Previously, court-based settlement conferences—where homeowners, court officials and banks sit down to discuss foreclosure proceedings—were only offered to homeowners with sub-prime loans.
In addition, under the new law banks are required to notify tenants at least 90 days before foreclosing on properties to give tenants time to find a new home.
“We still need to do a little more, but overall this is going to go a long way in keeping dreams of homeowners alive,” said state Sen. Jeff Klein (D, Bronx-Westchester), who sponsored the legislation and has been working on it for more than two years.
Before this law was passed, local governments and community groups spent money and time to maintain foreclosed properties to prevent these properties from becoming blighted neighborhood eyesores, Mr. Klein said. Now lending institutions are responsible for maintaining these properties.
The law also aims to prevent foreclosure by allowing banks to decrease the principal of a loan for homes where the home's value has fallen below the original loan amount. In return, when the homeowner sells the property, the banks will get a percentage of that sale price.
“The laws we have passed in New York have stood as a national model for foreclosure mitigation,” Mr. Paterson said, in a statement. “This effort is about keeping New Yorkers in their homes and protecting them during this economic crisis.”
“We commend the government for passing this important legislation,” said Michael Minott, program manager of external education at Neighborhood Housing Services of NYC.
For the first 10 months of 2009, New York state reported more than 58,200 foreclosures, according to Realtytrac.com. Among the top foreclosure counties in the state are Queens with 10,521, Bronx with 3,071 and Manhattan with 1,238. Mr. Minott predicts that the problem will continue to increase as adjustable rate mortgage cause homeowners to experience higher payments. “That will trigger a new wave of default,” he said.
The new law is also expected to crack down on foreclosure and loan modification scams that have arisen due to the market conditions. The law bans any firm from collecting upfront fees from homeowners for loan modifications. Many of these independent loan modification companies charge an unnecessary $2,500 upfront fee, Mr. Klein said.
“Homeowners don't need to hire these companies,” he said. “They can get their lending institution or a U.S. Department of Housing and Urban Development-approved counselor to do it for free.
Noting that many of these opportunistic businesses take the fees and just disappear, Mr. Minott said, “It will hopefully put them out of business.
Wednesday, December 16, 2009
Friday, December 11, 2009
Only 5% of loan modifications go through!
As an attorney working to help homeowners, reports of these stats make me scream! I thank the Wall Street Journal for their reporting which appeared in today's paper. I respectfully copy here the story authored by
Ruth Simon (at ruth.simon@wsj.com).
The new numbers were the latest sign of trouble in the $75 billion foreclosure-rescue plan launched in February. The program provides financial incentives for mortgage companies and investors to reduce loan payments to affordable levels for struggling borrowers. But it has proved difficult to move borrowers from a trial phase to permanent mortgage fixes.
"We agree that servicer performance in converting trial modifications to permanent ones has been unsatisfactory," a Treasury Department spokeswoman said. The department last week said it was stepping up pressure on mortgage companies to complete more loan modifications.
Through
November, more than 728,000 borrowers had begun making trial payments
under the plan, up from 651,000 in October, with modifications saving
borrowers an average of more than $550 a month, the Treasury Department
said.
Bank of America Corp. had 156,864 borrowers in the trial program and 98 other borrowers had received permanent fixes. Citigroup Inc. had completed 271 permanent modifications and had 100,124 active trial modifications.
A Bank of America spokesman said the company had "the highest number of...active trial modifications" and expected to gain momentum in converting borrowers to permanent fixes in December.
A spokesman for Citigroup's mortgage unit said the bank was beginning to see "greater success" thanks to "recent improvements in documentation requirements and increased borrower awareness."
The program calls for borrowers to make three trial payments to qualify for a permanent modification. They must also provide a hardship affidavit and other documents.
The administration has been successful in getting borrowers into trial modifications, said Thomas Lawler, an independent housing economist. But its results on permanent modifications has been "discouraging," he said. Officials "clearly didn't think enough about what would happen on the back end," he said.
The administration had set a goal of 500,000 trial modifications by November 1. Many mortgage-servicing companies began the trial process based on verbal information provided by borrowers. But getting borrowers to turn in required documents has been challenging. Many borrowers, meanwhile, complain they are asked repeatedly for forms they have already filed.
Some companies have required borrowers to provide most or all of the needed paperwork before they begin the trial process. Two such firms, Ocwen Financial Corp. and GMAC Mortgage Inc., account for more than 11,000 permanent modifications -- more than 36% of the total.
"Deciding to get the documentation up front has been key," a GMAC spokeswoman said. Despite financial pressures, GMAC has boosted staffing in loss mitigation by 35%, she said.
J.P. Morgan Chase & Co. has 136,686 active trial modifications and 4,302 permanent modifications. In testimony before Congress this week, Chase said that 29% of borrowers who entered the program between April and September didn't make the required payments; 20% hadn't provided all of the required documents. "Our focus has been on getting the documents we need from customers," a Chase spokesman said.
At Wells Fargo & Co., 96,137 borrowers were in the trial plan and 3,537 had received permanent fixes. About 14,000 additional borrowers had provided all required documents and most should receive permanent modifications in the next month or so, said Cara Heiden, co-president of Wells Fargo Home Mortgage.
More than half of Wells Fargo customers in the program hadn't yet made all their trial payments because they hadn't been participating long enough, she said.
Write to Ruth Simon at ruth.simon@wsj.com
Ruth Simon (at ruth.simon@wsj.com).
Foreclosure Rescue Still Bogged Down
By RUTH SIMON
Fewer than 5% of borrowers participating in the Obama administration's foreclosure-prevention program, about 31,000 in all, have received permanent loan modifications, the Treasury Department said Thursday.The new numbers were the latest sign of trouble in the $75 billion foreclosure-rescue plan launched in February. The program provides financial incentives for mortgage companies and investors to reduce loan payments to affordable levels for struggling borrowers. But it has proved difficult to move borrowers from a trial phase to permanent mortgage fixes.
"We agree that servicer performance in converting trial modifications to permanent ones has been unsatisfactory," a Treasury Department spokeswoman said. The department last week said it was stepping up pressure on mortgage companies to complete more loan modifications.
Waiting for a Permanent Fix
See more data on loan modifications, and sort by servicer, the number of loans eligible and the number modified.More
Bank of America Corp. had 156,864 borrowers in the trial program and 98 other borrowers had received permanent fixes. Citigroup Inc. had completed 271 permanent modifications and had 100,124 active trial modifications.
A Bank of America spokesman said the company had "the highest number of...active trial modifications" and expected to gain momentum in converting borrowers to permanent fixes in December.
A spokesman for Citigroup's mortgage unit said the bank was beginning to see "greater success" thanks to "recent improvements in documentation requirements and increased borrower awareness."
The program calls for borrowers to make three trial payments to qualify for a permanent modification. They must also provide a hardship affidavit and other documents.
The administration has been successful in getting borrowers into trial modifications, said Thomas Lawler, an independent housing economist. But its results on permanent modifications has been "discouraging," he said. Officials "clearly didn't think enough about what would happen on the back end," he said.
The administration had set a goal of 500,000 trial modifications by November 1. Many mortgage-servicing companies began the trial process based on verbal information provided by borrowers. But getting borrowers to turn in required documents has been challenging. Many borrowers, meanwhile, complain they are asked repeatedly for forms they have already filed.
Some companies have required borrowers to provide most or all of the needed paperwork before they begin the trial process. Two such firms, Ocwen Financial Corp. and GMAC Mortgage Inc., account for more than 11,000 permanent modifications -- more than 36% of the total.
"Deciding to get the documentation up front has been key," a GMAC spokeswoman said. Despite financial pressures, GMAC has boosted staffing in loss mitigation by 35%, she said.
J.P. Morgan Chase & Co. has 136,686 active trial modifications and 4,302 permanent modifications. In testimony before Congress this week, Chase said that 29% of borrowers who entered the program between April and September didn't make the required payments; 20% hadn't provided all of the required documents. "Our focus has been on getting the documents we need from customers," a Chase spokesman said.
At Wells Fargo & Co., 96,137 borrowers were in the trial plan and 3,537 had received permanent fixes. About 14,000 additional borrowers had provided all required documents and most should receive permanent modifications in the next month or so, said Cara Heiden, co-president of Wells Fargo Home Mortgage.
More than half of Wells Fargo customers in the program hadn't yet made all their trial payments because they hadn't been participating long enough, she said.
Write to Ruth Simon at ruth.simon@wsj.com
Thursday, December 10, 2009
WE NEED THIS LEGISLATION! Wall Street Reform and Consumer Protection Act H.R. 4173
Once again we have the opportunity to allow our bankruptcy judges to modify home loans. Earlier this year, this very important legislation was defeated in the Senate and rightfully, it is again presented to our House for a vote. HOME LOANS are the only contracts bankruptcy judges can not modify! Please work to have this changed!
This is the letter that I sent out today to Congressman Garrett:
Later this week, the House of Representatives will begin debate on H.R. 4173, the "Wall Street Reform and Consumer Protection Act". During debate on the bill, an amendment that will help families avoid foreclosure and stay in their homes ---at no cost to taxpayers - will be offered by Representatives Conyers, Turner, Lofgren and others. Based on key provisions of H.R. 1106, the "Helping Families Save Their Homes Act", which passed the House on a bipartisan basis earlier this year, the amendment would allow bankruptcy judges to modify residential mortgages.
As you probably know, the government's voluntary mortgage modification program has fallen far short of its goals. The amendment being offered would be the inducement needed to step up and make meaningful mortgage modifications for the millions of struggling homeowners who are facing foreclosure.
The ongoing foreclosure crisis is having a negative effect on American families, our communities, and our economy. Experts warn that a rise in foreclosures next year and into 2011 could undermine the chances of a sustained economic recovery.
Residential mortgages are the only contract that bankruptcy judges cannot modify. This restriction--which does not apply to commercial real estate or vacation homes or any other type of loan --is costly to everyone, as property values continue to go down and spillover effects multiply.
If adopted, the mortgage modification amendment to H.R. 4173 would simply give bankruptcy judges the authority to modify unaffordable loans for families who are facing foreclosure and cannot obtain a voluntary modification. Such an approach would require no new tax dollars, and it would not excuse families from paying their mortgage.
I join with other concerned and struggling Americans in asking you to stand up for the families in our state and across the country by using your voice and your vote to give your full support to the amendment being offered by Representatives Conyers, Turner, Lofgren and Marshall. Thank you for your consideration.
Sincerely,
Michele Peters
This is the letter that I sent out today to Congressman Garrett:
Later this week, the House of Representatives will begin debate on H.R. 4173, the "Wall Street Reform and Consumer Protection Act". During debate on the bill, an amendment that will help families avoid foreclosure and stay in their homes ---at no cost to taxpayers - will be offered by Representatives Conyers, Turner, Lofgren and others. Based on key provisions of H.R. 1106, the "Helping Families Save Their Homes Act", which passed the House on a bipartisan basis earlier this year, the amendment would allow bankruptcy judges to modify residential mortgages.
As you probably know, the government's voluntary mortgage modification program has fallen far short of its goals. The amendment being offered would be the inducement needed to step up and make meaningful mortgage modifications for the millions of struggling homeowners who are facing foreclosure.
The ongoing foreclosure crisis is having a negative effect on American families, our communities, and our economy. Experts warn that a rise in foreclosures next year and into 2011 could undermine the chances of a sustained economic recovery.
Residential mortgages are the only contract that bankruptcy judges cannot modify. This restriction--which does not apply to commercial real estate or vacation homes or any other type of loan --is costly to everyone, as property values continue to go down and spillover effects multiply.
If adopted, the mortgage modification amendment to H.R. 4173 would simply give bankruptcy judges the authority to modify unaffordable loans for families who are facing foreclosure and cannot obtain a voluntary modification. Such an approach would require no new tax dollars, and it would not excuse families from paying their mortgage.
I join with other concerned and struggling Americans in asking you to stand up for the families in our state and across the country by using your voice and your vote to give your full support to the amendment being offered by Representatives Conyers, Turner, Lofgren and Marshall. Thank you for your consideration.
Sincerely,
Michele Peters
Tuesday, December 1, 2009
The Scoop on First-Time Homebuyer Credit - Direct from the IRS - 11/24/2009
There has been so much bantering about what is covered and what is not covered, that the IRS has posted on their website what you really need to know for your taxes - good or otherwise. As I always recommend, it's best to go to the source. As a convenience, I'm posting below the information the IRS gives (at the link above you can go directly). And check it out -- they actually have a video on YouTube -- scroll all the way down for that link.
