For some nifty tips, you can view:
Winter 2009/2010 which includes tips on online banking and ideas for growing a small business.
Enjoy!
Monday, March 15, 2010
Tuesday, March 2, 2010
NAR issues brochure to help reduce short sale stress
On April 5, 2010, the U.S. government will implement the
Home Affordable Foreclosure Alternatives Program (HAFA). The HAFA helps
homeowners who are unable to retain their home under the Home
Affordable Modification Program by simplifying and streamlining the use
of short sales and deeds-in-lieu of foreclosures. Homeowners must meet
certain requirements to participate and incentive payments are provided
to homeowners and servicers. To help REALTORS understand HAFA and its
guidelines, the National Association of REALTORS ("NAR") has released an
informational brochure available through the links below:
NAR’s press release
HAFA brochure
NAR’s press release
HAFA brochure
Friday, February 12, 2010
Legislation Protecting Prospective Renters Passed By NY City Council
Legislation Protecting Prospective Renters Passed By NY City Council
MANHATTAN — The City Council passed
legislation on Thursday requiring that landlords provide greater
transparency during the tenant screening process.
Landlords are routinely sold copies of
housing court histories that misrepresent prospective tenants, which
leads to deserving renters being denied housing, the City Council said.
Because renters often have no idea that the landlords are obtaining
these reports, they are powerless to correct any inaccurate information.
Housing court data is reported by name,
not social security number, causing landlords to frequently get the
wrong reports, the City Council said.
The reports many landlords obtain also
fail to disclose the context of a renter’s appearance in housing court.
If someone goes to court because they are involved in a rent strike to
protest adverse living conditions, the report simply shows a housing
court action for non-payment.
“Prospective tenants across our city have
been denied by landlords for the simple fact that their tenant
screening report shows a housing court action,” said Council Speaker
Christine C. Quinn.
"By streamlining the process for tenants
and giving them easier access to reports they are entitled to view, we
can ensure that all New Yorkers are given a fair chance to find a new
home.”
The new law called “Tenant Fair Chance Act,” requires
landlords to tell applicants which company was providing the records, so
they can get their own copies and correct problems.
Landlords could be fined $500 for violations, but Quinn said the
real estate industry is not opposing the bill.
“Today, we are taking another step to
ensure that the deck is not stacked against the renters of this city,”
Council Member Dan Garodnick said in a press release.
“By improving the accuracy and
transparency of tenant screening reports, we are making sure that
tenants who assert their rights in court don't face a backlash for it
the next time they try to rent an apartment.”
Friday, January 22, 2010
THE HAMP HOT LINE WORKS! ONE PHONE CALL CAN MAKE A DIFFERENCE
Don't be threatened when a banker tells you the U.S. Treasury has made a
determination that stops your program - they may be wrong - as CHASE was wrong
this week.
A big applause for everyone working at the Making Home Affordable Program. https://www.hmpadmin.com/portal/about/overview.html
As you may know, I am an attorney working with short sales in Manhattan, and assisting some home owners in loan modifications. Both programs are frustrating, irritating, hair-pulling, down-right horrible - but there is nothing more satisfying than the feeling when it works!
Since July 2009, I have represented a single homeowner who faced the loss of her company and was struggling building a new company and needed to apply for a home loan modification because of changed circumstances and the loss of income.
One loan- from CHASE - which qualified under the Home Affordable Modification Program ("HAMP") limit of $729,750.00 - for a modification.
Three months into the process, CHASE lost the short sale package - reason: change of computer systems. The process began again, from the beginning.
The homeowner received nearly daily phone calls (mostly rude) from the bank's collection agency demanding payments - the homeowner kept explaining that they were in the home modification program - no department of CHASE reports to the other she was told and the phone calls would continue - which they did through October.
November rolled around and CHASE again lost several of the documents -- again they are re-sent....December arrived, CHASE doesn't know what happened to those documents, they need to be sent again and this time, they need to be embellished. More info supplied.
By the end of December, CHASE reports that all seems to be fine and that they are waiting for a "representative" to be assigned.
Encouraged by the press releases and statements from the Obama administration demanding to know why only 5% of all loan modifications are approved, and asking for twice-monthly reports on status from the banks, I am hopeful that a modification approval will be eminently forthcoming.
I'm "buddies" now with "Eric", "David" and "Jennifer" with whom I've spoken over the past several months and they have shared that they are sitting in the same office together (Texas) with a few desks separating them. How cozy.
But NO -- I received a phone call from "Jennifer" January 18th, 2010, with the news that the "U.S. Treasury has put all loan modifications on hold since December until further notice." WHAT? HOW IS THIS POSSIBLE? "The Underwriters are not able to make a decision". And even though the loan had every appearance of being approved, "should have been approved", it is not. The late payments continue to accrue.
I said - show me where this is in writing - this is completely contrary to what our administration is saying needs to be done! Oh no, I was told, it is an internal memo and only information to be provided to the homeowners.
I wanted to throw the phone through the window. People wonder why homeowners destroy their homes because they are so angry at the banks.
