Realtors® Applaud Bill to Speed Lender Response to Short Sales

Washington, April 13, 2011

A new bill to improve the process for approving short sales may soon bring relief to distressed homeowners who are unable to keep their homes and hope to avoid foreclosure. The bill, introduced in the U.S. House yesterday and strongly supported by the National Association of Realtors®, would impose a deadline of 45 days on lenders to respond to short sale requests.

The legislation, the “Prompt Decision for Qualification for Short Sale Act of 2011,” was offered in Congress by U.S. Reps. Tom Rooney (R-Fla.) and Robert Andrews (D-N.J.).

“The current short sale process can be time-consuming and inefficient, and many would-be buyers end up walking away from a sale that could have saved a homeowner from foreclosure,” said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I.

“Realtors® and consumers continue to raise issues about delays in the short sale process because lenders are unable to decide whether to approve a short sale. After many months of delays, and with no response from lenders, potential buyers are losing patience and canceling their contracts, often resulting in the property entering foreclosure. A short sale minimizes the negative impact on sellers and generally costs the lender less than a foreclosure,” said Phipps.

NAR has been actively pushing the lending industry to improve the process for approving short sales, which represent about 13 percent of recent home sales according to NAR data. Phipps praised Reps. Rooney and Andrews for their efforts on the bill and urged Congress to pass the bill quickly.

“As the leading advocate for homeownership and housing issues, Realtors® want to help more homeowners avoid foreclosure by facilitating a short sale when a family is absolutely unable to keep their home; however, that can only happen if lenders and servicers approve short sale offers in a reasonable amount of time,” said Phipps. “Streamlining short sales transactions will reduce the amount of time it takes to sell the property, improve the likelihood that the transaction will close, and reduce the overall number of foreclosures. This benefits seller, lenders, buyers, and the entire community.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

The Separate Roles of Love and Money

November 29th, 2011

For older couples contemplating marriage, something in writing has come to mean more than a Valentine’s Day card. The prenuptial agreement, entwining love with money, has become almost as essential a document as the marriage license, say lawyers who draw up such agreements.

“Increased longevity means that more couples who are in their 60’s, 70’s and even their 80’s are marrying for the second or third time, and they want to make sure that their assets go to their own children and grandchildren and nowhere else,” said James C. Kahn, a partner in the White Plains law firm of Kahn & Kahn, which specializes in matrimonial law. “It may not be romantic, but it’s a fact of contemporary life to put something in writing, and most older couples deal with the issue realistically.”

Putting something in writing is not confined solely to older couples, though. Younger couples are also signing prenuptial agreements, especially when one of the partners has considerable assets and the other has none, said Joseph A. Scutieri, who is also a partner in Kahn & Kahn.

“It’s usually the parents of the one who has the assets to protect who insist on the prenuptial agreement even though it puts a tremendous strain on the young couple,” Mr. Scutieri said. “When you start out a marriage with the assumption that there will be a divorce, it can be the kiss of death.” ‘The Timing Was Awful’

Nevertheless, Mr. Kahn added, many parents still think it is worth the risk. “A typical example is with one of our clients who is a successful businessman with a string of retail outlets,” Mr. Kahn said. “He put his son, the one who is getting married and who is in his 20’s, into his business and signed over one of the company’s retail units to him. The father, who wants to protect the company, insisted that the son’s fiancee relinquish any claims to the business by signing a prenuptial agreement just in case the marriage doesn’t work out.”

Mr. Kahn continued: “The girl came to us for advice on the eve of the marriage. The timing was awful. She was very upset. What should she do? We advised her against signing the prenup because we felt that it was not in her best interest. But she was so upset and fearful of the consequences and the thought of postponing the wedding and all the other complications that she signed anyway. What was especially troubling to me was the time frame. By signing the prenup, she literally waived her rights away throughout the entire life of the marriage. I felt that marriage was off to a bad start.”

But when older couples are involved, a prenuptial agreement can actually increase the chances that the marriage will be successful, said Susan Pollet, a lawyer who has her own practice in Chappaqua and specializes in family, labor, and employment law. “By discussing finances openly and outlining their positions, especially regarding their adult children, older couples work out the particulars upfront amiably before they get a formal written agreement,” Ms. Pollet said, adding that in order to draw up a sound financial agreement, “it is absolutely essential that each of them have their own attorney.”