IR-2009-108, Nov. 24, 2009
WASHINGTON — A new law that went into effect Nov. 6 extends the first-time homebuyer credit five months and expands the eligibility requirements for purchasers.
The Worker, Homeownership, and Business Assistance Act of 2009 extends the deadline for qualifying home purchases from Nov. 30, 2009, to April 30, 2010. Additionally, if a buyer enters into a binding contract by April 30, 2010, the buyer has until June 30, 2010, to settle on the purchase.
The maximum credit amount remains at $8,000 for a first-time homebuyer –– that is, a buyer who has not owned a primary residence during the three years up to the date of purchase.
But the new law also provides a “long-time resident” credit of up to $6,500 to others who do not qualify as “first-time homebuyers.” To qualify this way, a buyer must have owned and used the same home as a principal or primary residence for at least five consecutive years of the eight-year period ending on the date of purchase of a new home as a primary residence.
For all qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 tax returns.
A new version of Form 5405, First-Time Homebuyer Credit, will be available in the next few weeks. A taxpayer who purchases a home after Nov. 6 must use this new version of the form to claim the credit. Likewise, taxpayers claiming the credit on their 2009 returns, no matter when the house was purchased, must also use the new version of Form 5405. Taxpayers who claim the credit on their 2009 tax return will not be able to file electronically but instead will need to file a paper return.
A taxpayer who purchased a home on or before Nov. 6 and chooses to claim the credit on an original or amended 2008 return may continue to use the current version of Form 5405.
Income Limits Rise
The new law raises the income limits for people who purchase homes after Nov. 6. The full credit will be available to taxpayers with modified adjusted gross incomes (MAGI) up to $125,000, or $225,000 for joint filers. Those with MAGI between $125,000 and $145,000, or $225,000 and $245,000 for joint filers, are eligible for a reduced credit. Those with higher incomes do not qualify.
For homes purchased prior to Nov. 7, 2009, existing MAGI limits remain in place. The full credit is available to taxpayers with MAGI up to $75,000, or $150,000 for joint filers. Those with MAGI between $75,000 and $95,000, or $150,000 and $170,000 for joint filers, are eligible for a reduced credit. Those with higher incomes do not qualify.
New Requirements
Several new restrictions on purchases that occur after Nov. 6 go into effect with the new law:
Members of the Armed Forces and certain federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and still qualify for the credit. An eligible taxpayer must buy or enter into a binding contract to buy a home by April 30, 2011, and settle on the purchase by June 30, 2011.
For more details on the credit, visit the First-Time Homebuyer Credit page on IRS.gov. http://www.irs.gov/newsroom/article/0,,id=204671,00.html
Related Items:
IRS YouTube Videos
New Homebuyer Credit, November 2009
http://www.youtube.com/watch?v=GkzB03uuGlg
IR-2009-108, Nov. 24, 2009
WASHINGTON — A new law that went into effect Nov. 6 extends the first-time homebuyer credit five months and expands the eligibility requirements for purchasers.
The Worker, Homeownership, and Business Assistance Act of 2009 extends the deadline for qualifying home purchases from Nov. 30, 2009, to April 30, 2010. Additionally, if a buyer enters into a binding contract by April 30, 2010, the buyer has until June 30, 2010, to settle on the purchase.
The maximum credit amount remains at $8,000 for a first-time homebuyer –– that is, a buyer who has not owned a primary residence during the three years up to the date of purchase.
But the new law also provides a “long-time resident” credit of up to $6,500 to others who do not qualify as “first-time homebuyers.” To qualify this way, a buyer must have owned and used the same home as a principal or primary residence for at least five consecutive years of the eight-year period ending on the date of purchase of a new home as a primary residence.
For all qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 tax returns.
A new version of Form 5405, First-Time Homebuyer Credit, will be available in the next few weeks. A taxpayer who purchases a home after Nov. 6 must use this new version of the form to claim the credit. Likewise, taxpayers claiming the credit on their 2009 returns, no matter when the house was purchased, must also use the new version of Form 5405. Taxpayers who claim the credit on their 2009 tax return will not be able to file electronically but instead will need to file a paper return.
A taxpayer who purchased a home on or before Nov. 6 and chooses to claim the credit on an original or amended 2008 return may continue to use the current version of Form 5405.
Income Limits Rise
The new law raises the income limits for people who purchase homes after Nov. 6. The full credit will be available to taxpayers with modified adjusted gross incomes (MAGI) up to $125,000, or $225,000 for joint filers. Those with MAGI between $125,000 and $145,000, or $225,000 and $245,000 for joint filers, are eligible for a reduced credit. Those with higher incomes do not qualify.
For homes purchased prior to Nov. 7, 2009, existing MAGI limits remain in place. The full credit is available to taxpayers with MAGI up to $75,000, or $150,000 for joint filers. Those with MAGI between $75,000 and $95,000, or $150,000 and $170,000 for joint filers, are eligible for a reduced credit. Those with higher incomes do not qualify.
New Requirements
Several new restrictions on purchases that occur after Nov. 6 go into effect with the new law:
- Dependents are not eligible to claim the credit.
- No credit is available if the purchase price of a home is more than $800,000.
- Purchaser must be at least 18 years of age on the date of purchase.
Members of the Armed Forces and certain federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and still qualify for the credit. An eligible taxpayer must buy or enter into a binding contract to buy a home by April 30, 2011, and settle on the purchase by June 30, 2011.
For more details on the credit, visit the First-Time Homebuyer Credit page on IRS.gov. http://www.irs.gov/newsroom/article/0,,id=204671,00.html
Related Items:
IRS YouTube Videos
New Homebuyer Credit, November 2009
http://www.youtube.com/watch?v=GkzB03uuGlg
Monday, November 30, 2009
Foreclosure Protections for All - The New York Times - By BOB TEDESCHI
A bill passed by the State Legislature this month would require, among other things, that lenders give all borrowers 90 days’ warning before starting foreclosure proceedings and that they take part in settlement conferences with borrowers before proceeding with a foreclosure action. The bill also covers co-op owners.
Gov. David A. Paterson is expected to sign the legislation; most of the measures would then take effect within two months.
Richard J. Biondi, the immediate past president of the New York Association of Mortgage Brokers, said the new legislation was welcome, if a bit overdue. “It’s terrific that they finally opened the door to prime borrowers and made these protections available,” he said.
Richard H. Neiman, the superintendent of the New York State Banking Department, said that given the recent deadlock in the Legislature, he was pleased by the speed with which the bill was passed.
Of the nearly 20 measures in the legislation, mandatory mediation could provide the most relief for struggling borrowers, some of whom have been unable to get their lenders to consider loan modifications. Because of the high volume of mortgage defaults, many lenders have been unable to keep pace with such inquiries from borrowers.
The foreclosure mediation, free for homeowners, would require lenders to provide a representative at a certain date and place. Lenders may be subject to sanctions if they fail to come with financial documents and other information required by mediators.
New York’s mediation program for subprime borrowers has had only limited success, its administrators say, in large part because borrowers often do not attend the sessions.
Under the new legislation, when lenders notify the state of an impending foreclosure action, the state must send the borrower’s name to housing counseling agencies, which can then inform the borrower about foreclosure avoidance strategies like the mediation program.
The new measures relating to co-ops, meanwhile, highlight the difficulties faced by those who fail to make their monthly maintenance payments, which go toward building expenses and the building’s underlying mortgage.
Co-op units do not fit the legal definition of real property, and therefore do not qualify for the protections of traditional foreclosure processes. As a result, Mr. Neiman said, co-op owners can often be forced to evacuate a unit within two months of the time their building’s board takes formal action against a nonpaying resident. Now that the new law gives occupants 90 days before they lose their ownership shares, he said, owners will have more time to seek help.
The legislation also includes protections for tenants of multifamily housing units that go into foreclosure.
Jane Azia, the director of nondepository institutions and consumer protection for the State Banking Department, says that because New York’s housing market includes a heavy mix of multifamily units, the protections for tenants are especially meaningful. By law, she said, a lender can evict tenants only after a foreclosure judgment, which typically takes about 15 months in the state.
“There are tenants out there who are harassed into leaving after the foreclosure process begins,” Ms. Azia said, “and they aren’t aware of their rights.”
The new law would give tenants more time to get out, but Mr. Biondi of the New York Mortgage Brokers Association said this measure could further damage the financial health of lenders.
“Tenants will probably just stop making payments,” he said. “And for lenders, getting any sort of legal enforcement against that will probably be difficult in the current environment.”
Tuesday, November 17, 2009
Corcoran Group Sanctioned for Failure to Preserve E-Mail for Discovery
As reported in the November 17, 2009, New York Law Journal, "A real estate company defendant in a lawsuit has been sanctioned by a Manhattan judge for its failure to preserve evidence and for persisting in deleting e-mails in spite of the court's repeated warnings to comply with discovery."
What's important in this decision (which is being appealed), is that when the court orders e-mails to be presented in discovery, just going ahead and deleting them - and wiping the hard drive (of server and personal computers alike), is not going to elicit warm regards from the court.
This is a good lesson to everyone involved in litigation. I present below the article which appears in today's Law Journal.
Eighteen months after plaintiffs Harold Einstein and Jennifer Boyd sued the Corcoran Group in connection with the alleged deceptive marketing of a condominium, New York Supreme Court Justice Charles Ramos learned that three of Corcoran's brokers were continuing to delete e-mails from their individual mailboxes.
"[T]he failure to implement any litigation hold, not only after the commencement of litigation, but also after this court's repeated warnings that counsel should 'read [their] client the riot act', was grossly negligent and rises to the level of 'culpable conduct' required for a finding of spoliation" said the judge, in Einstein v. 357 LLC, 604199/07, ruling that Corcoran "willfully misled" the plaintiffs during the sale of the condominium.
Jay B. Itkowitz of Itkowitz & Harwood, who represented the condominium's buyers, called the ruling "groundbreaking."
He said in an interview that the ruling was the first in the state to send the "critical message" that "when you are sued or know you are going to be sued ... you have to take immediate and significant steps to preserve electronic evidence."
Errol Margolin of Margolin & Pierce, who represented the Corcoran defendants, said that he "disagreed completely" with the ruling, which he plans to appeal. Corcoran added in a statement that "we disagree with the discovery ruling and intend to file an appeal at the appropriate time. This case is still in the discovery phase and no decision has yet been made on the merits of the case."
Einstein and Boyd purchased a condominium in June 2007 for $1.3 million.
According to the complaint, Christina Coats, a Corcoran broker, had previously told the couple that the unit in Park Slope, Brooklyn had been taken off of the market because of a water leak, but that the condition had since been repaired.
Shortly after moving in, the buyers "experienced massive" flooding in the unit's recreation room during a period of heavy rain.
After repeated flooding, the plaintiffs retained an expert who advised them that the "water penetration to the recreation room had spawned a mold condition," and that the condominium was unsafe for the couple and their two children.
In December 2007, Einstein and Boyd sued Corcoran, three of its brokers, including Coats, and a number of other defendants in connection with the alleged defective design and deceptive marketing of the unit.
In June 2008, the plaintiffs served Corcoran and the brokers with a document demand.
The Corcoran defendants' lawyers claimed at an October hearing that the defendants had produced all e-mail traffic from the individual brokers, but the defendants later admitted that they had not handed over a relevant e-mail from Adam Paceli, the vice president of Corcoran, to a co-defendant.
On Dec. 10, 2008, Justice Ramos ordered the individual brokers to "produce their respective hard drives to a non-affiliated vendor ... for inspection and deleted file recovery."
But according to plaintiffs, the Corcoran defendants failed to supply them with a list of the devices and in February 2009, the plaintiffs moved to strike defendants' pleadings or compel compliance with discovery.
Corcoran responded with an affidavit from Terence Thomas, director of information technology for Corcoran, who testified that "all Corcoran e-mails, outgoing and incoming, are forwarded to a central server. As e-mails are sent and received, an exact replica of the central server is recorded on the hard drives of agents' individual computers."
The real estate company also turned over two hard drives, despite the fact that their attorneys had previously told the plaintiffs that they had no list of devices with potentially relevant data.
The plaintiffs hired Kroll OnTrack to search the hard drives, and discovered that certain e-mails were missing.
In May 2009, Thomas submitted a second affidavit, in which he said Corcoran had an e-mail deletion policy as a result of limited server space. If an individual deleted an e-mail from a local computer prior to a scheduled month-end backup, the file was not recoverable, Thomas said.
