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Saturday, April 22, 2017

FAKE NEWS and FAKE DEALS (When an agreement is not an agreement?)

    One of the most recurring and frustrating things when representing a party in a real estate transaction is to hear a real estate agent say the following “Your client already agreed”.  This statement is typically made in a situation where such deal would be adverse to my client’s interests.  While the real estate agent may be under the mistaken impression that the deal is now fait accompli, it is always my firm position that there is no agreement and no deal unless and until I agree and whatever may have been discussed beforehand was altogether meaningless.

    The clear reason that these backroom and backdoor deals are made is that the real estate agent knows that if I were to be apprised of it, I would counsel my client against doing so.  I would advise my client of how the terms of the contemplated side deal is contrary to the terms of the contract, typical practice and, most important of all, common sense.  An example of this kind of deal would be where an agent implores a purchaser to agree to close with a tenant when the contract provides that the premises would be delivered vacant.

    There is a good reason why a real estate agent doesn’t want your attorney involved as they attempt to amend and renegotiate a contract of sale on a post hoc basis.  They know that most likely he would advise you of your various options and factors involved in your decision, instead of you giving you the narrow and self-interested version that the real estate agent has given.  Indeed, if you are given bad or incomplete information, it would naturally pervert the decision making process and lead to results contrary to your interest.  This also leaves aside the fact that these deals aren’t in writing, as they are required to be.  That is why when I am confronted with these kinds of side deals, I instantly dismiss them as deals that weren’t made knowingly by my client. 

    Some good advice then for those who are being pressured by a real estate agent to agree to something.  Say “no”, politely or otherwise, and contact  your attorney.

Sunday, February 19, 2017

THE PERILS OF BUYING FROM DEAD PEOPLE (The title company you choose matters)

       I had a rather heated exchange this week with the owner of a title company who, to put it mildly, had no clue as to what he was doing.  To be more generous, perhaps he just didn't care.  He had called me to complain that I had been bad mouthing his company and to ostensibly defend himself.   When I refused to accept his apology and instead told him that I was simply telling the truth, things got heated and went south.

    I will quickly summarize the two transactions that I had with him, neither of which closed and both  which were aborted at the table due to his surprisingly reckless behavior and cavalier attitude.  Indeed, I think one of my final comments to him was the following “I went to a closing and ended up at an abortion”.

    The first transaction involved the sale of a two (2) family house by someone who purported to be the sole heir of a 92 year old woman who had died without a will and survived only by her nephew.   He owned one-half of the property while his deceased aunt owned the other half.

       To establish that he was indeed her nephew and her sole living heir, the seller’s attorney had produced three (3) affidavits of heirship which would serve to confirm this fact. Simply put, an affidavit of heirship lays out who the heirs of a decedent are and also sets forth the basis for such knowledge.  The affidavits that were submitted were prepared and executed with guidance from the title company.  To make the case of the nephew being the sole heir even stronger, one of the affidavits was executed by the seller’s attorney.

       I examined all three (3) affidavits and became concerned as they were very general and sloppily done and incomplete.  I started questioning both the nephew and the seller’s attorney about the nephew's status as a nephew, but the Seller's attorney became upset and ordered her client not to speak to me. 

    What had me concerned was that the affidavits set forth in the most general terms that the affiant was a “friend” of the decedent and nothing more.  I thought that the nature of the relationship should be far more descriptive and describe the nature and length of the friendship.  Indeed, you can be friends with someone that you know for 2 months and not know anything about their personal lives or you could be friends with someone for 30 years and know everything.  Also, it seemed implausible to me that the decedent could have died at 92 years old leaving only one known blood relative, as the nephew claimed.

    When I spoke to the owner of the title company to raise my concerns, he minimized them as his position was that he was covered as he had three (3) affidavits.  I disagreed and told him that the substance of the affidavits matter not just their status as affidavits.   However, he felt as if they had a talismanic effect and that they were beyond reproach and once he was in possession of one, he was safe.  Such a belief was shockingly naive and I kept wanting to say to him throughout the course of our conversation "Are you kidding?".

    While my initial attempts at questioning the nephew were rebuffed, I persisted and finally was able to ask some questions.  I asked if a family tree had been prepared, and the answer was “no”.  It is quite useful, and customary, to prepare a family tree when there are issues involving potential heirs.  However, I find that most people won’t take the time to prepare one when it should be the first thing that is done.

