I have had a few clients ask me recently about the difference between buying a property at a foreclosure auction and buying a property owned by a bank (REO/Real Estate Owned).
A property purchased at a foreclosure auction or foreclosure sale is purchased through a bidding process by individuals at the auction. The property is sold to the highest bidder. If the foreclosing lender is not satisfied with the amount of the bids they may also bid on the property to raise the selling price. In the end the lender often ends up as the highest bidder and takes ownership of the property. Property that is acquired by the lender in this process is called REO property or Real Estate Owned property. The lender will in turn, eventually, place this property on the market with a Realtor for resale to the public. (more…)
.
Title insurance underwriters, concerned about the risk in insuring short sale flips have taken a position of not insuring them. Old Republic Title Insurance announced to it’s agents last month that it would no t authorize the issuance of lender or owner title insurance policies on short sale flip transactions.
So what is a short sale flip?
A short sale flip is when a property is purchased by a real estate “investor” from a seller who has negotiated with the current mortgage holder(s) to release the mortgage(s) for less than what is owed, the purchaser of the property then flips, or resells, the property for a profit. (more…)
A Declaration of Homestead is a type of protection for a person’s primary residence. The Declaration of Homestead is a form that is filed at the Registry of Deeds in the county where the property is located, referencing the title/deed to the property. It allows homeowners in Massachusetts to protect their property up to five hundred thousand dollars ($500,000) of the value from civil attachment.
Today the House of Representatives voted 409 to 5 to give home buyers three more months to close on their purchases and still qualify for the $8,000 or $6,500 federal income tax credit.
The House bill extends the closing deadline to September 30, 2010.
Now the Senate must approve the new, stand-alone House bill. But the Senate has already shown support and approval of the measure by having passed their own version of the bill last week.
The House bill doesn’t help anyone currently shopping for a home. Buyers must have signed a purchase contact by April 30 to qualify for the tax break. The issues currently is that many who now qualify for the credit may not be able to close their transaction in time. That is by July 1, 2010.
The debate over the unauthorized practice of law in Massachusetts took a new twist this week.
A 2009 ruling in favor of National Real Estate Information Services Inc. (NREIS) in an unauthorized practice of law case brought by the Real Estate Bar Association for Massachusetts Inc. (REBA) has been vacated by the First Circuit Court of Appeals.
According to the June 21 order to vacate, the appeals court said it would let the Massachusetts Supreme Judicial Court decide what constitutes the practice of law in the state encompassing all the interconnected activities of a real estate conveyance and the issuance of title insurance, and whether or not non-attorneys can conduct “witness” or “notary” closings. The appeals court said the district court construed the sparse state case law and declared the practices at issue did not constitute the unauthorized practice of law.
This decision will impact who can capture title insurance premiums in Massachusetts. Last year, $198 million in title premiums were generated in the state.
In 2009, United States District Judge Joseph L. Tauro entered an order of summary judgment in favor of NREIS, enjoining REBA from enforcing its interpretation of the practice of law.
In the court’s decision, Tauro agreed with NREIS’ position that the definition of the practice of law as set forth by REBA was a violation of the Dormant Commerce Clause of the United States Constitution. The order to vacate also reverses the district court’s decision on NREIS’s dormant Commerce Clause counterclaim. NREIS claimed that requiring attorneys to conduct closings was an unconstitutional restraint on trade that would result in higher closing costs.
REBA had filed the original lawsuit in 2006 in an attempt to restrict the provision of title, settlement and closing services by Massachusetts attorneys only. The decision marked the first time a Federal District Court has ruled on the issue of unauthorized practice of law as it relates to settlement services.
