Attorney Scott J. Clifford recently authored the following article that was featured on www.housingpredictor.com about buying a home again after foreclosure.   You can find the article at http://www.housingpredictor.com/2011/buying-a-home-after-foreclosure.html.  If you have any questions, please feel free to contact Attorney Clifford at 781-829-9100.

The Massachusetts Supreme Judicial Court recently issued its opinion in the matter of Bevilacqua v. Rodriguez (SJC 10-880).  The SJC affirmed the lower court’s decision dismissing the Plaintiff’s attempts to “quiet title” for lack of standing, holding that the Plaintiff never possessed record title to the property when he thought he purchased the property at foreclosure from U.S. Bank, N.A. since U.S. Bank, N.A. did not hold a valid mortgage when it began its foreclosure proceedings.  This decision reaffirmed the SJC’s holding in U.S. Bank v. Ibanez which was decided last year.  The SJC in Ibanez previously held that foreclosing lenders must be the record holder of the mortgage prior to the time of the first foreclosure publication under G.L.c. 244, § 14. 

So this most recent decision leaves those buyers who purchased at the foreclosure sale in limbo as the foreclosing lender must re-foreclose in order to cure the title.  So buyers beware when purchasing property at foreclosure or subsequent to a foreclosure.  If you have any questions concerning your title if you purchased a property at foreclosure please contact Attorney Scott J. Clifford at 781-829-9100.

The Federal Hosing Finance Agency appears poised to help more homeowners who find themselves in the all to familiar position of finding they owe more on their homes than the homes are worth – a concept called being “underwater”.  The agency’s Home Affordable Refinance Program (“HARP”) has been extended until the end of 2013.   This will help those homeowners who are current on their existing mortgage and as a result could receive a lower interest rate.   This is yet another step in hopefully the right direction of helping those who previously could not take advantage of historically low interest rates because of their homes being “underwater”.  If you find yourself “underwater” and are current with your mortgage, call Attorney Scott J. Clifford so we can put you in touch with a qualified and licensed mortgage broker who may assist you in obtaining a HARP refinance.

Mortgage rates have hit new historic lows.  Now is the time to lower your monthly payment.  If your interest rate is not already below 4.00% contact our Attorney Scott Clifford or Attorney Larvey so they can put you in touch with one of the lenders we work with who are offering rates in the mid to high 3s depending on the term and your credit scores.  

As reported back in April, the Massachusetts legislature has been working to overhaul and modernize the Massachusetts Homestead Act. The legislation has finally been passed and enacted into Law. The modernization of the Homestead Act should provide greater consumer protection against creditors and clarifies ambiguous language in the existing homestead laws. There will now be presumptive homestead protection from creditors for homeowners with $125,000.00 in equity plus the option that previously existed to record a Declaration of Homestead which includes higher limits of protection. Additional changes include protections for beneficiaries of trust along with protections for co-owners who transfer property to themselves.

The fall out from the mortgage crisis continues to create new and more complicated lending guidelines. The latest one is probably the scariest as a borrower could potentially lose their financing even a day before the closing.

Fannie Mae and Investors now require that all debts and potential debts be re‐verified at the time of closing. Any change (increase) to existing debt or the addition of new debt could result in your loan no longer meeting qualifying guidelines and your loan being denied.

If any new debt is acquired on any existing credit accounts and/or if any debt is incurred through new credit accounts, the loan will be subject to requalification. If it is determined that your loan does not meet current qualifying guidelines, your loan closing could be delayed or terminated. This could result in the loss of your rate lock, your earnest money deposit and other costs associated with your loan.

This problem is going to occur most often in connection with home purchases. Typically, once people have completed their home inspection, signed their P&S Agreement and submitted their loan application, they typically begin planning for their new home, including the purchasing of new furniture. Too often the lure of interest free financing and/or an offer to save 10% or 15% if you open a new account causes them to charge the new purchase. This will trigger a credit inquiry and a change circumstance that will appear on the credit report pulled two or three days prior to closing which may result in your loan no longer meeting qualifying guidelines. Since most financing contingencies are eliminated when you receive your commitment from the Bank, if you lose your loan you most likely will lose your deposit on your purchase. Thus, it is very important to avoid using your existing credit and/or applying for new credit between the time you submit your loan application and the time of your closing. Feel free to contact us if you have any questions regarding these changes at sclifford@elclaw.com.

