Tuesday, December 28, 2010

When was the last time you got a bargain?

When did you last enter into a transaction where you a) got a steep discount on the price and b) the seller provided 100% financing? Well, read this story about the FDIC sales of two mortgage portfolios.

Real Money: The FDIC Sells Four Loan Portfolios Totaling $1.22 Bil.

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
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Monday, December 27, 2010

Mortgage Rates May Have Hit Bottom - NYTimes.com

Have mortgage rates hit bottom? The New York Times' Lynnley Browning writes that "a recent and sustained increase may indicate that consumers can expect to pay more in the new year to buy or refinance a home."
"Mortgage rates typically track those of 10-year and 30-year Treasury and other government bonds. Yields, or interest rates, on those notes have been "rising amid lender concerns that the White House’s deal with Congress on Dec. 7. to extend the Bush-era tax cuts and the Federal Reserve’s move in early November to buy back $600 billion in debt to stimulate economic growth will combine to fuel inflation and swell the budget deficit."

Read the full column Mortgage Rates May Have Hit Bottom

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Vested Title Inc.
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-808-6130 - Fax 201-656-4506
E-mail vti@vested.com - www.vested.com

Wednesday, December 22, 2010

Not only borrowers were hurt by sloppy mortgage servicing.

In her Sunday Times Fair Game column, "Opening the Bag of Mortgage Tricks," Gretchen Morgenson writes about an untold story of sloppy mortgage servicing practices—the impact on mortgage investors.
“[B]orrowers aren’t the only ones concerned about potential mischief. Investors who hold mortgage securities are increasingly worried that servicers may be putting their interests ahead of those who own the loans.

“A servicer might, for example, deny a loan modification to a borrower because it also owns a second mortgage on the same property and doesn’t want to write down that asset, as required in a modification. Levying outsize default fees is another tactic — the fees typically go to the servicer, not the lender, but they can still propel a property into foreclosure more quickly. And foreclosures aren’t a good outcome for investors. “
The result in once such case was a federal jury’s award to investors of several millions of dollars in punitive damages.

How did it happen?

After a mortgage servicing company collapsed, a “small firm called Compass Partners bought the servicing rights to these assets for $8 million. A short time later, Silar Advisors, a company overseen by Robert Leeds, a former Goldman Sachs executive, got involved by financing Compass. Compass/Silar began servicing the loans for the investors.”

“Almost immediately, the plaintiffs in the suit contended, Compass/Silar started siphoning off money owed to investors holding the loans. Among the servicer’s tactics, the plaintiffs said, were improperly charging default interest, late fees and loan origination fees that reduced amounts due to investors.”
In addition, when borrowers tried to renegotiate or pay-off defaulted loans, the servicing company refused to negotiate. “In other cases when Compass/Silar urged the investors to modify troubled mortgages, the servicer reaped undisclosed fees in the deals.”

“A Silar spokesman said the firm was pleased that the jury awarded only $79,000 in compensatory damages to the plaintiffs but was disappointed by the punitive-damages assessment. “The jurors are to be commended for their careful consideration of the facts in a very lengthy trial,” the spokesman said. He declined to comment as to whether Silar was currently servicing any loans.”
“It is obvious that we are in the litigation stage of the financial debacle of 2008. That usually means shining the light on dark corners and watching what scurries away. The view may not be pretty, but at least in this case, investors got some recompense in addition to an education.”
A former employer gave me this saying about the business place - In some markets the bulls eat, in some the bears eat, but the pigs always get the garbage.

What do you think?

Read the full column, Opening the Bag of Mortgage Tricks.

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Tuesday, December 21, 2010

N.J. foreclosures coming to a court ordered halt?

Hot off the wire, New Jersey's Supreme Court is threatening to halt foreclosures by six lenders for "irregularities."

According to NJ.com, the state's chief justice writes that the court
"has become increasingly concerned about the accuracy and reliability of documents submitted to the Office of Foreclosure."

A special master could be appointed to review the foreclosure practices of companies including Wells Fargo, JP Morgan Chase and Citibank.
Of course, nothing is said of the substance of the "irregularities" or about the underlying fact that the loans are in default. More to follow.

Read the full report N.J. Supreme Court intervenes in mortgage foreclosures by six lenders NJ.com

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Vested Title Inc.
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-808-6130 - Fax 201-656-4506
E-mail vti@vested.com - www.vested.com

Monday, December 20, 2010

Looking to refi? "Be Cynical About the Refinance Process"

The New York Times’ Jennifer Saranow Schultz writes about the refinance process.
“As least until recently, we’ve been in the midst of a refinancing boom. So consumers applying for refinancings should at least expect some delays.
“While lenders are leery about releasing details about how long refinancings are taking to close today versus a year ago, some are willing to admit that processing times are longer today for a number of reasons, including regulatory changes and historically low rates.”
I’m not sure of the “refinance boom” since most home values in New Jersey fell dramatically over the past two years.
“Kris Yamamoto, a spokeswoman for Bank of America, said in an e-mail that the longer processing times are the result of the “dramatic changes” the mortgage environment has undergone in recent years, including “new underwriting standards being enforced and regulatory changes enacted” to ensure that consumers can safely afford their mortgages. She also pointed to the low rates.”
How about the family that can afford its current mortgage but wishes to take advantage of a lower rate? Unless you had 30% equity, or more, in your home when you took your last mortgage, you can pretty much forget about it since home values have fallen as much as that number. Lenders will not make 100% loan to value mortgages despite encouragement by the Federal government.

So, what to do when you apply and you find your loan application dragging? Some lenders, after already locking the interest rate for 90 days are extending the rate longer if the delay can be found on the bank side. My suggestion—when the lender asks for a document, send it immediately, retain proof of delivery, for example, the fax transmission report or FedEx delivery receipt, and keep in touch with your processor in writing.

Read the full Times story including two cautionary accounts posted by other readers.

What do you think about this issue?

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Tuesday, December 14, 2010

You’ve got to have homeowners insurance, but how do you save money?

Carla Hill, writing for Realty Times, has 7 tips on saving money in her article,

Tips for Lowing Your Homeowners Insurance Bill

In today's economy, every penny counts. How can you lower the cost of your homeowners insurance? Here are a few helpful tips.

1. Bundling: Many companies offer discounts for customers who buy multiple policies, such as your car, boat, and home insurance.

2. Deductibles: If you can afford a bit more of a financial burden should something happen at your home, then consider raising your deductible. This can easily save you on monthly costs.

3. Buy Early: You must obtain insurance in order to close your sale. Give yourself plenty of time for price comparisons and to ensure you'll have coverage in time for the sale.

4. It Never Hurts to Ask: Be sure to ask your insurer what discounts they have available. Certain groups and associations you may hold membership in receive discounts on their insurance!

5. Right Amount: Homeowners insurance is in effect to cover the replacement cost of items and structures on your property. This cost is, however, not the market value.

6. Safety Discounts: Many times installing safety extras such as smoke detectors and alarm systems can reduce your monthly bill!

7. Good Credit: Did you know that your credit score can affect your rates? According to Yahoo! Business & Finance, "In general, people with low credit scores and problems on their credit report end up paying more for insurance than people who don't have those kinds of issues in their lives."

And be sure to review your policy each year before renewal time to be sure that you policy still accurately coverages your property. Have you made changes or modifications that would require more or less coverage? Do all or even a few of these tips and you could see your insurance bill decrease!

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Thursday, December 2, 2010

Mortgage interest deduction in trouble

We’ve written previously about the threat to the mortgage interest tax deduction. Will it happen? There’s a good chance. The unanswered question is – what happens to the real estate marketplace?