He later testified at a hearing that he had never spoken to the individual brokers about their e-mail deletion policies, did not investigate what types of electronic communication devices they used, and failed to advise anyone that a possibility existed that e-mails relevant to the litigation were being deleted.
'LITIGATION HOLD'
Justice Ramos concluded that the defendants' engaged in spoliation by selectively deleting e-mails and failing to implement a "litigation hold."
While New York case law and the Civil Practice Law and Rules are "silent" on the obligations of parties to implement a litigation hold, Ramos relied on cases from the Southern District of New York in concluding that the "failure to suspend the deletion policy or to investigate the basic ways in which e-mails were stored and deleted constitutes a serious discovery default on the part of the Corcoran Defendants and their counsel rising to the level of gross negligence or willfulness."
The judge also took to task Corcoran's attorneys with Margolin & Pierce for making "numerous" materially false statements, such as representing to the court that all e-mail traffic had been produced.
"This Court repeatedly warned counsel for the Corcoran Defendants that the failure to make a complete production of e-mails caused the Court great concern and needed to be remedied properly. Yet the Plaintiffs, and this Court, only learned about the manual deletion policy in May 2009," Ramos wrote.
By disclosing that fact 18 months into the litigation, the judge said, Corcoran defendants "willfully and unnecessarily caused extensive motion practice and delay without any reasonable justification."
Ramos found that a "reasonable fact-finder" could conclude that "at least some of the deleted e-mails were relevant to this litigation and favorable to the Plaintiffs," including one which suggested that the brokers cancelled an open house because of "heavy rain."
In addition to sanctioning the Corcoran defendants by finding they misled the plaintiffs about a walter infiltration problem, the judge also held that defendants' "contumacious conduct" entitled plaintiffs to attorney fees and costs in connection with reviewing the two hard drives and counsel fees spent in bringing discovery motions and sanctions.
Itkowitz estimated that the plaintiffs were entitled to roughly $100,000 as a result of Ramos' ruling.
All told, the plaintiffs are requesting $5 million plus punitive damages in the litigation.
What's important in this decision (which is being appealed), is that when the court orders e-mails to be presented in discovery, just going ahead and deleting them - and wiping the hard drive (of server and personal computers alike), is not going to elicit warm regards from the court.
This is a good lesson to everyone involved in litigation. I present below the article which appears in today's Law Journal.
Eighteen months after plaintiffs Harold Einstein and Jennifer Boyd sued the Corcoran Group in connection with the alleged deceptive marketing of a condominium, New York Supreme Court Justice Charles Ramos learned that three of Corcoran's brokers were continuing to delete e-mails from their individual mailboxes.
"[T]he failure to implement any litigation hold, not only after the commencement of litigation, but also after this court's repeated warnings that counsel should 'read [their] client the riot act', was grossly negligent and rises to the level of 'culpable conduct' required for a finding of spoliation" said the judge, in Einstein v. 357 LLC, 604199/07, ruling that Corcoran "willfully misled" the plaintiffs during the sale of the condominium.
Jay B. Itkowitz of Itkowitz & Harwood, who represented the condominium's buyers, called the ruling "groundbreaking."
He said in an interview that the ruling was the first in the state to send the "critical message" that "when you are sued or know you are going to be sued ... you have to take immediate and significant steps to preserve electronic evidence."
Errol Margolin of Margolin & Pierce, who represented the Corcoran defendants, said that he "disagreed completely" with the ruling, which he plans to appeal. Corcoran added in a statement that "we disagree with the discovery ruling and intend to file an appeal at the appropriate time. This case is still in the discovery phase and no decision has yet been made on the merits of the case."
Einstein and Boyd purchased a condominium in June 2007 for $1.3 million.
According to the complaint, Christina Coats, a Corcoran broker, had previously told the couple that the unit in Park Slope, Brooklyn had been taken off of the market because of a water leak, but that the condition had since been repaired.
Shortly after moving in, the buyers "experienced massive" flooding in the unit's recreation room during a period of heavy rain.
After repeated flooding, the plaintiffs retained an expert who advised them that the "water penetration to the recreation room had spawned a mold condition," and that the condominium was unsafe for the couple and their two children.
In December 2007, Einstein and Boyd sued Corcoran, three of its brokers, including Coats, and a number of other defendants in connection with the alleged defective design and deceptive marketing of the unit.
In June 2008, the plaintiffs served Corcoran and the brokers with a document demand.
The Corcoran defendants' lawyers claimed at an October hearing that the defendants had produced all e-mail traffic from the individual brokers, but the defendants later admitted that they had not handed over a relevant e-mail from Adam Paceli, the vice president of Corcoran, to a co-defendant.
On Dec. 10, 2008, Justice Ramos ordered the individual brokers to "produce their respective hard drives to a non-affiliated vendor ... for inspection and deleted file recovery."
But according to plaintiffs, the Corcoran defendants failed to supply them with a list of the devices and in February 2009, the plaintiffs moved to strike defendants' pleadings or compel compliance with discovery.
Corcoran responded with an affidavit from Terence Thomas, director of information technology for Corcoran, who testified that "all Corcoran e-mails, outgoing and incoming, are forwarded to a central server. As e-mails are sent and received, an exact replica of the central server is recorded on the hard drives of agents' individual computers."
The real estate company also turned over two hard drives, despite the fact that their attorneys had previously told the plaintiffs that they had no list of devices with potentially relevant data.
The plaintiffs hired Kroll OnTrack to search the hard drives, and discovered that certain e-mails were missing.
In May 2009, Thomas submitted a second affidavit, in which he said Corcoran had an e-mail deletion policy as a result of limited server space. If an individual deleted an e-mail from a local computer prior to a scheduled month-end backup, the file was not recoverable, Thomas said.
He later testified at a hearing that he had never spoken to the individual brokers about their e-mail deletion policies, did not investigate what types of electronic communication devices they used, and failed to advise anyone that a possibility existed that e-mails relevant to the litigation were being deleted.
'LITIGATION HOLD'
Justice Ramos concluded that the defendants' engaged in spoliation by selectively deleting e-mails and failing to implement a "litigation hold."
While New York case law and the Civil Practice Law and Rules are "silent" on the obligations of parties to implement a litigation hold, Ramos relied on cases from the Southern District of New York in concluding that the "failure to suspend the deletion policy or to investigate the basic ways in which e-mails were stored and deleted constitutes a serious discovery default on the part of the Corcoran Defendants and their counsel rising to the level of gross negligence or willfulness."
The judge also took to task Corcoran's attorneys with Margolin & Pierce for making "numerous" materially false statements, such as representing to the court that all e-mail traffic had been produced.
"This Court repeatedly warned counsel for the Corcoran Defendants that the failure to make a complete production of e-mails caused the Court great concern and needed to be remedied properly. Yet the Plaintiffs, and this Court, only learned about the manual deletion policy in May 2009," Ramos wrote.
By disclosing that fact 18 months into the litigation, the judge said, Corcoran defendants "willfully and unnecessarily caused extensive motion practice and delay without any reasonable justification."
Ramos found that a "reasonable fact-finder" could conclude that "at least some of the deleted e-mails were relevant to this litigation and favorable to the Plaintiffs," including one which suggested that the brokers cancelled an open house because of "heavy rain."
In addition to sanctioning the Corcoran defendants by finding they misled the plaintiffs about a walter infiltration problem, the judge also held that defendants' "contumacious conduct" entitled plaintiffs to attorney fees and costs in connection with reviewing the two hard drives and counsel fees spent in bringing discovery motions and sanctions.
Itkowitz estimated that the plaintiffs were entitled to roughly $100,000 as a result of Ramos' ruling.
All told, the plaintiffs are requesting $5 million plus punitive damages in the litigation.
Federal Regulators Issue Final Model Privacy Notice Form Nov 17 2009 Press Release
Eight federal regulatory agencies today released a final model privacy notice form that will make it easier for consumers to understand how financial institutions collect and share information about consumers. Under the Gramm-Leach-Bliley Act (GLB Act), institutions must notify consumers of their information-sharing practices and inform consumers of their right to opt out of certain sharing practices. The model form issued today can be used by financial institutions to comply with these requirements.
The Financial Services Regulatory Relief Act of 2006 amended the GLB Act to require the agencies to propose a succinct and comprehensible model form that allows consumers to easily compare the privacy practices of different financial institutions, and has an easy-to-read font.
The agencies conducted extensive consumer research and testing in developing the model form issued today. Then they solicited public comments and considered those comments in developing a model form that is easier for consumers to understand and use. The final rule provides that a financial institution that chooses to use the model form obtains a "safe harbor" and will satisfy the disclosure requirements for notices. The rule also removes, after a transition period, the sample clauses now included in the appendices of the agencies' privacy rules.
The final model privacy form was developed jointly by the Board of Governors of the Federal Reserve System, Commodity Futures Trading Commission, Federal Deposit Insurance Corporation, Federal Trade Commission, National Credit Union Administration, Office of the Comptroller of the Currency, Office of Thrift Supervision, and Securities and Exchange Commission.
The Financial Services Regulatory Relief Act of 2006 amended the GLB Act to require the agencies to propose a succinct and comprehensible model form that allows consumers to easily compare the privacy practices of different financial institutions, and has an easy-to-read font.
The agencies conducted extensive consumer research and testing in developing the model form issued today. Then they solicited public comments and considered those comments in developing a model form that is easier for consumers to understand and use. The final rule provides that a financial institution that chooses to use the model form obtains a "safe harbor" and will satisfy the disclosure requirements for notices. The rule also removes, after a transition period, the sample clauses now included in the appendices of the agencies' privacy rules.
The final model privacy form was developed jointly by the Board of Governors of the Federal Reserve System, Commodity Futures Trading Commission, Federal Deposit Insurance Corporation, Federal Trade Commission, National Credit Union Administration, Office of the Comptroller of the Currency, Office of Thrift Supervision, and Securities and Exchange Commission.
Thursday, November 12, 2009
Homebuyer tax credit extension and expansion update
On November 6, President Barack Obama signed into law the extension and expansion of the current homebuyer tax credit, an important step in ensuring a real estate and economic recovery.
The measure extends the present $8,000 tax credit program for first-time homebuyers through April 30, 2010.
It expands the program, effective November 7, 2009, to include current homeowners, who are now eligible for an up to $6,500 tax credit (10 percent of the purchase price) through April 30, 2010 provided they have lived in the home they are selling, or have sold, as principal residence for five consecutive years in the past eight years.
If potential homebuyers have a binding contract on or before April 30, they will have until June 30 to close the transaction.
Income limits for eligible homebuyers are expanded to $125,000 for single buyers and $225,000 for couples. The purchase price of the home cannot exceed $800,000. To help guard against fraud, buyers are required to attach documentation of purchase to their tax return.
Click here http://www.realtor.org/fedistrk.nsf/files/government_affairs_tax_credit_ext_chart_110409.pdf/$FILE/government_affairs_tax_credit_ext_chart_110409.pdf for detailed information about the legislation.
The measure extends the present $8,000 tax credit program for first-time homebuyers through April 30, 2010.
It expands the program, effective November 7, 2009, to include current homeowners, who are now eligible for an up to $6,500 tax credit (10 percent of the purchase price) through April 30, 2010 provided they have lived in the home they are selling, or have sold, as principal residence for five consecutive years in the past eight years.
If potential homebuyers have a binding contract on or before April 30, they will have until June 30 to close the transaction.
Income limits for eligible homebuyers are expanded to $125,000 for single buyers and $225,000 for couples. The purchase price of the home cannot exceed $800,000. To help guard against fraud, buyers are required to attach documentation of purchase to their tax return.
Click here http://www.realtor.org/fedistrk.nsf/files/government_affairs_tax_credit_ext_chart_110409.pdf/$FILE/government_affairs_tax_credit_ext_chart_110409.pdf for detailed information about the legislation.
Mortgage Program Gathers Steam After Slow Start - The Wall Street Journal, Wednesday, November 11, 2009
Some excerpts:
"Whether the program will ultimately be judged a success will depend upon how many trial modifications become permanent."
"The administration won't release figures on completed modifcations until December, but so far it appears that very few trial modifications are becoming permanent, often because of lack of documentation."
"'It's a fiasco in the making,' said Alan White, an assistant professor at Valparaiso University in Indiana, citing preliminary information about low numbers of permanent modifications and complaints from attorneys and housing counselors. "The good news is you've gotten all these homeowners in from the cold and on these temporary modifications," Mr White said. "The bad news is we are stumbling in getting all these people ... all the way" to keeping their homes.
"At Morgan Stanley's Saxon Mortgage Services, about 26,000 to 39,000 borrowers in the program have made more than three trial payments. Roughly 500 have received completed modifications." "'It's hard to get the documents in,' said Saxon Chief Executive Anthonly Meola ..."
