Category Archives: Real Estate

Judge Spinner Relives Suffolk New York Home Owner of Mortgage

 

Judge Spinner relieves Homeowner of Mortgage to Penalize Lender

 

 

Yesterday on Long Island New York Judge Spinner  in INDY MAC v YANO HOROSKI  http://www.courts.state.ny.us/courts/10jd/suffolk/pdf/foreprogramrules.pdf held in  essence that a bank who is seeking foreclosure against a homeowner  whose is in default must act in good faith http://legal-dictionary.thefreedictionary.com/good+faith and negotiate in good faith in an attempt to medicate damages.  The Judge stated ” The judge concluded that the banks’ conduct was “wholly unsupportable at law or in equity, greatly egregious and so completely devoid of good faith that equity cannot be permitted to intervene on its behalf.” However he went further stating that the banks conduct made him believe they would repeat this conduct, and a penalty would not therefore be a deterrent.  SO HE EXTINGUISHED THE ENTIRE DEBT.

See http://www.law.com/jsp/article.jsp?id=1202435781738&rss=newswire

Facts. Ms Yano Horoski a college professor refinanced her existing mortgage and refinanced the residence for $ 292,500.00 with an adjustable whose interest rate went from 10% to 12%. Part of the monies in the refinancing went to her husband’s home doll collection business. Apparently due to some financial and medical issues they could no longer afford the mortgage. As such they approached the lender. The Judge held that the family made several efforts to mediate the matter including one in which her daughter would purchase the home.   But the law firm  Steven J Baum http://www.mbaum.com/SJB/index.jsp attorney would not agree to anything but foreclosure.

Steven Baum is the dominant law firm in New York representing banks in foreclosure sales and “short sales”. They never permit any changes in a contract, and in fact are aggressive . In their contracts they only give a purchaser 30 days to obtain a mortgage and if you don’t monetary penalties kick in which are in my opinion draconian and penalize purchaser’s unfairly.

I’m glad the Judge slammed the lenders and their attorney who all benefit from taxpayer “TARP” bailout monies but treat consumers like garbage.

 

 

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Major New York Concrete and Steel Testing Firm Indicted For Fraud

Proposed Freedom Tower Under Construction.

Proposed Freedom Tower Under Construction.

Our present Financial tsunami was largely fueled because the ” cops” of the financial industry the SEC, and private valuation firms ” rating agencies”   ( Fitch, Standard and Poor’s and Moody’s ) were grossly negligent.  see; http://dealbook.blogs.nytimes.com/2008/10/22/rating-agencies-draw-fire-capitol-hill/ Locally, in New York a similar “FRAUD” has been committed in the construction industry.

Fraud is the singular most cause of our problem and an easy definition is ” MISREPRESENTATION OF MATERIAL FACTS”.   see  http://www.dmoz.org/Society/Law/Legal_Information/Fraud/ In our financial debacle the rating agencies told investors  ( misleading them ) that the mortgage back securities were ” AAA” almost as secure as Federal Debt obligations. The ratings were false, and as such investors were lied to and put money at risk, which they would not have if they knew the mortgages were junk.

With respect to Treadwell ” the concrete poured is tested and they falsify the  results stating they meet building code requirments when in actuality they don’t. As such the public safety is at risk, including death from a building collapse.

New York is a concrete  and steel jungle we rely on professionals to maximize our safety.  A whose ” who” of New York Construction Buildings may have been built and or are  defective and/ or below acceptable  measurable industry and city building code standards of concrete density.   see http://www.nytimes.com/2008/06/21/nyregion/21concrete.html?partner=permalink&exprod=permalinkThe Manhattan District Attorney on October 30th indicted officers of Testwell Laboratories . The charges include fraud and racketeering.  http://manhattanda.org/whatsnew/press/2008-10-30.shtml and see: http://www.1010wins.com/pages/3229974.php?

Quoting  DANY ” The investigation revealed that TESTWELL falsified tests on both the structural steel and welding. In many cases, the same piece of steel was tested multiple times; in others, steel was certified in a time-frame that could not possibly have matched the time it took to fabricate it.

