Category: Home Buyer

Posted on

Alternative home buying consultation

real estate astrology
by Dan Krell &copy 2009
www.DanKrell.com

Consulting the stars to buy a home

Before buying or selling a home, some people will consult a Realtor to understand market trend analyses, economic analyses and employment data. For a fresh approach to home buying/selling and real estate investing, some will consult with an astrologer (before meeting with their Realtor). Astrology has been used for many years to assist people in making business and financial decisions as well as attempting to predict future trends.

According to the American Federation of Astrologers (AFA), astrology has been practiced for over 4,000 years. It is considered an art by some, science by others, and mocked by many. Reported past followers of astrology include Plato, Copernicus, and Sir Isaac Newton. Former First Lady Nancy Reagan made headlines when she consulted with astrologers. Because there is a wide range of opinion, the AFA has stated that “few other topics stimulate as much debate as astrology.” The AFA conducts research and compiles data to better the practice of astrology. The AFA also established a code of ethics and provides accreditation to astrologers (astrologers.com).

The art/science of astrology is practiced by calculating and reading natal charts; each natal chart is exclusive to each person’s rising sign, planets, and houses. An individual’s natal chart is read to interpret and understand past and future influences on a person’s life, including (but not limited to) business, finances, relationships. Businesses owners sometimes use astrological charts to help time entering into contracts, expansion, and hiring.

Why rely on a real estate expert when you can consult the heavens? Having an astrologer read your natal chart can help you understand and choose the best timing for buying a home as it relates to your life events. Depending on your chart, the astrologer may determine that buying during a certain period of time may be best to avoid negative influences. Additionally, an astrologer may even determine the type of home that may be best for you as well its surroundings.

Some astrologers have actually claimed that they predicted the decline of the real estate market. In his book, Cosmic Trends, Philip Brown predicts future trends by studying celestial and historical cycles. Published in 2006, Brown described emerging astrological signs that were not seen since the 1930’s. Special attention is given to Cancer, which Brown describes as representing homes and real estate.

In 2008, Lloyd A. Wright, AMAFA wrote “The Catastrophic Eclipse of the Real Estate Bubble,” which describes the effects of lunar and solar eclipses to the relative positions of Saturn (land and real estate), Jupiter (money), and the moon (the public) during 2007. Prior to the lunar eclipse of October 24, 2007, he stated that the real estate market was relatively stable. However afterward, he described the markets as beginning to tumble (astrologers.com).

Although some astrologers may say that we are bound to our fates by karma, most astrologers will explain that we have free will that can be enhanced by reading our natal charts. Astrology is not exact, so it easy to misunderstand the intent and use of the field in one’s life.

Although often ridiculed, astrology is frequently misunderstood. However according to astrological practitioners, real estate market trends are not just associated with economic data – they may also be related to heavenly cycles and events.

This column is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of July 27, 2009. Copyright © 2009 Dan Krell.

news
Posted on

Have you unknowingly perpetrated Mortgage Fraud?

You’ve probably read a few recent articles featuring victims of the mortgage crisis. Many of these home owners claimed to have been duped into obtaining loans that they could not afford. One recent article described how the home owner went along with a plan to obtain a mortgage that involved using someone else’s credit as well as artificially inflating their bank account to qualify. Is the home owner guilty of mortgage fraud if she knowingly follows the scheme of their real estate agent and/or mortgage broker to deceive the lender to qualify for a mortgage?

Among the many crime reports published by the Federal Bureau of Investigation (FBI) is the Mortgage Fraud Report. According to the 2006 Mortgage Fraud Report (https://www.fbi.gov/stats-services/publications/mortgage-fraud-2006) mortgage fraud is defined as “the intentional misstatement, misrepresentation, or omission by an applicant or other interested parties, relied on by a lender or underwriter to provide funding for, to purchase, or to insure a mortgage loan.” As the Maryland and Virginia areas are described as being significantly affected by mortgage fraud, the FBI cited recent increases of mortgage fraud are due to many perpetrators of fraud who have taken advantage of recent lenient credit standards.

The FBI divides mortgage fraud into two categories, fraud-for-profit and fraud-for-property. Fraud-for-profit typically involves schemes or scams for financial gain. According to the FBI, fraud-for-profit schemes (also referred to as “industry insider fraud”) often involves artificially inflating property values, obtaining loans on non-existent properties, or “revolve equity.” Illegal flipping schemes that commonly use straw buyers and fraudulent appraisals are examples of fraud-for-profit.

