Jay Hollander's Weblog

Welcome to the Real Estate Law weblog. Here you'll find items pertaining to real estate from a lawyer's perspective.

Wed Nov 16, 2005

What's More Important - Rates or Credit?

In many "bubble - no bubble" conversations I've had with people, the question usually comes up of whether any bubble pop will wind up being caused more by higher restrictions in the availability of credit than to marginally higher interest rates.

An article in today's Wall Street Journal shows how more agressive low doc and no doc loans may wind up raising the risk of defaults in the event of a significant slow down.
http://online.wsj.com/article/SB113210807674198518.html?mod=home_whats_news_us

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Thu Nov 10, 2005

Fannie Mae Concedes New Accounting Errors

Mortgage behemoth, Fannie Mae, again late in its accounting filings, has shuffled top management, even as it has admitted further accounting irregularities and the failure to account for derivative based losses and other expenses.

http://hosted.ap.org/dynamic/stories/F/FANNIE_MAE?SITE=1010WINS&SECTION=BUSINESS&TEMPLATE=DEFAULT

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Sun Oct 16, 2005

Make PMI Disappear Like MGIC

In a recent Q and A at Bankrate.com, the subject of the "Single File" PMI mortgage insurance alternative came up.

This product, unknown to many borrowers, is offered by a private mortgage insurance provider known as MGIC. The product can transform a non-deductible PMI payment for those borrowing more than 80%, into a tax deduction, if you qualify and if done correctly.

See here for more details. http://tinyurl.com/ae6ck

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Fri Oct 07, 2005

Average Residential Mortgage Rates at 6 Month High

Freddie Mac's Primary Mortgage Market Survey as of October 6th, found average mortgage rates hovering at 5.98%, assuming a payment of 1/2 a point.

The survey held fears regarding inflation as the major reason explaining the jump.
http://www.freddiemac.com/dlink/html/PMMS/display/PMMSOutputWk.jsp?week=40&ending=20051006

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Mon Sep 19, 2005

New Mortgage Recording Tax in Wayne County

Wayne County has elected to impose a county mortgage recording tax of $.25 for each $100 secured effetive as to mortgages recorded on and after October 1, 2005 for a total mortgage recording tax of $1.25 for each $100 secured.

See the link below:

http://www.tax.state.ny.us/pdf/memos/mortgage/m05_6r.pdf

Thanks to Mike Berey of First American for his usual prompt notificatation.

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Mon Jun 20, 2005

A Cautionary Tale and a Morality Play

By now, there's no shortage of articles in the mainstream press warning of fears of a housing bubble.

So much so that now, there's a gripping article on the real world effects of foreclosure. It's real and, depending on what position you play in the drama, it's not pretty.

http://www.boston.com/news/local/articles/2005/06/19/the_real_estate_booms_flip_side_foreclosures?mode=PF

And, since misery loves company, there are, and will be more, entrpreneurs eager to help defaulting property owners --- or not....

http://www.thestate.com/mld/thestate/news/local/11931835.htm

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Tue May 31, 2005

Are They Really Partners

Bankrate.com answers a question that comes up all the time, namely, can friends or family split tax deductions when one person puts up the down payment and the other pays the ongoing payments? Nope. http://www.bankrate.com/brm/itax/tax_adviser/20050526a1.asp

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Sun May 22, 2005

Sure rates are low, but the devil is in the details

Many deals are subject to mortgage contingencies, that is, the buyer's ability to obtain a loan commitment fora mortgage that meets the terms set out in the contract.

Once the loan commitment arrives, buyer and seller are happy. At the Closing table, a stack of documents so high that it that conjures up images of a devastated forest, is placed in front of the buyer to sign, with the attorney explaining it all in about five minutes, so the Closing proceeds smoothly and without undue delay.

So, in case, you wondered what these mortgage terms really mean, here's a brief introduction:
http://www.bankrate.com/brm/news/real-estate/REguide/mortgage-keys1.asp

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Wed Apr 13, 2005

Update on Mortgage Recording Tax Increase

Thanks to Bill Baron of TitleVest Agency for passing on this update on the recent legislation authorizing an increase in the mortgage recording tax:

"We just became aware that Governor Pataki signed into law the 2005-2006 Budget Bill which includes the increase in mortgage recording tax rates which I referenced in my March 31, 2005 email update.

To recap, the mortgage recording tax rate will be increasing by .05% in the following counties:

New York, Queens, Kings, Bronx, Richmond, Nassau, Suffolk, Westchester, Rockland, Orange, Putnam and Dutchess

In addition, the current .25% exemption on the first $10,000 of the mortgage principal on 1-2 family dwellings will be increased to .30% (i.e. from a maximum deduction of $25 to $30).

An updated mortgage tax rate chart available for download and printing can be accessed at the link below:

http://cl.exct.net/?ffcc17-fe5a1577726c027d7413-fe5012757d6705757c13

According to the NYS Land Title Association, the increase in mortgage tax will not be effective immediately, as previously reported, but rather on June 1, 2005."

More information on TitleVest services can be found at www.titlevest.com .

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Tue Dec 14, 2004

Tax Change on "Workouts"

Ray A. Smith, of the Wall St. Journal, has an article on RealEstateJournal.com which highlights a little-known change in the new tax law President Bush signed in October. It affects real-estate investment partnerships who have invested in a property and then find the property's value has declined, either through a tenant going bankrupt, a vacant apartment with no new tenant to be quickly found, or a general downturn in the industry.

In the past, such investors, if they had obtained a loan to purchase property that later declined in value, could renegotiate the terms of the loan, reducing it to reflect the new reality, and often the lender would agree to the reduction and in turn receive an equity interest in the partnership, with the restructuring resulting in cancellation of part of the debt. Investors didn't have to pay income tax on their share of the cancelled debt and could automatically exclude canceled-debt income from their personal taxable income under an equity-for-debt exception.

No more. Now they must pay income taxes at ordinary income-tax rates on their share of canceled debt. The tax bite can be sizable. The article notes certain exceptions investors may qualify for, if they can meet all the requirements.

http://www.realestatejournal.com/columnists_com/buildingvalue/20041207-buildingvalue.html

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