Realty Times’ Carla Hill writes,
“For months now, experts have been debating the fate of the home mortgage interest deduction (MID). So why exactly are politicians targeting the MID? With a federal deficit of around $13 trillion, officials are hard-pressed to find ways to curb the growing the debt.
“ Some say there are better options available than keeping the MID, following suit of many European nations who have in recent years nixed the deductions themselves, but the National Association of REALTORS® (NAR) disagrees. They feel that this deduction is a strong incentive for homeownership. For nearly 100 years homeowners have been allowed to deduct the interest paid on mortgages for their primary residences, second homes and most home equity lines of credit.”
Frankly, the deduction of mortgage interest helped expand primary- and second-home ownership. Although not the primary incentive to home ownership, the deduction, when taken into account for budget planning, allows the buyer to buy a little bigger and better than her net income will allow. Call it a subsidy, if you will.
“NAR President Ron Phipps, states, "Recent progress has been made in bringing stability to the housing market and any changes to the MID now or in the future could critically erode home prices and the value of homes by as much as 15 percent, according to our research. This would negatively impact home ownership for millions of Americans, including those who own their homes outright and have no mortgage."
“Will Washington continue to allow taxpayers who own their homes to reduce their taxable income by the interest paid on the loan? Time will tell. It is dependent on finding alternative ways to curb growing anxiety over our growing debt.”
Good luck to us all.

Read the full Realty Times article.

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Tuesday, November 30, 2010

Will the buyers be out during the holidays?

The folks at Realty Times think they just might be.

“As the year winds down, many homeowners fear that now could be a bad time to sell their home. While it’s true that the holidays can deter some folks from house hunting and making a major purchase—don’t give up.”
The recommendation to sellers:
“ If your house is on the market, step up the action plan to draw attention to it. Don’t let the holiday blues make you feel like there’s no hope. Homes are sold and bought this time of year. But the ones that get snatched up are the ones that are enticing to buyers.”
There are some things you can do to make your home more “showable”.
“A good rule of thumb, is to keep decor simple and subtle. If you celebrate Christmas, go ahead and put a tree up but don’t put one up in every room. Remember that buyers will be looking at your home and imagining their own holiday celebrations there. So, be sure to leave them room to envision their lives in the home.
“This goes for the outside too. Holiday lights can be placed outside very tastefully but ditch the huge inflatable characters that make it look like your yard is an amusement park. Instead, opt for a nice holiday wreath and some subtle seasonal decor. Keep in mind that curb appeal is what gets buyers in the door. If your home isn’t appealing from the outside, buyers won’t bother to stop for a look inside.”
What else can you do? Stash the gifts, they can clutter the living room. Add some fragrance to the air but don’t go overboard. Spruce up the mantle. No personal photos.
“Listing your home for sale during the holidays doesn’t have to make you blue; in fact it can truly brighten your spirits by putting some green in your bank account. Just be sure to focus on making your home a buyer’s dream this holiday season.”
Read the full article Fall May Bring Serious Buyers by Phoebe Chongchua.


For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Monday, November 29, 2010

How much house can you afford?

Trying to calculate “how much house you can afford?” Here’s a link to calculator from the folks at Bankrate.com that will give you a little guidance. By entering your income and living expenses you are able to get a rough calculation as to how much you can spend monthly on your housing and how much you can afford to pay for that new home.


Remember, it’s a calculator, so it’s nothing more than one tool in the box when you take the first steps in buying a home.

Mortgage and house calculator

Good luck!
For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Thursday, November 18, 2010

Digital electric meter causes headaches for homeowners

We live in the electronic age, that’s for sure. I know that my residential water company drives by my home and “reads” my water meter by radio as it passes by. I think the bills have been accurate. But,
“Sgt. John Robertson 2nd, an Army mechanic at Texas’s Fort Hood, is fuming about the so-called smart electric meter his local utility has installed on the side of his tidy, 1,800-square-foot home.”
“Like thousands of consumers with the new meters around the country, Sergeant Robertson suspects the device is not as smart as advertised.
“In his case, he says it is inaccurately measuring his family’s power use and driving up his bills — some months by as much as 50 percent, to as high as $320 — since it was installed in December. This, he said, is despite his efforts to cut back on energy use. “
But the system seems to plagued with errors.
“Over the last year, as utilities around the country have installed an estimated two million of the new digital meters, power companies have received plenty of complaints — and in some states have been hit by class-action lawsuits — most of them from consumers saying the smart meters are overstating their electrical usage.”
“Using digital technology and computer networking, smart meters can transmit real-time data that is supposed to enable utilities to conserve electricity and better allocate power during parts of the day when overall demand is high. Utilities can also then vary the price for power, by time of day or time of year, based on when it is being used; some are already offering this option to customers.”
In theory, consumers are supposed to be better able to adjust their electric use. Operative word being theory.
“But because of faulty technology in some cases, and more often through general shortcomings in consumer education and customer-service support by many utilities, smart meters are leaving many customers dumbfounded.”
So, the regulators are taking a closer look, and lawsuits have started. And there’s a lot of money at stake in operating savings for utility companies if the system works correctly.

Read the full report from the New York Times.


For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Wednesday, November 17, 2010

Buying a home? Mortgage Preapproval Is Harder to Get

The New York Times’ Lynnley Browning writes about the mortgage preapproval process and changes to it.

“When properly done, preapproval can speed up the purchase process by providing a rigorous assessment of the maximum amount a buyer can afford to borrow, based on a formal credit check and verification of income and assets. “
“But prevetting has become more difficult and confusing these days, for borrowers as well as lenders, as a result of lending rules that took effect in January.”
“The rules from the Department of Housing and Urban Development require lenders to issue a binding good-faith estimate of total closing costs within three days of submission of a formal loan application. The formal application is usually made when a preapproval is written.”
So, what’s the rub?
“Many lenders are reluctant to be locked into closing costs amid declining property values, and therefore fewer of them, especially the big banks, are providing preapproval letters for a certain loan amount on a property that often has yet to be formally appraised. The problem is particularly acute for buyers who have not yet decided which property they want.”
When a problem arises, banks begin to move very, very cautiously.
“By not issuing preapprovals — and all the banks are not doing it — the banks are erring on the side of caution because there’s less risk for them,” said Lou-Ann Smith, a co-owner of Hamilton Ladd Home Loans, a broker in Ridgefield, Conn.”
Many sellers and real estate agents, meanwhile, still expect mortgage preapprovals. And,
“Agents embrace preapprovals because they allow them “to show they have a real buyer who’s already started the process,” Mr. Mollica said. And at the peak of the housing market, lenders were more than happy to provide preapproval letters.”
Another stumbling block to the revitalization of the housing market? Maybe. Read the full report.

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Tuesday, November 16, 2010

Need to co-sign a loan? Be careful

Realty Times’s Bob Hunt writes “Guarantors of Another's Debt Need to be Very Careful.” Loan guarantees are likely to be sought in an economy like this one.
“In this kind of environment it is not unusual that a creditor may want some third party to guarantee the debt of a borrower. Parents may be asked to guarantee a lease for one or more of their offspring. (And which would you prefer: that you guarantee their lease, or that they move back in?) In-laws may be asked to guaranty some debt taken on by newly-weds; and a person venturing into a new business may need to turn to friends and/or family to guarantee a loan for start-up costs.”
While guaranteeing a family member’s loan is a traditional way to help someone get started in life or business, it should not be taken lightly. “Loan guarantors need to fully understand the terms of their guarantee.”

A California case points out the pitfalls of co-signing or guaranteeing another’s obligation. In this case, the bank went after the guarantors while it did not pursue the borrowers.
The guarantors didn't think it was right or fair that they should be pursued while the original borrower and one of the guarantors stood by. However, the trial court ruled against them; and the appellate court sustained the trial court's decision.
“There are two issues here that other, perhaps more pedestrian, potential guarantors want to keep in mind. More accurately, there is one main issue, and two examples of it. The main issue is simply this: IF YOU ARE GOING TO GUARANTEE A LOAN, BE SURE YOU READ THE DETAILS OF THE GUARANTEE CAREFULLY.”
“The point is simple. If you are going to guarantee a loan – which may be a terrific thing to do for someone – be sure you read the terms of the agreement carefully. Have a trusted attorney review it. You could be glad you did.”
Read the full article from Realty Times.

