Dog Days of August

Here we are coming to the final two weeks of August and what is the hottest summer I can remember in many years.

It's been a slow month and I look forward to the cooler days of Autumn and what I hope for is better news across the country with our economy. 

What YOU Need to Know - "Real Estate Education" - New York State - Brokers & Salespersons

The following information is reprinted in its entirety from the Department of State's website for your information:

The Department of State’s “Real Estate Education” Campaign

The following are some basic facts that anyone looking to buy, sell or rent should know. 

These facts are part of a new brochure that is available for download on the Department of State homepage, http://www.dos.state.ny.us/.  [This is the link to the brochure itself.]

What you need to know before entering into a real estate transaction:

1. All real estate professionals[1] must be licensed by the Department of State, and they must renew their licenses every two years.
2. To check if a person who represents themselves as a real estate salesperson or broker is, in fact, licensed by the state of New York, you can search the Department of State website, http://www.dos.state.ny.us/ by clicking on the “eAccessNY” link [this is the direct link to the search area for licensed real estate professionals] and entering the name of the person or by calling (518) 474-4429.
3. Buyers, sellers, renters and landlords all have the right to hire their own broker in a real estate transaction.
4. You should not assume that an agent is acting solely on your behalf. Unless you have entered into a written agreement with the broker, he or she could be representing the other party to the transaction.
5. When you have hired an agent to represent you, he or she owes you the following duties: reasonable care, undivided loyalty, confidentiality, full disclosure and the ability to provide you with an accounting of any money collected or expended on your behalf.
6. Real estate salespeople and brokers must disclose whom they are representing in the transaction at the time of their first contact with you.
7. Commission fees are negotiable. You have the right to negotiate the amount of the commission to be paid to a broker or salesperson. There is no such thing as a mandatory commission rate.
8. If a broker collects fees that you owe to the landlord or seller, such as a deposit or the first month’s rent, the broker has an obligation to separate that money from his or her own. If the money is not immediately provided to the landlord or seller, the broker must put the money into a separate escrow account until the transaction has been closed. If the transaction does not close, the broker cannot keep the money and must return it to you.
9. Non-refundable commission deposits are not permissible. A broker earns a commission when he or she finds a person who is ready, willing and able to purchase the property or rent the apartment. Only if the broker has assisted the parties in reaching an agreement on all of the material elements of the deal has he or she earned a commission.
10. Real estate salespeople and associate brokers work under the oversight and supervision of the broker with whom they are associated. You have the right to contact the broker with any concerns about the transaction or the agent’s handling of the transaction. Some salespeople and associate brokers advertise themselves as a “team” or “group.” This is not a separate company. These agents still work for a broker who is responsible for supervising their activity.

The brochure also includes information on where New Yorkers can turn if they believe that they have been a victim of a loan scam or of abusive lending practices. New Yorkers are encouraged to visit the Department of State’s website if they have any further questions about what constitutes illegal or dishonest actions by licensed real estate professionals – and to report these actions to the Department if they experience them.

[1] To become a licensed real estate salesperson, an individual must take specific coursework and pass an exam on state real estate law and practice. To work in New York state, salespersons must be associated with a real estate broker. Real estate brokers are individuals who, after gaining two years of experience in real estate sales, take additional coursework and exams in order to own or operate their own brokerage firms. Real estate appraisers must take required coursework and exams to become certified in estimating the value of real property.

###

Additional news available at http://www.dos.state.ny.us/about/new2.htm.
New York State Department of State | info@dos.state.ny.us | 518.486.9846 | 212.417.5801

Late Breaking News - In NYC You Can See if Someone Has Posted A Doc Against Your Property

July 6, 2010 the New York City Department of Finance implemented a Notice of Recorded Documents Program.  Owners of property in Manhattan, Bronx, Brooklyn, Queens, or Staten Island can register to receive notification when a deed or mortgage (or related) document has been recorded against their property. This program was designed to alert registered property owners or their designees when documents are recorded without their knowledge so that they can take steps to attempt to limit the harm caused by such recording.  

An owner’s agent (including a child, spouse, or domestic partner of owner if listed as a designee), the managing agent, the property owner's attorney, the lien holder, and the executor or administrator of the estate of the owner or lien holder of the property may also receive notification if registered. 

To find out more about this program, you can go to the New York City Department of Finance website at www.nyc.gov/finance  or ACRIS webpage at www.nyc.gov/acris and click on the Recorded Document Notification link. to register.

Fannie Mae - New Program for Forclosure Help - starts 8/1/2010

Fannie Mae Introduces HAFA Program - You can read the announcement here.


On Tuesday, June 1, Fannie Mae issued Servicing Guide Announcement SVC-2010-07, introducing Fannie Mae's Home Affordable Foreclosure Alternatives (HAFA) Program. It, like Treasury's Home Affordable Foreclosure Alternatives Program (as described in Supplemental Directive 09-09 Revised), is designed to mitigate the impact of foreclosures on borrowers who are eligible for a loan modification under the Home Affordable Modification Program (HAMP) but ultimately are unsuccessful in obtaining one.