        After further questioning, with his story quickly unraveling, the nephew finally confessed that he wasn’t really the decedent’s “nephew”.  Instead, he used to call her “aunty” and she called him “nephew” but they were not in fact blood relatives.  The names they used for each other were simply terms of endearment.  As it turned out that he was not a blood relative and instead merely a friend, the closing was adjourned.

    In an interesting footnote, I just learned that the nephew who wasn’t actually a nephew, has just petitioned the Surrogate’s Court for Letters of Administration to dispose of the assets of the decedent, his non-aunt.   This would include a disposition of the real property that he was trying to sell to my client.  His petition contained a startling claim.  He has now gone from being a nephew to then being a young friend who referred to the decedent with affection as “aunt” as he was 35 years her junior to now claiming that he was her paramour.  That would be a completely different kind of affection altogether and his newfound claim would tend of subvert his credibility.  No, his name was not "Hillary" in case you are wondering.

    I had another closing with the same title company earlier this week and as the sellers again were heirs, I was on guard as to any improprieties.  This time, it was three (3) heirs of a decedent who were selling to my client, and all of them claiming to be issue (basically children) of the decedent.  As the certification of title contained in the tile report into the heirs was a bit wordy, the first thing that I did was to draw a family tree so as to give me a road map for who everyone was in the family.  Upon doing so, I could see that the title certification was potentially incomplete as it failed to account for whether or not the family members who had previously died had died survived by a spouse.  I asked the title company to update their certification page and I went to question the surviving heirs about this issue.

         Upon questioning them, it turned out that the three (3) heirs were actually step children and not blood relatives.   Furthermore, the decedent had had a child by a previous marriage who was unaccounted for in the title certification and whose present location was unknown.   We accordingly adjourned the closing and an hour later I received the angry phone call from the owner of the title company.

      His defense was to advise me that we both wanted the same thing - clear title - and to thank me from saving him a lot of potential liability on both transactions.  Indeed, he told me “I am glad that I work with you because you carefully look over what you are doing”.   My response was “I am not glad that I work with you because you are sloppy and reckless and an a complete and utter waste of time”.   I then apologized for my honesty which got him even more upset.  I do find that with the hypersensitive fragility of modern day egos, one has to regularly apologize for ones honesty.

       The fact is that it matters which title company that you work with and it matters if your attorney has the requisite knowledge and experience to analyze and question the story and claims of the heirs of the seller as well as questioning the of the title company.  If not, you may be getting the same 50% solution that the title company I mentioned in this post.  I don’t have to tell you that 50% ownership is as good as no ownership at all.

Saturday, September 17, 2016


       I recently received a bill from Nassau County demanding a renewal fee for a fire alarm permit.   Apparently, the County requires homeowners to pay for the privilege of preventing fires and requires them to pay a fee for their kind permission.  Not to be left out, there is also a fee imposed by the County to permit their residents to have a burglar alarm.  While the fees are nominal, the concept is preposterous and outrageous.

      I am thinking of the word “permit” not in the sense of a license, like a driver’s license, and instead in the sense of having “permission”.   Indeed, the County readily acknowledges that it is a complete scam as there is no physical permit issued.  You are paying the County so that they can give you permission to protect your family and the contents inside your home.  There is definitely some "protection" being paid for here, but more in the underworld sense.

    With due apologies to Chief Justice Roberts, the fee imposed is clearly a tax.  Typically, a tax is imposed either to raise revenue or to either encourage or discourage activity.   One would think, although you cannot trust anyone in government to think, that they are not seeking to discourage people from protecting their family and their homes.  Thus, this tax is purely to raise revenue simply because they can.

    I have written before that we have gone from fighting to the death against “taxation without representation” to blithely accepting and being apathetic to “taxation with representation”.   The latter is far more destructive to society, and to one’s own humanity.

    How can Nassau County impose this additional tax?   Because they want to so they can.   There are no hearings, no allowance for debate and no opportunity for citizens to reject such fees.  Of course, the same kind of scandalous trespass happens on the state and national level.  It doesn’t help that there isn’t a second political party to object as there is seemingly only the “Tax and Spend Party” comprised of tax and spend Democrats and tax and spend Republicans.   The latter are, in fairness, comprised of some self-labeled “principled conservatives” who actually have no principles and aren’t conservative.

    It doesn’t matter that Nassau County is one of the highest taxed counties in the country.   By the way, these kinds of fees are not included in the calculus determining total taxes charged.   Recently Nassau County unilaterally dramatically increased their recording fees.  Title companies quickly issued bulletins alerting their clients to the exorbitant fees.

