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from Local Attorney, Michael H. Wasserman

Thursday, July 31, 2008

END OF MONTH CLOSINGS

As a general rule, more closings happen at the end of any given month that at any other time, and most of those closings would happen on the last day (or perhaps the last Friday).

So it being the end of July and all, I would ordinarily expect to be closing files with completed transactions. I am still closing lots of files this month, only the number of closed files due to mortgage companies (a) denying loan applications or (b) rejecting short sale proposals, is out-running the number of loan funded.

We are still fighting the good fight, but oh my goodness, how things have changed.

Thursday, July 24, 2008

CT ANNOUNCES TITLE INSURANCE FEE INCREASES

Starting August 1st, it is going to be a bit more expensive to buy and sell real estate in the Chicagoland area; title insurance and escrow closing fees are going up.

Chicago Title's new rate structure includes a $50 bump up on all owners title insurance policies (a seller cost) and $50 more for all escrow closings (typically a buyers charge). The charges for "title indemnities" and (Chicago) water department full account payment certifications are also being increased.

I will not be surprised to see similar announcements from other title companies in the not to distant future.

Kudos to CT for kicking up that TI fee, effective August 1, pure nefarious genius there. Property tax bills are supposed to be mailed out on August 1st - payable September 1. When Mortgage Companies expect a tax bill due, they demand that the title insurance company guaranty payment of the taxes. Title company are happy to oblige. They collect money from the buyers who will be responsible to pay the taxes and set up escrow accounts to hold that money until the tax bills are actually issued. And - back to that genius part - the title company charges the buyer a handling fee (a newly increased fee) for the TI. The hapless buyer has no say in the matter. The lender demands it. The buyer pays for it. TIs will be imposed on most transactions until those tax bills are issued and I don't know about any of you, but for myself, just don't see anything out there to suggest that they will come out any time soon.

To be sure, a $50 on either side of the transaction is not going to kill the market or gain much notice in most circles. Yawns no doubt. But, if you place these increases into context by reflecting back on the overall roll-up of closing costs in recent months, you can see that its not just the declining market prices or the tightened lending standards that are depressing the number of contracts closing or the overall malaise in the marketplace.

-> Seller paid City of Chicago transfer tax levied at $3.00 for each $1,000 of the sales price
-> Cook County Recorder's fee increase for mapping and computer document systems
-> Processing fees associated with title company State Predatory Lending Database compliance in all Cook County mortgage transfers
-> City of Chicago Water Department full account payment certification fees increased
-> Cook County Property Tax Homeowners Exemption laws have changed reducing the dampening effects - likely accelerating tax increases
-> City of Chicago's announced increase of the local tax rate.
-> increased premium rates for Mortgage Insurance - when available.

Its not only harder to buy and sell real estate right now; its also costlier.

Tuesday, July 15, 2008

NEW NOTARY LAWS in COOK COUNTY


Stand-by for a neat little change to the Illinois Notary Public Act that will likely impact the way we transact real estate closings here in Cook County. Both houses approved SB 0546 as the recent legislative session ended and we are awaiting the Governor's signature. This change, if implemented will require anyone who is selling residential real estate in Cook County will have to present proof of identity, including a thumb print image.

It will fall to the Notaries who witness closing documents to collect this information. We will be obligated to prepare newly devised
"Notarial Records" that will include the "signor's" personal identity information, the aforementioned thumb print and even a certification that the transfer involved "residential" real property (Looks like all those childhood hours with a Dick Tracy Crimestoppers Club Junior Detective kit did not go to waste... where'd I put that thumb print pad anyway?)

The form itself promises to be a fairly simple, but long form and it will slow things down, in my office or at the title company. Don't be surprised when notaries start charging to cover the new paperwork, we can charge up to $25 per record.

Notaries will have to then forward the Records to either the title insurance company or the County Recorder for 7 years safekeeping. The Recorder will (by this law) charge a $5.00 fee to receive the record. The title companies have not yet announced what fees they will charge fees.