1010 news radio reported ” The ( fraud)  charges involve some of the most high-profile buildings in the city, including Yankee Stadium, the Freedom Tower, the United Nations and the Metropolitan Museum of Art, Manhattan District Attorney Robert Morgenthau said. Other projects included hospitals, firehouses, schools, subway stations, an Atlantic City casino and a new terminal at John F. Kennedy International Airport.”

HELLO THE NUCLEAR REGULATORY COMMISSION FINED THIS GROUP IN 2003!

A little Google work on “Testwell” makes one wonder if due diligence was used before they were retained on the indicted projects after the firm was fined by the Federal  U.S. Nuclear Regulatory Commission fined them in 2003 for shoddy inspections at their ” NUCLEAR Facilities” http://www.nrc.gov/reading-rm/doc-collections/enforcement/actions/materials/ea03036.html

In the present indictment the allegation states that improper non certified inspectors conducted measuurements. In the later Nuclear investigation the omission is the same Specifically, your Radiation Safety Officer (RSO)/Director of Radiography performed and/or allowed radiography to be performed on at least three occasions without the supervision of a certified radiographer, even though he knew that the supervision of a certified radiographer was required.”

Our Society must stop FRAUD which is essentially Lying. I’m sure when this investigation is over we will see a trail of money and that public projects and public safety was risked is appalling. That some of our major infrastructure and tourism buildings may have been compromised and possibly have to be rebuilt demands that the guilty parties go to jail.


New York Housing Crisis Has Just Started

I firmly believe that New York will follow California’s housing decline. And as such we have a minimum of 3 years of  declining  markets. Take a look at San Diego  and what is happening, See this site” http://piggington.com/.

Professor Laffer http://en.wikipedia.org/wiki/Arthur_Laffer in today’s Wall Street Journal Op-Ed piece ” The End of Prosperity” is very scary. http://online.wsj.com/article/SB122506830024970697.html

Another Blog on the topic NY centric is http://nychousingbubble.blogspot.com/2008/09/wsj-manhattan-wont-avoid-property.html

In Florida it’s so bad ( the market bust) they are giving bus tours of foreclosed homes. http://www.msnbc.msn.com/id/23814563/

So California , and Florida have been in serious decline, and after the total destruction of the NYC financial markets, how can NY be immune?  It cannot, and don’t buy into the greedy ignorant self serving Realtor advice. NYC housing prices will plummet.

Last week I represented the seller of a home on Long Island. The purchase price $405,000.00. The purchaser placed $10,000.00 down , less than 3 %. The purchaser’s attorney requested a ” seller’s concession”, whereby the price of the home was increased 3% or approximately $12,000.00 so they could finance their closing costs. So now the price is $417,000.00.

Now given the banking crisis, the question you ask is ” who would fund this lunacy” .  Uncle Sam via a “FHA Loan” The government funded the whole thing.  Now if you deduct the Realtor commission of 6% from the ” true sales price of 405,000.00, the home’s valuation is really $380,000.00

So the taxpayers are paying 10 % over the true market value, and the ” market prices’ are still in decline. This is insanity, and taxpayers should not be in the market especially one that is falling perceptively.

The government funding of high risk real estate at above market prices in a declining market is economic suicide and risks failure of government funds for essential services ” health , safety and welfare of the public”.

Ownership of a home, house, condominium or cooperative apartment is not a ” right” of all citizens,  it should only occur when a person has saved a sufficient amount, for a down payment of 20%. This market will not recover until real estate prices and the payment for same comes into balance with the historical average of 30% of ones income going to housing.

This brings me back to what I have said for over 3 years, this market is worse, than anyone imagines. Today NYU Professor Nourel Roubini states ” the worst is to come” , http://business.timesonline.co.uk/tol/business/economics/article5014463.ece I’ve felt this way for a long time. We have invested in ” financial instruments that no one really understands, nor can they value. Now the government owns them.