"The Treasury department last month gave borrowers who have made three trial payments sixty additional days to hand in their paperwork and relaxed some documentation requirements."
"Freddie Mac, the government-controlled mortgage company, recently hired Titanium Solutions Inc. to go door-to-door gathering needed documents. 'Most of our borrowers got into the loan with assistance' and need similar help with the modification process, said Freddie Mac Senior Vice President Ingrid Beckles."
"Susan Cook, a real-estate broker who works as a home-retention consultant for Titanium said borrowers often report that they have sent in their paperwork 'two or three times.' But there is always some little piece that is probably missing.' she said."
"Whether the program will ultimately be judged a success will depend upon how many trial modifications become permanent."
"The administration won't release figures on completed modifcations until December, but so far it appears that very few trial modifications are becoming permanent, often because of lack of documentation."
"'It's a fiasco in the making,' said Alan White, an assistant professor at Valparaiso University in Indiana, citing preliminary information about low numbers of permanent modifications and complaints from attorneys and housing counselors. "The good news is you've gotten all these homeowners in from the cold and on these temporary modifications," Mr White said. "The bad news is we are stumbling in getting all these people ... all the way" to keeping their homes.
"At Morgan Stanley's Saxon Mortgage Services, about 26,000 to 39,000 borrowers in the program have made more than three trial payments. Roughly 500 have received completed modifications." "'It's hard to get the documents in,' said Saxon Chief Executive Anthonly Meola ..."
"The Treasury department last month gave borrowers who have made three trial payments sixty additional days to hand in their paperwork and relaxed some documentation requirements."
"Freddie Mac, the government-controlled mortgage company, recently hired Titanium Solutions Inc. to go door-to-door gathering needed documents. 'Most of our borrowers got into the loan with assistance' and need similar help with the modification process, said Freddie Mac Senior Vice President Ingrid Beckles."
"Susan Cook, a real-estate broker who works as a home-retention consultant for Titanium said borrowers often report that they have sent in their paperwork 'two or three times.' But there is always some little piece that is probably missing.' she said."
Thursday, November 5, 2009
UPDATE: The Proposed Homebuyers Tax Credit Legislation
What it is in a nutshell:
The legislation extends the availability of the tax credit to purchases made before May 1, 2010. Prospective purchasers with binding contracts in place as of April 30, 2010 will be allowed an additional 60 days to complete the transaction.
The credit will remain $8,000 for first-time buyers, while repeat buyers who purchase between December 1, 2009 and May 1, 2010 will be eligible for a credit of $6,500.
Repeat buyers must have lived in their homes consecutively for 5 of the previous 8 years. Income limits are expanded to $125,000 on a single return and $225,000 on a joint return.
Please keep in mind the income restrictions. That is a puzzle piece I find most people are not aware of.
Here's a recent Associated Press news article: http://www.google.com/hostednews/ap/article/ALeqM5hJJraNRE6DjWj2orF7SYJ12PADEAD9BPFFR01
The legislation extends the availability of the tax credit to purchases made before May 1, 2010. Prospective purchasers with binding contracts in place as of April 30, 2010 will be allowed an additional 60 days to complete the transaction.
The credit will remain $8,000 for first-time buyers, while repeat buyers who purchase between December 1, 2009 and May 1, 2010 will be eligible for a credit of $6,500.
Repeat buyers must have lived in their homes consecutively for 5 of the previous 8 years. Income limits are expanded to $125,000 on a single return and $225,000 on a joint return.
Please keep in mind the income restrictions. That is a puzzle piece I find most people are not aware of.
Here's a recent Associated Press news article: http://www.google.com/hostednews/ap/article/ALeqM5hJJraNRE6DjWj2orF7SYJ12PADEAD9BPFFR01
Monday, October 26, 2009
What's with the pricing?
This week the Cororan Group released their current sales report. Their figures report an overall decline in all contracted sales of 35% since February 2008 -- it does give one "pause". Also during the last six months, only about 3% of all deals were "at" or above the asking price. In other words, deals are being done with negotiation and the asking price is rarely the contract of sale price anymore. Let those prices simply be a guideline.
This is a time where astute research will pay off for the buyer. Be aware of "like kind" properties in comparing what is being sold because there is a difference between a cooperative and a condominium sale to state the obvious. Ask your broker to present you with the hard facts and not suppositions. All brokers have access to the same information and it is all to work for the public good.
Personally I am not in support of the $8,000 tax rebate for first time buyers. I believe there has been more than enough incentive to get people out of their rental "digs" and into their first homes. I believe we need to focus on helping middle income earners who are small business owners or independent contractors who are all fighting for their financial lives right now. I'd love to hear what you have to say about it.
Thank you.
This is a time where astute research will pay off for the buyer. Be aware of "like kind" properties in comparing what is being sold because there is a difference between a cooperative and a condominium sale to state the obvious. Ask your broker to present you with the hard facts and not suppositions. All brokers have access to the same information and it is all to work for the public good.
Personally I am not in support of the $8,000 tax rebate for first time buyers. I believe there has been more than enough incentive to get people out of their rental "digs" and into their first homes. I believe we need to focus on helping middle income earners who are small business owners or independent contractors who are all fighting for their financial lives right now. I'd love to hear what you have to say about it.
Thank you.
Monday, August 31, 2009
Rents in Manhattan are falling as unemployment climbs
NYC Apartment Rents Fall as Tenants Gain Leverage (Update3)
By Brian Louis
Aug. 25 (Bloomberg) -- Manhattan apartment rents fell as much as 10 percent in August from a year ago as tenants gained negotiating power in the recession and forced landlords to offer concessions.
In buildings attended by doormen, rents on one-bedroom apartments dropped 10 percent from a year earlier to an average of $3,274 a month, according to a report by the Real Estate Group of New York. Studio prices fell 7 percent at those properties to $2,329 and two-bedrooms declined almost 6.9 percent to $5,161. Soho and TriBeCa were the most expensive neighborhoods.
Rents in Manhattan are falling as unemployment climbs. The number of job seekers rose to 402,200 in July, the most since 1992, New York City’s Comptroller William Thompson said yesterday. Landlords are offering incentives such as free rent and paying brokerage fees to lure tenants, said Daniel Baum, chief executive officer of the Real Estate Group.
“The concessions out there right now are pretty aggressive,” he said.
The city’s unemployment rate climbed to a 12-year high of 9.6 percent in July even as the national rate ticked down to 9.4 percent. The U.S. economy has lost 6.7 million jobs since the recession began in December 2007, making it the biggest employment slump in the last eight decades. Economists surveyed by Bloomberg predict the unemployment rate will reach 10 percent by early next year.
Rising U.S. Vacancies
That translates into less pricing power for landlords. U.S. apartment vacancies jumped to 7.5 percent in the second quarter, the highest level in 22 years, according to New York-based research firm Reis Inc. Asking rents dropped 0.7 percent from a year earlier to an average of $1,040 a month.
Rising vacancies and falling rents sent shares of real estate investment trusts that own apartments lower in the last year. The 13-member Bloomberg index of apartment landlords fell 36 percent in the 12 months through yesterday.
The Manhattan survey released today is based on data from more than 10,000 available apartment listings, according to the Real Estate Group.
In Manhattan’s non-doorman buildings, the average rent for studio apartments fell 8 percent to $1,931. One-bedrooms dropped 5.9 percent to $2,606 and two-bedrooms fell 8.2 percent to an average of $3,527.
On the Upper West Side, the average rent for a one-bedroom apartment in a doorman building was $3,236. In Greenwich Village, a similar apartment averaged $3,654.
Across Central Park on the Upper East Side, the average rent for a one-bedroom apartment in a doorman building is $3,276. In Gramercy Park, the price averages $3,656.
The least expensive average rents were in Harlem, where the monthly price ranged from $1,274 for a studio to $2,105 for a two-bedroom unit in a building without doormen.
To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net. Last Updated: August 25, 2009 14:09 EDT
By Brian Louis
Aug. 25 (Bloomberg) -- Manhattan apartment rents fell as much as 10 percent in August from a year ago as tenants gained negotiating power in the recession and forced landlords to offer concessions.
In buildings attended by doormen, rents on one-bedroom apartments dropped 10 percent from a year earlier to an average of $3,274 a month, according to a report by the Real Estate Group of New York. Studio prices fell 7 percent at those properties to $2,329 and two-bedrooms declined almost 6.9 percent to $5,161. Soho and TriBeCa were the most expensive neighborhoods.
Rents in Manhattan are falling as unemployment climbs. The number of job seekers rose to 402,200 in July, the most since 1992, New York City’s Comptroller William Thompson said yesterday. Landlords are offering incentives such as free rent and paying brokerage fees to lure tenants, said Daniel Baum, chief executive officer of the Real Estate Group.
“The concessions out there right now are pretty aggressive,” he said.
The city’s unemployment rate climbed to a 12-year high of 9.6 percent in July even as the national rate ticked down to 9.4 percent. The U.S. economy has lost 6.7 million jobs since the recession began in December 2007, making it the biggest employment slump in the last eight decades. Economists surveyed by Bloomberg predict the unemployment rate will reach 10 percent by early next year.
Rising U.S. Vacancies
That translates into less pricing power for landlords. U.S. apartment vacancies jumped to 7.5 percent in the second quarter, the highest level in 22 years, according to New York-based research firm Reis Inc. Asking rents dropped 0.7 percent from a year earlier to an average of $1,040 a month.
Rising vacancies and falling rents sent shares of real estate investment trusts that own apartments lower in the last year. The 13-member Bloomberg index of apartment landlords fell 36 percent in the 12 months through yesterday.
The Manhattan survey released today is based on data from more than 10,000 available apartment listings, according to the Real Estate Group.
In Manhattan’s non-doorman buildings, the average rent for studio apartments fell 8 percent to $1,931. One-bedrooms dropped 5.9 percent to $2,606 and two-bedrooms fell 8.2 percent to an average of $3,527.
On the Upper West Side, the average rent for a one-bedroom apartment in a doorman building was $3,236. In Greenwich Village, a similar apartment averaged $3,654.
Across Central Park on the Upper East Side, the average rent for a one-bedroom apartment in a doorman building is $3,276. In Gramercy Park, the price averages $3,656.
The least expensive average rents were in Harlem, where the monthly price ranged from $1,274 for a studio to $2,105 for a two-bedroom unit in a building without doormen.
To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net. Last Updated: August 25, 2009 14:09 EDT
New Consumer Protections for Credit Cards and Mortgages: How They Can Help Borrowers
With all the discussion of Health Care Reform, much of what has occurred with other legislation has gotten a bit lost in the news. I believe the credit card reform bill is one of them and people should be informed to the rights that have been reinstated to them regarding notice; and also there is an important segment related to home mortgages and disclosures (see more by scrolling below).
The FDIC's press release today, lists many of the key issues - and since they have done better than what I could only hope to summarize, I'm reprinting here in its entirety their release for your convenience and information.
New Consumer Protections for Credit Cards and Mortgages: How They Can Help Borrowers Avoid Surprises Other Topics in the Latest FDIC Consumer News Include Making the Most of Bank Rewards Programs and New Resources Explaining Deposit Insurance Coverage
FOR IMMEDIATE RELEASE August 31, 2009
Media Contact: Jay Rosenstein (202) 898-7303 jrosenstein@fdic.gov
New federal consumer protections for credit cards and mortgages -- including prohibitions against abusive lending practices and requirements for clearer, more timely disclosures -- will help people avoid surprises. The Summer 2009 issue of FDIC Consumer News from the Federal Deposit Insurance Corporation features key changes in the rules and what they mean for the public. The protections for credit cards are the result of a new law passed in May that is intended to help shield consumers from abusive fees, penalties, interest rate increases and other unwarranted changes in account terms. Most of the provisions start next year, but some took effect August 20, 2009, including a requirement that card issuers must generally provide a 45-day advance notice of a rate increase or other significant changes in account terms, up from 15 days.
The expanded notice period should give consumers more time to react to rate increases or other adverse account changes.
As for mortgages, the new rules feature prohibitions by the Federal Reserve Board against a variety of unfair or deceptive lending practices involving loans made on or after October 1, 2009. Some of the Fed's rules apply to all home mortgages except for home equity lines of credit, and they include prohibitions against inaccurate appraisals (to prevent a consumer from overpaying for a home or borrowing too much) and the unfair handling of loan payments (to avoid unnecessary fees).
