The U.S. Supreme Court on Tuesday ruled that homeowners had a right to rescind their mortgage loan for up to three years after the loan origination date if the lender failed to provide the requisite “Truth-in-Lending” disclosures.
The decision, Jesinoski v. Countrywide, is here. A Reuters article on the decision is here.
The Finney Law Firm has been retained to help a community association improve the development of a massive apartment complex in its community, and to force the City of Cincinnati and the developer to comply with local zoning laws.
We were unsuccessful in having City Council reject the plan, so we filed suit in December 30th before Hamilton County Common Pleas Court Judge Steven Martin seeking an injunction against the project proceeding. A copy of that Complaint is here. The motion for Temporary Restraining Order is here.
The hearing on the Motion for Temporary Restraining Order is this Wednesday, January 7, 2015 at 8:30 AM.
How long will it be until I can buy a house again? This is one of the first questions many people ask when filing for bankruptcy and/or after losing a house to foreclosure. The common misconception, often perpetuated by creditors, is that you will never be able to buy another house or that you will not be able to for ten years. This is just not true. New programs allow debtors to purchase a home much faster than they usually think is possible.
The mandatory waiting periods to apply for mortgages backed by Fannie Mae, United States Department of Agriculture (“USDA”), or the Federal Housing Administration (“FHA”) is between one and four years depending on your situation and the type of loan you apply for.
Conventional loans backed by Fannie Mae backed loans have a longer waiting period than those backed by the FHA. Individuals who receive a discharge in a Chapter 7 bankruptcy have to wait four years from their discharge date. Those who filed Chapter 13 bankruptcy have a two year waiting period from the date of discharge. If your Chapter 13 bankruptcy was dismissed you must wait four years from the date of dismissal.
USDA loans carry a three year waiting period for a Chapter 7 discharge. During a Chapter 13, you can receive a USDA loan as quickly as 12 months after filing. You must have both court approval and evidence 12 consecutive Chapter 13 Plan payments. You are also eligible for a USDA loan one year after your Chapter 13 discharge.
The FHA’s new programs may offer the best possible solution for those who have filed for bankruptcy or lost their home to foreclosure. The FHA’s Back to Work – Extenuating Circumstances program allows borrowers to qualify for a new FHA loan just one year after a foreclosure, short sale, deed in lieu of foreclosure, or bankruptcy. This program began on August 15, 2013 and is set to expire September 30, 2016. Not everybody will qualify for this new program but it may be very beneficial for many borrowers.
Individuals can also receive an FHA loan during a Chapter 13 bankruptcy as long as that individual has made 12 months of satisfactory Chapter 13 plan payments and has the Court’s approval.
Your credit score will affect the rates you receive on post-bankruptcy mortgage loans. Your credit score will be low immediately after you file but should consistently rise as you maintain your monthly payments and do not have any further delinquent payments.
As always, please discuss any and all programs with your bankruptcy attorney before deciding on a certain course of action.
With today’s low interest rates and relatively available money from traditional commercial and residential mortgage lenders, seller financing of real estate is not the most popular alternative, but it remains an option. This article explores the positives and negatives of the three major means of seller financing of real estate transactions.
The three major options are: (i) Lease (with option or obligation to purchase), (ii) Land Contract and (iii) deed with a note and mortgage back to the seller. Each of the three has its advantages and drawbacks, depending on whether you are the buyer or the seller.
As a general proposition, the “risk” a seller holds is that the buyer defaults, the physical condition of the property when returned is impaired, and getting clear title back in the seller is expensive and time consuming. From the buyer’s perspective, he does not want to improve real property and pay significant sums toward the purchase price only to learn at later date that he has to fight to get clear title into his name. The three instruments offer essentially a spectrum of rights from least to most in the buyer: a lease (with either option or obligation to purchase) gives the least protection to the buyer, a land contract (depending upon its terms) moderate protection, and a deed with a note and mortgage back to the seller the most protection.
A lease essentially gives possessory rights to a tenant in exchange for payment of rent. Under a lease with an obligation to purchase or option to purchase, some portion of that periodic payment can be applied to the ultimate purchase price. From a buyer’s perspective, a lease is a precarious instrument, as a default extinguishes the rights of the tenant — potentially both to occupy and buy. Notice of default and written right to cure provisions can make the instrument more palatable for a tenant, but it is as a general rule the least favorable instrument for the tenant of the three options.
A typical land contract is simply a contract to to purchase real estate with (i) a delayed closing and (ii) possessory rights vested in the buyer until closing. Under O.R.C. Section 5313.07, which applies only to residential property, if the buyer has paid either for five years or more than 20% of the purchase price, in the event of a default a the seller must pursue a foreclosure action, with the proceeds beyond the contract price payable to the buyer. For commercial contracts, a simpler “forfeiture action” is available, but it still remains more involved than a simple eviction action called for with a lease. If the instrument is placed of record, a buyer achieve some protection — perhaps greater than that under a lease — from a land installment contact.
