the wasserblawg

The FBI released it's annual report on mortgage fraud earlier this week. Virtually all law enforcement and industry statistics show an upswing in mortgage fraud activity. The Mortgage Bankers Association released the National Delinquency Survey last week, reporting that the increase in foreclosure rates between quarters has reached its highest point since 1972 (when the records were first kept). The increase in foreclosures on first time mortgages increased by 36% between the first quarter 2008 and first quarter 2009. Little wonder why lenders are scrutinizing loan applications with an even finer toothed comb. Nor should it come as any surprise that lending guidelines are getting even tighter than they already are. Fannie Mae recently announced several new underwriting / eligibility guidelines that will become effective September 1st. Some key changes all Chicago area home buyers (and their agents) need to know: Buyers wishing to purchase owner occupied 2 flats will need to mak...

It is getting harder and harder to satisfy mortgage loan underwriters these days. Ask anyone who makes a living helping Chicago area home Buyers or Sellers close their real estate contracts. Tight mortgage lending guidelines are requiring Buyers to document every last nickel of income and savings, the sources of those funds. New appraisal rules are insulating property appraisers from real estate agents and loan officers. Lenders are requiring specific (and increasingly careful) examination of chains of the transfer of title ownership. There is a lot more paperwork being required. Its taking Longer. Frankly, it is a pain in the kishkes trying to manage the process and keep deals together as a loan application winds its way through the lending pipeline. I hear a lot of grousing from Buyers, Sellers & Real Estate Agents. (OK, I grouse about it too) But then, Tuesday's FBI report on Mortgage Frau d reminds us all why we are working so much harder. Our present day (would be) borrow...

Some Chicago area Condo Sellers are facing newly increased closing costs and timing hassles, as one of the largest local property managers has instituted new charges and procedures to issue out closing related paperwork. Wolin-Levin, Inc. recently implemented a new web-based facility to generate paperwork needed in connection with condo sales and leases. My review of the new product, and the undesirable effects it will have on condo transactions follows. Condominium Managers & Disclosure Requirements Condominium Buyers should do at least some due diligence investigation of the Association's over-all financial condition. No one wants to buy a new condominium and then learn about the $20,000 special assessment that they have to pay the month following. Illinois law allows for this. If a Buyer asks, the Seller must produce information, such as the organisational documents (Declaration and By-Laws) and financial records (Budgets and Financial Statements). The association must al...

Peter H. Berge at Minnesota CLE reports today that "At least in Minnesota, it is now unethical for solo practitioners to use "& Associates" in the law firm name. The Minnesota Lawyers Board of Professional Responsibility just adopted that rule in its new Opinion 20 . The stated reason for the rule is that Rule 7.1 prohibits false and misleading statements and Rule 7.5(a) shall not use a firm name or letterhead that is in violation of Rule 7.1. Using the term "& Associates" in a firm name, the LBPR reasoned, is misleading if there are not more than two licenses attorneys in the firm. While recognizing that "Associates" has other meanings in general use, the term has come to have a specific meaning in the custom of law firms. Needless to say, there has been consternation among some solo practitioners. Many solos feel they are being unfairly picked on; that if large law firms could continue to use the names of dead partners they s...

I've reported from time to time over the past year about Title Insurance Companies that have closed up shop; fallout from the overall collapse of the real estate markets. Title Insurance provides critically important protection for property owners. Savvy Buyers insist that sellers provide a policy of insurance as part of every purchase transaction. It affords indemnity insurance against financial loss from defects in title to real property. It protects an owner's financial interest in real property against loss due to title defects, liens or other matters. The insurer will defend against lawsuits attacking the title. or reimburse the insured for actual monetary losses incurred, up to the dollar limit of the insurance policy. Problem is, what happens when the title insurance company shutters its doors? Contracts that are "in process" grind to a halt. Mortgage payoff checks or other checks issued from closings that are "in the mail" or otherwise un-cashed m...

A big hat-tip to Wells Fargo Mortgage Consultant Martha VanBendegom for sharing information with me, so that I can share it with you. Everyone knows that a Buyer and Seller set out the terms of their real estate deal by writing and signing a contract. All agreed terms get spelled out, including the sales price and the closing date. The parties set the closing date in the contract. It gets written in stone, so to speak, no? Well, more written in sand than stone. Sand on a shoreline smacked over and over again by pounding waves of mortgage rules and procedures. Waves that erode the shoreline of that contract, and that will all but wipe those closing dates clean off the beach. Regulations spawned by the Federal Housing and Economic Recovery Act of 2008 go into effect at the end of July. The new regulations, coupled with Fannie Mae & Freddie Macs recent implementation of the Home Valuation Code of Conduct are going to take that "false illusion" of a fixed, certain, closing d...

If these stories were not true, they would likely be pretty amusing. This one is true. Not at all funny. My client wants to sell his home. The Buyer's loan is approved. The Seller has moved out. Just need one last piece of paper: a payoff statement from the mortgage holder so that we can repay the loan and so the bank will release its lien against the property. (Yes, my client and I are dealing with one of the national lenders). Most often, asking for a payoff letter a simple enough proposition. Call the bank's super-computer; key in some identification information and a fax number; voila: a computer generated payoff statement arrives in my fax in-box. Not so here. The property is in foreclosure. Things go a bit differently. Gotta go through the foreclosure attorneys (which we have). Gotta send in a written request (which we have). Gotta have the borrowers written authorization (we have). The process takes a bit longer. Started two weeks ago for goodness sake. Understand, we c...