Even when there are no children to take into consideration, older professionals who have accumulated substantial assets want to make sure that their assets are protected before they enter into marriage, said Denise S. D’Ambrosio, a lawyer in the White Plains office of Hall, Dickler, Lawler, Kent & Friedman.

“With one out of two marriages ending in divorce today, people with means who are thinking about marriage are very cautious about shifting their assets to joint ownership,” Ms. D’Ambrosio said. “I have clients in their late 40’s, for example, who are getting married for the first time who are using a prenuptial agreement just as they would an insurance policy or as a good financial planning device. They have a lot to lose and they have seen people who have had their entire marital wealth reduced to almost nothing through the legal costs of divorce. So naturally, they are cautious.”

Mr. Scutieri added that divorce has increased during the last five years, especially among middle-aged people. “The recession is taking its toll, especially in Westchester, where corporate cutbacks have hit middle-aged couples who have had to alter their lifestyles drastically,” he said. “Money problems lead to fighting and eventually divorce, even though financially, couples would be better off not divorcing.”

An added benefit of a prenuptial agreement, said Jean Carlson, a financial planner in Mamaroneck, is that it gives a couple an opportunity to work out their financial future before marriage.

“Prenuptial agreements are not only for the rich,” Ms. Carlson said, adding that average-income people also need them. For those with average incomes, for instance, their largest asset is probably their pension or their home, and that leads to questions. How will pension money be divided? Does each partner own his or her own home? How will the property each spouse brings to the marriage be held? What about property acquired or money earned after the marriage? Will that be considered separate or marital property?

Couples about to marry for the second time would be well advised to plan for the marriage just as they would plan for retirement, Ms. Carlson said. “They should sit down and review such things as insurance policies, individual retirement accounts, and pension options. And they certainly should make out new wills.”

Some couples avoid the whole procedure by choosing to live together without being married.

Mr. Scutieri said: “There are numerous elderly couples who decide not to get married for various reasons. One of them is that they want to keep both of their Social Security benefits. Their total benefits would be reduced should they marry. There are also those who don’t marry for fear of the future. They know they would be financially responsible for paying the bills if their new spouse, for instance, had to go into a nursing home. For example, in Westchester, good nursing homes cost about $4,000 a month and a half-million dollars worth of assets can vanish quickly when the state is dunning a spouse for payment.”

And then there are those romantics who prefer not to sully relationships with talk of money. Take the couple aged 68 and 70 that recently sold their individual houses in Scarsdale and decided to live together.

“We are both very well fixed,” said Dan P., a retired executive who insisted on anonymity. “I am a widower. My companion has been divorced and widowed. She has four children and six grandchildren. I have two children and three grandchildren. We have had a very close relationship for a number of years, ever since our respective spouses died. We have been on a number of trips together, but we only recently decided to live together.”

Although the couple had seriously contemplated marriage several times, he said, they eventually decided against it. “It got much too complicated,” he said. “When we started discussing assets, it began to sound like a cold business deal. We stopped before any real harm was done. Society is much more permissive today, and at our age who cares if we get married or not? A few people have criticized us, but our children haven’t. I think they are relieved.”

The couple, who share expenses, rent a condominium in Rye Brook. “But we have looked at a vacation house we like in Maine where we spent last summer,” he said. “We are seriously thinking of buying the place as equal partners. It has enough bedrooms for all our visiting children and grandchildren, who seem to get along surprisingly well.”

Babe Ruth Signature Inspires Awe and a Lawsuit

November 29th, 2011

LUMPY and soiled, its hemp stitching tight in some places and loose in others, it looks like any old baseball: no way to tell immediately that it has a connection to the original field of dreams.

But after closely studying the faded script and seeing the scrawled signature of Babe Ruth, the viewer senses a glow around the ball. Smaller than a regulation-size ball, the old orb inspires awe.

”He could’ve blown the cover off this one,” said Joseph M. Accetta, a lawyer on the staff of Westchester County Surrogate Court Judge Albert Emanuelli, who is hearing a lawsuit involving the 1938 baseball.

