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Joseph Coupal - Friday, July 31, 2015

By Steven Brooks

Flood zones continue to change over time.  The Federal Emergency Management Agency (“FEMA”) continuously updates maps through its Flood Map Service Center (MSC) that insurers and lenders rely upon in determining whether borrowers are required to purchase flood insurance.  The FEMA Flood Map Service Center contains current maps, and may be accessed here.

The determination of whether flood insurance is required is not set in stone at the time a loan is applied for, or even at the time of the closing.  Mortgage lenders now include flood insurance notices in their loan document packages.  These notices, which borrowers are required to sign, inform borrowers that they may not need flood insurance now, but the flood plain is always subject to change.  In that event, if the house later lies within the flood zone, the lender can require a flood insurance policy for the property.  So, even if this happens years after the closing, lenders are permitted to require borrowers to obtain flood insurance. And, if the borrower does not obtain a policy, the lender has to right to obtain it, and charge the borrower for the privilege.

In 2013, FEMA made significant changes to the maps.  These changes more than doubled the number of homes in the Boston area requiring flood insurance.  These changes caught many homeowners by surprise, and the homeowners had little or no recourse.  Given the ever-increasing cost of flood insurance, when shopping for a home, it is worthwhile to assess the likelihood of the flood maps changing, and including the property.  Low-lying lots, or lots in close proximity to water are always the most susceptible to changes.  Do your homework, and know the risks involved before purchasing.

For more information, contact Brooks & Crowley, LLP.

Supreme Judicial Court Rules That Successor Lenders Are Not Shielded From Liability For The Original Lender’s Misconduct

Joseph Coupal - Saturday, August 24, 2013
Recently, the Massachusetts Supreme Judicial Court  overturned a Superior Court decision that will change the way Massachusetts courts analyze liability of  successor lenders and assignees on consumer home loans.  In Drakopoulos v. U.S. Bank, Nat’l Ass’n, 465 Mass. 775 (2013), residential borrowers defaulted on a mortgage that required monthly payments that exceeded their monthly income by $600.00.  The borrowers had been unaware that their income was inflated on their loan application (for a 10.315% stated-income loan), and they weren’t required to demonstrate how they could make payments that were 150% of their monthly income.  Following the default, the loan and mortgage were assigned to another lender for collection.  The second lender then foreclosed on the mortgage.     The borrowers raised the original lender’s predatory lending practices as a defense to the foreclosure action, claiming violations of the Consumer Protection Act, the Predatory Home Loan Practices Act, and the Borrower’s Interest Act. The Superior Court granted summary judgment on behalf of the foreclosing lender, ruling that the original lender’s conduct could not be attributed to the successor lender.  On appeal, however, the Supreme Judicial Court found that if the acts of the original lender were unconscionable, then the original mortgage was unenforceable.  Applying  common law principles of assignee liability to the contractual defense of unconscionability, the SJC  concluded that if a mortgage is unenforceable for this reason, then the mortgage does not  become enforceable by assigning it  to a third party.  This consumer-friendly decision reaffirms the fact that lenders may not shield themselves from liability simply because they are not the original party to a contract.   Successor lenders have an incentive to insure that the laws have been followed when the original transaction took place, or else they could be left unable to enforce mortgages that they received by assignment if the original lender engaged in unconscionable behavior.     If you are buying a home and need a mortgage, let the experienced lawyers at Brooks & Crowley, LLP help you navigate through the process.  

Contributed by Laura Martin

Are We in a Buyer’s Market? : Significant Upward Movement in CoreLogic and Case/Shiller’s Home Price Indexes

Joseph Coupal - Thursday, May 23, 2013
The Case/Shiller Indexes estimate that home prices increased by 7.3 percent in 2012, the strongest rate of appreciation in nearly seven years. In MSN Money’s article they explain how the most recent releases of CoreLogic and Case/Shiller data will affect the housing market. In an earlier post, we suggested that with home prices rising, that the time may be right for anyone  considering  buying a home.  CoreLogic suggests that while prices have been rapidly rising, this trend is likely to decelerate during the next year.  Regardless slowing increases of indexes, there are projected increases even into 2017. Additionally, CoreLogic reports that the markets that were hit the hardest by the recent housing boom and bust are the markets seeing the most rapid increases now. Read our earlier post here, to learn more about how Case/Shiller indexes work.  Contact Brooks & Crowley LLP at the outset if you are purchasing a home.  

Contributed by Laura Martin

Massachusetts Attorney General Says Lenders Violating Mortgage Settlement Terms

Joseph Coupal - Wednesday, May 08, 2013
On May 7, 2013, Massachusetts Attorney General Martha Coakley complained that  lenders Bank of America, Wells Fargo, Citibank, Ally Financial, and JP Morgan  Chase,  violated the mortgage settlement agreement.  The complaint was that the lenders are failing to offer help in a timely fashion, are sending borrowers inaccurate and confusing information, and have been denying them relief without specifying why. The $25 billion national mortgage settlement agreement was reached back in 2011, and was intended to prevent homeowners from losing their homes to foreclosures due to abuses by the lenders.  The settlement was meant to help stem foreclosures by offering financial assistance and improved loan servicing for consumers.  Joseph A. Smith, Jr., who is in charge of overseeing compliance with the national mortgage accord, said he believes the lenders can do better and intends to use his enforcement powers from the settlement to ensure compliance.  Read the full article here.  