Other parts of the Fed's rules protect subprime borrowers obtaining high-cost mortgages. More broadly, there are new requirements from the Fed and the U.S. Department of Housing and Urban Development for early disclosures of mortgage terms and costs.
Also in this issue of the FDIC's quarterly newsletter for consumers are tips on making the most of bank rewards programs, such as credit cards that enable users to gradually accumulate cash rebates or "points" good for free travel or merchandise, and checking accounts that offer cash or other prizes for frequently using a debit card. The publication says that these programs can be great deals for consumers, but the key is to be on guard against potential pitfalls that include allowing the rewards to overshadow the more important features of an account when comparison shopping, and overspending (in pursuit of the free benefits) that can result in interest charges and unmanageable debt.
The newsletter also notes the availability of a new FDIC brochure and video to help consumers understand their deposit insurance coverage, including how to have far more than $250,000 protected at the same bank. The latest FDIC Consumer News can be read or printed at www.fdic.gov/consumers/consumer/news/cnsum09. To order up to two free paper copies, consumers can use the online form on that same Web page or call the Federal Citizen Information Center toll-free at 1-888-8-PUEBLO (1-888-878-3256) weekdays from 8:00 a.m. to 8:00 p.m. Eastern Time and ask for Department D96.
The goal of FDIC Consumer News is to deliver timely, reliable and innovative tips and information about financial matters, free of charge. To find current and past issues, including special editions, visit www.fdic.gov/consumernews or request paper copies by contacting the FDIC's Public Information Center toll-free at 1-877-275-3342, by e-mail to publicinfo@fdic.gov, or by writing to the FDIC Public Information Center, 3501 North Fairfax Drive, Room E-1002, Arlington, VA 22226. There are two ways to subscribe to the quarterly FDIC Consumer News. To receive an e-mail about each new issue with links to stories, go to www.fdic.gov/about/subscriptions/index.html.
To receive the newsletter in the mail, free of charge, contact the Public Information Center as listed above. The FDIC encourages financial institutions, government agencies, consumer organizations, educators, the media and anyone else to help make the tips and information in FDIC Consumer News widely available. The publication may be reprinted in whole or in part without advance permission. Organizations also may link to or mention the FDIC Web site.
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 8,195 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed.
The FDIC receives no federal tax dollars -- insured financial institutions fund its operations. FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-158-2009
The FDIC's press release today, lists many of the key issues - and since they have done better than what I could only hope to summarize, I'm reprinting here in its entirety their release for your convenience and information.
New Consumer Protections for Credit Cards and Mortgages: How They Can Help Borrowers Avoid Surprises Other Topics in the Latest FDIC Consumer News Include Making the Most of Bank Rewards Programs and New Resources Explaining Deposit Insurance Coverage
FOR IMMEDIATE RELEASE August 31, 2009
Media Contact: Jay Rosenstein (202) 898-7303 jrosenstein@fdic.gov
New federal consumer protections for credit cards and mortgages -- including prohibitions against abusive lending practices and requirements for clearer, more timely disclosures -- will help people avoid surprises. The Summer 2009 issue of FDIC Consumer News from the Federal Deposit Insurance Corporation features key changes in the rules and what they mean for the public. The protections for credit cards are the result of a new law passed in May that is intended to help shield consumers from abusive fees, penalties, interest rate increases and other unwarranted changes in account terms. Most of the provisions start next year, but some took effect August 20, 2009, including a requirement that card issuers must generally provide a 45-day advance notice of a rate increase or other significant changes in account terms, up from 15 days.
The expanded notice period should give consumers more time to react to rate increases or other adverse account changes.
As for mortgages, the new rules feature prohibitions by the Federal Reserve Board against a variety of unfair or deceptive lending practices involving loans made on or after October 1, 2009. Some of the Fed's rules apply to all home mortgages except for home equity lines of credit, and they include prohibitions against inaccurate appraisals (to prevent a consumer from overpaying for a home or borrowing too much) and the unfair handling of loan payments (to avoid unnecessary fees).
Other parts of the Fed's rules protect subprime borrowers obtaining high-cost mortgages. More broadly, there are new requirements from the Fed and the U.S. Department of Housing and Urban Development for early disclosures of mortgage terms and costs.
Also in this issue of the FDIC's quarterly newsletter for consumers are tips on making the most of bank rewards programs, such as credit cards that enable users to gradually accumulate cash rebates or "points" good for free travel or merchandise, and checking accounts that offer cash or other prizes for frequently using a debit card. The publication says that these programs can be great deals for consumers, but the key is to be on guard against potential pitfalls that include allowing the rewards to overshadow the more important features of an account when comparison shopping, and overspending (in pursuit of the free benefits) that can result in interest charges and unmanageable debt.
The newsletter also notes the availability of a new FDIC brochure and video to help consumers understand their deposit insurance coverage, including how to have far more than $250,000 protected at the same bank. The latest FDIC Consumer News can be read or printed at www.fdic.gov/consumers/consumer/news/cnsum09. To order up to two free paper copies, consumers can use the online form on that same Web page or call the Federal Citizen Information Center toll-free at 1-888-8-PUEBLO (1-888-878-3256) weekdays from 8:00 a.m. to 8:00 p.m. Eastern Time and ask for Department D96.
The goal of FDIC Consumer News is to deliver timely, reliable and innovative tips and information about financial matters, free of charge. To find current and past issues, including special editions, visit www.fdic.gov/consumernews or request paper copies by contacting the FDIC's Public Information Center toll-free at 1-877-275-3342, by e-mail to publicinfo@fdic.gov, or by writing to the FDIC Public Information Center, 3501 North Fairfax Drive, Room E-1002, Arlington, VA 22226. There are two ways to subscribe to the quarterly FDIC Consumer News. To receive an e-mail about each new issue with links to stories, go to www.fdic.gov/about/subscriptions/index.html.
To receive the newsletter in the mail, free of charge, contact the Public Information Center as listed above. The FDIC encourages financial institutions, government agencies, consumer organizations, educators, the media and anyone else to help make the tips and information in FDIC Consumer News widely available. The publication may be reprinted in whole or in part without advance permission. Organizations also may link to or mention the FDIC Web site.
# # #
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 8,195 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed.
The FDIC receives no federal tax dollars -- insured financial institutions fund its operations. FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-158-2009
Thursday, July 23, 2009
Can I prevent a foreclosure on my home?
The best defense in a foreclosure is to prevent it. Whatever the reason – be it lack of employment, medical bills - thousands of people are discovering that they can no longer make their loan / mortgage payments.
This is not the time to fall into a daze of denial. You must remain in a pro-active position. Act while you are still in the bank’s good graces!
You can stop a foreclosure.
This is not the time to fall into a daze of denial. You must remain in a pro-active position. Act while you are still in the bank’s good graces!
You can stop a foreclosure.
First:
- Contact your lender – ask for the loss mitigation department. You will need your loan number. Tell them your situation and what steps you are taking.
- Do not ignore any notices.
- Keep all records of your contacts with the lender – who you spoke to, what day and time, what was the result of your conversation. Even if no one will speak with you – record that note.
- If you need to send anything in writing, send it by certified mail return receipt.
A foreclosure defense attorney can intercede on your behalf. I have found that too many people are in such denial that they ignore the proceedings until the auction is scheduled and then that week they call my office for help – and there are few options at that point!
Remain pro-active – many laws have been passed to protect homeowners and you can benefit from them.
Monday, June 15, 2009
Beware of Neighbor’s Home Foreclosure
Today, the media reported on the escalating number of foreclosures across America.
Forbes Magazine via a Reuters Report additionally spoke on the impact in Manhattan. This story by Bob Tedeschi in the New York Times, speaks on the subject of what happens to you if your neighbor falls into foreclosure. With respect to him and the New York Times, I am publishing it below for your convenience to read. The excellent graph which accompanies the article can be found at the Times website http://www.nytimes.com/2009/06/14/realestate/mortgages/14mort.html?nl=your-money&emc=b2
If you know anyone in the position of facing foreclosure, I represent sellers in foreclosure defense. Please contact my office for further information at 800.461.3190.
Beware of Neighbor’s Home Foreclosure
The New York Times
By BOB TEDESCHI
Published: June 12, 2009
WHEN it comes to selling your house or planning your next home equity line of credit, being a nosey neighbor could very well pay off.
That’s one implication of a recent report from the Center for Responsible Lending, a consumer advocacy group based in Durham, N.C.
The report, which was released in May, focuses on the ripple effects of home foreclosures, and suggests that homeowners who are concerned about their home’s value should watch for signs of trouble among their closest neighbors.
This year alone, it says, foreclosures will cause an estimated 69.5 million nearby homes to suffer price declines averaging $7,200 per home. The loss in property value could total $500 billion.
The resulting loss in financial flexibility is significant. “Homeowners who had counted on using their home equity to finance their retirement, cover tuition costs, start a small business, or pay medical bills in many cases no longer have this option,” the report said.
Ellen Schloemer, the executive vice president of the Center for Responsible Lending, said that over the next four years, foreclosures would affect an estimated 91.5 million neighboring homes.
“As the foreclosure crisis continues to worsen, the contagion is spreading,” Ms. Schloemer said. “You can’t just say those foreclosures are hurting someone else.”
The rate of home foreclosures has rise sharply since 2007, when the first subprime adjustable-rate mortgages began resetting to higher rates. But even borrowers with good credit have defaulted on their loans as the economy has faltered.
According to the Mortgage Bankers Association, an industry trade group, about 1.4 percent of all first mortgages entered foreclosure in the first quarter of this year, a 20 percent jump from the fourth quarter of 2008, and a record high.
The center’s report relied on forecasts from Credit Suisse, which said late last year that about nine million homes would probably go into foreclosure in 2009 to 2012. The center also used late 2008 data from the Mortgage Bankers Association to estimate this year’s foreclosure figures (about 2.4 million homes).
Two earlier reports released by the Center for Responsible Lending examined the spillover effects of the mortgage crisis. But this year it relied on new research about how a foreclosure affects neighborhood home values — specifically, a 2008 study that includes researchers at Fannie Mae, the government-sponsored agency, and the University of Connecticut.
This study found that homeowners who lived within 300 feet of a foreclosed residential property experienced a drop of 1.3 percent in home value; those living 300 to 500 feet of the foreclosed home typically see a drop in value of 0.6 percent.
John P. Harding, a professor at the University of Connecticut’s Center for Real Estate and Urban Economic Studies, and an author of the study, said the properties that are most affected by a foreclosure are the ones close enough to see the peeling paint, broken windows and overgrown lawns that often accompany such situations.
The worst time for immediate neighbors to sell their homes, refinance or cash out some of their home equity, Mr. Harding said, is just before the bank takes title to the property, because that is the point of greatest neglect.
After that point, Mr. Harding said, many lenders will at least maintain the property’s appearance well enough to attract prospective buyers.
Of course, the best time to try to sell a home or convert equity into cash is when neighbors are on sound financial footing, though it may not be easy to determine.
Job loss is the biggest cause of mortgage default, according to industry experts, so if a neighbor becomes unemployed, you should probably start your own clock ticking.
For those living outside the immediate vicinity of the foreclosure, but still in the neighborhood, Mr. Harding said home values typically bottom out around the time when the bank actually sells the home.
“My advice would be to try to ride that out, not panic, and know that this is the peak effect from lower-priced competition,” he said.
Mr. Harding said that banks, municipalities and the federal government are justified in financing foreclosure-avoidance programs, but not if they help homeowners just barely afford to stay in their homes. In such situations, neighboring homes could still see values drop.
“You want to offer help at a level at which people can still do critical maintenance to the property,” he said.
Forbes Magazine via a Reuters Report additionally spoke on the impact in Manhattan. This story by Bob Tedeschi in the New York Times, speaks on the subject of what happens to you if your neighbor falls into foreclosure. With respect to him and the New York Times, I am publishing it below for your convenience to read. The excellent graph which accompanies the article can be found at the Times website http://www.nytimes.com/2009/06/14/realestate/mortgages/14mort.html?nl=your-money&emc=b2
If you know anyone in the position of facing foreclosure, I represent sellers in foreclosure defense. Please contact my office for further information at 800.461.3190.
Beware of Neighbor’s Home Foreclosure
The New York Times
By BOB TEDESCHI
Published: June 12, 2009
WHEN it comes to selling your house or planning your next home equity line of credit, being a nosey neighbor could very well pay off.
That’s one implication of a recent report from the Center for Responsible Lending, a consumer advocacy group based in Durham, N.C.
The report, which was released in May, focuses on the ripple effects of home foreclosures, and suggests that homeowners who are concerned about their home’s value should watch for signs of trouble among their closest neighbors.
