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.

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 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.
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

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
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, 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
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

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
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

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.


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 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
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 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
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 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
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, 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
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 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.
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 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
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, 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
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

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


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, 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