What to do?
I went to the Making Home Affordable website - easily found the Contact Us page (upper right hand corner in big letters) where the page clearly states: "Whether you are having problems registering online, require support for the servicer tools, or have general questions about the Home Affordable Modification program, we can assist." So I called. And they did.
The phone number is (866) 939 - 4469; and you can also e-mail - which I did too - support@hmpadmin.com My e-mail was answered within two hours.
I called - was transferred to a "HELP Team Member" - explained in detail what had been happening and asked if they knew anything about the U.S. Treasury putting a hold on home loan modifications. It seemed absolutely contrary to what should be occurring. She concurred and assured me that their upper management spoke nearly daily with the U.S. Treasury department and she was unaware of anything of that manner.
BUT importantly -- she said she personally would bring their management knowledge of what I was going through and it would be addressed that afternoon with the U.S. Treasury department.
Now, if you're like me - you're skeptical of anything like that being done - but apparently it happened.
I called CHASE later that afternoon and at 4:25 p.m., as I was speaking with the CHASE representative, he stopped me to read to me an email he had just received.
He read: the U.S. Treasury has notified us of some information that has been not quite accurately imparted to some homeowners. Not all loan modifications are on hold. Those that may qualify under HAMP will continue to be processed.
So there you have it. We changed a policy - and hopefully helped accelerate some loan approvals.
A big applause for everyone working at the Making Home Affordable Program. https://www.hmpadmin.com/portal/about/overview.html
As you may know, I am an attorney working with short sales in Manhattan, and assisting some home owners in loan modifications. Both programs are frustrating, irritating, hair-pulling, down-right horrible - but there is nothing more satisfying than the feeling when it works!
Since July 2009, I have represented a single homeowner who faced the loss of her company and was struggling building a new company and needed to apply for a home loan modification because of changed circumstances and the loss of income.
One loan- from CHASE - which qualified under the Home Affordable Modification Program ("HAMP") limit of $729,750.00 - for a modification.
Three months into the process, CHASE lost the short sale package - reason: change of computer systems. The process began again, from the beginning.
The homeowner received nearly daily phone calls (mostly rude) from the bank's collection agency demanding payments - the homeowner kept explaining that they were in the home modification program - no department of CHASE reports to the other she was told and the phone calls would continue - which they did through October.
November rolled around and CHASE again lost several of the documents -- again they are re-sent....December arrived, CHASE doesn't know what happened to those documents, they need to be sent again and this time, they need to be embellished. More info supplied.
By the end of December, CHASE reports that all seems to be fine and that they are waiting for a "representative" to be assigned.
Encouraged by the press releases and statements from the Obama administration demanding to know why only 5% of all loan modifications are approved, and asking for twice-monthly reports on status from the banks, I am hopeful that a modification approval will be eminently forthcoming.
I'm "buddies" now with "Eric", "David" and "Jennifer" with whom I've spoken over the past several months and they have shared that they are sitting in the same office together (Texas) with a few desks separating them. How cozy.
But NO -- I received a phone call from "Jennifer" January 18th, 2010, with the news that the "U.S. Treasury has put all loan modifications on hold since December until further notice." WHAT? HOW IS THIS POSSIBLE? "The Underwriters are not able to make a decision". And even though the loan had every appearance of being approved, "should have been approved", it is not. The late payments continue to accrue.
I said - show me where this is in writing - this is completely contrary to what our administration is saying needs to be done! Oh no, I was told, it is an internal memo and only information to be provided to the homeowners.
I wanted to throw the phone through the window. People wonder why homeowners destroy their homes because they are so angry at the banks.
What to do?
I went to the Making Home Affordable website - easily found the Contact Us page (upper right hand corner in big letters) where the page clearly states: "Whether you are having problems registering online, require support for the servicer tools, or have general questions about the Home Affordable Modification program, we can assist." So I called. And they did.
The phone number is (866) 939 - 4469; and you can also e-mail - which I did too - support@hmpadmin.com My e-mail was answered within two hours.
I called - was transferred to a "HELP Team Member" - explained in detail what had been happening and asked if they knew anything about the U.S. Treasury putting a hold on home loan modifications. It seemed absolutely contrary to what should be occurring. She concurred and assured me that their upper management spoke nearly daily with the U.S. Treasury department and she was unaware of anything of that manner.
BUT importantly -- she said she personally would bring their management knowledge of what I was going through and it would be addressed that afternoon with the U.S. Treasury department.
Now, if you're like me - you're skeptical of anything like that being done - but apparently it happened.
I called CHASE later that afternoon and at 4:25 p.m., as I was speaking with the CHASE representative, he stopped me to read to me an email he had just received.
He read: the U.S. Treasury has notified us of some information that has been not quite accurately imparted to some homeowners. Not all loan modifications are on hold. Those that may qualify under HAMP will continue to be processed.
So there you have it. We changed a policy - and hopefully helped accelerate some loan approvals.
Wednesday, December 16, 2009
New law to help owners facing foreclosure
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.
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.
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.
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