Contributed by Laura Martin

Is It Finally Time to Buy? : Many Indications of Home Price Gains Suggest That Potential Buyers Should Get Off The Sidelines

Joseph Coupal - Wednesday, May 08, 2013
S&P/Case-Shiller keeps a composite of 20 metropolitan areas across the country and releases reports of housing price increases and decreases.  The market was at an all time low in 2008, with rates decreasing  close to 20 percent.  In its April 30, 2013 report, the numbers showed an increase to approximately 9 percent.  This was the largest increase from year to year in the last seven years.  From January to February, 2013, the market also increased by 1 percent. This was  the largest month to month increase in seven years, although increases have been taking place from month to month for several months. This data suggests  that this increase will likely continue. According to Robert Shiller’s book Irrational Exuberance, single family home prices usually go back to a base level price from 1890, with inflation factored in.  As the market fluctuates the scales will tip in favor of buyers and sellers.  With prices being low, buyers have had the advantage.  But as home prices increase,  sellers are going to increasingly find favor in the market.  Buyers may want make any pending purchases now, before the scales tip even more in this direction. Read about Case-Shiller here and see a chart of recent Case-Shiller data here. If you  are purchasing a home, contact Brooks & Crowley LLP and let an experienced attorney help guide you through the process.    

Contributed by Laura Martin

Is a Binding Contract Hitting Send? Review of Feldberg V Coxall

Joseph Coupal - Friday, January 25, 2013
The Massachusetts Middlesex Superior court has applied the Uniform Electronic Transaction Act (“UETA”) in Feldberg v Coxall. The statute was implemented to bridge a gap between the centuries- old laws used to govern contracts, and the modern digital age. Here, Justice Wilkens concluded that since the circumstances supported an intention by both parties to be bound in an agreement, that when applied in this dispute the UETA could allow the signature block or the ‘from” field on an email to satisfy the record element of a land sale agreement. For the contract between a buyer and seller of land to be held up in court, Massachusetts law requires that there be a “writing” or a record of that agreement. UETA allows this standard to include electronic records. Therefore if a seller and buyer make an agreement through email, they may have created a record. The conduct of the parties is still primary, and Courts look for behavior from both sides to show an intention to be bound. This case is still waiting to be heard on its merits, but Justice Wilkens was clear in his opinion on the electronic signature. He denied dismissal based on the recorded contract being through email, and accordingly the land was attached to the lawsuit. If you find yourself in the exciting transition of buying or selling a home, don’t go through it alone. Laws are always changing and the consequences of seemingly innocuous actions can be significant. Contact a real estate lawyer at Brooks & Crowley LLP to help you navigate through the process. Contributed by Laura Martin

Foreclosures on the Rise

Joseph Coupal - Friday, July 13, 2012
The number of foreclosures on US homes are high.  The April-June period saw 311,010 properties begin the foreclosure process, which is about a 9% increase from the previous quarter.  In June, foreclosure filings had risen for the second consecutive month.  RealtyTrac stated that, “In the first six months of the year, homes in some stage of the foreclosure process — default notices, auction sale notices and bank repossessions — topped one million.” The highest foreclosure rates are found in Nevada, followed by Arizona, Georgia, California, and Florida. The high number of foreclosures has been a contributing factor to the low home prices, as buyers are able to purchase homes for prices that are much less than what the normal market value would be.  The increased foreclosures in the first part of the year will likely result to increased short sales and bank repossessions in the second part of the year. If you are facing foreclosure, contact an attorney.  The sooner you contact an attorney the better your chances are avoiding foreclosure.  Contact the law offices of Brooks & Crowley to see what seasoned legal advice our attorneys can offer you.

Facing Foreclosure? Mediation May Be An Option

Joseph Coupal - Friday, July 06, 2012
Foreclosure mediation programs have been gaining popularity in various states.  Studies suggest they help people lower their monthly payments to allow people to keep their homes rather than defaulting on payments.  Data on their effectiveness is patchy, but figures from some programs suggest they help some people to lower their monthly payments, allowing them to keep their homes and avoid defaulting again.  Foreclosure sales are tough on them market by weighing on home prices and having a long, lengthy process.  Critics of mediation believe that the housing market would mend more quickly to just clear out foreclosure cases and evict millions of families, but mediation proponents feel that mediation can provide an alternative, less painful route.  Full article here. Massachusetts does have a mediation program in place.  If you are facing dangers of foreclosure, contact the attorneys at Brooks & Crowley and see how we can help you.

Thomas Kinkade’s Assets in Dispute

Joseph Coupal - Tuesday, July 03, 2012
The late Thomas Kinkade’s assets are in dispute between his wife and his girlfriend.  He and his wife were legally separated for two years leading up to his death, and he was living with his girlfriend.  His girlfriend has put forth handwritten notes that state that Kinkade bequeathed both his mansion and $10 million dollars to her to ensure her security.  The notes are dated November 18, 2011 and Dec. 11, 2011 and a court will soon determine the authenticity of the notes.  His wife is seeking full control of the estate, valued at $66.3 million dollars.

Impending Foreclosure?

Joseph Coupal - Saturday, June 23, 2012
When your home is threatened by foreclosure all hope may not be lost.  The typical window of a foreclosure from the date of the filing of the complaint until the judgment of sale is entered is about a 2-month window.  Although this is a short amount of time, if you are pro active and talk to an attorney early on in the process, you may be able to find an alternative.  The sooner you seek legal help, the better chance you have of your attorney being able to help defend you in a foreclosure.  See full article here. If you are facing a foreclosure, contact us at Brooks & Crowley and let us try to help you work out an alternate to foreclosure

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