Fraud-for-property, however, is the misrepresentation by a borrower so as to obtain a loan to purchase a home. Fraud-for-housing increased in recent years due to the rise of home prices; applicants would provide misleading or false employment, income, and asset information to the lender to qualify for the loan. Although the intent of the borrower is to repay the loan, this activity is still illegal and can lead to Federal prosecution.

To avoid becoming involved in a mortgage fraud scheme, the FBI provides these tips: If it sounds too good to be true, it probably is; Get referral for real estate and mortgage professionals and check the licenses with regulatory agencies; Be wary of strangers and unsolicited contacts, as well as high-pressure sales techniques; Look at written information to verify the value of the property; Understand what you are signing and agreeing to – If you do not understand, seek assistance from an attorney; Make sure the name on your application matches the name on your identification; Review the title history to determine if the property has been “flipped” and the value falsely inflated; Know and understand the terms of your mortgage (Check your information against the information in the loan documents to ensure they are accurate and complete); Never sign any loan documents that contain blanks as this leaves you vulnerable to fraud.

Mortgage fraud is not a victimless crime. Besides foreclosed upon borrowers and mortgage entities, other victims include legitimate borrowers and those living in neighborhoods affected by mortgage fraud.

Original published at https://dankrell.com/blog/2008/03/25/have-you-unknowingly-perpetrated-mortgage-fraud/

By Dan Krell

This article is not intended to provide nor should it be relied upon for legal and financial advice. Copyright © 2008 Dan Krell.

Posted on

Why Title Insurance is Important

Title insurance should not be an enigmatic item listed on the settlement sheet, and there should be no question as to its validity. Here is a very basic explanation of why title insurance is important.

Title insurance, like other forms of insurance, is governed by the Maryland Insurance Administration (MIA). Title companies and title attorneys are licensed by the State to sell title insurance.

Title insurance is important because it’s an assurance that the home buyer receives a clean title from the home seller. Clearing a title of all liens and mortgages is not always an easy task. The first step is for the title attorney to order a title abstract.

A title abstract is simply a synopsis of the chain of title, or a history of ownership, that has been recorded in the office of land records in the county court house. The title abstract indicates all owners, mortgages, liens, encumbrances, and easements attached to the property. The title abstract also indicates previous sales and mortgage and lien satisfactions.

Because all the information in the title abstract is obtained from recorded information, it is inevitable that mistakes occur. For example, it is common for mortgage release letters to be lost, misfiled, or never filed at all. Sometimes there are years of information that is lost or destroyed resulting in a break in the chain of title.

Once received, the title attorney will review the abstract and look for any blemishes including unreleased mortgages or liens and breaks in the chain of title. If there are any blemishes found, they need to be cured before issuing a clean title. The home seller can remedy most blemishes by supplying all required documents or paying to release attached liens and mortgages. Sometimes it may be necessary for the home seller to show their title insurance policy so as to indicate they were given a clean title.

Sometimes there are items not filed in the office of land records that may affect the ownership of your home. Some of these items may be heirs of previous owners or undocumented lien holders who may make claim to your home. Title insurance can protect you from these claims. It is rare, but making a claim with the title insurance company can resolve these issues.

Lenders believe title insurance is important. If you are obtaining a mortgage to purchase the home, your lender will require “lender’s coverage” title insurance. The lender’s coverage protects the lender in case there are any unrecorded liens, easements, or other unrecorded defects.

Just as in other insurance policies there are different levels of coverage of title insurance. A basic owner’s title insurance policy typically assures clear title to the property and covers against incorrect signatures, on documents, forgery, fraud, and defective recordation of covenants, encumbrances or judgments.

Extended coverage may include coverage for building permit violations from previous owners, covenant violations from previous owners, living trusts, and a variety of encroachments and forgeries. Title insurance does not cover against liens placed after the effective date of the policy.

Policies and limitations vary, consult your title attorney for more information. Some policies cost more than others because of the difference in title insurance companies and levels of coverage. When comparing title companies, you should also ask about title insurance coverage and rates. You can access more information about title insurance at the MIA website, www.mdinsurance.state.md.us.

by Dan Krell

Copyright © 2006

Posted on

Expectations for the 2007 Market

The past year’s real estate market was not what people expected. With much speculation and pessimistic media reports many expected the worst. The worst never happened and the numbers for 2006 were respectable, as home sales go. What’s expected for the 2007 market?

It was interesting to see the inventory grow as the number of active listings increased through the year. In fact, 2006 has had the most active listings at one time since before 1999! Many home sellers were taken aback by the amount of competition they faced for potential home buyers; while at the same time home buyers were overwhelmed with the amount of choice.