This year alone, it says, foreclosures will cause an estimated 69.5 million nearby homes to suffer price declines averaging $7,200 per home. The loss in property value could total $500 billion.
The resulting loss in financial flexibility is significant. “Homeowners who had counted on using their home equity to finance their retirement, cover tuition costs, start a small business, or pay medical bills in many cases no longer have this option,” the report said.
Ellen Schloemer, the executive vice president of the Center for Responsible Lending, said that over the next four years, foreclosures would affect an estimated 91.5 million neighboring homes.
“As the foreclosure crisis continues to worsen, the contagion is spreading,” Ms. Schloemer said. “You can’t just say those foreclosures are hurting someone else.”
The rate of home foreclosures has rise sharply since 2007, when the first subprime adjustable-rate mortgages began resetting to higher rates. But even borrowers with good credit have defaulted on their loans as the economy has faltered.
According to the Mortgage Bankers Association, an industry trade group, about 1.4 percent of all first mortgages entered foreclosure in the first quarter of this year, a 20 percent jump from the fourth quarter of 2008, and a record high.
The center’s report relied on forecasts from Credit Suisse, which said late last year that about nine million homes would probably go into foreclosure in 2009 to 2012. The center also used late 2008 data from the Mortgage Bankers Association to estimate this year’s foreclosure figures (about 2.4 million homes).
Two earlier reports released by the Center for Responsible Lending examined the spillover effects of the mortgage crisis. But this year it relied on new research about how a foreclosure affects neighborhood home values — specifically, a 2008 study that includes researchers at Fannie Mae, the government-sponsored agency, and the University of Connecticut.
This study found that homeowners who lived within 300 feet of a foreclosed residential property experienced a drop of 1.3 percent in home value; those living 300 to 500 feet of the foreclosed home typically see a drop in value of 0.6 percent.
John P. Harding, a professor at the University of Connecticut’s Center for Real Estate and Urban Economic Studies, and an author of the study, said the properties that are most affected by a foreclosure are the ones close enough to see the peeling paint, broken windows and overgrown lawns that often accompany such situations.
The worst time for immediate neighbors to sell their homes, refinance or cash out some of their home equity, Mr. Harding said, is just before the bank takes title to the property, because that is the point of greatest neglect.
After that point, Mr. Harding said, many lenders will at least maintain the property’s appearance well enough to attract prospective buyers.
Of course, the best time to try to sell a home or convert equity into cash is when neighbors are on sound financial footing, though it may not be easy to determine.
Job loss is the biggest cause of mortgage default, according to industry experts, so if a neighbor becomes unemployed, you should probably start your own clock ticking.
For those living outside the immediate vicinity of the foreclosure, but still in the neighborhood, Mr. Harding said home values typically bottom out around the time when the bank actually sells the home.
“My advice would be to try to ride that out, not panic, and know that this is the peak effect from lower-priced competition,” he said.
Mr. Harding said that banks, municipalities and the federal government are justified in financing foreclosure-avoidance programs, but not if they help homeowners just barely afford to stay in their homes. In such situations, neighboring homes could still see values drop.
“You want to offer help at a level at which people can still do critical maintenance to the property,” he said.
Monday, June 8, 2009
CALL TO ACTION - NYS Homebuyer Tax Credit 2009
We only have two weeks left --- please let our New York State legislative persons know that you support the Homebuyer Tax Credit. Please find below a sample letter you can use.
Subject: Please Support $7,000 Homebuyer Tax Credit
As a constituent, I am asking for your support on a critical piece of legislation that would provide a personal income tax credit for the purchase of a home in New York State (A.7125 by Assemblyman Vito Lopez/S.3900 by Senator Joseph Addabbo). With just two weeks left in the 2009 Legislative Session, your support is critical.
Under this legislation, homebuyers would be able to receive a $7,000 New York State personal income tax credit that would be returned to the homeowner over the course of their first three years of homeownership, dependent upon their tax credit eligibility. This tax credit would be applied to the purchase of a one or two family house, townhouse, condominium or cooperative apartment that was purchased for one million dollars or less. The homeowner must reside in the property for at least six months of each year to receive the tax credit.
In light of the current housing and economic crisis, this proposal to ease the tax burden paid by homebuyers is a significant step towards stimulating the New York housing market and revitalizing the economy. Over the past year, sales of single family homes in New York State have dropped over 25% and the statewide median sales price has plummeted by more than $22,000 over the past two years.
This State tax credit will work in conjunction with the temporary $8,000 federal housing tax credit, set to expire on December 1, 2009, further stimulating the New York housing market and economy. Increased home purchases will reduce current inventory and lead to production of new housing, resulting in a recovery from the currently depressed building and construction economic sectors. This will ultimately generate additional tax revenue for New York State government from increased income taxes tied to construction employment, increased real estate mortgage recording and real estate transfer taxes, and increased sales tax revenue on items associated with a home purch ase including home furnishings and durable goods such as refrigerators, washing machines, clothes dryers, etc.
Just this year, California enacted a $10,000 homebuyer tax credit, Utah passed a $6,000 new homebuyer tax credit, and 14 other states have introduced home buyer tax credit legislation. New York State is competing with states such as these to lure and retain a young and well-educated workforce and enacting this legislation is a definitive step in the right direction.
In order to retain a qualified workforce, sustain our economy and strengthen our communities, we must make homeownership more affordable to the average homebuyer. I urge you to become a sponsor of A.7125 by Assemblyman Vito Lopez/S.3900 by Senator Joseph Addabbo and help bring this bill to a vote before the end of the 2009 Legislative session. Time is of the essence and the economy in New York State cannot afford to wait.
Thank you.
Subject: Please Support $7,000 Homebuyer Tax Credit
As a constituent, I am asking for your support on a critical piece of legislation that would provide a personal income tax credit for the purchase of a home in New York State (A.7125 by Assemblyman Vito Lopez/S.3900 by Senator Joseph Addabbo). With just two weeks left in the 2009 Legislative Session, your support is critical.
Under this legislation, homebuyers would be able to receive a $7,000 New York State personal income tax credit that would be returned to the homeowner over the course of their first three years of homeownership, dependent upon their tax credit eligibility. This tax credit would be applied to the purchase of a one or two family house, townhouse, condominium or cooperative apartment that was purchased for one million dollars or less. The homeowner must reside in the property for at least six months of each year to receive the tax credit.
In light of the current housing and economic crisis, this proposal to ease the tax burden paid by homebuyers is a significant step towards stimulating the New York housing market and revitalizing the economy. Over the past year, sales of single family homes in New York State have dropped over 25% and the statewide median sales price has plummeted by more than $22,000 over the past two years.
This State tax credit will work in conjunction with the temporary $8,000 federal housing tax credit, set to expire on December 1, 2009, further stimulating the New York housing market and economy. Increased home purchases will reduce current inventory and lead to production of new housing, resulting in a recovery from the currently depressed building and construction economic sectors. This will ultimately generate additional tax revenue for New York State government from increased income taxes tied to construction employment, increased real estate mortgage recording and real estate transfer taxes, and increased sales tax revenue on items associated with a home purch ase including home furnishings and durable goods such as refrigerators, washing machines, clothes dryers, etc.
Just this year, California enacted a $10,000 homebuyer tax credit, Utah passed a $6,000 new homebuyer tax credit, and 14 other states have introduced home buyer tax credit legislation. New York State is competing with states such as these to lure and retain a young and well-educated workforce and enacting this legislation is a definitive step in the right direction.
In order to retain a qualified workforce, sustain our economy and strengthen our communities, we must make homeownership more affordable to the average homebuyer. I urge you to become a sponsor of A.7125 by Assemblyman Vito Lopez/S.3900 by Senator Joseph Addabbo and help bring this bill to a vote before the end of the 2009 Legislative session. Time is of the essence and the economy in New York State cannot afford to wait.
Thank you.
Wednesday, May 20, 2009
FICO Web Site May Help Homeowners Seeking Loan Modifications -- as reported on Bloomberg.com
This article is just too wonderful and jam packed with useful information and website links -- so with all respect and credit to Bloomberg.com, I am posting it here for your information.
FICO Web Site May Help Homeowners Seeking Loan Modifications
By Alexis Leondis
April 17 (Bloomberg) -- FICO, owner of the credit-scoring formula that many lenders use in making mortgages, is now helping homeowners figure out if they can keep them.
The Minneapolis-based credit-rating company is unveiling a new Web site today, mortgagereliefonline.com, to help struggling homeowners avoid foreclosure. Borrowers complete a confidential online form and should find out within seconds whether they may qualify for loan modifications or refinancing, according to a statement from the company. A free credit counselor approved by the U.S. Housing and Urban Development department will contact the eligible borrower within 48 hours, FICO said.
“This site enables consumers to come to one place and have almost immediate feedback in terms of what they’re eligible for,” said Lisa Nelson, vice president of global scoring for FICO. The company partnered with nonprofit organizations Minneapolis-based Homeownership Preservation Foundation and Houston-based Money Management International, which will provide the credit counseling at no cost to homeowners.
U.S. foreclosure filings rose 24 percent in the first quarter from a year earlier, Irvine, California-based RealtyTrac Inc., a seller of default data, said yesterday. The unemployment rate jumped to 8.5 percent in March, the highest since 1983, as 663,000 jobs were lost, according to the Labor Department.
The initiative by FICO, formerly known as Fair Isaac Corp., follows President Barack Obama’s Making Home Affordable plan to assess who is likely to qualify for foreclosure prevention.
Government Web Site
A government Web site, Makinghomeaffordable.gov, created by the Obama administration in March, also provides an online questionnaire, which analyzes a homeowner’s eligibility for loan modification or refinancing. Links to free HUD-approved counselors are listed on the government’s site for homeowners to contact.
The housing-rescue plan is intended to help as many as 9 million homeowners who may be close to default refinance into cheaper loans. It has two main parts: having lenders lower monthly payments for 3 million to 4 million homeowners by modifying their loan terms; and refinancing the loans of 4 million to 5 million Americans whose properties have dropped in value and may owe more than their homes are worth.
Loan servicers and non-profit credit counseling agencies have been inundated with calls from homeowners concerned about defaulting on their mortgages, said Barry Zigas, director of housing policy for the Washington-based Consumer Federation of America. “The site may be a way to cut through waiting on hold,” Zigas said.
Homeowners should keep in mind that a loan modification or refinancing is ultimately decided by the loan servicer, Zigas said.
Federal Aid
Banks receiving federal aid through the U.S. Troubled Asset Relief Program must also take part in the government’s mortgage modification initiatives, HUD Secretary Shaun Donovan said in an April 9 interview on Bloomberg television.
The mortgage servicing divisions of JPMorgan Chase & Co., Citigroup Inc., GMAC LLC, Morgan Stanley, Credit Suisse Group AG and Wells Fargo & Co. have signed contracts to participate, according to the Making Home Affordable Web site.
Borrowers struggling with their mortgages are better served by working directly with their loan servicer or a nonprofit agency than with for-profit companies that charge fees, said Thomas Kelly, a spokesman for New York-based JPMorgan.
Lenders such as JPMorgan will benefit from the new FICO site because it will streamline the number of consumers looking to modify or refinance their loans, said Nelson of FICO.
Seek Counseling
Homeowners who do not meet the government’s guidelines for foreclosure prevention and are deemed ineligible by FICO’s online form will be recommended to seek debt counseling and also be contacted by a counselor, Nelson said.
About 7.6 million mortgage holders don’t qualify because their mortgages are more than 105 percent of the value of their homes, according to real estate valuation service Zillow.com.
“Without congressional action to allow bankruptcy judges to modify the mortgage on a person’s primary residence, voluntary efforts by lenders will continue to fall short and be outpaced by the rising tide of foreclosures that’s at the root of the recession,” said Charlene Crowell, communications manager for the Center for Responsible Lending, a consumer group in Durham, North Carolina.
-- With reporting by Dan Levy in San Francisco and Dawn Kopecki in Washington. Editors: Rick Levinson, William Ahearn.
To contact the reporter on this story: Alexis Leondis in New York aleondis@bloomberg.net.
Last Updated: April 17, 2009 00:01 EDT
FICO Web Site May Help Homeowners Seeking Loan Modifications
By Alexis Leondis
April 17 (Bloomberg) -- FICO, owner of the credit-scoring formula that many lenders use in making mortgages, is now helping homeowners figure out if they can keep them.