The un -precedent bailout of AIG is already ” insufficient funds’ they burned threw the government funds in less than a month.  In his testimony this past week before Congress ” Greenspan ” used my words ” Economic Tsunami” .

Folks, be afraid, be very afraid  I truly believe we are entering a  second Great Depression.   Consider the following facts.

1. Two wars being fought.

2. A Presidential Election with a complete change in economic strategy.

3. The complete eradication of ” investment Banking” which will bad for the nation and may cripple NYS and NYC.

4. The Dow , and world markets in synchronized downturns.

5. Unemployment and layoffs increasing daily.

6. State and local tax revenues eroding.

7. Bank failures ING, INDY MAC, WAMA, keep going.

Mortgage Lobby Firm For Freddie and Fannie Sow’s Weed of Destruction.

Professor Shilling Housing Bubble Graph

Professor Shilling Housing Bubble Graph

Peter Yost a writer for the Associated Press had written an important article on the lobbying efforts regarding Freddie Mac and Fannie Mae. http://news.yahoo.com/s/ap/20081020/ap_on_bi_ge/the_influence_game_housing . The article reports that in 2005 some Republicans believed that if Fannie and Freddie were not curtailed from their financial lending practices the consequences to the nation could be severe. Here,  quoting  Senate Majority Leader Bill Frist, R-Tenn., .

“If effective regulatory reform legislation … is not enacted this year, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole,” the senators wrote in a letter that proved prescient.

The article demonstrates how DCI an apparently Reupblican lobbying firm was hired by Fannie and Freddy to change the votes of several reupblicans thus undermining good faith efforts to protect Americans.  By targeting several elected officals to prevent a vote on legislation that would have limited Freddie and Fannie on the theme ” it will break the housing boom” ,

If true,  the reports are true it shows that many lobbyist are defacto viruses, whic have caused America to become sick.

Most folks know that the current economic crisis largely stems from and housing bubble. http://www.housingbubblebust.com/This bubble  http://en.wikipedia.org/wiki/United_States_housing_bubble was caused from a perfect storm which included, low interest rates, no money down mortgages, adjustable rate mortgages, ruthless and unethical realtors, bankers, appraisers, attorneys and home inspectors, all who often worked in sync instead of for the purchaser’s best interest.

Some of their conduct and ability to sell “all for one and houses for all ” were the   legislative efforts to increase housing event to  Americans despite their past credit history and or ecnomic and employment ability to pay for the mortgage.

It appears Freddie and Fannie by retaining and having   DCI http://www.dcigroup.com/ steathly deploy their viral ” kill the bill” pill they in fact crippled the nation. Or at a minimum undermined the nationa debate and the intent of our constitution to have a ” bicameral” systmem of government.

Most folks play by the rules. However the major problem facing the nation is that financial folks, elected folks, banking guys and gals and lobbyists’s at the state and federal level are crippling this nation. They act with unbridled greed, self intrest above the national good are narcassistic and are totally partisan. They ” place their subjective “ends” to justify their ” what ever means necessary” even if it means associating with their sworn enemies.

Can President Obama , end this mess. Will a supermajority of Democrats be able to realize the toxic envornment in Washington is caused by ” greed” and by subordinating the electorate.  We shall see.

Recession Could Harm NYC 55 Billon Dollar Tourism Industry.

Times Square Areat

Times Square Area

Many New Yorker’s avoid the TIMES SQUARE AREAS FOR IT’S TOURIST TRAP REPUTATION. For the worlds top tourist trap locations see http://www.forbestraveler.com/best-lists/tourist-traps-story.html. While we New Yorker’s may have our noses in the air,  Perhaps we should be a little more gratful to the visitors to this area, for they are an economic engines for New York. I guess we have been spoiled and should be more appreciative of our toursim industry.