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Taxpayers to lose mortgage interest deduction? Yes, if commission has its way.

The New York Times reports on a new commission report urging the elimination of the mortgage interest deduction from income taxes.

“By proposing to curtail the tax deduction for mortgage interest, the president’s deficit commission is sounding an alarm.”
“The home mortgage deduction is one of the most widely used and expensive tax subsidies. More than 35 million Americans claim it, and the federal government estimates it will cost the Treasury $131 billion in forgone revenue in 2012. Its size, popularity and link to the emotionally charged American notion of homeownership has made it so politically sacrosanct that there are serious doubts whether Congress will even entertain the idea.”
So why raise it as an issue? “[T]o jar the public into recognizing the magnitude of the nation’s budget deficit and some of the drastic steps that might be needed to close it.”

But the mortgage interest deduction is a great benefit to middle-income homeowners. Won’t this dump more of the deficit reduction responsibility on this group? The answer is yes.
“The proposal, part of a draft by co-chairmen Alan K. Simpson and Erskine B. Bowles, suggested that the tax code could be streamlined, and income tax rates drastically lowered, by eliminating the $1.1 trillion in annual tax expenditure entitlements — subsidies and breaks given to targeted businesses and individuals. The commission chairmen also offered the option of capping the deduction at $500,000 on mortgages, rather than the current limit of $1 million.”
Once again, the specter of class-warfare is brought to the fore as
“The prospect brought an angry outcry. House Speaker Nancy Pelosi blasted the commission’s suggestions, saying it would force middle-class homeowners to subsidize tax breaks for the wealthy.”
“The mortgage interest deduction is one of the pillars of our national housing policy,” said Michael D. Berman, chairman of the Mortgage Bankers Association. “Limiting its use will have negative repercussions for consumers and home values up and down the housing chain.”
“But tax policy experts say that for all its popularity, the value of the deduction in public policy is debatable. It was intended to encourage homeownership, but housing economists point out that countries like Canada and Australia, which do not allow mortgage interest deductions, have homeownership rates similar to those of the United States.”
That may be true, but we are not in Canada or Australia.

Read the full article and see how the proposal may impact us all.

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Monday, November 15, 2010

FDIC closes three banks – total to date is 146

Reuters reports that FDIC regulators closed three banks in the United States on Friday, November 12, 2010. This brings the number of closures in 2010 to 146.

“The Federal Deposit Insurance Corp has said it expects bank closures to peak this year after 140 closures in 2009. The bulk of this year's closures have been smaller institutions, each with less than a billion dollars in assets.”
“FDIC Chairman Sheila Bair said recently that while the number of failures will exceed last year's tally, the total assets of this year's failures will likely be lower.”
The weak link in the American banking world appears to be community banks as “their recovery has lagged behind that of larger institutions and the broader economy.” These banks are susceptible to the problems in the commercial real estate market because they have “higher concentrations” in these loans than bigger banks.

Read the full Reuters report.

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Thursday, November 11, 2010

Tip for home sellers - don't let your emotions get in the way

Carla Hill, writing in Realty time says, Sellers: Don't let emotions rule.
It can be easy for the selling experience to become clouded by emotion. A homeowner may have years of memories stored within the walls of a home. They look at a room, and instead of resale potential, they see a baby's first steps and early Christmas mornings. When the time comes to sell, however, the time has also come to sever emotional ties with a house.
Emotions can cloud your reasoning. And they can misguide you during a very expensive and important business transaction. Sellers sometimes overvalue their homes, adding in sentimental value on top of property value. They refuse offers that, while reasonable, don't add up to the value of their memories. Or they turn down a potential buyer, because they don't garden and won't "leave the rose bushes," or aren't the "type" of person they'd like living in their home.
For a smooth transition, hire an experienced real estate agent. Once you've turned yourself over to their guidance, you can then turn your focus onto the new phase of your life. And agent can help you establish a fair, and unbiased, asking price. They find the sellers. They show the house. And they help you sign on the dotted line. The middle man is extremely beneficial in separating from your emotions.
Your emotions may surface as soon as you list the house for sale, since many agents will suggest you remove many of your personal items from the house for staging. This is neither a personal attack on your decorating nor your memories. Staging is a wonderful way for homeowners to see the house as their future home, instead of seeing your house and your home.
Don't fret over lost memories; take pictures of your home and make a scrapbook. Channel your emotions into the joy of moving. And have fun imagining the new memories you'll make in your new place. This is not a time for mourning, instead it's a time for celebrating!

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Wednesday, November 3, 2010

Refinance costs - how often can they be deducted?

Here's an interesting question from a Kiplinger's reader:
Although I refinanced my mortgage less than two years ago, interest rates are so low that I plan to refinance again. What costs can I deduct when I refinance for a second time?
Folks who refinance and refinance, again, are called serial refinancers. We saw the phenomenon grow during the days of sub-prime lending. But with interest rates now so low, it may make sense to refinance sooner rather than later.

To answer the question,

Serial refinancers get an additional tax break on top of the usual mortgage-interest and property-tax deduction. You can deduct the points you pay to get a mortgage in the year you buy a home -- even if the seller paid the points for you (a point is equal to 1% of the loan). You can also deduct points paid to refinance a mortgage, but normally that deduction must be spread out over the life of the loan. So if you paid two points ($5,000 in this example) on a $250,000, 30-year mortgage, you can deduct just $166.67 per year for 30 years.
The income tax consequences for making a mistake are not light. So caution is in order.

Read the full article, Get a Tax Break for Refinancing Again



For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Tuesday, November 2, 2010

Seller’s can help themselves with digital decorating.

Have an empty house or apartment to sell. Well, apparently nothing comes across the Internet than posted photos of one. Real estate brokers have resorted to “virtually” staging to make vacant apartments and homes more inviting.


From Vivian S. Toy, writing the New York Times,
“ANY broker will tell you that selling an empty apartment is much harder than selling a beautifully furnished one.
“But staging a home with rented furniture can cost thousands of dollars, and that’s money that most sellers aren’t willing to pay. So brokers at Halstead Property and Brown Harris Stevens are using a service that furnishes rooms virtually with the d├ęcor of the broker’s choice, adding color and life to photographs of otherwise bland and blank boxes.”
Wow, what will they think of next in this economy? I hope it’s not virtual buyers.

Read the full story, Furnished With Pixels.

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Monday, November 1, 2010

Avoid probate yes, but taxes no. Living trusts work for some.

Every so often, we in the title industry get to see that someone has bought a book that attempts to teach the reader how to avoid probate. The idea behind these books is that the person who follows the plan will not only not have to have an estate administration but can avoid estate taxes, too.


So we were pleased to see that Karin Price Mueller writing for the Biz Brain in The Star-Ledger, answered the following question:
“What are the benefits to having a living trust fund compared to a regular will?”
“Living trusts, also called revocable trusts or revocable living trusts, are sometimes touted as an absolute essential.”
“While the person who set up the living trust is still alive, there are advantages for those who will help manage that person’s affairs if they’re unable to.”
But living trusts are not fool proof and must be done with the assistance of an attorney. Rely on a do-it-yourself book and you’ll get burned.

Read the full article here.

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Thursday, October 28, 2010

NJ homeowners get break on filing for homestead benefits

From the NJ Division of Taxation-

Deadline for Homeowners to File Homestead Benefit Applications
Extended to Jan. 3, 2011

The deadline for homeowners to file 2009 Homestead Benefit applications has been extended to Jan. 3, 2011, to allow more people to file, Treasurer Andrew Sidamon-Eristoff announced. The old deadline was Nov. 1.

