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
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, 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
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, 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.

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 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

Tuesday, September 21, 2010

Death and taxes in New Jersey - ouch!

The Star Ledger’s Karin Price Mueller writes,


“Sure, the thought of dying doesn’t bring a smile or a happy dance to most. But dying and being taxed, even after you’re dead?

“Welcome to New Jersey.

“While there have been many changes to estate tax law through the years, often benefitting the so-called rich, New Jersey, as usual, rocks to its own drummer. It’s a politically charged issue, but let’s face it: Dead people can’t vote. And the state isn’t likely to give up easy revenue anytime soon.

“So don’t die in New Jersey — or at least don’t die in New Jersey without a comprehensive estate plan.”

What kind of death taxes are there? Federal and state.

“The federal estate tax exemption increased over the past decade, meaning you were able to leave more money free of federal tax as the exemption went up each year. For 2010, the tax was completely repealed, making this year a great year to die, at least federally speaking. If there’s no action in Washington for 2011, a $1 million exemption will be resurrected.

“Congress keeps dallying around the issue, so the future of the federal estate tax remains, for now, in limbo. New Jersey’s estate tax, by comparison, is pretty solid.”

While some states tied their estate taxes to the federal, New Jersey didn’t. Thus, the exemption in New Jersey has been $675,000 since 2001.

“That may sound like a lot of moola, but it’s not hard to die in New Jersey with that much in assets. Lots of state residents reach the $675,000 threshold in real estate alone. Throw in a 401(k) and a bank account or two, and you’re there. Even if you don’t have enough to owe federal estate tax, you very well may owe the tax to New Jersey.

“Here’s an example: Let’s say you die with an estate worth $950,000 in 2010 or 2011. You won’t owe any federal estate tax. But anything over $675,000 — in this case, $275,000 — would face the New Jersey estate tax. That comes to a bill of $31,800. If you instead died in a state with no state estate tax, your estate would owe nothing at all.”

Ouch, so what to do?

Ms. Price Mueller recommends a few options. Find out what they are by reading 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
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

New Jersey in the news

Is something wrong with New Jersey’s air?

It must be the air. What else could explain another breaking story about fraud by a New Jersey resident? This time to the tune of $45 million in a Ponzi scheme.

As reported in the Star Ledger, Montclair resident Antoinette Hodgson “told her alleged victims she was using their money to buy and renovate homes and then sell them for profit, authorities said.”

“But in truth, authorities say, she used money from new investors to repay older investors and spent hundreds of thousands of dollars at casinos in Atlantic City and Las Vegas. She also spent more $700,000 on a Dunkin Donuts franchise in Arizona, authorities said.”

Don't get me wrong, I love New Jersey, been here for more than 30 years and plan on staying another 30 years.

The Star Ledger article can be found 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, September 20, 2010

From Realty Times – First Time Buyer ABC’s

Carla Hill, writing for Realty Times, discusses the questions and terminology confronting first time home buyers.


Here’s the full article:

As a first-time buyer, you have a lot of questions. There is terminology you don't understand. And there are expenses you need to anticipate. Here are some explanations of just that, to help you on your way to homeownership.

First, what costs should you expect? After you have become "pre-approved" for a mortgage, you will know how much you can spend (aka your "budget"). Pre-approval is done by the bank or lender who will be writing your mortgage. It is accessed by your: credit history, assets, employment history, and financial status. And it guarantees you a loan.

Being pre-approved can quicken the time it takes to close, as well as give you an advantage over buyers who are not pre-approved, should a home garner multiple offers.

Next, figure out how much money you'll need to put down. Are you looking at an FHA loan with 3.5 percent down? Or are you planning on putting 15 to 20 percent down? Financial expert Suze Orman recommends that in today's troubled market, you put at least 20 percent down on a house.

Closing costs are what are paid, well, at closing. You should expect to pay for an appraisal, title services, title insurance, transfer taxes, inspections, loan origination, private mortgage insurance, and homeowners insurance, among a host of other charges. The average closing costs are paid, yes, by the buyer. And they average around 2 to 4 percent of the total purchase price of the home. You can, of course, negotiate payment of closing costs with the seller. This is especially true in a market which favors buyers.

