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October 2010 Archives

OneUnited Bank Sues Boston Church For Not Repaying Loan

According to the Boston Globe, OneUnited bank sued the Charles Street African Methodist Episcopal Church for failure to repay a loan offered to the church for the construction of a neighborhood gathering site called The Roxbury Renaissance Center. OneUnited threatened to foreclose on the center if the church doesn't resolve the matter.

Charles Street needed at least $4 million to build the Roxbury Center. OneUnited offered to help out, but the church could not afford an $800,000 down payment on a construction loan. The bank ended up relaxing its policy on the loan as a good gesture to help bring in more customers to the new branch in the area. The church was supposed to pay the loan off in June 2008 when both parties signed the $3.7 million loan agreement.

Basics of Real Property Tax

Property tax is commonly based on the value of real property, even though there are different kinds of property subject to real property tax. "Real property" is land and anything permanently attached to the land, like a building. Examples of real property include offices, apartments, homes, and commercial buildings. Taxing land and buildings are a chief source of revenue for local governments like Boston's, and state law provides municipalities with the power to levy property taxes.

An MA real estate lawyer can explain the all the details on property taxes for Boston homeowners. Generally, property tax entails three phases: levy, appraisal, and collection. Taxing authorities, like a city or hospital, within local governments are responsible for administering the three parts of property tax.

Potential Cuts on Homeowner Tax Benefits Could Affect Boston

According to the Boston Herald, a report from a bipartisan presidential deficit-reduction commission might set off changes in how the federal tax system deals with home ownership. For years, homeowners reaped the advantages of tax benefits like mortgage-interest reductions, property-tax write-offs, and capital gains exclusions. But the nation's deficit problem may potentially affect Boston homeowners as the government considers cutting tax subsidies to reduce the deficit.

Government officials are also debating on whether it should make cuts on defense spending and social programs in addition to tax subsidies. While many people agree that a tax-system support for housing is significant, the tax incentives have become too costly. Panelists at the Urban Land Institute's annual meeting admitted housing taxes appear to favor home ownership more than renting, creating a disproportional incentive.

Mortgage Rates Slowly On The Rise

The Boston Herald reported that rates on 30-year mortgages have increased from their lowest level since the last ten years, reaching a national average of 4.21 percent. According to mortgage buyer Freddie Mac, the average rates on 30-year fixed loans was 4.19 percent last week, which was also the lowest weekly average recorded since 1971.

A knowledgeable Boston real estate lawyer can clarify in detail the varying rates of different types of mortgage loans and which kind of loan best fits a homebuyer's needs. 15-year fixed loans have risen to an average rate of 3.64 percent from last week's average of 3.62 percent.

Foreclosure Petitions Drop In Boston

The Warren Group reported the number of Massachusetts foreclosures set up by lenders fell last month compared to last year while completed home seizures rose for the ninth consecutive month, according to The Boston Herald. Timothy Warren stated that "if fewer people are losing their homes to foreclosure, that bodes well for the housing market as a whole."

A Boston real estate lawyer can give a thorough explanation about the foreclosure process, but typically the first step to foreclosure is filing a petition. Lenders filed 2,358 petitions to foreclose homes last month and reveals a 6.7 percent drop compared to the 2,527 filed last year. From the 703 home takings in September 2009, completed foreclosures climbed 26.6 percent as lenders seized 890 homes this year.

'Robo-Signing' And Its Effect On Boston Homeowners

With huge mortgage lenders like Bank of America and JP Morgan Chase freezing foreclosures in Boston to review and verify all their paperwork, Boston real estate attorneys are criticizing the mortgage lender habit known as "robo-signing."  Lawyers like Tom Miller have indicated that lenders appear to be more inclined to hastily stamp or "robo-sign" foreclosure documents without checking see if the whole process was fair and legal.

The Boston Globe reported the issue of robo-signing has highlighted a fundamental problem in the mortgage industry. Lenders seem to treat mortgages like basketball trading cards instead of treating each foreclosure on a case by case basis. So how has robo-signing affected Boston homeowners?

Reverse Mortgage Basics for Boston Homeowners

Many Boston homeowners are turning to "reverse" mortgages to help pay off a current mortgage, invest in improving or upgrading their home, pay for health care expenses, or supplement their retirement income. Some people may not be familiar with what is entailed in a reverse mortgage, and fortunately FindLaw offers homeowners in the Bay State with a few of the basic concepts behind reverse mortgages.