Applications were mailed to homeowners in September, and many potential applicants still need time to file. Homeowners who meet the eligibility requirements and file timely applications will receive a partial credit against their property tax bill for the second quarter of 2011 for property
taxes paid in 2009.

New Jersey residents who owned a home that was their principal residence on Oct. 1, 2009, and paid property taxes on that home, will qualify for a Homestead Benefit, provided their 2009 New Jersey gross income was $75,000 or less, or if they are senior or disabled homeowners and their 2009 New Jersey gross income was $150,000 or less.

Homeowners who need additional information on the Homestead Benefit Program or who require assistance in filing an application may call the Division of Taxation’s Homestead Benefit Hotline at 1-888-238-1233 from 8:30 a.m. to 4:30 p.m., Monday through Friday.

Information on the Homestead Benefit Program is also available on the Division’s Web site at:
www.state.nj.us/treasury/taxation/2009homesteadinfo.shtml and through its Automated Tax Information System at 1-800-323-4400 (Touch-Tone phones only). Text teephone service for the hearing impaired is provided at 1-800-286-6613 or 609-984-7300.

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Stephen M. Flatow, Esq.
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Fairfield, NJ 07004
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Tuesday, October 26, 2010

From Realty Times - Bank of America ends foreclosure freeze

From Realty Times, back to business for Bank of America.
Part of the freeze is over for 23 states. Bank of America has announced that foreclosures are resuming in over two dozen states. The bank says in its review, it has not found a single occasion where a foreclosure proceeded in error.
The foreclosure freeze was brought about by allegations of wrongdoing by lenders across the country. Here in New Jersey, where foreclosures are supervised by a division of Superior Court, the allegations should prove erroneous. The safeguards are already there.

Read the full report: Real Estate Outlook: Freeze Over In Many States

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
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Fairfield, NJ 07004
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Foreclosure mess ignores one fact – the borrowers are not paying

From the New York Times’ Gretchen Morgenson’s column,
“LAWYERS representing delinquent homeowners have been shouting for years about documentation problems in residential mortgages. Now that their complaints have gained traction with investors, attorneys general and some state court officials, the question of consequences looms large.
“Is the banks’ sloppy paperwork a matter of simple technicalities that are relatively easy to cure, as the banks contend? Or are there more far-reaching consequences for banks and the institutions that bought mortgage-backed securities during the mania?

“Oddly enough, the answer to both questions may be yes.”
All through this new crisis, one comment has been missing. The homeowners (and the hundreds, if not thousands, of sham owners) who borrowed money in a rising economy have simply stopped paying their mortgages.

Some defaults are legitimate. People lose jobs, catastrophic illness brings medical bills. But these reasons have always been there. Others plan to lose their home as some sort of leverage to get the lender to reduce the rate of interest, the principal amount or both. Others just want to move away. These so-called “strategic defaults” demonstrate the feckless nature of America’s homeowners.

There’s no doubt in my mind that there are violations of Truth-in-Lending and other consumer protection laws that address wrongs from the time of loan origination. But the lawyers I know wouldn’t know the underpinnings of the Federal “right to cancel” and what a violation of its rules could mean to a homeowner.

The bottom line is that the problem should not be placed solely at the feet of the mortgage servicers, Fannie Mae or Freddie Mac. It started at the very highest reaches of the Clinton administration and continued through the Bush administration. The bottom line is that loans were extended by hook or by crook through the efforts of dishonest mortgage brokers and bankers to people who had no right to buy a home and those loans were bought by Fannie and Freddie.

Problem loans are here, and they’re in foreclosure. Let the market do what it has to do…fall or rise. All lawyers will do is increase the cost and make it harder for deserving borrowers to get the loan they truly qualify for.

That’s what I think.

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
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Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
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Monday, October 25, 2010

The Morris Canal, a true piece of New Jersey history

A photo in the Sunday Star-ledger caught my eye.


It’s a picture of a Morris Canal plane house located in Bloomfield, New Jersey.


(I must confess, that at the age of 7, a counselor told us Camp Loyaltown hikers near Hunter, New York, that we were going to see an "inclined plane." Now, I knew that an incline meant a hill or a rise, but, boy, was I disappointed when I didn’t see a Cessna nose down in the ground.)

There are some good publications on the Morris Canal, the remnants of which are located throughout the northern part of the state from the west to Jersey City, and a quick on-line search will reveal them


For your next title order or
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Sunday, October 24, 2010

Nothing is free – especially that mortgage

The New York Times’ Lynnley Browning writes about “The Price of a ‘No-Cost’ Loan”

“HOME buyers concerned about high closing costs in this tight economy might be tempted by a type of loan that requires no cash outlay in exchange for paying a higher interest rate, especially because rates are already at historically low levels.
“But these “zero-cost” or “no-cost” financing deals, as they’re known, could end up costing a borrower dearly over time, some mortgage experts warn. “
“Unlike some similar loans, which don’t require an out-of-pocket outlay but tack on the thousands of dollars in closing costs to the balance, zero- and no-cost loans typically add a half percentage point or so to the rate while not increasing the mortgage balance. “
The fees charged by third parties, such as this Company, are paid by the lender and the fees are disclosed on the settlement statement.

The article has examples of how much these “no-cost” loans actually cost. Read the full article to see just what kind of bargain these loans are.
For your next title order or
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Fairfield, NJ 07004
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Friday, October 22, 2010

AP Story - No Foregone Conclusion - background on the foreclosure mess

From the Associated Press-
Good article by Alan Zibel and Candice Choi on the scope of the foreclosure mess.  I do not agree with all the statements made, but, hey, they wrote the article.

Erroneous documents. A freeze on foreclosures. Charges of fraud.

A flurry of developments have sketched an alarming scenario: that major U.S. banks rammed through foreclosure after foreclosure without giving many borrowers a fair shot at keeping their homes.

Questions have arisen about the scope of the problem, the effect on the nation's foreclosure epidemic and the likelihood that some people could regain their foreclosed homes.

Here's what you need to know about the unfolding foreclosure mess:

Q: What's the problem I'm hearing about foreclosures?

A. Four of the nation's largest banks — JPMorgan Chase & Co., Ally Financial's GMAC Mortgage unit and PNC Financial — have stopped foreclosures in some states. The biggest bank, Bank of America Corp., has done so in all 50 states. JPMorgan has done so in 41. They're checking to see if their employees made errors in loan documents needed to complete foreclosures. The banks say they think they'll resume foreclosures in those states within weeks. Others think it could drag on longer, especially as more state and federal officials intervene.

Q. What kinds of errors?

A: Evidence has surfaced of mistakes in the documents that mortgage companies present to a judge to foreclose on a home. Lenders failed, for instance, to show they have a legal right to foreclose on borrowers' homes. And some mortgage company employees have acknowledged they signed foreclosure documents without reading them. Many documents also appear to have been signed without a notary public witnessing that signature. That's a violation of law.

Q: How did this happen?

A: Mortgage companies have been overwhelmed by paperwork involving millions of foreclosures and defaults. Consumer advocates say the companies took shortcuts to manage the onslaught rather than hiring more staff. One way was to have a bank or a bank representative "robo-sign" thousands of documents he or she hadn't actually read.

Q: How widespread is the problem?

A: Only JPMorgan Chase has spelled out how many foreclosures it's suspending: about 115,000. But consumer advocates say the problems with foreclosure documents are widespread. Two of the biggest lenders, Wells Fargo & Co. and Citigroup Inc., say they have no plans to suspend foreclosures. They say they're confident they complied with state laws.