What is mortgage insurance? Mortgage insurance, also known as private mortgage insurance (PMI), protects your lender, should you default on your loan. And it can be required when you have made only a small downpayment. It costs around 1 percent of the total loan. According to the Federal Reserve Bank of San Francisco, "Under [The Homeowner's Protection Act of 1998], mortgage lenders or servicers must automatically cancel PMI coverage on most loans, once you pay down your mortgage to 78 percent of the value if you are current on your loan."

What is escrow? With a purchase as large as this, it is important that one party doesn't run off with all the funds! This is where an escrow account comes into play. All necessary and agreed upon funds are put into a third party account. When all terms have been met, then the funds are released to the appropriate parties. [Escrows, in the sense the term is used here, is not a New Jersey custom.]

What is an offer? When you have found a home you like, you'll discuss with your agent what a reasonable price pay is. This will more than likely be less than the price the seller is asking. And it will be based on the condition of the home, the price of home's in the neighborhood, as well as current market conditions. Remember, your offer is the price you are willing to pay for the property. You have signed the offer and, if accepted, you will be expected to follow through with the purchase of this home!

What are property taxes? Welcome to homeownership! Property taxes are paid each year to your local government at the county level. Some areas of the country charge much higher taxes than others, and the price is a percentage of the value of your property. That means that more expensive the house, the more expensive the taxes.

As a first-time buyer, it is highly recommended you work with a local real estate agent. They not only can answer any questions you may have, but their wealth of knowledge and experience will help guide you in a positive direction for this important transaction.

You can read the article on-line.


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, September 16, 2010

Homebuyer Tax Credit Extension for Contracted Homebuyers Only

A reminder from Realty Times about the Homebuyer Tax Credit -
The extension on filing for the homebuyer tax credit is available only to those who had already contracted to buy a home by the end of April.
Closings must occur no later than September 30, 2010.

The extension applies only to homebuyers who had sales contracts in place as of April 30, 2010, but have not yet closed.

Military personnel still have until April 30, 2011 to contract a home sale and June 30, 2011 to close the deal. Those dates for the military are unchanged by the new legislation.
Read the full article - Realty Times - Homebuyer Tax Credit Extension for Contracted Homebuyers Only

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 15, 2010

This and that to save you money

As any sane American or human for that matter, we like to save money. So, here are some news and article blurbs that may help you do that:


New York Times, Sept. 12, 2010

Bucks: Finding Banks That Don’t Charge A.T.M. Fees
By Jennifer Saranow Schultz

Banks have different policies when handling fees for A.T.M. use. “Here are a few banks with more generous A.T.M.-fee policies as well as resources for finding other banks with similar policies.”

The article also contains links to other sites.


New York Times, Sept. 10, 2010
Your Money: In Using Software to Write a Will, a Lawyer Is Still Helpful
By Tara Siegel Bernard

“Four wills, written using four different computer programs, point up some strengths and some surprising weaknesses.” Our attorney clients will be happy with this article. And those of us in the title insurance industry can testify to the botched estates caused by self-drafted wills.

Read the full article here.

New York Times, Sept. 10, 2010

Health: Getting a Guide for the Jungle of Individual Health Policies
By Lesley Alderman

“Health insurance brokers, who are paid a commission by insurance companies but are free to consumers, are busier than ever.”  I didn't know that, did you?

Read more about what you and I don't know.


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 14, 2010

A sign of the economy - Nervous Americans want easy access to their cash

From the Associated Press:
Nervous Americans want easy access to their cash

By Pallavi Gogoi

NEW YORK — Americans want to be close to their cash.
People are bailing out of bank certificates of deposit and parking their cash in checking and savings accounts that earn little or no interest but also don't exact penalties for early withdrawal.
It's another signal of how nervous Americans are about their finances as the U.S. economy struggles. Consumers are stuck with few options to make their money work. The Standard & Poor's 500 is down 0.5 percent for the year, one big reason why people have pulled a net $145.3 billion out of mutual funds in the first eight months of the year, according to Lipper Inc.
Why? "At times of uncertainty, there is a natural human tendency to stay liquid and have money easily accessible," says Dan Geller, executive vice president at financial data analysis firm Market Rates Insight.

