Getting an F.H.A. mortgage will cost more

From the New York Times, Lynnley Browning writes about the increase in F.H.A. insurance premiums scheduled to take effect for loans taken out on or after April 18, 2011.

“FEDERAL Housing Administration mortgages, the government-insured loans that have surged in popularity in recent years, will be getting slightly more expensive this spring.

“The F.H.A. announced this month that it was raising the annual mortgage insurance premium for borrowers by a quarter of a percentage point — to 1.1 or 1.15 percent of the loan amount for 30-year fixed-rate loans, and 0.25 or 0.50 for 15-year or shorter-term loans.”

While the F.H.A. is calling the rise a “marginal increase,” “industry experts say that some consumers, especially those considered marginal borrowers, may now be prevented from buying or refinancing a property.”

This is the second change in premium rates in the past 12 months, having last gone up in November 2010.

“The increase does not apply to F.H.A. loans already in place, or to F.H.A. reverse mortgages or home-equity conversion (HECM) loans.”

The raise is necessary because F.H.A. reserves have fallen below required levels.

Read more, F.H.A. to Raise Insurance Premiums.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

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Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

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Ah, “deregulation for the sake of competition. Bad days ahead for telephone customers?

This Star-Ledger story caught my eye because it affects me. Well, it affects everyone in New Jersey who doesn’t use cellular service to obtain residential telephone service.

According the S-L,

“Most of the state’s regulation of basic cable and land line telephone service would come to an end under a controversial bill that passed the state Assembly on Thursday.

“Supporters of the "Market Competition and Consumer Choice Act" (A3766) say it removes outdated rules that go back to the era of Ma Bell.

“But Stefanie Brand, the state ratepayer advocate, said in a letter to lawmakers that it would leave New Jersey residents "at the mercy of cable and telephone companies."

“And local officials are complaining it allows Verizon to go back on pledges it made to towns in exchange for getting a statewide franchise in 2006 so that it would not have to negotiate town-by-town to offer its FiOS service.”

What’s the fuss?

“Currently, companies offering basic telephone and land line services have to get the okay from the Board of Public Utilities before they can raise rates. The bill, which passed 66-7 with four abstentions, would eliminate that oversight.”

“It would also roll back rules requiring cable companies to give credits to customers whose service is out for more than four hours, correct billing errors and protect customers from "slamming," in which their telephone company for local or long distance service is switched without their permission.”

Now you know we are in trouble when a bill sponsor says,

"This is a competition bill," said Assembly Majority Leader Joseph Cryan (D-Union), a sponsor. "The telecommunications industry is one of the industries we can point to where deregulation actually works."

So, if you use a telephone in your home, you might want to read the full article and contact your elected representative.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

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E-mail nails down the contract. Watch what you write!

From the New York Times,

“BE careful when clicking “send.” That is essentially the message to brokers and their clients from a [New York] state court, which ruled recently in a real estate dispute that e-mails can carry the same weight as traditional ink-on-paper contracts.

“’Given the vast growth in the last decade and a half in the number of people and entities regularly using e-mail,” handwriting and e-mail should now basically be considered one and the same, according to the decision in Naldi v. Grunberg, which was handed down on Oct. 5 by the Appellate Division, First Department of State Supreme Court in Manhattan. The ruling, which attracted little public notice when it was announced, was appealed on Monday to the Court of Appeals, the state’s highest court.”

“’As much as communication originally written or typed on paper, an e-mail retrievable from computer storage” is proof of a deal, according to the court’s opinion, which was written by Associate Justice David Friedman.”

What’s this all about? It’s about a 300+ year old law called The Statute of Frauds. Every state has one and it basically requires that contracts involving real estate be in writing before they are deemed binding on the parties.

As you can imagine, e-mail wasn’t around in England when the first statute of frauds was developed. States are now recognizing that e-mail may be used to make some contracts binding and that’s what the appellate court did,

“saying that if e-mail can be used for financial transactions like taking out business loans, it should be good enough for home purchases, too.”

“Though e-mail is hardly a new form of communication, uncertainty persists about how binding it is, which means the ruling in Naldi v. Grunberg could bring some clarity.”

“In most cases a disclaimer can inoculate senders from having e-mail backfire, real estate lawyers said. Mario J. Suarez, a lawyer at Thompson Hine who handles many commercial transactions, suggested that the wording might say the communications “shall not be deemed an offer, as no documents are binding unless and until executed.” Kirk Henckels, an executive vice president of Stribling, said he was under the impression that e-mails are “what we used to do over the phone,” and that property cannot truly change ownership until a paper document is signed by both parties. Mr. Henckels said the thinking was, “I can call this off unless I’ve received it back,” alluding to a signed contract.”

Read the full story.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

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Stewart Title recognizes Vested Title Inc. as Outstanding Agency

Stewart Title has recognized Vested Title Inc. as Outstanding Agency for 2010. Here is Stewart Title's Barri Pitman presenting the award to Paul Kruger, our Vice President and Manager at our Fairfield, New Jersey office.

Congratulations to all at Vested Title Inc.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

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Feds make rule changes for mortgage brokers

The New York Times Lynnley Browning writes about new compensation rules from The Federal Reserve that will affect compensation of mortgages. According to the new rules, borrowers who use brokers “will most likely pay less for their services” and “be offered the lowest possible interest rate and fees for which they qualify.”

Small banks and credit unions which do not fund loans from their resources will also be covered by the rule change.

"But most banks and other direct lenders, including the few mortgage companies that function like banks, are exempt.

“The new rule is known as the Loan Originator Compensation amendment to Regulation Z, part of a strengthened Truth in Lending Act passed by Congress in 2008. Designed to prevent consumers from being steered into high-cost, risky loans, it covers how a loan originator — or any person or company that arranges, obtains and/or negotiates a mortgage for a client — is paid.

“Under the new rule, a lender can no longer pay a loan originator a lucrative rebate known as a yield-spread premium, which is tied to the rate or terms of the mortgage. Banks and other lenders can continue to pay commissions to brokers, but these payments must now be based solely on the loan amount.

“In the past, the higher the interest rate and points, the more money a broker stood to “earn.'"

How does this work?

“Brokerage firms typically earn a yield-spread premium of 1.5 to 2.5 percent of the loan amount, with higher-rate loans paying closer to 2.5 percent. The brokerage and its broker, or loan officer, typically split the rebate. On a $400,000 loan at 5.25 percent, that might total $8,000, based on two points paid, with a point being 1 percent of the loan amount.

“In the new system, the brokerage can earn a fixed commission from the lender, but the amount is not tied to the loan terms. Also, the brokerage cannot pass on a part of the commission to the broker, who must now be paid an hourly wage or salary. The exception is for loans where the lender pays the borrower’s points to the brokerage, typically for higher-rate loans. (The commission range is expected to be 1.5 to 2.5 points.) “

A new day for consumers may be dawning, but you still have to keep a wary eye open for charges, hidden and disclosed, when applying for that mortgage.

Read the full report.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

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