home owner Archives - Page 8 of 15 - Real Estate News and Commentary

October 22, 2017September 5, 2019

Title fraud protection

In the wake of the largest consumer data breach in history, ads for credit monitoring and other related services are flooding the airwaves. One of these associated services is home title monitoring. These commercials claim that they will protect you from home stealing and title fraud. But what is home title monitoring and is it worthwhile?

According to a FBI report (fbi.gov) “House Stealing, the Latest Scam on the Block,” house stealing is a combination of two popular “rackets:” identity theft and mortgage fraud. The 2008 report described a couple of versions of how the scam is perpetrated. One form of this crime is committed by obtaining a cash-out mortgage posing as you to get a check at settlement. Another form is committed by fraudulently taking title to your home and then selling the home for the proceeds. Although fraudsters frequently target vacant homes, house stealing can also occur while you’re still occupying your home. The FBI describes how scammers perpetrate house stealing and title fraud:

Here’s how it generally works:
-The con artists start by picking out a house to steal—say, YOURS.
-Next, they assume your identity—getting a hold of your name and personal information (easy enough to do off the Internet) and using that to create fake IDs, social security cards, etc.
-Then, they go to an office supply store and purchase forms that transfer property.
-After forging your signature and using the fake IDs, they file these deeds with the proper authorities, and lo and behold, your house is now THEIRS* [*Since the paperwork is fraudulent, the house doesn’t legally belong to the con artists.]
There are some variations on this theme…
-Con artists look for a vacant house—say, a vacation home or rental property—and do a little research to find out who owns it. Then, they steal the owner’s identity, go through the same process of transferring the deed, put the empty house on the market, and pocket the profits.
-Or, the fraudsters steal a house a family is still living in…find a buyer (someone, say, who is satisfied with a few online photos)…and sell the house without the family even knowing. In fact, the rightful owners continue right on paying the mortgage for a house they no longer own.

Both forms of house stealing (or title fraud) are typically intertwined with mortgage fraud. And because of the process, mortgage fraud usually has multiple conspirators carrying out the scam. An example of this is the 2013-2014 sentencing of at least five co-conspirators (including a title company manager and mortgage broker). These criminals perpetrated a complex multi-million-dollar mortgage fraud scheme that occurred in Maryland. One conspirator sold homes that did not belong to her.

According to the FBI report, house stealing is difficult to prevent. However, vigilance on your part is highly recommended. Red flags include receiving payment books and/or late notices for loans for which you did not apply. Additionally, it is recommended to routinely monitor your home’s title in the county’s land records. Any unrecognized paperwork or fraudulent looking signatures may be an indication of title fraud and should be looked into. Title fraud should be reported to the FBI.

Title fraud protection

You can visit Montgomery County’s land records office and get information on searching your home’s title from the very helpful staff. You can also search land records online. However, you should consult a title attorney for a detailed title search.

A problem with searching land records is that it is not always definitive. Of course, accuracy depends on those who prepare and file the documents with the county. Common issues that are found in title searches are misspelled names and aliases. Deeds and other related documents (such as quit claim deeds and mortgage satisfaction letters) are not always filed timely, or sometimes not at all.

After the Equifax breach, millions of consumers’ identifications are available to criminals to perpetrate house stealing/title fraud. Title monitoring services tout their ability to protect you from such scams. Before you decide to enroll, be aware of the fees, the limitations, and how it compares or differs from your owner’s title insurance policy (including cost).

Your title insurance policy may already protect you from title fraud. According to the Maryland Insurance Administration’s A Consumer Guide to Title Insurance (insurance.maryland.gov), “Title insurance protects real estate purchasers and/or lenders from losses that arise after a real estate settlement…A title insurance policy provides coverage for legal defense, as well as the coverage amount listed in the policy, which usually equals the purchase price of the real property.” Basic coverage typically protects you for fraud that occurred prior to settlement. However, enhanced coverage may provide protection for fraud that occurs after settlement.

You should consult with a title attorney about your title insurance coverage and how it protects you from title fraud.

By DanKrell
Copyright© 2017

Original published at https://dankrell.com/blog/2017/10/22/title-fraud-protection

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

September 24, 2017

Mortgage Interest Deduction last chapter?