A CD commonly carries an interest rate for a fixed term ranging from three months to five years. Depositors typically pay a penalty if they withdraw their money prior to the end of the CD's term.
"Interest rates on short-term instruments like CDs are so low, why bother when you can leave money in the bank?" says Martin Feldstein, professor of economics at Harvard University.
This is not a stand-alone phenomenon: As American households spend less, chances of higher economic activity and a healthy recovery continues to diminish. It's no surprise that overall deposits in U.S. banks fell for two consecutive quarters for the first time in two decades.

Read the full article and make up your mind whether you want to stay in certificates of deposit.


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, September 13, 2010

A Downside of Short Sales

We’ve previously written about short sales. Their numbers are growing as more homeowners sell in a down market. (As a refresher, a short sale occurs when the sale price is less than the amount of outstanding mortgages and expesenses of sale and the lender agrees to accept less than full payment for its mortgage.)

Short sales are subject to abuses that can amount to fraud. The most usual case is the broker who arranges the short sale and does not disclose that his buyer will resell the house at a higher price immediately after the short sale occurs. Title companies are one the lookout for these types of deals and refuse to insure them.

The Sunday New York Times discusses this problem in a column by Bob Tedeschi. Here’s the column

A Downside of Short Sales
By Bob Tedeschi

STRUGGLING homeowners have found some refuge in short sales, in which lenders allow borrowers to escape foreclosure by selling a home for less than what is owed on the mortgage. Government programs offering incentives to both parties will push the number of short sales to 400,000 this year from 100,000 in 2008, according to CoreLogic, a financial consulting firm.

But the jump in short sales has also given rise to a new form of fraud — which, as a recent study by CoreLogic suggests, could undermine the burgeoning practice.

Fraudulent short sales take many forms, but Frank McKenna, the vice president for fraud strategy at CoreLogic and one of the report’s authors, says one arrangement is more common than others.

An agent for the borrower negotiates with the lender to obtain a low selling price for a property, then sells it to a “straw buyer,” or someone with whom the agent is affiliated. The agents are sometimes real estate agents, or employees of businesses that advertise as “foreclosure rescue” specialists, Mr. McKenna said. As the agent negotiates with the lender — and unbeknownst to the original homeowner or the lender — the agent arranges to resell the property at a higher price. The new buyers may not know that they could have obtained the property for a lower price. Or, even worse, they may be victims of identity theft, unaware that their financial information was being used to buy a home.

In other fraudulent transactions, a borrower might purposefully default on a mortgage he or she could actually afford. The borrower arranges to transfer the property to a friend or relative through a short sale, and the original borrower can remain in the home. The new owner can also transfer ownership back to the original owner through a quitclaim deed, Mr. McKenna said.

He estimated that only about 2 percent of the short sales completed in the last two years were fraudulent, but said fraud was becoming more frequent. “It’s happening a lot more in this market because there are so many more short sales,” he said. “There’s more opportunity to go after the quick buck.”

CoreLogic does not track the actual number of fraudulent short sales. Rather, it estimates the figure by identifying short-sale transactions in which the house was quickly sold or “flipped” to a new buyer, or resold for a vastly higher price. The company obtains and analyzes publicly available sales and financial information on most of the nation’s home purchases.

Florida, California, Texas and Arizona had the greatest number of suspicious short sales, according to the CoreLogic report. New York ranked fifth, with roughly 5.5 percent of all short sales falling into the “suspicious” category. New Jersey ranked eighth, with about 3.3 percent of short sales categorized as suspicious. In Connecticut, the percentage of suspicious short sales was close to zero.Mr. McKenna said the rising number of suspicious short sales could undermine the use of these transactions as a foreclosure alternative. That, he said, would be unfortunate, since borrowers and lenders have only recently reported some momentum in successfully completing short sales.