Mayor Bloomberg warned that as a result of the 2008 recession/depression tourism to Times Square could drop. If this was to occur New York City’s finances already in tough shape from the collapse of investment banking in America would take another hit. See http://www.reuters.com/article/domesticNews/idUSTRE49G4OU20081017?feedType=RSS&feedName=domesticNews

I was shocked to readt that 1/8 of the City’s revenue is dervied from the Great White Way. I was aware that Wall Street represented roughly 23% of the City’s tax base.  These are staggering numbers and I don’t think folks are paying enough attention to the severity of this economic tsunami we are in.

The Times Square Alliance http://www.timessquarenyc.org/ has a nice site with informatio on the great white way http://en.wikipedia.org/wiki/Great_White_Way#Great_White_Way which according to legend was named because of all the ” white lights”.

Obamanomics; The Birth of Socially Responsible Economic Theory

Obamanomics  is here and its “hip” and “in” make no bones about it. But it’s genesis was by none other than  President  George Bush with the gleeful assistance of Congress. It is a seminal moment and to the majority of trend -noid-Americans a shift they can readily grasp but choose not too.

Robert Reich in his editorialal states it’s ” bottom up ” as opposed to ” top down” economic policy http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/10/05/INTM139L8L.DTL. I think his article lacks acknowledment of his and Obama’s  theory which in my opinion will create the Socially Responsible Economic Theory. This may be a good thing but it has risks.

The Death of Liberal’s with Sanity.

The Great Mayor Edward Koch http://en.wikipedia.org/wiki/Ed_Koch coined the above phrase http://www.realclearpolitics.com/articles/2006/10/a_liberal_with_sanity.html and while Mayor Koch pushed for affordable housing, and economic development and empowerment he never suggested the creation of a NYC owned bank or insurance firm.

The Clash:

Adam Smith ” invisible hand theory” modernized by Herbert Stein vs

Obama, Kruger, Reich activist government-partenersip theory.

Herbert Stein in my opinion represented the modern economic theory of Adam Smith he has been referred to as a liberal’s conservative and a conservative’s liberal.http://en.wikipedia.org/wiki/Herbert_Stein . Under President Ford right up until most of the Bush administration the role of government has been strong but subtle.

With today’s announcement of government partnerships with banks we have a cataclimic shift of economic theory. As such the modern Adam Smith- Stein  versions of the government role in society has ended. We have entered into the Paul Krugman Robert Reich economic error.

In his article ” Adam Smith did not wear an Adam Smith  necktie Stein argues government intervention with great skepticism.  But this did not mean government could not make rational decisions.

T]he people who wear the Adam Smith tie are not doing so to honorliterary genius. They are doing so to make a statement of their devotion to the idea of free markets and limited government. What stands out in WofN, however, is that their patron saint was not pure or doctrinaireabout this idea. He viewed government intervention in the market with great skepticism. He regarded his exposition of the virtues of the free market as his main contribution to policy, and the purpose for which his
economic analysis was developed.

Yet he was prepared to accept or propose qualifications to that policy in the specific cases where he judged that their net effect would be beneficial and would not undermine the basically free character of the system. He did not wear the Adam Smith necktie.”

The Public -Private Synergy , Paul Krugman Obama Reich an et al;

The Obamanomics theory is really an agressive John Manynard Kaynes Theory. It has has been referred to as ” a third way” .  They use the American rebuilding of Japan as the factual evidence of how ” active” as opposed to ” passive” government intervention in the economy can ” rebuild” and re-habilitate an economy. General McArthur a solider led this effort see” http://www.time.com/time/asia/2006/heroes/nb_macarthur.html. It is historically called the Potsdam Declaration  for the full text see :http://www.ibiblio.org/pha/policy/1945/450802a.html. While we did have sucess in Japan, will this theory of government – partnerships be effective. Krugman is very smart and he just one the Nobel Peace Prize http://www.bloomberg.com/apps/news?pid=20601103&sid=av56boh_S7S4&refer=us He states in the following video that John Manynard Keynes http://en.wikipedia.org/wiki/John_Maynard_Keynes is his hero.

IRAQ FAILURES TO REBUILD AND MUSSOLINI’S FACIST REGIMES SUGGEST MODERN U.S. INTERVENTION FAILURE.