The mortgage interest deduction seems to be the everyone’s lovable fiscal scapegoat. The mortgage interest deduction was almost abolished in 2010 as a means of increasing revenue after the recession. And then again in 2012 it’s elimination was considered to increase revenue lost through sequestration. This time the mortgage interest deduction is in Congress’ sights as a means of tax reform.

The mortgage interest deduction is a remnant of consumer interest deductions that were allowed when income tax was first collected. It wasn’t until the 1980’s when most consumer interest deductions, such as credit card and auto loan interest, were eliminated (to reduce budget deficits after a deep recession). The mortgage interest deduction survived in a limited form, which implemented a cap on the amount of an individual’s deductions.

The mortgage interest deduction is again embattled. Reporting by AP’s Marcy Gordon reveals the divide in eradicating the MID (GOP eyes popular tax breaks to finance overhaul; apnews.com, September 18, 2017). The MID is viewed by some as a middle-class mainstay that is a political hot potato. While others see the MIS as an antiquated subsidy that can be removed as part of a major tax plan. However, the likelihood of totally abolishing the MID is slim because of the political fallout. More likely to occur is something akin to what happened in the 1980’s, which was a narrowed version that limited deductions. Speaker of the House, Paul Ryan hinted that the current $1million cap could be further reduced, by saying “We could change that limit — I suppose.”

Over the decades, the mortgage interest deduction has been criticized by some as poor economic policy. Those who argue against the mortgage interest deduction claim that it doesn’t increase homeownership. They also claim that the MID is a subsidy that artificially inflates home prices, and is used mostly by the wealthy. Additionally, the enticement of receiving a MID at the end of the year is used to encourage home buyers to buy homes that they really can’t afford. A recent study by Jonathon Gruber (known to many as the architect of Obamacare), et al, produced results that mimics the assertions of the mortgage interest deduction critics’ (Do People Respond to the Mortgage Interest Deduction? Quasi-Experimental Evidence from Denmark; National Bureau of Economic Research, Inc; Working Paper 23600, July 2017).

Proponents of the mortgage interest deduction, such as the National Association of Realtors, and the National Association of Home Builders, claim that the MID encourages homeownership and makes it affordable for many.

As a witness in the September 13^th Senate Finance Committee Hearing on Individual Tax Reform, Iona Harris (chair of NAR’s Federal Taxation Committee) testified that limiting or abolishing the mortgage interest deduction could actually have the unintended consequence of increasing taxes on millions of “middle class homeowners,” while “putting the value of their homes at risk.”

Ms. Harris stated:

“…it is estimated that American homeowners already pay well over 80 percent of all federal income taxes… 53 percent of individuals claiming the itemized deduction for real estate taxes in 2014 earned less than $100,000.”

And recapped the outcome of the 1980’s mortgage interest deduction reduction:

“…When Congress last undertook major tax reform in 1986, it eliminated or significantly changed a large swath of tax provisions, including major real estate provisions, in order to lower rates, only to increase those rates just five years later in 1991…Most of the eliminated tax provisions never returned and in the case of real estate, a major recession followed.”

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August 6, 2017November 23, 2021

Real estate BS detector

DARPA issued a recent request for information seeking ideas about how to create automated capabilities to assign “Confidence Levels” to scientific studies, claims, hypotheses, conclusions, models, and/or theories. In other words, the Defense Advanced Research Projects Agency wants to create a BS detector. First reported by Adam Rogers for WIRED (Darpa Wants to Build a BS Detector for Science; wired.com; July 30, 2017), DARPA doesn’t look at it as rooting out “BS” but rather establishing the what, why, and how scientists know stuff. Imagine how this could be applied as a real estate BS detector!

The Defense Advanced Research Projects Agency’s stated mission on their website is “to make pivotal investments in breakthrough technologies for national security.” So, chances are that if they are able to devise a real working BS detector, you won’t know about it.

When it comes to real estate, people sometimes bend the truth. Additionally, real estate agents are known for “puffery” and are generally not trusted because of the salesy techniques they employ. But having a real estate BS detector would be huge breakthrough! Imagine being able to weed through the BS and nonsense that many real estate agents spout when they are clearly trying to sell. Wouldn’t it be wonderful to check your real estate BS detector, when an agent is pontificating about a house or themselves, to know if the agent is wasting your time? Unfortunately, the real estate BS detector is not a real device. However, there are strategies to help you detect real estate BS.