    And then there is the mortgage tax which is without peer.  It is typically 2.05% of the mortgage amount, although in most cases the mortgagee pays 0.25% (known as the “quarter point”) and the borrower pays only 1.8%.   It flips the whole rationale being taxes on its head.  A tax is supposed to be paid when someone earns money.  In such instance, you are giving the government their cut.    We can argue about how much they should take, but we can generally agree that a tax should only be imposed in the context of income.   Obviously, how one defines “income” is another issue to debate and the Internal Revenue Code’s definition of “income” in Section 61 of “income from whatever source derived” doesn’t help.  Yes, they used the word “income” to define “income”.

    The mortgage tax is due when you borrow money.   This is the very opposite of income and it seems nonsensical to pay a tax when you are creating an obligation to repay debt with interest.  But then again, things don’t have to make sense.   Simply put, the government can seemingly charge what they want to charge when they want to charge it for whatever reason or for no reason at all.   That doesn’t really sound like a democracy at all.


Sunday, September 4, 2016


    This will not be a screed against title companies. I will not name names.  My simple point is that in the abstract, pardon the pun, title companies have great discretion and power.  Let me explain.

    A title company should follow the Fox News motto of “We report, you decide”.  Indeed, they are simply a middleman that collects various kinds of information about a given property and that is all.  They do not actually insure a transaction themselves and instead it is the underwriter that they are the agent for that actually does. 

    This is one of the basic misunderstandings that most people have about title companies.  The other great misunderstanding that people have is that title insurance covers a buyer for both violations and Certificate of Occupancy.  It doesn’t.

     One more pet peeve, if you permit.  The two words many people will misuse to describe a title issue is that title isn’t “clear” or “clean”.   Those words are rather meaningless.   Instead, the correct terms to use are that title isn’t “insurable” or “marketable”.

    Notwithstanding the fact that they don’t actually insure, title companies are given great latitude in deciding whether a transaction will in fact be insured by the underwriter.  Indeed, as their agent, they are afforded the right to use their discretion in deciding whether or not a transaction should be insured.  In close cases, or if they are unsure, they are supposed to refer the question directly to counsel for their underwriter.  Many times they don't and simply will decide in the affirmative when they think the risk is minimal.

    Obviously, discretion is a two way street and it can be used properly by a title company or simply misused.   Many times a title company will give cover to a buyer who does not wish to close at a certain time, wishes to delay or does not wish to close at all.  There are also simply times where the clearance officers and counsel at a title company are inarguably incompetent and ignorant and this can either delay or sometimes kill a deal. 

    I recently had two experiences that demonstrate both the cover and incompetent aspects when engaging a title company that resulted in two closings being adjourned.  What as particularly frustrating is that both adjournments occurred when the parties were already at the table.  Of course, both deals ended up closing 2 days later, as I will set forth below.


    Let’s start with incompetence.  This example was truly breathtaking both in sheer incompetence as well as the Hillaryesque deceit and untrtuthfulness of the title company.  The buyer wanted to close, so the title company wasn’t being used as a “cover”, but instead it simply had no idea what it was doing.  I could relate in painful detail what occurred, but it is beyond the scope of this post.  So I will just review some highlights.

    I had cleared title over two days with the clearance officer at the title company, which apparently handles far more New Jersey deals than New York transactions.  And this is being generous, as there weren’t really any substantive title issues to clear besides customary corporate title exceptions.  However, the same were confounding for this particular title company.

    After spending a few hours and 2 days going through the issues in detail with the title company’s clearance officer, she told me that the file was clear.   However, when we were at the closing, after 5 hours of being there, the title company had second thoughts at the closing and decided not to close.   To exacerbate matters, the clearance officer did her best Hillary impression and lied about the substance of our conversations.  As an aside, I would note that the real reason that the title company refused to close is that they couldn’t find at title closer to appear on their behalf at the closing.

    I would note one particular exchange that I had with the aforementioned clearance officer.  She pointed out a certain title exception and asked me what documentation I had to clear it.  My answer was a respectful “so what”.  I asked her if she knew what the consequences were for the corporate seller not having filed the very unimportant document that she was questioning.  She told me that she did not.   I informed her that the answer was “nothing”.  That there simply weren’t any material consequences whatsoever and that the fee for the document was $9.00.  Again, she was wholly ignorant.

    The transaction was adjourned by the title company at the closing and we ended up closing with another title company 2 days later.