The Minneapolis-based credit-rating company is unveiling a new Web site today, mortgagereliefonline.com, to help struggling homeowners avoid foreclosure. Borrowers complete a confidential online form and should find out within seconds whether they may qualify for loan modifications or refinancing, according to a statement from the company. A free credit counselor approved by the U.S. Housing and Urban Development department will contact the eligible borrower within 48 hours, FICO said.
“This site enables consumers to come to one place and have almost immediate feedback in terms of what they’re eligible for,” said Lisa Nelson, vice president of global scoring for FICO. The company partnered with nonprofit organizations Minneapolis-based Homeownership Preservation Foundation and Houston-based Money Management International, which will provide the credit counseling at no cost to homeowners.
U.S. foreclosure filings rose 24 percent in the first quarter from a year earlier, Irvine, California-based RealtyTrac Inc., a seller of default data, said yesterday. The unemployment rate jumped to 8.5 percent in March, the highest since 1983, as 663,000 jobs were lost, according to the Labor Department.
The initiative by FICO, formerly known as Fair Isaac Corp., follows President Barack Obama’s Making Home Affordable plan to assess who is likely to qualify for foreclosure prevention.
Government Web Site
A government Web site, Makinghomeaffordable.gov, created by the Obama administration in March, also provides an online questionnaire, which analyzes a homeowner’s eligibility for loan modification or refinancing. Links to free HUD-approved counselors are listed on the government’s site for homeowners to contact.
The housing-rescue plan is intended to help as many as 9 million homeowners who may be close to default refinance into cheaper loans. It has two main parts: having lenders lower monthly payments for 3 million to 4 million homeowners by modifying their loan terms; and refinancing the loans of 4 million to 5 million Americans whose properties have dropped in value and may owe more than their homes are worth.
Loan servicers and non-profit credit counseling agencies have been inundated with calls from homeowners concerned about defaulting on their mortgages, said Barry Zigas, director of housing policy for the Washington-based Consumer Federation of America. “The site may be a way to cut through waiting on hold,” Zigas said.
Homeowners should keep in mind that a loan modification or refinancing is ultimately decided by the loan servicer, Zigas said.
Federal Aid
Banks receiving federal aid through the U.S. Troubled Asset Relief Program must also take part in the government’s mortgage modification initiatives, HUD Secretary Shaun Donovan said in an April 9 interview on Bloomberg television.
The mortgage servicing divisions of JPMorgan Chase & Co., Citigroup Inc., GMAC LLC, Morgan Stanley, Credit Suisse Group AG and Wells Fargo & Co. have signed contracts to participate, according to the Making Home Affordable Web site.
Borrowers struggling with their mortgages are better served by working directly with their loan servicer or a nonprofit agency than with for-profit companies that charge fees, said Thomas Kelly, a spokesman for New York-based JPMorgan.
Lenders such as JPMorgan will benefit from the new FICO site because it will streamline the number of consumers looking to modify or refinance their loans, said Nelson of FICO.
Seek Counseling
Homeowners who do not meet the government’s guidelines for foreclosure prevention and are deemed ineligible by FICO’s online form will be recommended to seek debt counseling and also be contacted by a counselor, Nelson said.
About 7.6 million mortgage holders don’t qualify because their mortgages are more than 105 percent of the value of their homes, according to real estate valuation service Zillow.com.
“Without congressional action to allow bankruptcy judges to modify the mortgage on a person’s primary residence, voluntary efforts by lenders will continue to fall short and be outpaced by the rising tide of foreclosures that’s at the root of the recession,” said Charlene Crowell, communications manager for the Center for Responsible Lending, a consumer group in Durham, North Carolina.
-- With reporting by Dan Levy in San Francisco and Dawn Kopecki in Washington. Editors: Rick Levinson, William Ahearn.
To contact the reporter on this story: Alexis Leondis in New York aleondis@bloomberg.net.
Last Updated: April 17, 2009 00:01 EDT
Thursday, May 7, 2009
Senate Approves Measure to Reduce Home Foreclosures
May 7, 2009 - Today the New York Times reported that once again the Bankruptcy Reform Bill was tossed away - but the Senate did vote to approve the foreclosure situation somewhat with new legislation. Did anyone make note of the results of the last legislative efforts from last summer and called, "Hope for Homeowners"?
It's somewhat buried within the following article, but I quote here: "Only one mortgage was modified (emphasis added) under the program, which lawmakers had hoped would help as many as 400,000 homeowners." HELLO! Please read more below. Thank you New York Times for the report. Found at http://www.nytimes.com/2009/05/07/us/politics/07housing
Senate Approves Measure to Reduce Home Foreclosures
By DAVID M. HERSZENHORN
WASHINGTON — The Senate on Wednesday approved a bill that would expand federal efforts to prevent mortgage foreclosures, shield mortgage service companies from lawsuits if they participate in federal loan modification programs, and give renters of foreclosed properties at least 90 days’ notice before eviction.
The bill included an expansion of federal efforts to combat homelessness, which has risen during the economic downturn.
The Senate bill, however, did not include Democrats’ most ambitious proposal to aid troubled homeowners: a provision that would have allowed bankruptcy judges to modify the terms of primary mortgages. That provision, championed by Senator Richard J. Durbin, Democrat of Illinois, failed last week to get the 60 votes needed to advance.
The broader housing measure, which the Senate approved on Wednesday, 91 to 5, must now be reconciled with similar legislation approved by the House in March. The House version included the bankruptcy provision but the speaker, Nancy Pelosi, said it would be removed.
So far, the federal programs to reduce foreclosures have largely fallen flat, particularly the Hope for Homeowners program approved by Congress last summer. Only one mortgage was modified under the program, which lawmakers had hoped would help as many as 400,000 homeowners.
The new Senate bill does not include additional money to aid mortgage borrowers, but it does draw $2.3 billion from the Treasury’s $700 billion financial bailout fund for various provisions.
The bill also would increase the borrowing authority for the Federal Deposit Insurance Corporation to $100 billion from $30 billion, a move that will save banks billions of dollars by reducing the extra premiums that they would have had to pay to shore up the deposit insurance fund.
The bill also extends through 2013 the $250,000 maximum value of deposits insured by the F.D.I.C. Before the financial crisis, the maximum amount insured had been $100,000.
“This bill is principally designed to provide that long sought-for relief for people who are facing foreclosure,” Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the banking committee, said at a news conference after the vote. “The bill does other things, but certainly, a major target is to deal with peoples’ housing issues and try to stem the tide.”
Senator Jack Reed, Democrat of Rhode Island, a main proponent of the bill, had a strong role in the homeless prevention provisions and others that would give the Treasury secretary more latitude in deciding when to use taxpayer money to buy stock in financial institutions receiving bailout assistance.
Mr. Reed, at the news conference with Mr. Dodd, stressed the effort to fight homelessness. “We’re facing the greatest crisis in homelessness since the Great Depression,” he said, citing news accounts of tent cities appearing.
The Senate bill would provide $2.2 billion for homelessness assistance and up to $440million for prevention.
It's somewhat buried within the following article, but I quote here: "Only one mortgage was modified (emphasis added) under the program, which lawmakers had hoped would help as many as 400,000 homeowners." HELLO! Please read more below. Thank you New York Times for the report. Found at http://www.nytimes.com/2009/05/07/us/politics/07housing
Senate Approves Measure to Reduce Home Foreclosures
By DAVID M. HERSZENHORN
WASHINGTON — The Senate on Wednesday approved a bill that would expand federal efforts to prevent mortgage foreclosures, shield mortgage service companies from lawsuits if they participate in federal loan modification programs, and give renters of foreclosed properties at least 90 days’ notice before eviction.
The bill included an expansion of federal efforts to combat homelessness, which has risen during the economic downturn.
The Senate bill, however, did not include Democrats’ most ambitious proposal to aid troubled homeowners: a provision that would have allowed bankruptcy judges to modify the terms of primary mortgages. That provision, championed by Senator Richard J. Durbin, Democrat of Illinois, failed last week to get the 60 votes needed to advance.
The broader housing measure, which the Senate approved on Wednesday, 91 to 5, must now be reconciled with similar legislation approved by the House in March. The House version included the bankruptcy provision but the speaker, Nancy Pelosi, said it would be removed.
So far, the federal programs to reduce foreclosures have largely fallen flat, particularly the Hope for Homeowners program approved by Congress last summer. Only one mortgage was modified under the program, which lawmakers had hoped would help as many as 400,000 homeowners.
The new Senate bill does not include additional money to aid mortgage borrowers, but it does draw $2.3 billion from the Treasury’s $700 billion financial bailout fund for various provisions.
The bill also would increase the borrowing authority for the Federal Deposit Insurance Corporation to $100 billion from $30 billion, a move that will save banks billions of dollars by reducing the extra premiums that they would have had to pay to shore up the deposit insurance fund.
The bill also extends through 2013 the $250,000 maximum value of deposits insured by the F.D.I.C. Before the financial crisis, the maximum amount insured had been $100,000.
“This bill is principally designed to provide that long sought-for relief for people who are facing foreclosure,” Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the banking committee, said at a news conference after the vote. “The bill does other things, but certainly, a major target is to deal with peoples’ housing issues and try to stem the tide.”
Senator Jack Reed, Democrat of Rhode Island, a main proponent of the bill, had a strong role in the homeless prevention provisions and others that would give the Treasury secretary more latitude in deciding when to use taxpayer money to buy stock in financial institutions receiving bailout assistance.
Mr. Reed, at the news conference with Mr. Dodd, stressed the effort to fight homelessness. “We’re facing the greatest crisis in homelessness since the Great Depression,” he said, citing news accounts of tent cities appearing.
The Senate bill would provide $2.2 billion for homelessness assistance and up to $440million for prevention.
Sunday, April 19, 2009
NYC Budget Update - As reported by NYSAR
City budget update
On April 1, 2009, City Council Speaker Christine Quinn released the council’s Fiscal Year 2010 Preliminary Budget Response. This document is a result of a month of testimony by city agencies and the public.
The council projects an even bleaker fiscal picture for New York City, forecasting tax revenue in the current and next fiscal year to be $438 million lower than the mayor’s estimates. The council also projects that revenues from the real property transfer tax and mortgage recording tax will decrease 43.4 percent and 48.6 percent, respectively, in the current fiscal year with further declines anticipated in Fiscal Year 2010.
The mayor will release his executive budget by April 30, 2009, whereupon the city council will hold another series of public hearings. The fiscal year 2010 budget must be passed by June 30, 2009.
On April 1, 2009, City Council Speaker Christine Quinn released the council’s Fiscal Year 2010 Preliminary Budget Response. This document is a result of a month of testimony by city agencies and the public.
The council projects an even bleaker fiscal picture for New York City, forecasting tax revenue in the current and next fiscal year to be $438 million lower than the mayor’s estimates. The council also projects that revenues from the real property transfer tax and mortgage recording tax will decrease 43.4 percent and 48.6 percent, respectively, in the current fiscal year with further declines anticipated in Fiscal Year 2010.
The mayor will release his executive budget by April 30, 2009, whereupon the city council will hold another series of public hearings. The fiscal year 2010 budget must be passed by June 30, 2009.
Latest Bankruptcy Conference in New Jersey
So Friday found me blurry eyed having worked all night prior at my Manhattan office - driving to a nine a.m. bankruptcy conference to learn what's new and exciting.
OK, I can think of a hundred at least other ways of spending my time - no less working on something else - than attending another bankruptcy conference. But I seem to never stop having to know more about what is going on. What if anything is changing in this market? How can I learn something else that can be of use...
So - a few things to report. The Third Circuit is sypathetic to debtors. That's the good news. The bad news - take a look at the means test requirements. That's enough to make anyone take pause, no less an attorney as to why and how a person can qualify to file bankruptcy. The link I've given here to the New Jersey Bankruptcy Court page has some valuable information for homeowners and others who find themselves distressed by their current economic problems.
http://www.njb.uscourts.gov/ The bankruptcy legislation that I spoke about in my last post is still of the utmost importance to be passed. Please read - write, call, e-mail your representatives in support of this legislation.
On another subject - somewhat related - what about just walking away from real estate property that can no longer be afforded?
I am frankly amazed at the number of phone calls I receive from people thinking that the bad investments they have made in real estate should somehow just be forgiven and forgot by everyone involved in them. I imagine that folks think that how easy it was for them to be wrongly qualified to purchase - it should be just as easy for them to walk away from it. Something akin to - you thought I could afford this - well I can't - so here, take it back and don't bother me again.
It isn't so easy. So....if you find yourself in that situation - please call my office and let's talk about what options may be available...212.461.4240.
Let's talk soon.