This program should reduce the incidences of fraudulent transfers significantly. Then again, there could also be a surge in (ugh) thumb amputations, we will have to just wait and see.

One curiosity wholly unrelated to the merits of the bill: The Governor has not yet signed it into law, but it takes effect July 1. Go figure.

Monday, July 14, 2008

Getting to the FInish Line - the hard way

Its that time of year when my morning work efficiency and intensity is slightly diminished whilst I watch the flash reports of the daily tour de france bike races on velonews or eurosport. THE most dramatic sporting even of the year (please don't get me started....)

So here is a link to the everyday athlete blog piece on a completely unrelated bike race, the Cascase Cycling Classic and Chris Horner's remarkable Stage Five finish. For those who care about such things, Horner finished 82nd, nine minutes behind winner Moises Aldape, who won the stage. Billy Demond finished with the same time, in 83rd.


(Thank you to friend and chicago cycling club mate Rob Sindelar for the head's up on this one)

Good one Chris!!

Tuesday, July 1, 2008

BOB DYLAN in the SUPREME COURT


The legal (and music) world is abuzz in response to Chief Justice John Roberts citing Bob Dylan in his dissent in Sprint v. APCC Services. From the New York Times:


Four pages into his dissent on Monday in an achingly boring dispute between pay phone companies and long distance carriers, John G. Roberts Jr., the chief justice of the United States, put a song lyric where the citation to precedent usually goes.

"The absence of any right to the substantive recovery means that respondents cannot benefit from the judgment they seek and thus lack Article III standing," Chief Justice Roberts wrote. " 'When you got nothing, you got nothing to lose.' Bob Dylan, Like a Rolling Stone, on Highway 61 Revisited (Columbia Records 1965)."

Alex B. Long, a law professor at the University of Tennessee and perhaps the nation's leading authority on the citation of popular music in judicial opinions, said this was almost certainly the first use of a rock lyric to buttress a legal proposition in a Supreme Court decision. "It's a landmark opinion," Professor Long said.

Rolling Stone named "Like a Rolling Stone" the best song of all time. Roberts, or the clerk who provided the citation, has good taste, but poor attention to detail. A double negative has gone missing; when Dylan sings it, it is "When you ain't got nothing..." Rolling Stone points out that Roberts is the first baby boomer SCOTUS chief. It may be true that we'll see more musical legal citations by those raised on the political music of the 60s.

In the lower courts, according to a study Professor Long published in the Washington & Lee Law Review last year, Mr. Dylan is by far the most cited songwriter. He has been quoted in 26 opinions. Paul Simon is next, with 8 (12 if you count those attributed to Simon & Garfunkel). Bruce Springsteen has 5.

Both Dylan and Springsteen had three songs nominated for ATL's Top Ten Law Songs list, though Dylan was the only one to make the final cut with "Hurricane." Johnny Cash had the most songs nominated. Why aren't the courts showing Cash citation love?

RETURN of the ILLINOIS ANTI-PREDATORY LENDING PROGRAM


Its back!

Today marks the effective date of the new Illinois Anti-Predatory Lending Database Program. From this point forward, title companies must record a certificate of exemption or compliance with all residential mortgages. Here's one over here --->

Got this sucker at a purchase this morning. Gotta figure its one of the first ones to be issued, given that the law went into effect only hours ago. Cost my clients $50 (a title company charge to handle the paperwork) plus an additonal buck to the County Recorder for the additional page to be recorded. Tacked about twenty additional minutes onto the closing, but all in all (so far) not too bad a disruption of the closing process.

Of course, the real test will be when compliance (non-exempt) certifications start making their way through the closing pipeline. This may not begin for another week to 10 days as compliance certifications will only be necessary for certain specified types of mortgage loans applied for on and after July 1.

I understand that the new program requires title companies to undertake a fair amount of data collection and reporting to the State of Illinois. How big is the burden? Title companies are creating and staffing whole new compliance departments and buyers are going start paying roughly $150 per loan to pay for the effort. We'll soon see how much longer closing appointments will be.