Program Features:

The Fannie Mae Home Affordable Foreclosure Alternatives Program, which becomes effective August 1, 2010, simplifies and streamlines the use of short or "preforeclosure" sale and deed-in-lieu of foreclosure (DIL) options on HAMP-eligible loans by incorporating the following unique features:

• Complements HAMP by providing alternatives for borrowers who are HAMP eligible (including borrowers facing imminent default);

• Allows the borrower to receive pre-approved short sale terms prior to the property listing;

• Prohibits the servicer from requiring, as a condition of approving the short sale, a reduction in the real estate commission agreed upon in the listing agreement;

• Releases the successful HAFA borrower from future liability for the debt;

• Uses standard processes, documents, and timeframes;

• Provides financial incentives to borrowers, servicers and subordinate lienholders; and

• Utilizes verified borrower financial and hardship information collected in conjunction with HAMP, eliminating the need for additional eligibility analysis.

Copy machines - SECURITY RISK!

One of my fellow members of the state bar association forwarded this link to a CBS News video which demonstrates that copy machines built since 2002 contain hard drives which maintain a copy of every document. 

Talk about a security risk waiting to happen!

NYC first in the nation for mortgage fraud

New York City was first in the nation for mortgage fraud last year, according to a report by LexisNexis Mortgage Asset Research Institute, released on April 26, 2010. To review the report, please click here.  The metro area accounted for 12 percent of all suspicious activity reports filed with the Financial Crimes Enforcement Network in 2009, squarely defeating second-ranked Los Angeles, whose suspicious activity reports accounted for 8 percent of the nation's total.

While the LexisNexis did not break down its city data further, a recent report from First American CoreLogic found that South Jamaica, Queens was first in the nation for mortgage fraud between 2004 and 2009. On the whole, New York state has seen a sharp increase in mortgage fraud over the past few years, according to LexisNexis. This year, the state -- ranked 18th in 2007 -- took second place, behind Florida. 

I always warn persons about mortgage fraud and get help quick schemes....please read more at my law site or contact our office if you are in need of assistance.

3.5% Closing Cost Assistance and Appliance Incentive Extended Through June 30, 2010

Fannie Mae is extending the 3.5% incentive for homebuyers who purchase and close on a Fannie Mae-owned home by June 30, 2010. Buyers purchasing properties listed on HomePath.com will continue to be offered an incentive of up to 3.5% of the final sales price to be used towards one of the following:
→Closing costs
→The purchase of new Whirlpool® appliances
→A mix of closing costs and appliances, at the buyer's discretion, up to the maximum 3.5%.

Eligibility
To be eligible for this incentive:
* Property sale must close on or before June 30, 2010
* Buyer must be an owner-occupant (second homes are eligible as long as they are owner-occupied) -- investors are excluded.

4/28/10 through 4/30/10 NASSAU COLISEUM - MORTGAGE MODIFICATIONS - Bank Open House

     There is an open house at the Nassau Coliseum this Wednesday, Thursday & Friday, 4/28-4/30/10 from 1PM to 7:30PM  where  most major lenders will be available to discuss mortgage modifications. There was an article in Newsday, last Friday April 23, 2010, "EVENT OFFERS HELP TO HARD-PRESSED HOMEOWNERS" by Ellen Yan which states:

     "Next week, the Nassau Coliseum will host a marathon - three days of face-to-face negotiations between lenders and distressed homeowners.   Borrowers can try to make on-the-spot loan modifications with their mortgage holders...."

    All mortgagees are invited to come, bring all their records, bills, proof of income (two most recent pay stubs), last two mortgage payment statements, layoff notices, credit card bills, utility bills etc. and try to work out modifications.

Short Sales in New York - Deficiency Judgments

As an attorney I have been working with homeowners in the luxury real estate market in Manhattan.  As we have been completing short sales, the banks have waived the deficiency judgments on loans that are close to the sale price.  However, in a recent Bank of America short sale - the loss is in excess of 500K -- I was presented with the following language that the bank would not waive the deficiency unless state law required it.

Is there a New York State law that requires waiver of the deficiency in a short sale?  The short answer is no. 

How contrary is this?  When you access the New York State Banking department's website, it specifically states:

•  "Short Sale:  The lender lets the borrower sell the house for less than the outstanding loan amount, takes the proceeds and forgives the remaining debt."

However after I called the Banking Department about this claim, no one could answer my questions, and they suggested that I speak with an attorney.  Interesting.

After speaking with several real estate attorneys, and the New York City Bar's attorneys who specialize in foreclosures - the answer is the same -- there is no law that says the bank must waive the deficiency judgment.  It seems to me as a reasonable person, that the bank would recognize that after all the work performed to acquire a buyer for a property at a higher amount then the bank would be able to receive in foreclosure, that waiving a deficiency is a better choice than taking the bankruptcy route.  But then again, who ever said that the people at the banks are reasonable?

Keep this in mind - bankruptcy is the option to all of this and in New York State there is no law that says (at the time of this post) that a bank must waive the deficiency against the homeowner for the amount of the loan that will not be paid off in a proposed short sale.

At my law site I have further information regarding foreclosures, short sales, and loan modifications.

New Short Sale Guidelines

The federal government recently announced the short sale program guidelines for the Home Affordable Foreclosure Alternatives (HAFA) program which will go into effect on Monday, April 5, 2010. 

Bank of America Home Loans is implementing HAFA, the program designed to help those customers who were not eligible for the Home Affordable Modification Program (HAMP) or any other modification.  For more detailed information on the HAFA program, go to the National Association of Realtors site.

The HAFE program provides incentives for short sales and what are known as a deed-in-lieu of foreclosure on a loan eligible for modification under the HAMP program.

A list of servicers participating in the HAMP program - including HAFA - can be found at the Making Home Affordable website.  

CHASES' website regarding short sales can be accessed for further information.