New Wells Fargo Short Sale Documents - Beware!

We Won’t Get Fooled Again…Unless We Do!

2013-04-03T15:30:22Z

We've seen many changes since the real estate collapse in 2007 but have really changed in a way that will prevent us from making the same mistakes that led us to the collapse? This article explores whether we have really learned anything or not through the eyes of the The Who's song "We Won't Get Fooled Again".

Free Use of Nash Law Firm Conference Room for Your Annual Corporate Meeting!

2013-01-02T22:31:45Z

Every year millions of people make their new year resolutions. At NasH Law Firm our new years resolution is simple - to provide more value to our business clients. Running a small or medium sized business is tough. Competitive pressure is intense, money is tight and the rules, regulations and laws facing business owners is daunting.

While we can't solve all of the problems faced by small and medium business owners, we can help guide them through the legal hurdles they face. We can help you set up a plan to protect the assets that you have worked so hard to accumulate. We can also work with your other professional advisors to make sure you have a balanced plan. Oh yeah, we can also help to provide legal services at a reasonable, affordable rate.

We offer variuos flat fee options that take the guessing out of your legal fees. We work with you to keep down your legal fees by setting up systems that work best for you and us in handling issues in an efficient way that will lower your costs.

We also want to give you something for free! A Business Email talking about issues facing small businesses today; numerous artilces addressing business issues that can be accessed in our website at any time and, for a limited time, the free use of our conference room for your annual company meeting (yes, all companies should have an annual meeting to look back at the past year and plan for the upcoming year).

Not only do we invite you to hold your annual corporate meeting in our conference room for free, a Nash Law Firm attorney will be available to answer fifteen minutes worth of questions at no charge.

What do you have to do? It’s simple, just call the Nash Law Firm at 763-862-6100 or email us at nyberg@nash-law.com and schedule your meeting for some time in January 2013.

Every business needs to have an annual meeting and we encourage you to take advantage of this free offer from the Nash Law Firm today.

Can Homeowner Sue Their Present Mortgage Holder For Claims Based Upon Actions of the Originating Lender?

2012-12-11T19:33:52Z

In most cases, a homeowner’s current mortgage holder is not their original lender. What happens when that homeowner sues their current mortgage holder for the alleged sins of the originating lender?

At least one court has determined that the current mortgage holder is not legally responsible for the violations of the originating lender.

In the recent case, Coyer v. HSBC Mortg. Serv., Inc., the Sixth Circuit affirmed the judgment of the lower court dismissing the homeowners’ claims against their current mortgage holder where the claims were based upon the alleged violations of the originating lender.

In 2005, the Coyers entered into a mortgage agreement with Option One (the originating lender) to purchase property in Linwood, Michigan. Subsequently, HSBC purchased the mortgage. After the Coyers allegedly stopped making payment to HSBC in 2010, HSBC began foreclosure proceedings pursuant to the mortgage contract’s “power of sale” clause. The Coyers filed a complaint asserting numerous allegations concerning alleged illegal conduct routinely practiced in the mortgage industry. They claimed: breach of fiduciary duty; negligence; common law fraud; breach of implied covenant of good faith and fair dealing; violation of the Truth in Lending Act, 15 U.S.C. 1601; and intentional infliction of emotional distress. The district court entered judgment on the pleadings in favor of HSBC. The Sixth Circuit affirmed.

The Coyle court specifically rejected the Coyes’ claim that there is fiduciary relationship between a mortgage and a mortgagee and that there is no legal claim for breach of an implied covenant of good faith and fair dealing. The Coyle court upheld the dismissal of the negligence, fraud and TILA claims because they were based on the actions of the originating lender, not the current mortgage holder.

While the Coyle case is largely based upon the courts reading of Michigan law, the underlying principles would most likely apply in a case brought in Minnesota. While this result does not prevent the borrower from suing their original lender for alleged violations of the law occurring in the origination of the loan, it will not prevent the foreclosure of a mortgage by a subsequent mortgage holder unless the complained of actions can somehow be tied to the current mortgage holder.