“Luke, trust your feelings.” Ok, there’s no such thing as a Jedi, but empirical research has demonstrated that intuition can be used to weed out lies. Many say they rely on their gut instincts to protect themselves. But the truth is that many ignore or don’t trust their intuition because the rational mind takes over and dominates. Increasing your intuition could help you detect the real estate BS and prepare for (and maybe prevent) regretful situations. Becoming more aware about your “gut feeling” can increase your intuition.

Being cynical can also help detect real estate BS. Don’t be rude of course, but questioning what others say helps you clarify and understand them at a higher level. It can also reveal untruths. Question all claims and over-the-top statements. For example, if you’re dealing with a real estate agent, ask for support to any assertion they make about themselves or their services. Ask to speak to their references. Also, ask for additional information that support their opinions on the housing market and deciding on a price to sell or buy a home.

Do your due diligence to discover real estate BS. After asking questions, take what others say or do during the real estate transaction at face value and take it upon yourself to verify it. It can save you a headache down the road. It’s easy to verify many aspects of the real estate transaction, because many local jurisdictions have their databases online. However, making a call or two to a helpful government employee is straightforward and can provide bonus information. Verify licenses of real estate agents, loan officers, and even home contractors. Verify permits of home improvements. Verify the local schools and the home’s zoning.

Finally, don’t feel pressured to do anything. The BS artist will make it seem as if you have to act immediately. But if you are not comfortable with the situation or are not yet ready, take a pause.

By Dan Krell
Copyright©2017

Original published at https://dankrell.com/blog/2017/08/06/real-estate-bs-detector/

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July 16, 2017December 13, 2022

Self-driving cars and home buying

Technology has made homes more efficient and environmentally friendly, while also making them more comfortable. Technology has made the business of real estate become increasingly easier through electronic communications and electronic signatures. Technology has also made finding a home much easier too. It’s obvious that the real estate industry has been greatly impacted by technology, but will the self-driving cars technology impact real estate?

A curious article that appeared in a recent issue of Appraisal Journal suggests that self-driving cars will eventually influence real estate (A Largely Unnoticed Impact on Real Estate-Self-Driven Vehicles; Appraisal Journal; Winter2017, Vol. 85, No.1, p51-59). The authors, Levine, Segev, and Thode, discuss how self-driving cars will likely become a standard on our roads, as well as likely changing the way we think about where we live. There is a suggestion that the wide spread adoption of self-driving cars could bring about a suburban renewal. As self-driving cars become more abundant, some suggest that would influence some home buyers and their decisions on where they choose to live. The concept of owning a self-driving car could make the choice a little easier to opt for the less expensive suburban home with more land.

However, you should consider that owning a self-driving car might not make your suburban commute more convenient. For many home buyers, a reason to move closer to an urban area is to reduce the commute time to their jobs. For some, the thought of increasing their commute time even by ten to fifteen minutes (by virtue of an extra metro stop) is unacceptable. Sitting in your self-driving car is not much different than sitting in a metro car or bus. So the notion that owning a self-driving car could spawn suburban growth may not hold water.

Owning a self-driving car won’t make the suburban commute less expensive. Many home buyers decide to live closer to their jobs to save money and energy. The self-driving car is like any other car, such that there are operating costs. Regardless whether your self-driving car is electric, gas or hybrid, there are fuel costs. There will be maintenance costs too. And of course, you need to a place to park it like any other car.

Even the value of commercial real estate may not necessarily be affected by self-driving cars. These vehicles won’t reduce travel time to the store, nor would they make any business more convenient than another.

Let’s face it, self-driving cars isn’t the internet. These vehicles are a convenient way to travel for sure, but they won’t change how we communicate. Nor will they change the basic requirements we seek from our homes.