Homeowners make monthly payments to a lender in a "regular" mortgage, while those in a "reverse" mortgage receive money from the lender. They typically don't have to pay the lender back as long as they live in the home. As an alternative, the loan is repaid when the individual sells his or her home, dies, or the home is not the individual's principle residence any longer. A borrower must be at least 62 years of age and live in the home to qualify for a reverse mortgage.

Should Boston Vote Yes on Question 2?

Chapter 40B, which is commonly referred to as the affordable housing law, is recognized for developing 58,000 new housing units in the Bay State. However, the Boston Herald reports that many Boston residents are considering repealing Chapter 40B by voting yes on Question 2. The affordable housing law appears to have provided more wealth to lawyers and consultants while paying less attention to the interests of local communities.

A Boston real estate lawyer can provide a detailed understanding about how Chapter 40B works, but generally the law encourages communities in wealthier suburb areas to build affordable units. It has also increased those communities' affordable housing stock since its enactment in 1969. Yet, the law permits developers to get around many local zoning requirements with only one permit so long as a section of the planned development is reserved for below-market rate units.

What If MA Homeowners Stopped Paying Mortgages?

In a period where thousands of homeowners are defaulting on their loans, the Wall Street Journal questions why some of them still choose to struggle and make payments when they can't afford to. Most people's homes have a market value way below the costs of their mortgage, and many have no equity left. What would happen if homeowners, like those in Boston, just stopped paying their mortgages?

The question has even brought Boston real estate lawyers in deep thought. Banks are completely swamped with foreclosures that some lenders, like Bank of America or J.P. Morgan Chase, have declared a temporary freeze on further foreclosures in some states as they sift through the piles of paperwork. There have been some cases where banks were repossessing homes without proper documents, and it has become difficult to establish who really owns the mortgage.

President Obama Rejects Congress' Foreclosure Bill

Growing evidence has emerged regarding mortgage lenders who have been evicting homeowners using flawed court documents. The problem has caused federal and state administrators to place more pressure on mortgage companies regarding potential legal violations.

According to the Boston Globe, President Obama used a rare pocket veto to reject a bill that could have potentially aggravated the rising issue of banks using faulty and misleading documents in home foreclosures. Obama sent the bill back to Congress since the current version of the bill had "unintended consequences on consumer protections" when it comes to the process of providing a notary's seal to foreclosure paperwork.

No-interest Loans Available for Unemployed MA Homeowners

Countless Bay state homeowners are struggling to make their mortgage payments due to job loss. With Massachusetts having an unemployment rate of 8.8 percent compared to the 9.6 percent nationwide rate, the U.S. Department of Housing and Urban Development has developed a $1 billion program where unemployed homeowners will be able to take out interest-free loans to help them pay for their mortgages.

The Boston Globe reported the U.S. Treasury department launched a $7.6 billion program earlier this year to assist those hit hardest by the recession. The Treasury program also focused on helping homeowners who are "underwater," which an MA real estate lawyer would explain as owing more on your mortgages than the actual worth of your home.

Martha Coakley Freezes MA Foreclosures

Martha Coakley, the Massachusetts Attorney General, has called for Bank of America and other major creditors to stop MA foreclosure proceedings for Bay State homeowners until the banks have shown they have abided by state law. According to the Boston Herald, lenders like Bank of America may have actually lacked the proper paperwork in taking possession of numerous U.S. homes.

In a Massachusetts deposition, a Bank of America executive admitted to signing thousands of foreclosure paperwork without really looking at them. The documents were intended to prove that Bank of America legally owned delinquent mortgages on many of the homes it intended to seize through foreclosure, but the Bank of America executive confessed that she signed 7,000 to 8,000 foreclosure documents a month without reading them first.

The Ostroff Company Helps Homeowners Avoid Foreclosure

A family-run real estate investment business claims they have modified their strategy and now focuses on buying out homeowners facing foreclosure. In a time where foreclosures continue to be on the rise, the Massachusetts Home Relief has posted profits while many real estate companies have worked hard to just survive.

According to the Boston Herald, the Ostroff family runs the Mass. Home Relief under the Hull-based Ocean Real Estate Investments market. Managing partner Jonathan Ostroff considers the business as a "solutions company" that helps homeowners avoid foreclosure. The Ostroffs will typically go through short sale or purchase a home from a seller and flip the home for a profit. They also generally assist sellers in finding a new and comfortable living arrangement.