Many people are promoting various services to homeowners facing a foreclosure based upon claims that they can stop the foreclosure based upon the alleged violations committed by the originating lender. The Coyle case illustrates that even if the alleged violations can be proven, the claim and any remedy would be against the originating lender, not the current mortgage holder who is foreclosing the mortgage. In other words, such a lawsuit would not ultimately stop the foreclosure.

It is very easy to be mislead when someone provides a way out of a terrible situation but relying on a scam only victimizes you yet again.

Is Your 28 Year Old Child Ever Moving Out?

2012-06-26T14:48:25Z

Multi Generational Households on the Rise.

June 25, 2012

Nash Law Firm, PLLC
By: Stephen J. Nash
nash@nash-law.com

Why the increase? The bleak economy, of course.The unemployment rate for young adults has climbed since 2007 and many have taken jobs that they didn’t really want but needed to take and approximately 1/3^rd have gone back to school.

Not only are they moving home to save expenses but approximately 1/3^rd are delaying either marriage, parenthood or both.

If you look at the 18 to 34 age range, almost 40 percent are living in multigenerational households. Anyone with older children are aware of this trend. In many cases, the children cannot afford to live away from home. In other cases, they would rather stay at home to have more money to spend on something other than housing and, in some cases, they are living at home to help their parents make the mortgage payment.

For many baby boomers one of their burning desires was to own their own home and their home became a symbol of their success. As they became more successful, they bought bigger and more expensive homes. Even as empty-nesters they often moved into the biggest, most expensive homes of their lives.

Will the younger generations ever look at housing the way their parents did? Many are going to live in a multigenerational home for a good share of their lives and many have seen the horrible financial consequences their parents have suffered in connection to their home debt. Once they move out are they going to want to own a home? Are they going to see their home as a reflection on how successful they are? Are they going to see owning a home as a way to accumulate wealth or will they fear that ownership of their home potentially will potentially cause financial hardship?

The answers to these questions will have a great impact on the real estate industry in the coming decade from how fast real estate recovers, how buyers are marketed and what type of homes are built. The likelihood that young adults are going to follow in the footsteps of their parents with respect to housing seems remote.

NOTICE

The foregoing is not intended to constitute legal advice for any specific circumstance, but is intended to reflect broadly applicable principles, under Minnesota law, relevant to a typical situation. Each set of facts and each contract is, or can be unique; the unique facts and specific language of the contract may require a different legal analysis and may result in a different outcome. Before proceeding in reliance upon this or any other general description of law, consult with an attorney competent in the field of practice relevant to your situation.

Does the Boomerang Generation Want to Own a Home?

2012-05-16T17:55:33Z

Understanding the views of the boomerang generations view of housing will be key to succeeding in real estate

In 1940 almost 28 percent of adults between the ages 25 and 34 lived in a multigenerational household. By 1980 that percentage dropped to 11 percent. By 2010 that percentage shot up to almost 22 percent.

Percentage of Adults Ages 25-34 Living in Multi-Generational Household

Why the increase? The bleak economy, of course. The unemployment rate for young adults has climbed since 2007 and many have taken jobs that they didn’t really want but needed to take and approximately 1/3^rd have gone back to school.

Not only are they moving home to save expenses but approximately 1/3^rd are delaying either marriage, parenthood or both.

Babyboomers couldn't wait to live on their own and to ultimately buy a house. There was a stigma to still living at home. If you think that that stigma still exists or that the young adults are miserabley trapped into this living arrangement, consider this: according to the Pew Research Center, 78 percent of adults ages 25 to 34 living in a multigenerational huosehold say that they are satisfied with the arrangement. Furthermore, 61 percent say that have friends or relatives that have moved back home due to economic conditions in the last few years.

What this demographic ultimately wants with respect to real estate is going to have a fundamental impact on the real estate industry. The likelihood that young adults are going to follow in the footsteps of their parents with respect to housing seems remote. Understanding the importance they place on ownership of a home and the type of housing they want is going to be a key factor in suceeding in real estate as we go forward. If you continue to market towards the hopes and goals of babyboomers you most likely are going to miss the market with the boomerangers.