The final method of seller financing is the delivery of a deed from seller to buyer, and taking back by the seller of a note for the payment of the remaining purchase price and a mortgage securing that payment. This method necessarily entails vesting in the buyer the equity in the property net of the balance due the seller. All that’s left in the seller is the right to collect payment of the mortgage balance, and whatever protective covenants are there for seller’s protection.
All three methods of seller financing involve risk on the seller that the buyer impairs title to the property through unpaid taxes, utility bills and the like, or, more likely, failure to maintain the property in the fashion that the seller anticipates. These issues can be addressed to some extent through good contract terms and tight management of the asset, but in the end the seller will retain some risk as to these issues.
But fundamental structure of the transaction, choosing one of the three options set forth above, will dictate the relative position of the seller and buyer in that deal.
We are pleased to announce the launch today of Ivy Pointe Title, LLC and the addition to our staff of President Richard P. Turner, Patricia A. Gillespie and Evan A. Meredith.
With Ivy Pointe Title, we offer a broadened range of real estate and closing services for residential and commercial transactions in Ohio and Kentucky, allowing us to better serve our clients.
Watch for our official announcement coming soon.
A recent Enquirer article highlighted Specific Performance as a remedy in real estate contracts. Specific Performance, as opposed to money damages, means that the judge will order the parties to a
contract to complete the contract. This is a rarely used remedy. In the case covered by the Enquirer, the seller is seeking an order from the Judge to force the buyers to go through with the sale and purchase his property.
Finney Law Firm recently represented buyers in seeking specific performance after the woman they contracted to purchase a home from informed the buyers that the she would not go through with the sale.
Our clients were beside themselves. They had hunted throughout the area for the perfect home and finally found it, negotiated and executed a contract for the home, and sold their home in reliance on that contract. Their dreams of settling into their new home were dashed in an instant.
The seller had gotten cold feet and found an attorney who suggested that there never was a valid contract because she hadn’t returned the accepted contract until a few hours after the time for acceptance set forth in the contract.
After reviewing the case law we determined that the contract was a valid notwithstanding the seller’s argument.
Explaining the costs and risks of litigation, we worked with our clients to weigh their options. They could walk away from the purchase and begin the house-hunt anew; they could offer more money in the hopes of warming the seller’s cold feet; or they could bring suit for specific performance on the contract. As with almost every case, litigation was offered as a last resort.
Ultimately, believing that the seller would not negotiate and they could not find a comparable home, our clients decided to sue to enforce the contract.
It took thirteen months to get to summary judgment, but eventually we prevailed and Judge Nadel ordered specific performance of the contract (for the first time in his judicial career).
After Judge Nadel ordered specific performance we were able to negotiate a settlement payment for damages and attorney fees and finally close on the sale. We’ve never seen two people happier to sign mortgage documents.
Let us know how we can make a difference for you and your real estate needs.
Construction on our next expansion is underway!
On Monday, October 13, the Finney Law Firm will launch Ivy Pointe Title, LLC, performing residential and commercial title, escrow and closing services. On that date we welcome three new employees to quickly and efficiently process your real estate purchases and loan closings.
Our title company motto is “accurate and on time, every time,” and our goal is to be consistently accessible to all closing participants, and to close their transactions on time and without error.
This is our latest opportunity to expand our services to our many lender, investor, Realtor, and business clients, and is responsive to the confidence you have placed in our firm to date.
Our attorneys and staff are united in striving to “make a difference” for our clients every day. This is one more facet — a pillar for the success of your business — in advancing that singular objective.
Thank you to everyone who has been “on board” with us in this venture.
Attached here is Judge Kubicki’s Order signed yesterday that extends the “stay” of Hamilton County’s order abolishing registered land through the end of the judicial proceedings on this matter.
This is an important piece of public interest litigation advanced by the Finney Law Firm.
Dan Horn of the Enquirer today features our firm’s success in obtaining a Temporary Restraining Order from Judge Barry Kubicki in saving Registered Land in Hamilton County.
We have a long way to travel in this litigation, but this is the first step.
Read it here.
It’s old news, as the law was enacted in 2000, but we are asked this from time to time: Are electronic signatures just as enforceable as physical or “inked” signatures?
Yes. The Electronic Signatures in Global and National Commerce Act (ESIGN) passed in 2000 specifically proves that a contract or signature “may not be denied legal effect, validity, or enforceability solely because it is in electronic form.”
Many of those engaging in commerce of all sorts are commonly using electronic signatures today, including on real estate contracts and other documents. Documents that require an “acknowledgement” or “notary seal” still must be signed in-person, but otherwise, the act makes the e-signature just as effective.
Because of proof of signature, there may still be instances in which we want personal signatures, but for many of not most commercial arrangements, e-signatures suffice.