”He was one of the top five players who ever played the game. He hit 60 home runs with a dead ball,” said Mr. Accetta, who is responsible for the ball’s safekeeping.

For Mr. Accetta, a baseball fan whose office is hung with framed mementos of baseball’s greats, the lawsuit is a joy. He rattles off statistics and anecdotes without pause. For example, he cited the 1932 World Series game between the Yankees and the Chicago Cubs when Ruth, the Sultan of Swat, with two strikes against him, pointed to center field with his bat and proceeded to place the ball there.

”He had great agility for a guy his size, tremendous power; he was a great athlete,” said Mr. Accetta, a 30-year-old with a reverential attitude toward baseball history. He acquired his love of the game’s past growing up in Queens, where he listened to older men talk about baseball in New York during the 1940s and ’50s.

”I had expected a shiny white ball with the Babe’s signature on it,” said Mr. Accetta, who retrieved the baseball from a safe in the judge’s chambers. ”At first, it’s a letdown when you see it. It’s not in terrific shape. The cover is split into two places.”

Mr. Accetta, who coaches Little League and plays in two softball leagues, added, ”It was even played with.” But the baseball in question was not played with by Ruth. Boys of long ago played with it at least once, Mr. Accetta said.

The autographed baseball is most likely a novelty item of the kind sold in gift shops and candy stores for play by youngsters, said Greg Schwalenberg, curator of the Babe Ruth Birthplace and Museum in Baltimore. ”Today’s ball is the same dimension and weight as back then.”

Even though Ruth played in what is known as the ”dead-ball era,” evidence to support that contention is hard to come by, Mr. Schwalenberg said. A baseball, which is still hand-stitched, is a cushioned cork center with a leather cover held together with 108 stitches and is 3 inches in diameter, 9 to 9 1/4 inches in circumference, and 5 to 5 1/4 ounces in weight.

”Later, the ball became livelier, apparently it had more of a pop to it; it may be that they were wound tighter inside,” Mr. Schwalenberg said.

Paul Ventry, a doctor in Potomac, Md., was a 10-year-old in 1938 when he stopped with his father, Victor, at the Peekskill train station.

Standing there waiting for a train was Babe Ruth. Young Paul ran to a nearby store and bought a baseball. He got back in time to get the Babe’s autograph.

For the next half-century or so, the ball sat in a breakfront in the Ventry’s Peekskill living room. According to court documents, Dr. Ventry claims that the baseball was a gift to him from his father, who died in 1973. At that time, Dr. Ventry took the ball to his home. After their mother, Catherine R., died in 1992, his sister, Catherine V., claimed the baseball was family property and ought to be sold. A legal wrangle has ensued.

”I delivered the baseball,” said Joseph A. Scutieri, a lawyer for Dr. Ventry, referring to handing it over to Mr. Accetta. When asked whether he felt it in the palm of his hand, Mr. Scutieri said, ”No, I didn’t even do that.”

But like Mr. Accetta, Mr. Scutieri’s work is more fun these days. ”This case combines two things that I love, sports and my job,” Mr. Scutieri said. ”I’d love to make a living playing baseball. That’s what I do in my free time, and here I get paid to argue what a Babe Ruth baseball is worth.”

This particular ball may not be worth very much, however.

”It’s a little dirty and worn,” Mr. Scutieri said. ”It’s not in the shape the collectors want it to be, mint condition, whether it’s baseball cards or baseballs. They don’t want you touching anything or handling it. They want it in plastic wrap.”

For comparison, Mr. Scutieri offered information on a 1927 baseball, a memento from the same year Babe Ruth hit 60 home runs.

”There’s a 1927 baseball signed by the Yankee team, Babe Ruth, Lou Gehrig, the best team ever,” Mr. Scutieri said. ”That one is worth $14,000.”

He added, ”The numbers on this ball are as high as $10,000, but it’s not in very good shape.” Despite the baseball’s ”priceless sentimental value,” as stated in court papers, Dr. Ventry claims the baseball is worth about $100.

Born George Herman Ruth in 1895, the Baltimore native played from 1920 to 1934 for the Yankees, in the House That Ruth Built, otherwise known as Yankee Stadium. In 1935, he played for the Boston Braves, retiring after one season.