A Middle Class Epidemic: Financial Stress

2012-05-14T20:04:32Z

Walk down any street in middle America and you can see the stress in peoples faces. Stress is killing many middle class Americans. For the first time in their lives they are fearful of their future. They are worried about their job or business, about the ability to keep their home and their ability to retire. Many have already lost their job, been downsized or have a business that is struggling to survive. Many have lost or are in the process of losing their homes. Those who haven't surely know friends and neighbors who are just like them who have suffered losses that were unimaginable just a few years ago.

Let's face it, most middle class Americans between 45 and 65 years old have been very successful. Every year things got better for them. Better jobs, better pay, better everything. When set backs happened. it was seen as a temporary situation that would soon be a distant memory. Lose a job? So what, get a better one. Have business troubles? Start a new business. Need (or want) something? Borrow the money, becuase there will always be more money tomorrow to pay off the loan.

Sure enough, it always seemed to work out for the best.

As a result of this experience, many felt that there was no room for failure. Buck up. Work harder. If things weren't going well, that was on you.

Then the world changed. Sometime around 2007, the real estate world imploded and the financial system nearly failed. Since that time, the value of all of the assets accumulated by middle America has plummetated while their debt load remained the same. Credit that was so easy to use to deal with cash flow problems dried up. Middle America for the first time in their lives had to cut back. Businesses started a downward trend that forced them to cut back. Jobs were eliminated and/or salaries and benefits were cut. Many of those cut were at the top of their profession with a highly regarded companies where there never was a fear of losing jobs. But they made too much money for this economy.

Who wants to hire someone who is 45 to 65 years old? There are plenty of younger workers who need work and will be happy to recieve a fraction of what the older worker would be happy with. While the 45 to 65 year old worker has developed tremendous skills in their old job, those skills don't necesarily transfer to a new job.

In the meantime, the bills continue to come. Since their income has dropped, they start to sell their assets that they don't "need". Unfortunately, everyone else is doing the same thing and nobody wants to pay much to buy a "wants". Next, they start spending their savings and retirment accounts to keep everything going until they get back on their feet again. But every day that goes by brings them closer to the day of reconing and they know it.

For the first time in their lives, they feel helpess to deal with their problems and have no hope that the future is going to be better. They consider themsleves "losers". Afterall, they took all the credit when things went well so how can they not take all of the blame when things go bad?

The truth of the matter is that they took too much credit when things went well and are taking too much of the blame when things went bad. Because they are facing something that they never have faced before, becuase they are in depression and becuase they are desperate for a solution they are vulnerable for the first time in their life.

When you are vulnerable, you need help from a trusted advisor. Not someone selling false hope. Someone who can objectively look at all of the options available to the borrower to help create a plan to get them out of this horrible place. Often the borrower will need a number of professionals who can work together to come up with and execute the plan. Because everyone i sfacing a different situation, has different goals and fears, no one plan is right for everyone. Beware of the "simple, one-fits-all" solution.

The good news is that there is a plan that is right for you. The key to any plan is to get you to a place where you can start to move forward again while at the same time perserving whatever assets that can be protected in the plan you chose. Once you clear out the old debt, you can start re-building your credit and can start saving so that you actually can retire some day.

Can You Draft a Contract For Deed? Should You?

2011-07-11T16:01:27Z

As contract for deeds become more popular, the problems associated with them have also risen. One problem that is becoming increasingly common is the practice of unqualified people drafting contracts. A contract for deed is a complex legal document and as such should only be drafted by an experienced real estate lawyer. A non-lawyer drafting a contract for deed arguably is practicing law without a license and, more importantly, doesn't have the knowledge to properly draft a contract for deed.

The non-lawyers that we often see drafting contract for deeds are real estate agents and title companies. In both cases, unless the person drafting the contract is also an attorney, they would be practicing law without a license. Without a legal background, how does the lawyer know all the legal risks associated with the contract and the options available to the client to best protect their position?

It is not just non-lawyers who shouldn't be drafting contract for deeds. Just having a law degree does not mean you have the knowledge and experience to properly draft a contract for deed. While I am a licensed attorney and have some knowledge of criminal law, the fact is, I don't have enough knowledge or experience to represent a client facing criminal charges. Likewise, many lawyers don't have enough knowledge or experience to properly draft a contract for deed for a client.

