WE’RE HEARING from New York where one mortgage banker and two MLOs recently entered into settlement agreements with the Department of Financial Services in lieu of a hearing for a fine or revocation of their license. The three matters had two things in common. One, they all got to write a check (the MLOs each paid the department a $10,000 fine and the mortgage banker paid a $20,000 fine) and two, they were all using the name My Christian Mortgage.
I guess appealing to persons of the Christian faith is one way to try and market yourself. The three companies fined by New York were using websites and radio advertising using the unapproved name of My Christian Mortgage. Not much else in the way of details was available from the public records I reviewed. I suspect the powers that be were concerned that lambs were headed off to slaughter and took steps to protect them. Perhaps a better way to market your business and be faithful is to get active in a church and word of mouth may or may not steer business your way.
Other news from New York involves the five boroughs and Long Island. The land where attorneys run the show as far as real estate sales contracts are concerned. There has been much discussion lately about the terms and conditions of the mortgage contingency clause. This one clause in a contract in New York is often longer than entire contracts used in other states. This is what happens when you put 15 million people in a small geographic area and a lot of attorneys are involved.
The discussions I mention basically concerned negotiating around when a mortgage loan commitment becomes firm and unconditional. The light at the end of the tunnel so to speak. In other words when does a buyer put her contract downpayment (good faith deposit) at risk? Alternatively when can the seller tell the buyer to take a hike because their lender is taking too long? These discussions are actually a good sign for the market because it means that other potential buyers are actually out there. So hang on a little longer and things should pick up.
Next we travel to Alabama to look at a recent decision (Robertson v. MERSCORP Inc.) out of the state’s Supreme Court. This case is definitely one to watch. It involves an attempt by local governments to make MERS record mortgage (and or note) assignments to generate revenue in the way of recording fees for the local government. Although it sounds boring it is not. MERS handles a zillion assignments of secondary market mortgage loans on its books all the time. Multiply each one of those by whatever the recording fee might be on a local level and we are speaking of a lot of money.
Who will pay for those fees? Who will pay to have the proper documents prepared? MERS aggressively tried to have the case dismissed on a procedural matter. MERS has lost that battle. Whether it will lose the war will remain to be seen and you can stay tuned. Every other state that needs revenue will also probably start to tune in too.
Finally we end in California with a new local requirement involving new home construction. In Palo Alto new homes must now be constructed with the wiring to permit charging an electric car. Supposedly it will only add $200 to the cost of construction. Of course the permit to do the construction is double that amount. What I want to know is how much can you actually save with a green car as opposed to a gas powered car. Is it enough money for a mortgage loan underwriter to take into consideration in getting someone’s loan approved? In other words don’t count my car loan payment in the debt to income ratio because I am actually saving money with my electric car.
Based in Chelsea, Mich., John McDermott is a real estate and elder care attorney who represents both consumers and businesses. He can be emailed at email@example.com.