In 1938, the year the baseball was signed, he coached at first base for the Brooklyn Dodgers from June 19 to the end of the season. He hoped to be hired as manager of the team, but Leo Durocher got the job. It was the last time the Babe wore a baseball uniform. Before his death in 1948, from throat cancer at 53, he played golf tournaments and went on fishing and hunting trips.

”The exact reason he was in Peekskill is not known,” Mr. Schwalenberg said.

Both lawyers say that the baseball became a focal point after a dispute arose between the brother and sister — who is a lawyer in the town of New Windsor in Orange County — over the mother’s insurance policies. A third sibling, Barbara Ventry Magee, is not named in the dispute.

Last summer Judge Emanuelli ruled that the baseball was part of the Ventry estate. But Mr. Scutieri persuaded the judge to reopen the case after he proved that his client was improperly served with the original court documents and did not have enough time to reply. Judge Emanuelli is expected to rule on the motion soon.

For Mr. Accetta, the day the baseball leaves his care could be a sad one. ”At some point, it has to go,” he said.

New Group to Probe Origins of Housing Bubble

by Brian Tumulty

WASHINGTON — The public should expect to see results within weeks from an effort to document criminal and civil violations at the root of the housing bubble, New York Attorney General Eric Schneiderman said Friday.

“Americans lost close to $7.5 trillion in home equity over the last five years,” Schneiderman said. “That’s where the wealth of the working class and the wealth of the middle class was. And that’s why we have to make sure we hold people accountable.”

Schneiderman, New York’s top law enforcement official, wouldn’t predict when any of the architects of the housing bubble might go to jail.

“I can’t comment on the specifics of the investigation,” he said.

The investigation is being undertaken as part of a collaboration, announced Friday, among state attorneys general and federal agencies.

Schneiderman joined U.S. Attorney General Eric Holder and other officials Friday at a news conference to discuss the formation of the Residential Mortgage-Backed Securities Working Group.

Federal and state officials will target the creation, promotion, and sale of the financial instruments that provided fuel for the overheated housing market and the run-up in prices. They will share information and staff while deciding which agency has the most appropriate jurisdiction to pursue criminal or civil charges.

“Mortgage-backed securities were, in many ways ground zero,” Robert Zhuzami, director of enforcement at the U.S. Securities and Exchange Commission, said at Friday’s news conference.

The promoters of these securities lied, cheated, and misled investors, although not all of their actions broke the law, Zhuzami said.

The mortgage-based securities market is dominated by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), which have been partly blamed for the housing bubble.

But the higher-risk mortgages, including interest-only loans, were packaged in private-label securities issued by firms incorporated as trusts, mainly in New York and Delaware.

Schneiderman and Delaware Attorney General Beau Biden have been leading the investigation into these instruments.

President Barack Obama announced during Tuesday’s State of the Union address that he asked Holder to form what he described as “a special unit of federal prosecutors and leading state attorneys general.”

Schneiderman, who serves as co-chairman, said the group will operate separately from negotiations to reach a financial settlement over abuses by the mortgage servicing industry — including making harassing phone calls demanding payments and filing false documents — after the housing market crashed.

Those abuses, involving homeowners who were behind on mortgage payments and faced foreclosure, involved hundreds of thousands of New Yorkers, according to Schneiderman. The abusive practices were most concentrated in Brooklyn, Queens, Nassau, and Suffolk counties.

The formation of the Residential Mortgage-Backed Securities Working Group gives Schneiderman and other state attorneys general an assurance the pending settlement won’t pre-empt their investigation of the mortgage securities industry.

The Associated Press reported that the pending settlement involves the Bank of America, JPMorgan Chase, Wells Fargo, Citibank, and Ally Financial.

Tumulty is a staff writer at the Gannett Washington Bureau.


The Case for Hiring a Lawyer

by Joseph Plambeack

FIRST-TIME buyers in New York City confront a series of choices: co-op or condo, high-rise or walk-up, a second bathroom, or just steps from the subway? But there seems to be consensus on at least one decision — whether to hire a real estate lawyer.

In New York, unlike most places in the United States, it is customary for buyers to seek the representation of a lawyer throughout the purchasing process. Although this is not a legal requirement, some longtime real estate agents say they have never witnessed a deal completed without the buyer’s having a lawyer on hand.