As we know the government owns AIG, Fannie, Freddie Mac, and god only knows what elese after the 700 pluse billion dollar bail out. However, the government discriminated Bear Stearns was saved, Lehman left to go under, ING goes under, others bailed out. And this is the risk  both Republicans and now Democrats when given control have partisan partners. The difference now ” THE PEOPLE ” DIRECTLY OWN THE INSTITUTIONS CREATED.

So, will Democrats behave like the Republicans and let partisan politics hurt the overall economy. Does the failure of such  government partnerships like ” Italy’s Alitalia where although the government owned almost 50% of the entity with the remainder private funding give us an indica that such our present  collaborationwith financial entitys is doomed to failure.  See http://www.signonsandiego.com/news/business/20080918-1104-italy-alitalia.html

Houses Purchased In Last Five Years Value Down 30%

As a  part time real estate attorney, I have been concerned for the past three years that the housing ” market” and that is the operative word was out of control. Purchaser’s disregarded the advice of Attorney’s and opted to heed the call on non professional Realtors and mortgage sales persons.  People take advice now from a bunch of non professionals, the Internet permits pseudo-quasi-babble to substitute for learned behavior and years of schooling. Not to say that education is a sine qua non for professional behavior.

 Now my worst fears have been confirmed. Nationally if you purchased a home in the last five years it’s worth almost 30% less than your purchase price and falling. Americans must re think non recourse http://www.portfolio.com/views/blogs/market-movers/2007/08/01/how-non-recourse-mortgages-can-drive-default-rates-up mortgages , in which they can walk away and the bank is stuck with the property. See Professor Piggingtons post ” Not everyone should own a home”http://piggington.com/not_everyone_should_own_a_home.

As alturistic as ” the shibbolth’s of ” affordable housing for all ” appeal to our moral compasses if the cost of housing alone exceeds 30% of ones income, it is in fact burdensome and non sustainable both emotionally to the health of a family and economically.  Many have hailed Congressman Frank as a champion of affordable housing. In my opinion he he, Bush and Congress have in fact created our economic tusnami. Back in the 1970″s Steve Winwood sang  the song ” Low Spark of the High Heeled Boys” it sums up the present market.  

“The percentage you’re paying is too high priced
While you’re living beyond all your means
And the man in the suit has just bought a new car
From the profit he’s made on your dreams”       Here is a nice collage of Winwood and Traffic

In our  currnet housing and financial collapse If you go to research the Great Depression http://en.wikipedia.org/wiki/Great_Depression, you realize that several factors caused the event and we are repeating the cycle.  They cite, cheap money ( over liquidity) with a housing bubble and than bank failure.  The negative secondary effect included ; decreased lumber ( housing) and a decrease in the price of coal ( fuel). Today these same indicators are present an unprecedented decrease in housing and a drop in the price of oil, all because the Marco economic picture is bleak. Today the Wall Street Journal  reports that one out of 6 home owners owe more on their mortgage than the home is worth.http://www.usnews.com/blogs/the-home-front/2008/10/9/almost-1-in-6-homeowners-under-water.html.  The article presents statistics that are scary ” if you purcased a home in the last 5 years 29% are worth less than the mortgage.

Economist have stated that the governments failure to intervened exacerbated the longevity of the depressive economic cycle. Today what is scary is that there is a concerted world effort by governments to assist the market, and the efforts are failing.  As such we are in uncharted waters, with the masts broken, sails down and no one knows when the storm will end. The future President Obama has been dealt a bad deck of cards. In America , our mortgaes are non- recourse, which means that you can walk away if you default. Than the bank forecloses the property and puts it back on the market.

The sum and substance of our economic collapse: Banks now own falling property, which cannot be valued or sold. The amount exceeds the reserves they are required to hold. No one knows how low this is going, all economists were wrong, the governmental watch dogs failied, Congress failed all we have is each other. I hope Obama has a magic carpet and supermans cape because he will need one