Q. Why is this all becoming known just now?

A. Consumer advocates had warned for years about shady foreclosure practices at mortgage companies and law firms they used. But the practices seized national attention only after GMAC's Sept. 20 announcement that it would halt some foreclosures. GMAC acted after evidence surfaced in Maine and Florida that a company employee had signed thousands of foreclosure documents without reading them. Another likely factor in GMAC's move was the Florida attorney general's August decision to review foreclosure practices at two law firms GMAC used.

Q: Why did some lenders halt foreclosures only in 23 states?

A: Those states require foreclosures to be approved by judges. Statements before a judge are made under oath. Any falsehoods are subject to perjury charges. If false documents in such cases aren't corrected, it's possible these foreclosure cases could be dismissed.

Q: What about the 27 other states and Washington, D.C.? What's happening with foreclosure cases there?

A: Except for Bank of America, major lenders are still pursuing foreclosures in those states — for now, anyway. But attorneys general in all 50 states are reviewing whether mortgage companies violated their states' laws. Many of those states require mortgage lenders to complete detailed paperwork before homeowners can be evicted. It's harder for homeowners to challenge foreclosures in these states. They can still do so by filing their own lawsuits. But it's an uphill battle.

Q: What do banks mean when they say they're halting foreclosures?

A: It all depends on the bank. Most, like GMAC, are still initiating foreclosures but are no longer evicting people or selling foreclosed homes in states that require judges' approval. Others, like Bank of America, have stopped seizing foreclosed homes but continue to sell homes that had already been foreclosed on and are still processing new foreclosures.

Q: Why is the paperwork for mortgages so complex?

A: A big reason is that mortgages have increasingly been bundled into investments that were sold from investor to investor. Accurate ownership records weren't always kept. An electronic system was set up so banks could track a mortgage and avoid paying fees each time a mortgage was transferred. This system is called the Mortgage Electronic Registration System — MERS for short. Lawyers have argued that MERS lacks the documentation to prove mortgage ownership. They say that means banks foreclosed on some homeowners whose loans the banks didn't actually hold. JPMorgan says it no longer uses MERS.

Q: What does all this mean for the foreclosure crisis?

A: The foreclosure freeze should cause only a temporary slowdown in the number of homes seized by lenders. One reason is that four states hardest hit by foreclosures — Nevada, Arizona, California and Michigan — aren't among the 23 states where many lenders are halting foreclosures. Even if the pace of foreclosures slows, some analysts say it should pick up again by spring.

Q: How will all this affect home prices and sales?

A: In home markets where foreclosures are on hold, prices could stop falling, at least for a while. That's because fewer foreclosed homes will be for sale. Agents who manage sales of foreclosed homes are already seeing some of those sales put on hold. These agents can't complete transactions involving mortgages handled by the lenders that have halted foreclosures. And a major title insurance company, Old Republic National, has said it won't insure foreclosed homes sold by JPMorgan and Ally Financial. It says it worries that flawed foreclosure paperwork could put the home's ownership in doubt. Another, Stewart Title, is clamping down on sales of foreclosed homes that may be linked to flawed documentation.

Q: Title insurance companies? What are they, and how are they involved?

A: Title insurers protect a homebuyer and mortgage provider in case any unpaid taxes, questionable ownership or other problems surface. Lenders won't issue mortgages without title insurance. Title insurers are trying to come up with a way to ensure they don't have to pay claims to the buyer of a foreclosed home if inaccuracies end up voiding the home purchase.

Q: What if I'm a homeowner in the middle of foreclosure? Could I get my home back?

A: You can hire a lawyer or approach a housing counselor who will examine your mortgage and foreclosure paperwork. Lawyers for homeowners will look for errors and use them to pressure lenders to at least forgive a portion of the homeowners' loans. But most experts say people who have lost homes to foreclosure don't have much hope in the long run, especially if banks can show judges that they have corrected any errors.

Q: What if I bought a foreclosed property? Could somebody take it back?

A: Not in most cases. Previous owners can sue the lender that sold the property. That won't be easy. Even if such lawsuits succeed, title insurance protects homebuyers from any claim on the property that surfaces after the deal has closed.

Q: Is anybody doing anything about this?

A: The attorneys general of all 50 states have announced a joint investigation. The federal agency that regulates government-controlled mortgage buyers Fannie Mae and Freddie Mac has told mortgage companies to fix their problems. Federal bank regulators are also examining the issue, as is Attorney General Eric Holder.

AP Real Estate Writer Alex Veiga contributed to this report from Los Angeles.


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if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
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Thursday, October 21, 2010

Foreclosure chaos - who benefits?

Bankrate.com’s Marcie Geffner writes about the pros and cons of the recently announced pause in mortgage foreclosures in many states.

“Recently, several major lenders suspended foreclosures as they review irregularities in legal paperwork. These suspensions could have a significant impact on today's homebuyers and sellers.

“The extent of disruption will depend largely on how long banks hold up foreclosures in the 23 states that require a judicial foreclosure process. During these suspensions, banks will review affidavits that have been challenged.

“If the problems are resolved quickly, the impact may be minor, according to Rick Sharga, senior vice president at RealtyTrac, a national foreclosure-tracking service in Irvine, Calif.”
The slowdown will, in our opinion, be temporary. The result of the banks’ review of foreclosure files will find them to be in order. We’ll then see a surge in foreclosures going to auction in the beginning of 2011.

How does it affect sellers?
“Homeowners in foreclosure who hope to sell may get a "temporary break" before the process moves forward, according to Nick Libert, broker/owner of Exit Strategy Realty in Chicago. That would allow them to live in their home a while longer and potentially close a short sale. Or, they could negotiate a loan modification to avoid foreclosure.”
“Homesellers who aren't in foreclosure also may benefit since banks have taken foreclosed homes off the market and the diminished supply could put upward pressure on prices.”
For buyers,
“Potential homebuyers who previously considered shopping for foreclosures may be scared off by the recent negative news reports. But Libert says there's no reason for buyers to delay their plans as long as they can get clear title to the property and title insurance.”
For everyone, “The bottom line is that affected housing markets are now in a state of heightened uncertainty that presents both risks and opportunities.”

Read the full report.
For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
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Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
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Wednesday, October 20, 2010

FDIC floats rules on when they’ll close financial firms

A story by Deborah Solomon in the Wall Street Journal covers an FDIC proposal that will let financial creditors take the hit when a financial firm must be closed “but left wiggle room for the U.S. to make payments to certain types of creditors.

“The proposal is the first step in the government's effort to clarify how it will seize and dismantle large financial firms that run into trouble. The Federal Deposit Insurance Corp. was given authority to liquidate firms as part of the U.S. effort to prevent another collapse like that of Lehman Brothers, whose demise rippled through the financial sector.”
The FDIC is taking the action at the same time that regulators in other countries are addressing the so-called “too big to fail” firms and banks.

What’s the FDIC considering? As a first step
it planned to prohibit additional payments to shareholders and long-term debtholders in the event of a firm's demise. The FDIC said it could make additional payments to certain short-term creditors in situations where it maintains "essential operations" or to "minimize losses and maximize recoveries."
The proposed rule has been put out for comment. We’ll keep you posted.

By the way, three more banks recently failed.

Here’s the WSJ story.

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
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Tuesday, October 19, 2010

Foreclosure properties are not always a bargain

We get a lot of phone calls from potential buyers. They usually go like this, “What can you tell me about buying a property at a foreclosure sale?” My answer, “Don’t unless you have done it before and you were successful.”

The New York Times ran a story, “Avoid Foreclosure Market Until the Dust Settles” by Ron Lieber. He writes,
 “Are you out of your mind to even consider buying a foreclosed property right now?”
He tells the tale of Todd Phelps and Paul Whitehead “thought they had won the lottery” when they bought a property at a foreclosure sale.