However, a government policy shift, much like the policies favoring designated car-pool vehicles and mass transit, could tip the scales in making the self-driving car the vehicle (no pun intended) to changing the real estate landscape. Creating special lanes for self-driving vehicles could reduce commute times, thus reducing fuel costs. Requiring dedicated parking for self-driving vehicles could also influence commercial real estate. However, like the impact of designated car-pool vehicles, a major impact to our lifestyle is unlikely from self-driving cars.

Choosing where you live is a personal decision that is impacted by many external factors, including quality of life. Of course the self-driving car is a technological advance that is surely to affect how you travel. However, it is doubtful that owning a self-driving car will largely impact your quality of life and how you decide where to live. In fact, the authors of the above mentioned article point to a 2016 Kelly Blue Book survey that indicates that a majority of Americans prefer “cars that are not fully autonomous and retain some ability for individual control.”

Original published at https://dankrell.com/blog/2017/07/16/self-driving-cars-home-buying/

By Dan Krell
Copyright© 2017

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June 30, 2017November 23, 2021

Healthy home trend trumps green initiative

Green building practices have been the trend for new homes over a decade. Housing experts have touted the benefits of green building as environmentally friendly and money saving. Health experts have also proclaimed the benefits of green home designs. However, a revealing exposé in Remodeling Magazine discusses the health dangers of living in a green design and/or energy efficient home. There is a healthy home trend that is trumping the green initiative.

The need for a healthy home

To describe how a green home’s air can become dangerous over time, Marisa Martinez uses the analogy of opening up the air-tight sealed bag of clothes from last summer and getting a whiff of the stale, plastic air (Breathing Easy: An Introduction to Healthy Homes; remodeling.hw.com; June 22, 2017). Martinez discussed how builders and home owners have focused on reducing environmental impacts of their home and neglected the health effects from the new building directives.

Green building and efficient home designs focus on reducing system operating costs by increasing the structure efficiency, thus reducing the impact to the environment. One of the outcomes of such a building design is having an air tight home. The air-tight feature is to ensure that there is minimal energy loss from escaping air. Owners and occupants of green homes are becoming ill because homes are air-tight. The lack of proper ventilation and the decreased breathability of a home can make the inside air become stale. And, over time, the buildup of interior pollutants can make the home toxic.

Increasing the awareness of green and efficient homes was a reason for the mandatory utility disclosures when selling a home in Montgomery County. This requirement was enacted in 2008 as a compromise from a proposed mandatory energy audit.

“According to Montgomery County Bill 31-07, enacted into Montgomery County Code Real Property 40-13b earlier this year, a home seller must provide potential home buyers the last twelve months of utility bills and information approved by the Montgomery County Department of Environmental Protection (DEP) about home efficiency improvements including the “benefit of conducting a home energy audit” before entering into a sales contract.”

Additional potential hazards can be encountered when renovating a green designed home because the air-tight feature can cause air pollutants to accumulate inside the home. Materials in new carpets, flooring (finished wood or vinyl), and paints can produce toxic off-gases that are not ventilated out of the home. Dust from drywall and other building materials pose a health hazard as well.

Martinez’s exposé flies in the face of research hyping the health benefits of green homes. One of the flaws of the these studies is that the health outcome comparisons of occupants of conventional built homes and green designated homes typically focused on new homes. The air quality issue that Martinez points out should be studied in older green and efficient homes, where the indoor air has had time to “mature.”

The green home movement was supposed to give us environmentally friendly, efficient homes that were also supposed keep us healthy. But the trend from green and efficient building is now transforming to a focus more on healthy home environments with an emphasis on good indoor air quality. Martinez stated that the good indoor air quality can be achieved by continuously exchanging the indoor air with conditioned outdoor air. There are physical and environmental benefits of a healthy home, which include increased emotional well being and reduced respiratory distress.

Leading the effort to educate the housing industry and consumers on healthy home environments is Bill Hayward. In an interview in Builder Magazine (Advocating for Fresh Air in Homes; builderonline.com; September 29, 2016) he discussed his journey in creating Hayward Healthy Homes after realizing his home was making his family ill. Hayward stated “Thirty percent of the population has allergies and is physically affected by the indoor air quality. The worst air that Americans breath right now is the air within their house.” More information and a free guide on creating a healthy home can be obtained from Hayward Healthy Home (haywardhealthyhome.com).

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