OK, I can think of a hundred at least other ways of spending my time - no less working on something else - than attending another bankruptcy conference. But I seem to never stop having to know more about what is going on. What if anything is changing in this market? How can I learn something else that can be of use...
So - a few things to report. The Third Circuit is sypathetic to debtors. That's the good news. The bad news - take a look at the means test requirements. That's enough to make anyone take pause, no less an attorney as to why and how a person can qualify to file bankruptcy. The link I've given here to the New Jersey Bankruptcy Court page has some valuable information for homeowners and others who find themselves distressed by their current economic problems.
http://www.njb.uscourts.gov/ The bankruptcy legislation that I spoke about in my last post is still of the utmost importance to be passed. Please read - write, call, e-mail your representatives in support of this legislation.
On another subject - somewhat related - what about just walking away from real estate property that can no longer be afforded?
I am frankly amazed at the number of phone calls I receive from people thinking that the bad investments they have made in real estate should somehow just be forgiven and forgot by everyone involved in them. I imagine that folks think that how easy it was for them to be wrongly qualified to purchase - it should be just as easy for them to walk away from it. Something akin to - you thought I could afford this - well I can't - so here, take it back and don't bother me again.
It isn't so easy. So....if you find yourself in that situation - please call my office and let's talk about what options may be available...212.461.4240.
Let's talk soon.
Monday, March 16, 2009
TELL YOUR SENATORS TO SUPPORT SENATE BILL 61; THE HELPING FAMILIES SAVE THEIR HOMES IN BANKRUPTCY ACT OF 2009
Over 6,600 American families a day are losing their homes to foreclosure. In the next five years, over 8,000,000 American family homes will be lost to foreclosure, unless we do something now. If we don’t, the value of all of our homes will keep going down and our neighborhoods will suffer.
DON’T LET THE BANKS BLOCK THIS NO-COST ACTION TO SAVE FAMILY HOMES AND OUR COMMUNITIES AND HELP RESTORE OUR NATION’S ECONOMY
Our Senators have the opportunity to pass legislation that would allow courts to change bad mortgages so struggling homeowners can save their homes from foreclosure. The result? Fewer foreclosures and more stable home prices for all of us.
Tell your Senators to support Senate Bill 61 - the Helping Families Save Their Homes in Bankruptcy Act of 2009. Reduce home foreclosures at no cost to taxpayers.
Call your United States Senators toll free: 877.354.4958
Or email them at: www.nacba.org/TellCongress
The mortgage modification proposal has been endorsed by leading economists, 22 state Attorneys General, state and local elected officials, newspaper editorial boards from around the country and nearly 100 leading national organizations representing seniors, consumers, religious affiliations, financial professionals, working families, and civil rights and housing groups.
Provided for by the National Association of Consumer Bankruptcy Attorneys, Inc., a nationwide organization dedicated to protecting the rights of honest, hard-working, financially distressed Americans. Go to www.nacba.org/S61 for more information about the bill and how you can help get it passed.
DON’T LET THE BANKS BLOCK THIS NO-COST ACTION TO SAVE FAMILY HOMES AND OUR COMMUNITIES AND HELP RESTORE OUR NATION’S ECONOMY
Our Senators have the opportunity to pass legislation that would allow courts to change bad mortgages so struggling homeowners can save their homes from foreclosure. The result? Fewer foreclosures and more stable home prices for all of us.
Tell your Senators to support Senate Bill 61 - the Helping Families Save Their Homes in Bankruptcy Act of 2009. Reduce home foreclosures at no cost to taxpayers.
Call your United States Senators toll free: 877.354.4958
Or email them at: www.nacba.org/TellCongress
The mortgage modification proposal has been endorsed by leading economists, 22 state Attorneys General, state and local elected officials, newspaper editorial boards from around the country and nearly 100 leading national organizations representing seniors, consumers, religious affiliations, financial professionals, working families, and civil rights and housing groups.
Provided for by the National Association of Consumer Bankruptcy Attorneys, Inc., a nationwide organization dedicated to protecting the rights of honest, hard-working, financially distressed Americans. Go to www.nacba.org/S61 for more information about the bill and how you can help get it passed.
Thursday, March 5, 2009
In today’s Wall Street Journal, http://online.wsj.com/home-page there is a superb article by Nick Timiraos titled, “Mortgage-Assistance Program Offers Disparate Treatment Depending on Goals and Circumstances”.
With respect to the full article, I am excerpting a small section of it because it details important components of the program. Mr. Timiraos writes:
….
The program has two main components. One provision will allow diligent borrowers who are current on their mortgage payments but have little or no equity in their homes to refinance their first mortgage to take advantage of current interest rates, which have fallen to near record lows. That is designed to allow responsible borrowers -- mainly those who have been hurt by falling home prices -- to benefit from the current climate. Lenders won't refinance borrowers who don't have equity in their homes.
With respect to the full article, I am excerpting a small section of it because it details important components of the program. Mr. Timiraos writes:
….
The program has two main components. One provision will allow diligent borrowers who are current on their mortgage payments but have little or no equity in their homes to refinance their first mortgage to take advantage of current interest rates, which have fallen to near record lows. That is designed to allow responsible borrowers -- mainly those who have been hurt by falling home prices -- to benefit from the current climate. Lenders won't refinance borrowers who don't have equity in their homes.
The second component involves modifying mortgage loans to lower monthly payments to 31% of the borrowers' gross monthly income, mainly by reducing the interest rate on the loan. This effort would target borrowers who are falling behind on their mortgage payments or who are in danger of falling behind. The government will provide financial incentives to lenders and mortgage servicing companies to encourage them to offer the reduced payment plans, which last for five years.
But as with any broad effort, homeowners are treated unevenly in the programs. The refinance provision is open only to borrowers who have loans that are owned by Fannie Mae or Freddie Mac. That excludes large numbers of borrowers with subprime and other exotic mortgages sold to investors; and borrowers with so-called "jumbo" loans that are too large for government backing. Those groups will be eligible for the modification part of the plan, but only for loans up to $729,750.
Borrowers who owe more than 105% of the current value of their home also won't be eligible for refinancing. That means that fewer borrowers in the nation's most over-heated housing markets, including California and Florida, and in some of the most depressed market in the Midwest can take advantage of the program. "Most of the people we serve are too far underwater to take advantage of this," says Dan Elsea, a mortgage broker in Detroit.
Nationally, 25% of mortgage holders have conforming loans that are within the 80% to 105% loan-to-value ratio needed to qualify for the program, according to real estate Web site Zillow.com. But that number falls in certain high-cost housing markets that have seen big price declines. In Los Angeles, for example, just 9% of mortgage holders are eligible to refinance, while 8% of conforming borrowers are too far underwater, according to Zillow.com.
….
Tuesday, March 3, 2009
Open Letter to our Legislators
As my elected official, you should know that I strongly support President Obama's initiatives to help millions of American homeowners and reduce the massive wave of home foreclosures that are fueling today's national economic crisis. I urge you to adopt the President's plan to prevent home foreclosures that do not need to happen. A key part of the Obama plan would permit distressed homeowners to seek home loan modifications in bankruptcy court.
I do not think that what has been tried so far to stop the foreclosure crisis is working. If families are going to stay in their homes and avoid foreclosure, it seems clear that court-supervised mortgage modifications are necessary. We have wasted too much time already on half measures and other dead-end efforts that have done nothing to slow down the runaway foreclosure crisis.
I particularly like the judicial modification approach because it can prevent hundreds of thousands of foreclosures without spending one penny of taxpayer money. Is it too much to ask that you take this no-cost action for homeowners? After all, you have seen fit to spend billions of dollars on bailing out banks, car companies, brokerage firms and other corporate giants. It's time that we face facts: We can't end the financial crisis without ending the rising tide of foreclosures.
At a time when an estimated 6,600 families are losing their home to foreclosure each and every day, there is no time for delay. I urge you in the strongest possible terms to support this urgently needed legislation.
American families are reeling under the weight of the recession today. At a point where you can help lighten that load and save the homes of many Americans, I am asking you to support judicial modification of mortgages. This nation needs to put the housing crisis behind it.
As my elected official, you can be assured that I will be watching with great interest to see how you come down on this issue of great importance to my family, my neighborhood and my community.
Please keep me informed about how you vote on this important issue.
Sincerely,
Michele A. Peters, Esq.
Monday, March 2, 2009
Partying on with our money!
Another bailout pays for their party. Did you know?
The Northern Trust Company has recently received $1.6 billion from the citizens of the United States as part of the government's bailout program.
Recently, the Northern Trust spent millions of dollars to sponsor a golf tournament (The Northern Trust Open at the Riviera Country Club in Los Angeles). In connection therewith, the company incurred the following expenses:
- Airfare for hundreds of clients and employees to Los Angeles.
- Hotel rooms, including rooms at very upscale properties, for hundreds of people.
- Dinner and cocktail parties.
- Chicago concert.
- Earth, Wind, & Fire concert.
- Sheryl Crow concert.
Northern Trust responded that it did not ask for the $1.6 billion but took it only to help the government reach its goal of having the participation of all major banks. It should be noted that Northern Trust is also current with its repayment plan. See Bailout Bank Blows Millions Partying in L.A., TMZ.com, Feb. 24, 2009; Stephen Bernard, Northern Trust faces scrutiny for event spending, AP, Feb. 25, 2009; and Northern Trust, An Open Letter to Northern Trust Shareholders, Clients and Staff, Feb. 24, 2009.
Why do I post this? Because I RESENT my tax dollars going to these institutions. If any corporation is in need of our "bail out" dollars - they should be in bankruptcy and under the supervision of the court and the U.S. Trustees who will ensure that the money goes to the proper places.
Friday, February 20, 2009
6 things to know about the Economic Stimulus package
Here are six things you need to know about the Economic Stimulus package which includes the much discussed - $8,000 first-time home buyer tax credit.
1. Eight grand, new first-time home buyers: The tax credit included in the economic stimulus legislation is much narrower than the original proposed amount. This credit is equivalent to 10 percent of the purchase price of the home--although it's capped at $8,000--and applies only to first-time home buyers and principal residences. It does not have to be repaid.
2. First time buyers defined: For the purpose of legislation, a "first-time home buyer" is someone who hasn't owned a principal residence for three years before purchasing a house. (The date of purchase is considered the day that title is transferred.) If you have owned a vacation home--but not a principal residence--within the past three years, you would still qualify for the credit. You would have to prove where your principal residence has been during that time.
3. 2009 buyers only: Only those who purchase a home on or after January 1 and before December 1, 2009 are eligible for the credit.
4. Income limits: The tax credit is subject to income limitations. Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit, that's $150,000 for married couples. Those earning more than these thresholds may be eligible for reduced credits.
5. Refundable: Because the tax credit is "refundable," qualified buyers can take advantage of it even if they don't have much tax liability.
6. Recapture: Buyers have to own the home for at least three years in order to capitalize on the credit. If they sell the home before then, they will have to return the credit to the government. (Exceptions will be made in certain cases, such as death or divorce.)
1. Eight grand, new first-time home buyers: The tax credit included in the economic stimulus legislation is much narrower than the original proposed amount. This credit is equivalent to 10 percent of the purchase price of the home--although it's capped at $8,000--and applies only to first-time home buyers and principal residences. It does not have to be repaid.
2. First time buyers defined: For the purpose of legislation, a "first-time home buyer" is someone who hasn't owned a principal residence for three years before purchasing a house. (The date of purchase is considered the day that title is transferred.) If you have owned a vacation home--but not a principal residence--within the past three years, you would still qualify for the credit. You would have to prove where your principal residence has been during that time.
3. 2009 buyers only: Only those who purchase a home on or after January 1 and before December 1, 2009 are eligible for the credit.
4. Income limits: The tax credit is subject to income limitations. Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit, that's $150,000 for married couples. Those earning more than these thresholds may be eligible for reduced credits.
5. Refundable: Because the tax credit is "refundable," qualified buyers can take advantage of it even if they don't have much tax liability.
6. Recapture: Buyers have to own the home for at least three years in order to capitalize on the credit. If they sell the home before then, they will have to return the credit to the government. (Exceptions will be made in certain cases, such as death or divorce.)
Monday, January 19, 2009
What a Difference 4 Months Make
On this very historical Martin Luther King Jr. Day - the eve of Barack Obama's inauguration, the feeling in the City is optimistic for the first time in many, many months.
The snow is falling and still there is a smile on so many New Yorkers' faces. We can all use a good dose of optimism and I welcome our new administration with open arms.
The snow is falling and still there is a smile on so many New Yorkers' faces. We can all use a good dose of optimism and I welcome our new administration with open arms.
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