“Several days later, however, they realized that what they had really bought was a second mortgage from Wachovia on a house that still had an enormous, unpaid primary loan. In other words, they did not own the home free and clear, and the auction company wouldn’t give back their $137,000 check.”
Admittedly, these homes are “tempting for scores of first-time homebuyers, second-home seekers and people looking to get an early jump on buying a retirement home while prices and interest rates are low.”

Bidding on a foreclosed home does have its pitfalls but it’s a way to get a start in the real estate market. And we have many clients who make a living buying at foreclosure sales, fixing up the property and selling it. Yet, the Phelps and Whitehead story is a cautionary one and you are invited to read the full report here.

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
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Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
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Monday, October 18, 2010

FHA has a “Little-Known Loan Program for Fixer-Uppers”

Lynnley Browning writes in the Sunday New York Times about a program through the Federal Housing Administration, FHA, for rehabilitation of “distressed homes or any other fixer-upper not only face the daunting task of turning a run-down property into a livable one, but often worry about paying for it all.”

“There’s a way to make essential repairs and add other accouterments without dipping into savings or taking out a home-equity loan. The Federal Housing Administration’s 203(k) rehabilitation program provides for loans covering renovation costs as well as the purchase price of a primary residence — investors excluded — and it allows for just a 3.5 percent down payment.”
“Although the program has been around since 1978, it is not well publicized, and many borrowers mistakenly think they have to buy a wreck in order to qualify. They don’t.”
“Covered repairs include a new roof or heating system (geothermal ones too). Decorative changes, like replacing vinyl with ceramic tile on the kitchen floor replacement, or painting the interior, are covered.”
The rates are usually a percentage point higher than conventional mortgages and certain aspects of the program can result in “closing costs $1,000 or more higher than average.”

Read the entire report.
For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
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Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
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Thursday, October 14, 2010

Foreclosure freeze may have grim future

The slow-down in foreclosures by several of the big lenders is not all good news. As reported in the Star-Ledger: “A halt in home foreclosures at the largest mortgage firms may sideline buyers worried about legal issues, further depressing sales at a time when distressed properties account for almost a quarter of all transactions.”

Why? Because doubt on the legal sufficiency of the foreclosures will result in those houses not reaching the real estate market.
“Bank of America Corp., the largest U.S. lender, extended a freeze on foreclosures to all 50 states on Friday as concern spread among federal and state officials that homes are being seized based on faulty data. JPMorgan Chase and Ally Financial Inc.’s GMAC Mortgage unit stopped repossession cases in 23 states where courts supervise home seizures — including New Jersey — amid allegations that employees submitted documents with unverified or false information to speed the process.”
Statistics from around the country demonstrate that foreclosure sales play a major role in the rebound of the real estate market.
"’Our preliminary review of September foreclosure activity doesn’t show any obvious or notable impact," said Rick Sharga, senior vice president of RealtyTrac. The effects may show up in the October data, he said.’”
On the other hand,
“A reduction in foreclosure sales may result in a short-term boost to the nation’s median home price as buyers shy away from distressed properties, said Thomas Lawler, founder and president of Lawler Housing and Economic Consulting in Leesburg, Va.”
The halt to pending actions by several lenders means that many property owners are living rent free. That would include those who have made so-called “strategic defaults.” Let’s hope the system straightens out sooner rather than later.

Read the full story.

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
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Fairfield, NJ 07004
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Wednesday, October 13, 2010

Why's my FICO score dropping? Here’s an answer

The New York Times’ Lynnley Browning writes,

“IF you’re looking to refinance or buy a home, potential lenders and mortgage brokers will be checking your credit scores. And if those scores are being verified, chances are they are going down.
“Yes, you read that correctly. Each time a credit score is pulled from one of the three credit bureaus as part of a loan application, it can decline by as much as 20 points, or more. Call it the Great Credit-Score Ding.”
While information about credit scores and their use is becoming more widespread, “few buyers know this goes on — or what to do about it.”
“Most consumers are unaware that this happens,” said Paul Stephens, the director of policy and advocacy for Privacy Rights Clearinghouse, a consumer advocacy group in San Diego.
The so-called FICO score is sold to the three credit bureaus — Equifax, Experian and TransUnion — “which each then use different formulas to compute a consumer’s creditworthiness.”

The higher your credit score, the lower your interest rate. So why does your score get affected by credit report inquiries?
“It is the “hard pull” inquiry — in which lenders and brokers learn that you are in need of money, and check your credit in order to process your application — that can most damage your score.”
This can result in a 20 point or more drop in your score each time you authorize a lender to check your credit.
“So how can borrowers minimize the blow, especially those shopping for the best mortgage rates and working with more than one lender or broker?”
“If all the requests are made within a short time, they usually will count as only one check.”
There is some good news, “borrowers who check their own credit scores through a less invasive “soft pull,” to get an estimate of creditworthiness and of loan rates, do not see their scores go down.” So, ask your lender to do “a soft pull before deciding which loan to go with, at which point a formal inquiry is made.”

Read the full column, Preventing Credit Score Dings

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Tuesday, October 12, 2010

Saving mom's home

Bankrate.com’s Steve McLinden fields questions about real estate. Here’s a column with a question that will resonate with more folks as time goes by.

Dear Real Estate Adviser,

My elderly mother needs assisted living. She owns a home in which she has lived for 50 years. If she sells the home, valued at about $150,000, she wouldn't be eligible for Veterans Affairs benefits for assisted living.

Is there any way she might be able to place the home in some kind of trust and not realize any monetary benefit from the sale?    -- Steve F.

Dear Steve,

Yes. A family trust might be the solution to the asset-retention challenge your mother -- and ultimately the rest of the family -- will face.

Also known as a living trust or revocable living trust, this type of trust protects a home and other assets such as stock from remaining on the books as part of her net worth. In addition, it covers how those individual assets will be handled prior to and after your mother's passing.

The trust would also leave control of the home in the hands of your mother while she is alive, provided she remains mentally competent.

Once your mother -- who is considered the grantor in this case -- passes away, the appointed family trustee would take over and be required by law to distribute the property precisely as the grantor desired.

In the case of a house, the children typically would receive equal shares after the parent's passing. At that point, the house could be sold, or one or more of the heirs could elect to buy the others out and take ownership. There may be some overhead to maintaining a trust, by the way.

Gifting the house outright to the children, who could then sell it, is another option, particularly if you need to raise money soon for your mother's assisted-living expenses.

The negatives to this are the tax consequences, since federal law only permits an annual exclusion of up to $13,000 per family member without payment of federal gift tax. It would be prudent to have the home appraised by a professional appraiser before doing this to avoid any questions of value by the Internal Revenue Service.

As your family plans out a strategy, take into consideration any Medicaid benefit planning in addition to the VA assisted-living planning as part of a comprehensive long-term elder-planning approach. Realize the gift of a house can result in a period of ineligibility for Medicaid benefits.

For these and many other reasons, you should first consult with an estate-planning attorney or other asset-protection professional who is steeped in knowledge of VA pensions and assisted-living benefits.

You also might take another look at the U.S. Department of Veterans Affairs "Survivors and Dependents Benefits -- Death After Active Service" section. The VA's toll-free line for income verification and means-testing questions is (800)929-8387.

Good luck in sorting this out and best wishes to your mother, whose needs should remain paramount to others in this matter.

Note- Always seek competent legal advice on issues such as estate planning. Your local bar association is a good source to locate specialists in the field of estate planning. This column should not be construed as legal advice!