But John P. Bonora, a vice president of the Fairfield County Bank in Ridgefield, Conn., said he did not expect this to happen. Noting that CoreLogic also sells fraud prevention services to lenders, Mr. Bonora theorized that its report might overstate the threat of fraudulent short sales.

“I’d forward the report to my folks and say you should have some of these things in the back of your mind,” he said. “But I don’t think this report would deter us from doing a short sale.”

Still, Mr. Bonora said, the report makes him more suspicious of real estate agents who market themselves as foreclosure specialists.

“They’re probably speaking with borrowers on a daily basis about foreclosures,” he said. “And people are opportunists.”

The story can be found on-line 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 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Thursday, September 9, 2010

It’s getting harder for many to borrow money to buy a home

Bob Tedeschi writes in the New York Times of the effect of falling pay on mortgage applications and approvals.


He writes,
“LENDERS scrutinize all elements of a mortgage application, but one factor remains critical: the debt-to-income ratio, or the percentage of a borrower’s monthly gross income that goes toward housing expenses. If it surpasses 36 percent, lenders will typically reject the loan.”
Falling income makes it difficult to qualify for the lowest cost loan.
“The higher debt-to-income ratios are a function of the diminished income levels of many homeowners since the economic downturn, said Nicolas P. Retsinas, a senior lecturer in real estate at Harvard Business School and one of the authors of the report.”
“In some ways it’s counterintuitive to the big headlines about falling home prices and increased vacancies,” Mr. Retsinas said. “And while housing prices have moderated, they really haven’t tumbled enough to account for falling incomes.”
Just what the real estate market needs… more bad news.

Read the full story.

If you have questions about what you see here, contact
Stephen M. Flatow
Stephen's Title Agency, LLC
StephensTitle AT comcast.net

Wednesday, September 8, 2010

What’s in a real estate buyer’s name?

That’s the question being raised in a recent New York Times “Big Deal” column.

“WHEN you see the words “Bubble & Squeak,” what do you think of? A child’s toy? Bathroom cleanser? Or does the traditional English dish of fried leftovers like potatoes and cabbage come to mind?”
“How about property in Chelsea? That is correct, because in addition to the dish, Bubble & Squeak is the name of a small company that owns real estate.”
The company is a limited liability company, commonly called an LLC, that has become very popular with real estate investors in the last 10 years or so. LLCs provide a limitation on liability similar to that of a corporation but without the same tax consequences as corporate ownership. They also provide some anonymity.
“We absolutely advise people who want their identity confidential to buy in an L.L.C.,” said Shaun Osher, the chief executive of CORE Marketing Group, a real estate brokerage firm. “Most of the time, the L.L.C. name has some kind of a significance. Usually it’s personal, but it has some meaning.”
The column asks, “What do these names have in common: “Elroy L.L.C.,” “Astro L.L.C.,” and “Judy L.L.C.”?”

To find out, read the column.

If you have questions about what you see here, contact
Stephen M. Flatow
Stephen's Title Agency, LLC
StephensTitle AT comcast.net

Tuesday, September 7, 2010

Advice for home sellers - Pricing homes right in a housing slump

The Asbury Park Press carries an AP story of interest to home sellers.
“The good news for sellers: Your house will sell. The bad? Only if the price is just right.”
That translates into taking a hard look at your listing price if you are serious about selling.
“The recently expired tax credits for homebuyers gave sellers a boost. Home sales surged and values edged up. The worst appeared to be behind us. But since the deadline passed at the end of April, housing has faltered. Job insecurity, tight credit and consumer confidence are undermining a sustained recovery, despite the lowest mortgage rates in decades.”
“Here's the disconnect facing sellers: The vast majority of sellers believe their homes are worth more than what their real estate agent recommends, according to HomeGain.com. At the same time, most buyers think for-sale homes are overpriced.”
And it doesn’t look as thought things will change for a while. What do you think?  How does this affect you?