Contract for deeds are vital documents involving a great deal of money. A bad contract for deed will haunt the client and can expose them risks that they aren't even aware of. Anyone who tries to make you believe that drafting a contract for deed involves just "filling in the blanks" does not truly understand the risks associated with contract for deeds and what can be done to limit those risks. Anyone who says they can draft a "standard" or contract for deed that is "fair" to both the seller and buyer, also does not understand the legal issues that need to be negotiated between the seller and buyer whose interests are very different.

A seller or buyer needs to understand their possible risks and obligations under a contract for deed and ways to limit those risks and obligations. In other words, they need someone who can draft a contract for deed that best protects their interests, something that only a knowledgeable, experienced real estate attorney can do.

New Wells Fargo Short Sale Documents - Beware!

2011-04-07T20:50:45Z

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Nothing is certain about short sales except that it continually changes. A recent change that we have become aware of is that Wells Fargo has recently came out with revised Short Sale documents. While they are not yet being required in all Wells Fargo short sale transactions, you need to be on the look out for these new forms becuase they have significant changes.

Not only are the changes significant, it is our view that no real estate professional should sign these documents. To sign these documents would put you at risk with your client, the government and the short sale lender.

Short sales are risky enough without this added risk.

To view the new forms and read a more complete description of the objectionable changes, click the following link: Danger, New Wells Fargo Short Sale Documents Put You At Risk

Bank of America Dabbles in Principal Reductions

2011-03-29T17:37:57Z

Bank of America and Ally Financial have agreed to participate in a test program designed to provide princple reductions for qualifying borrowers. At this time, the programs are limited to areas hardest hit with foreclosures - California, Arizona and Michigan. The program is funded by the US Treasuries "Hardest Hit Fund".

While we don't know the criteria or whether the idea of principle reductions will spread, it certainly is worth noting that lenders are now putting their toes in the water that they vowed never to enter.

For more on this story, click the following link: Housingwire Prinicipal Reduction Story

Fannie Mae Will Not Purchase Mortgages Used to Purchase During the Period of Redemption

2011-03-23T16:24:48Z

More red tape to kill short sales

Short sales are a tough business - a long slow, unpredictable process. Even if you get through the process there is no guarantee that the buyer will still be there. Another huge hurdle has arisen.

THE FANNIE MAE SELLING GUIDE MAY PREVENT FANNIE MAE FROM PURCHASING MORTGAGES USED TO BUY PROPERTIES DURING THE PERIOD OF REDEMPTION.

The selling guideline is poorly written and it certainly can be argued that it either does not apply to Minnesota foreclosures because there is no there is no unexpired redemption period when the short sale closes because the owner has to redeem in order to complete the sale. There is also a procedure to deal with this situation that is set out in the selling guidelines.

Click here to read the relevant selling guideline and the procedure to overcome the selling guideline.

However, an argument that the guideline shouldn't apply in Minnesota or a procedure to deal with the situation doesn't matter if lenders don't want to take an additional risk by dealing with properties in the period of redemption. Uncertainty kills deals.

I have spoken to a number of lenders and mortgage brokers and it is clear that investors are fearful and really don't care it the guideline makes sense in Minnesota or that there may be a procedure to follow that may overcome the rule, they won't take a risk that Fannie Mae will not purchase the loan.

That leaves only those lenders who do not plan on selling their mortgages to Fannie Mae as sources of lending for sales during the period of redemption. Unfortunately, it is a very real policy that those investors may pull back when they find out that they are the only ones willing to take this risk.

The impact of this turn of events is just another body blow to the real estate market. This is another reason for sellers to not bother even trying a short sale, another reason for real estate professionals to avoid short sale (why risk all of the work put into a short sale only to see it inevitably fail even if the short sale approval is obtained) and another reason that the foreclosure inventory for the lenders will increase. This, ultimately, will lead to a further decline in property values. A LOSE, LOSE PROPOSITION FOR EVERYONE!

For real estate professionals who work with short sales (or any property in foreclosure), you had better make sure that you can find a buyer, get the short sale approval before the period of redemption or the risk of a failed transaction just multiplied.