“I would never, never have a situation where a buyer did not have an attorney,” said Deanna Kory, a senior vice president of the Corcoran Group. “Without question, there is too much to understand. You can’t understand it on the fly.”

Buyers in New York City rely upon lawyers because real estate transactions can be extraordinarily complicated. In addition to the usual concerns about contracts, liens, and titles, New York’s numerous co-ops have financial statements and meeting minutes that require scrutiny. Buying a condo, and even a single-family home, can be equally knotty. Not to mention that the sellers on the other side of the table usually come armed with their own labor.
And then, of course, there is the simple fact that real estate in New York is expensive. Making bad deals can jeopardize huge amounts of money.

“You’re signing the largest check you’ve ever signed,” said Gary L. Malin, the president of the brokerage Citi Habitats, “and you want to make sure that you’re not missing something. To not engage an attorney — you’d feel naked in the process.” Lawyers also provide a necessary buffer in what can be an emotional process. Peter Graubard, a real estate lawyer since 1994, said lawyers were able to provide an objective assessment even while advocating for buyers.

“I’m really the only involved party whose fee doesn’t depend on the deal closing,” Mr. Graubard said. “I get paid for my lack of a conflict of interest.”

Mr. Maim, who worked for a short time as a real estate lawyer before joining Citi Habitats, says it is especially important for first-time buyers to have a lawyer on their side. A real estate agent can help with some aspects of the process, but a lawyer is the one who performs crucial due diligence and helps finish the deal.

At the start of the buying process, the lawyer helps negotiate the contract. Michael P. Kozek, a lawyer at Jeffrey S. Ween & Associates, says that most of the drafting is done by the seller’s lawyer, but that there should be a chance to review the terms and try to adjust them. The buyer’s lawyer will also dig into the information available about a property, looking at a co-op’s finances and the minutes of its board meetings. Some buyers with a background in finance believe they can handle this part by themselves. But, Ms. Kory said, they may not know the customary tax breaks and accounting methods used by co-ops, which can lead to serious misunderstandings.

Michael W. Goldstein, a lawyer who has handled residential real estate deals for more than 20 years says an experienced lawyer is also easily able to spot in the board’s minutes any issues that may percolate into problems. Perhaps there is talk about a loud resident who is to be the buyer’s neighbor or discussion of a balky boiler that may need expensive repairs not accounted for in the building’s capital improvement plan.

Because experienced real estate lawyers see a lot of contracts and know the customs, they can also help cut through roadblocks. For that reason, Ms. Kory said, it is usually a mistake to hire a lawyer who does not have extensive familiarity with residential deals.

Lawyers and real estate agents both say that the best way to find a lawyer is through word of mouth, in the best case from a friend or a family member. But if that option is not available, real estate agents are often happy to refer someone with whom they have worked.

Ms. Kory says she often advises clients to talk to two or three lawyers, and then choose one, before making an offer on a home. That might seem premature, she said, but having good representation lined up can help ensure that you get the home you really want.

“Having a lawyer makes you look more capable of following through on the deal,” Ms. Kory said. “Even if you are the only one bidding, you will come across stronger if you have all your ducks in a row.”

Buyers should have a few simple questions ready for prospective lawyers. First, ask about residential real estate experience — generally, more is better. Find out about the experience with closings for homes similar to yours, or even in the building you are considering. Then find out how much of the work would be done by the lawyer personally, and how much (and which parts) would be handled by a paralegal.

And ask if the charge will be a flat fee or based on an hourly rate. In general, residential real estate lawyers in New York charge a fee, often between $1,500 and $2,500. More complicated or expensive deals, like buying a multifamily brownstone, for example, can take the tab closer to $5,000.

In most cases, that fee will cover a few hours of face time with the lawyer, his or her presence at the closing, and a few conversations over the phone. The lawyer will spend several additional hours examining the paperwork and performing due diligence. The buyer also receives something else: more peace of mind.

“The reality is that most people are not well versed in real estate law,” said Mr. Maim of Citi Habitats. “There are a lot of things that could potentially go wrong in the process. And you could very likely regret not spending the money.”