Now that we are heading towards the end of the year, many home sellers are taking their homes of the market after a disappointing fall and many days on the market. These home sellers are anticipating re-listing their homes in the spring. In fact the number of active single family homes listed in Montgomery County has hovered around the 4000 unit mark since June, however recently dropped to about 3000 units in November (which is still more than last year at the same time) (GCAAR.com). While some of those homes did sell, most did not.

Although the average home price has steadily increased in the county, many neighborhoods are seeing depreciation in the form of lowered sales prices. The home price average in Montgomery County is more likely skewed due to the increase of home sales in the million dollar or more range. November showed a decrease in sales in all price ranges except $1.5M or higher. There was an increase of almost twelve percent in sales in November as compared to the same time last year for this price range; there were 296 sales of homes priced $1.5M and higher in November 2006 in Montgomery County.

Many are anticipating a brisker market this upcoming spring. Many forecasters are predicting a nationwide recovery in the real estate market place. While perusing the optimistic reports about the 2007 real estate market don’t expect a huge appreciation in home values. Many forecasters predict a balanced market across the nation. Economists for the National Association of Realtors predict that the number of existing home sales will maintain at the roughly the same level as 2006, however new home sales will continue to slide into 2007 (Realtor.org).

Locally, the outlook is also positive due to a strong economy, relatively low unemployment, and relatively low interest rates. Another positive sign for the market in 2007 is the foreclosure rate. A recent article in the Baltimore Examiner (examiner.com) reported about a 12% drop in Maryland foreclosures from 2005, while the rest of the country realized a 27% increase during the same time!

As the spring market arrives, we will see many homes returning to market along with new listings of existing homes. Adding to the many options available will be the high builder inventory, which has been accumulating through the fall.

Spring will also bring many home buyers to explore the market as well. However, with many choices to consider, the average days on market for listed homes will remain high. Let’s face the truth that the market has slowed; however, the good news is that we are not heading into oblivion.

By Dan Krell
Copyright © 2006

Posted on

HUD is Kicking Back

When you bought your home recently did your Realtor or lender tell you that you had to use a specific lender or title company? Did the seller require you to use the mortgage and title companies of their choosing? If so, you may have been denied your right to choose the lender and title company to conduct the settlement for your home purchase just for a kickback.

To help home buyers become educated consumers about settlement services a law was passed in 1974 called the Real Estate Settlement Procedures Act also known as RESPA. RESPA has many caveats associated with it however there are several common provisions associated with a home buyer’s choice of settlement companies and lenders.

First, RESPA requires that home buyers receive disclosures that disclose costs related to settlement, as well as outlining lender servicing and escrow account procedures, and disclosing relationships between settlement professionals and other real estate professionals. This protects the home buyer by allowing them to know what they are to expect with regard to fees, affiliated business relationships, etc.

Second, RESPA is widely known for prohibiting giving or receiving anything of value, including money, for settlement service referrals, also known as kickbacks. RESPA also prohibits fee splitting and receiving compensation for services that were not provided. This is done because kick backs typically increase fees charged to the home buyer, sometimes excessively, so as to “take care” of the referring party.

Third, RESPA prohibits a home seller from requiring a home buyer to use a specific title company or lender.

Penalties for violating RESPA are stiff. Violations of RESPA include civil and criminal penalties. The penalties vary depending on the infraction. For example, if someone is found guilty in criminal court of giving or receiving a kickback, they may be subject to a $10,000 fine and a year in jail. The civil penalty for kickbacks is the repayment of three times the fee in question.

Although kickbacks are not as common today as they were in years past, they still exist. In response, the U. S. Department of Housing and Development (HUD) has taken a firm stance on kickbacks in the last several years. There have been many out of court settlements in the last few years, and there may be some serious criminal charges pending as investigations continue.

It is not uncommon for home buyers, especially first time home buyers, to ask their Realtor for lender and title company recommendations. After all, most people do not buy homes very often. As a practice, many Realtors provide a list of several names of lenders or title companies for the home buyer to interview. The list is usually comprised of professionals with whom the Realtor has worked with in the past and (hopefully) had a good experience. As a home buyer, you can always start with whomever you bank with. It makes sense that since you have already developed a banking relationship with your bank, why not start there?

If you find yourself in the situation where you are “forced” to use a specific lender or title company, or you think this may have occurred in the past, you can contact HUD (HUD.gov) or contact the state attorney general’s office of consumer protection for additional information.

By Dan Krell
Copyright © 2006

Proudly powered by WordPress