Read the full article.

If you have questions about what you see here, contact
Stephen M. Flatow
Stephen's Title Agency, LLC

Monday, September 6, 2010

From the New York Times - Housing Woes Bring New Cry: Let Market Fall

Bad news in the forecast for homeowners on Labor Day? The New York Times prints, "Housing Woes Bring New Cry: Let Market Fall."
The unexpectedly deep plunge in home sales this summer is likely to force the Obama administration to choose between future homeowners and current ones, a predicament officials had been eager to avoid.
The Obama administration has been trying to pull a rabbit out of the hat when it comes to the falling value of American homes and poor market demand.

Over the last 18 months, the administration has rolled out just about every program it could think of to prop up the ailing housing market, using tax credits, mortgage modification programs, low interest rates, government-backed loans and other assistance intended to keep values up and delinquent borrowers out of foreclosure. The goal was to stabilize the market until a resurgent economy created new households that demanded places to live.
With the exception of the tax credits gimmick, these programs have not been successful. The mortgage modification program has been an outright disaster.  Maybe drastic action is in order.
Some economists and analysts are now urging a dose of shock therapy that would greatly shift the benefits to future homeowners: Let the housing market crash.
When prices are lower, these experts argue, buyers will pour in, creating the elusive stability the government has spent billions upon billions trying to achieve.
There is a lot at play here; financially and emotionally. We've complained before about "strategic defaults" where a homeowner walks away from his home because its market value has fallen below the value of the mortgage. And we've mentioned that every seller thinks her home is worth a million dollars when it's listed for sale.

Maybe the "shock therapy" is what is needed.

Read the full column, and let us know what you 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 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Wednesday, September 1, 2010

From Bankrate.com - Five tips on how to avoid identity theft

Five tips on how to avoid identity theft. We’ve had it happen to us and can testify how it affects your life.

“Everyone makes mistakes. After all, it's only human to goof up now and then. But if you want to protect yourself from identity theft and other financial scams, you need to play it safe, be smart and avoid simple mistakes that can expose your financial data and identity to fraudsters.”

Here are the five tips:
1. “Never carry a Social Security card, whether it's your own or your spouse's, parent's, child's or other family member's, in your wallet.”
While there’s no doubt you'll need your SS number to apply for a job, get a mortgage “most people don't need to give out their Social Security number on a day-to-day basis.”
“Another tip: Don't write a Social Security number on a scrap of paper and carry that in your wallet instead of a Social Security card. If your wallet is lost or stolen, a person of criminal intent can easily guess what those nine digits are.”
2.  Don’t yak on a cell phone in public.
“Elevators, public streets, restaurants, airport terminals -- these are but a few of the public places where Linda Foley, founder of the Identity Theft Resource Center in San Diego, says a private conversation on a cell phone can be easily overheard by someone who can memorize or write down any financial information that's disclosed.”
3.  Be wary of Internet friends.
“[N]ot all of the people you may encounter are who they say they are. Some of them are scammers on the prowl for information.”
"You share where you were born and when you were born, now I know where to get your birth certificate," Foley says. "I can take that and get a duplicate Social Security card and with that I can get a driver's license and with that I can get a passport and with that I can travel anywhere and be you as much as I want."
4. Keep financial information off of your resume.
Posting your resume on line?
“Never put your Social Security number, birth date, place of birth or other financial information on your resume. Be wary of scams that use e-mail messages -- "We loved your resume, and we need your Social Security number to do a background check so we can hire you," is one example -- to prey on unemployed people.”
5. Pass up that free offer in exchange for personal information.
"Be suspicious of offers that seem too good to be true, regardless of how or where they're presented. That free T-shirt may be a lure to entice you to fill out an application for a credit card that doesn't exist. Once you complete the application and get the T-shirt, those data are out of your control.”
You can read the full article on Bankrate.com.


If you have questions about what you see here, contact
Stephen M. Flatow S
Stephen's Title Agency, LLC
StephensTitle AT comcast.net