See the column on line - Family trust could save mom's benefits

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
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Fairfield, NJ 07004
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Monday, October 11, 2010

The FDIC strikes back

The FDIC has announced it will be filing lawsuits alleging negligence by bank officers at several closed banks, the Washington Post reports. It’s about time.
“The Federal Deposit Insurance Corp. has authorized lawsuits against more than 50 executives at failed banks across the country in an attempt to recover more than $1 billion of the agency's losses during the credit crisis.
“More than 50 bank officers and directors were negligent, committed fraud or otherwise breached their duties and are, therefore, legally liable, the FDIC concluded after lengthy investigations into the first wave of bank failures.”
The FDIC has paid our over $75 billion since 2008 in connection with bank failures. Previous recovery efforts in the late 1980s were successful.
"These investigations are now beginning to produce results, and we anticipate that many more will be authorized," FDIC Chairman Sheila C. Bair said in a statement Friday evening. "As a matter of policy, the FDIC believes strongly in accountability for directors and officers whose personal misconduct led to a bank's failure."
Only one lawsuit has been filed so far against officers of IndyMac Bank.

I hope we see more.

Read the full story.

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
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Thursday, October 7, 2010

Two more banks fail; U.S. tally at 127 - MarketWatch

According to a report from Market Watch, the FDIC has closed two more banks bringing the total of closed banks to 127.  While the FDIC press releases are mum about underlying reasons for the bank's poor performance leading to its closing, it seems clear that the financial marketplace is not getting better.

Read the full report: Two more banks fail; U.S. tally at 127 - MarketWatch

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Wednesday, October 6, 2010

New Jersey Announces Settlement with Wells Fargo - is your mortgage modification around the corner?

Attorney General Paula T. Dow announced today that Wells Fargo Home Mortgage has agreed to provide New Jersey consumers with nearly $67 million in loan modifications and pay the state $3.98 million to resolve allegations that companies it acquired – Wachovia Corporation, Golden West and World Savings — deceptively marketed adjustable rate mortgage loans.
What happened to bring about this announcement? A loan with negative amortization, that's what. Negative amortization loans generally kept your monthly payments artificially low. They were not sufficient to pay down any principal and, in fact, usually neither the interest. At the end of 5 years, you could owe as much as 125% of the money you borrowed.
New Jersey homeowners accounted for about 5 percent of the “Pick-a-Payment” loans acquired by Wells Fargo as part of its acquisitions of Wachovia, Golden West and World Savings in 2008. Under terms of the settlement, Wells Fargo will provide across-the-board forgiveness of accrued interest and late fees for eligible delinquent borrowers who live in the homes on which they took out “Pick-a-Payment” mortgages.
Starting on December 18, 2010, the company also will provide loan modification terms that enable affordable payments and reduce principal for some consumers. Modified loan terms will vary according to the circumstances of the borrower, but can include principal forgiveness, loan extension, interest rate reduction, and principal forbearance (which gives the borrower additional time to pay off the loan principal). Borrowers who remain current on their modified payments over three years will earn additional principal forgiveness. Borrowers who qualify may also convert into a fixed rate loan. All modification fees and pre-payment penalties will be waived. The modification program will extend until June 30, 2013.
I'm sure by now we are tired of reading about lender's abuse of their customers but it's good to see that the state is doing something to correct a past abuse.

What do you think?

Read the full article from Real EstateRama - Attorney General Announces Settlement with Wells Fargo Home Mortgage


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Monday, October 4, 2010

Four ways to avoid becoming a victim of mortgage fraud

From the blog, NJ Home Equity Loans.

The idea of being exploited by a mortgage con artist is quite scary. Although there is no way to guarantee 100% that it will not be a victim of mortgage fraud, there are several steps you can take to avoid falling victim.
Here are four ways:
  • Know who you're dealing with.Interact personally with the people you work with.
  • Fraudsters have to rush through the process because they hope that you will not see any fraudulent or illegal activities taking place.
  • Do not allow last minute changes to be made. Review everything in writing.
  • Privacy Protection. Be wary of how much information is requested during an on-line loan interview. Do not give out passwords to your bank accounts for verification, etc. Check your credit report for activity.
Read the full posting (grammatical mistakes and all) Four ways to avoid becoming a victim of mortgage fraud


For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Wednesday, September 29, 2010

Realty Times - New Short Sale Bill Submitted to Congress

Short sales are a fact of life. Their most frustrating aspect is delay by the mortgagee to review and approve the proposed short sale. Realty Times’ Carla Hill writes about legislation designed to alleviate that problem.
“U.S. Representative Robert Andrews (D-N.J.) and Tom Rooney (R-Fla) offered up new legislation to Congress last week. H.R. 6133, "Prompt Decision for
Qualification of Short Sale Act of 2010," is an effort from Congress to help keep potential buyers from walking away from short sales, simply because lenders take months to respond to their offers.”
This is certainly welcome news. It's goal-
“This legislation aims to "require the lender or servicer of a home mortgage,upon a request by the homeowner for a short sale, to make a prompt decision
whether to allow the sale." (Library of Congress) “
The bill is strongly supported by the National Association of REALTORS. We have to say that it is long overdue.

“Hopefully, if this bill passes into law, homeowners will find relief from their mortgage woes, and will be able to sell their home without having to be
foreclosed upon.”


Read the full article: Realty Times - New Short Sale Bill Submitted to Congress

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Tuesday, September 28, 2010

The Empire State Building- what it was not designed to do

I grew up believing that the mast on the Empire State Building in midtown Manhattan, New York City, was put there to serve as a docking port for dirigibles. Dirigibles were a flight of fancy, most notably advanced by the Germans as a source of national pride, for transatlantic flights.

One featured prominently in an Indiana Jones movie, and, most tragically, in a fiery crash in Lakehurst, New Jersey. Now, don't be confused by the blimps floating over football stadiums. Dirigibles have a metal frame to suppor its skin. A blimp is nothing more than a big bag of helium.

The New York Times puts the kibosh on the link between the Empire State Building and dirigibles:

THE new exhibition at the Keith de Lellis Gallery, “New York: A Bird’s-Eye View,” has a striking assortment of aerial views of the city. No image is more arresting than that of the Navy dirigible Los Angeles docking at the mooring post of the Empire State Building, a giant cigarlike cylinder coming nose-to-nose with the tallest building in the world.

That the photograph is a composite, a fake, is disappointing but not surprising: no airship ever docked there, and indeed the whole mooring mast concept was a bit of a stunt itself.
Now, I didn't know that. Did you? Read the full article.

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
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Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Monday, September 27, 2010

Thinking of a savings account? FDIC and NCUA insurance important considerations

There's one thing that we should remember when it comes to opening a savings account or any type of bank account - deposit insurance.

Here's an informative article from E-Wisdom.com that you should find helpful.

"Consumers may consider a number of options when picking a new savings account, including its yield and fees, especially as new federal regulations cause banks to look for different ways to make up losses.

"A recent report from U.S. News and World Report Money's Jim Wang noted there are a number of factors consumers may consider when looking at a new savings account.

"The first thing they should check is if the banking institution is insured by the Federal Deposit Insurance Corp. Credit unions should have backing from the National Credit Union Administration.
"FDIC and NCUA insurance protect up to $250,000 per depositor and if a financial institution doesn't have that protection, pass on it," Wang wrote. "There's no reason why you should put your savings in a bank that isn't insured."
"Interest rates are another factor, and banks may offer a promotional period that lasts a set amount of time. Wang said consumers should make sure the "post-teaser" level is comparable to other offers.

"Potential fees also present a concern and these charges may be connected to how much money is in an account. Some savings accounts, for example, require that a specified minimum balance be maintained to avoid a monthly fee."

Go to the website- FDIC and NCUA insurance important when considering savings accounts


For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
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Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Thursday, September 23, 2010

New York Times - The U.S.-China Exchange Rate Squeeze

Confused by all this talk of the effects of the exchange rates between Chinese and U.S. currency? I know I am. The following opinion by Sewell Chan appeared in the Sunday New York Times.


WASHINGTON — Say there was a way to create a half-million American jobs over the next two years without adding a dime to the debt or deficit. And say it would also revive moribund Rust Belt factories, reduce the country’s gaping trade deficit and help stabilize the international economic system.