Because of the financial crisis that has hit homeowners over the last two years, a lot of homeowners who have defaulted on their mortgages are attempting to sell their homes in order to avoid foreclosure and salvage their credit. Unfortunately, due to the decline of property values in our area, some homeowners cannot sell their homes for sufficient enough amount to pay off their existing mortgage balances.

As a result, HUD has put into place the Pre Foreclosure Sale (“PFS”) procedure. There are several restrictions, but homeowners who utilize the PFS procedure can sell their homes for the current fair market value which often times is less than the amount they owe to their lender. Under this program, HUD compensates the lender for the difference in the sale price vs. the outstanding balance on the loan.

Please contact us at (781) 829-9100 or sclifford@elclaw.com if you find yourself in this situation and want to know if you meet the criteria necessary to utilize the PFS procedure.

As of January 1, 2010, any application for a mortgage loan will require the Lender to provide the Borrower with the new three page Good Faith Estimate (“GFE”). Mortgage loans are governed by RESPA regulations. After many years of planning and roundtable discussions, in 2008 the Department for Housing and Urban Development (“HUD”) came up with the initial changes to the RESPA Regulations that began on July 1, 2009.

The overall goal of the revisions to the RESPA Regulations was to bring more clarity and transparency to the process. Some of the main components of the changes that became effective on January 1, 2010 include: 1.) a new three page GFE (which is only good for ten days and cannot be changed by the Lender unless there are “changed circumstances”); 2.) Up front disclosure of the Yield Spread Premium (“YSP”) by mortgage brokers; 3.) Tolerance limitations that prohibit any variation to some fees on the GFE while allowing some limited variations to other fees on the GFE that the Borrower is allowed to shop for (the goal here was to hold Lenders accountable for the fees they disclosed on GFE and to encourage Borrowers to shop for their loan); 4.) A new HUD-1 Settlement Statement that now mirrors the GFE to make it easier for borrowers to verify the fees they were quoted and the actual amounts charged; and 5.) Lenders can now disclosure average charges for certain services that are required as part of the loan process.

Since most of these changes are happening at once and are foreign to even people who have borrowed in the past, please call us if you have any questions or concerns on how the new RESPA regulations will effect you or how to understand the new GFE.

As some of you know, the U.S. Government has expanded the homebuyer tax credit so that first time homebuyers are not the only ones eligible to receive the credit. If you previously owned a principal residence for more than five consecutive years in the last eight years, and, you are within the income guidelines, then you can qualify for a credit of up to $6,500.00. You must then own the new home for the next three years or you could be subject to repaying the tax credit.

Some important features of the homebuyer tax credit program include the following:

• The credit amounts to ten percent of the purchase price, up to a cap of $6,500.00;
• You need to sign your P&S Agreement no later than April 30, 2010 and must then close on or before June 30, 2010;
• You must be up to date with your federal taxes to receive the full credit;
• This credit is claimed on your 2010 tax return;
• Those who have not owned a principal residence in the last three years might be eligible for a credit of up to $8,000.00.

There are many more details, including income guidelines; therefore, you should consult the IRS website and/or a tax professional to see if you qualify for all or a portion of the first time homebuyer and/or repeat homebuyer tax credit on your 2010 tax return.

As of April 5, 2010, there will be another change to the smoke detector regulations (527 CMR 32.00 et seq.) that will directly effect those trying to sell homes in Massachusetts. This change to the existing regulation will apply to single and multi-family homes built (or recently renovated) before 1975. The regulations require two different types of smoke detectors to be in place depending upon the location in the home. Smoke detectors within twenty (20) feet of a kitchen or bathroom will be required to use photoelectric technology only. Those smoke detectors outside of the 20-foot kitchen & bathroom zone will be required to have both ionization and photoelectric technology. Homeowners/Sellers can make their homes compliant by either installing dual technology units or by installing separate units. It is very important to note that only photoelectric technology may be used within twenty (20) feet of a kitchen or bath.

If you have any questions or concerns, you can check with your local fire department or contact us.