All of this would occur, some economists say, if only China would stop manipulating its currency, keeping it artificially undervalued as a means of boosting its exports and fueling its tremendous economic growth.

Anger over China’s exchange-rate policy nearly boiled over in Congressional hearings last week. Treasury Secretary Timothy F. Geithner accused China of violating international norms. President Obama plans to press the currency issue, along with complaints about China’s policies on trade and intellectual property, at the Group of 20 summit meeting in South Korea in November.

That China has undervalued its currency, the renminbi, for much of the past decade to boost its surging export-driven economy is not seriously doubted; China intervenes in the markets by buying an estimated $1 billion a day using renminbi. For the lay observer, it’s befuddling. Why does this situation persist?

Would China benefit by letting the renminbi rise?

Yes, most experts agree that China would probably be better off if the renminbi’s value rose. Doing so would give Chinese consumers more purchasing power, lessen the risk of inflation and asset bubbles, and potentially reduce stark inequalities that have contributed to social unrest.

What’s stopping China, then?

Exporters, concentrated along the southern coast, wield enormous clout in Beijing and benefit from an undervalued currency, said Minxin Pei, a political scientist at Claremont McKenna College in Claremont, Calif. So do state-owned enterprises, which have excess capacity and need to be able to sell goods cheaply abroad. China’s importers are unhappy with the undervalued renminbi — as are officials at the central bank — but both groups are relatively weak.

In the United States, there must be someone against a stronger Chinese currency, right?

Large multinational corporations, and Wall Street, are comfortable with a weak renminbi. Many of the biggest American conglomerates make goods in China (or sell them in the United States) and benefit from the undervalued currency. Financial services companies find deal-making easier with a strong dollar and want to help invest the capital sloshing around China.

But aren’t the forces on the other side just as strong?

A high dollar places tremendous competitive pressure on American agricultural producers and domestic manufacturers, and thereby hampers job creation.

So, it’s not surprising that Midwest politicians and labor unions have been among China’s fiercest critics. High unemployment has also prompted the White House and most Congressional Democrats (and a substantial number of Republicans) to side with the critics.

How have previous problems with a strong dollar been handled?

In the late 1960s, rising federal spending during the Vietnam War and the Great Society pushed inflation upward. The United States had a trade deficit for the first time in the postwar era. Manufacturers were furious. President Richard M. Nixon responded by taking the country off the gold standard in 1971, which caused the dollar to fall by about 20 percent.

From 1981 to 1985, the dollar soared again, as the Federal Reserve boosted interest rates to combat inflation and the Reagan administration borrowed to finance big budget deficits. In September 1985, Treasury Secretary James A. Baker III met Japanese and German officials at the Plaza Hotel in Manhattan. Faced with threats of protectionist action by Congress, the two countries agreed on a plan to devalue the dollar.

So, could such an agreement happen again?

A rapid devaluation of the dollar is unlikely anytime soon. No country, even an ally, wants to see its currency suddenly rise in value (and its exports become more expensive) amid a fragile global recovery. The international monetary system has also gotten more complex, with the creation of the euro and the rise of large emerging economies like Brazil, India and Russia.

Though China allowed its currency to rise by more than 20 percent against the dollar from 2005 to 2008, the financial crisis (which led investors to flock to the dollar) led to a return to old ways. In June, Beijing promised greater exchange-rate flexibility, but since then the renminbi has risen by only about 1 percent. Too little, too late, Mr. Geithner testified last week.

Ultimately, says Jeffrey A. Frieden, a Harvard political scientist, exchange rates reflect broader macroeconomic forces. For the dollar to get back in sync, Americans must save and invest more and consume and borrow less, and the Chinese, Germans and Japanese have to recognize that excessive reliance on exports is not to their long-run advantage.

“It’s conceivable that the Chinese might conclude it’s in their own self-interest to let the currency rise,” Professor Frieden said, “but it’s not going to come from browbeating and it’s not even going to come from well-meaning attempts at cooperation.”

Read the full column here.

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Fairfield, NJ 07004
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Wednesday, September 22, 2010

How Underwater Mortgages Can Float the Economy

We have previously written about the plight of homeowners whose homes are now worth less than the mortgage. Some have decided to walk away from property while others are making their mortgage payments. In the face of low mortgage interest rates, refinancing would be a good idea but with LTVs, loan to value ratios, being what they are homeowners cannot refinance.


The Federal government stepped in with a program allowing banks to make loans up to 125% of LTV, but there have been few loans made.

The Sunday New York Times carries an Op-ed on the issue written by Glenn Hubbard and Chris Mayer.

“RECENT calls for another federal stimulus package raise an important question: Before considering costly short-term measures to raise overall consumer demand, have we done enough to ensure that financial markets will work properly and lead us to recovery? For housing — the sector at the center of the crisis — the answer is no. But the good news is that it might be possible to improve the housing market and invigorate the economy in a way that won’t require a costly stimulus package.
“In a normally functioning mortgage market, almost all homeowners would have refinanced their mortgages to take advantage of low rates. Yet today, low interest rates are doing little to stimulate the housing market because of other stresses, including declines in house prices, falling household incomes and banks’ wariness of making loans.
“To change this dynamic, we propose a new program through which the federal government would direct the public and quasi-public entities that guarantee mortgages — Fannie Mae, Freddie Mac, Ginnie Mae, the Department of Veterans Affairs loan-guarantee program and the Federal Housing Administration — to make it far easier and quicker for homeowners to refinance.”
Whoa, haven’t we been down this road? But, they write,
“This program would be simple: the agencies would direct loan servicers — the middlemen who monitor and report loan payments — to send a short application to all eligible borrowers promising to allow them to refinance with minimal paperwork. Servicers would receive a fixed fee for each mortgage they refinanced, which would be rolled into the mortgage to eliminate costs to taxpayers.”
How does this work in dollars and cents?
“Consider a family that bought a home in 2006 for $225,000, taking out a $200,000 fixed-rate mortgage at the prevailing 6 percent interest rate with monthly payments of about $1,200. That home is now worth about $175,000. The family still owes $189,000 and thus cannot refinance because they are underwater.
“But under our proposal, the family would be offered a new mortgage at today’s prevailing rate of 4.3 percent. The family would see a 15 percent decline in their monthly mortgage payment, saving more than $2,000 per year. This would not only help homeowners through the current crisis, but would be the equivalent of a 26-year tax cut of more than 4 percent of income, assuming the family spends around 30 percent of income on housing.”
But prior experience has shown mortgage programs to be a bust. They know that and ask,
“What went wrong? First, the program was not widely publicized relative to the federal government’s efforts to help with more modest loan modifications. Second, the refinancings require substantial upfront costs for borrowers. Third, many borrowers — those with second liens or shaky incomes — were locked out. (About 20 percent of all borrowers with federally backed mortgages have a second lien.) Last, many borrowers do not know the current value of their homes, and are reluctant to pay to get an appraisal only to be turned down for a refinancing.
“THE program we propose addresses these issues. It would have minimal costs, which we would roll into the cost of the mortgage rather than forcing homeowners to make a big upfront payment. For mortgages with second liens, the government could request a blanket approval from all servicers to allow the new mortgages to have priority over existing second ones. It is in the interest of the servicers of second liens to allow such refinancings, because they reduce payments on the first mortgage and thus lower default risk on the second lien.”
Seems like common sense to me, what do you think? Read the full Op-ed.
Glenn Hubbard, the chairman of the Council of Economic Advisers under President George W. Bush and the co-author of “Seeds of Destruction: Why the Path to Economic Ruin Runs Through Washington, and How to Reclaim American Prosperity,” is the dean of the Columbia Business School, where Chris Mayer is a senior vice dean.


For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com