    Sometimes a title company is used, perhaps “manipulated” would be a better word, by a buyer’s attorney when their client isn’t either ready or doesn’t wish to close.  I recently had an experience where it was exceedingly clear at the table that the buyer did not, for whatever reason, wish to close.  After proffering every lame excuse that can be conjured from the very depths of nothingness, purchaser’s counsel finally turned to the trusty “you don’t have clear title” excuse.

    This excuse can many times, if not most, carry the day.  Indeed, you typically have a buyer who is a laymen and is relying heavily on counsel and extremely fearful of buying something a property that is, at best, problematic and, at worst, worthless.  Thus, if there is even a suggestion or hint from buyer’s counsel that there is a title issue, most buyers will panic.  So we adjourned the closing.

    As it turned out, the buyer was waiting for a check that it deposited to clear and thus didn’t have sufficient funds to close.   We closed 2 days later when the check cleared and magically so did all title issues.

IT'S A MISTAKE (The Nuremberg Defense employed in a real estate context)

         I speak to many mindless “professionals” who never cease to amaze me with their idiocy, both in word and deed.  Perhaps “idiocy” is too kind a word?

        When I question them as to their stupefying actions, their common defense is “The client told me to do it”.   And that’s the point.  The person who asked them to do something was their “client”, meaning that they came to you for your guidance, your good advice and the benefit of your  experience.  They didn’t come to you to be a rubber stamp for a course of action that is contrary to their own interest or to be a source misinformation, bad information or no information.

        The perfect example is a mortgage broker/loan officer who locks in a client interest rate without fully discussing the options and various consequences involved.   There is obviously a great deal of self-interest at play as invariably the borrower ends up paying the mortgagee nonsense fees  that they could have and should have completely avoided.  The mortgage “professional” gleefully will lock in a rate without a second thought or without any inquiry whatsoever.   Indeed, for example, he never checks to see if the parties can close prior to the expiration of the lock in period or if there are any potential issues that will preclude the parties from doing so.   I find that many times the mortgagee isn’t even ready by such false deadline leaving aside the seller who may have their own issues, including title issues.  All it seems that they are concerned about is that starting in 30 days, the mortgagee can start collecting what is typically a daily fee/penalty from the buyer.

      I recently encountered a loan officer who managed to do something even more remarkable.  He had an appraisal conducted even before the contract was countersigned by the seller.  When I apprised him of various issues concerning the contract and inspection report, he forwarded a copy of the appraisal to me.  I then questioned him on why he had permitted an appraisal to be conducted before the contract was fully executed and his response was simply that my client had told him to do it.  I asked him who would be responsible to pay for the appraisal if the contract was never fully executed.   He sheepishly said the buyer would.   I then asked if he ever considered the fact that the buyer would not want to pay for an appraisal for a house that he is not purchasing, his response was the same robotic defense of “The buyer told me to do it”.

      Finally, I pointed out to him that he was using the classic Nuremberg Defense to justify his defenseless actions.  Of course, he had no idea what I was referring to.  I concluded the conversation by telling him that “Ignorance is probably a way of life for you”.

Saturday, November 7, 2015


(The following is part 2 of the series "A Disgrace to the Profession".   While the two posts stand independent of each other, I would commend you to read Part 1 first).


You won’t believe what I am about to write.  Indeed, I didn’t when someone first told me the story.  But it’s not a story and instead it’s the truth.  So I will tell it from the first and let you decide if something like this could actually happen.

I received a call from a real estate agent who had a friend who had received certain documents relating to a foreclosure action that they didn’t understand that they wanted me to review.  They had purchased the house in a short several a few years ago and the bank that was prosecuting the foreclosure action was paid off and the homeowner had obtained their own mortgage.  For whatever reason, the attorneys for the bank that had gotten paid off had sent these foreclosure documents to the homeowner.  Perhaps they were nothing.

When I reviewed the documents, it seemed as if the foreclosing attorneys were mistakenly continuing to prosecute their long standing foreclosure action and were now actually nearing a sale date.  For whatever reason, no one had informed them that the house had been sold and that their client’s loan had been paid off.  I figured it would be simple enough to stop this mistake quickly by simply printing out the deed and Satisfaction of Mortgage from ACRIS and presenting them to the foreclosing attorneys.

However, when I checked ACRIS, I found nothing about the transaction.  The Deed in favor of the homeowner had not been recorded, nor the new mortgage nor a Satisfaction of Mortgage for the old mortgage.  At first, I thought that what may have occurred, as does on rare occasions, is that the title company may have lost or misplaced all of the documents to be recorded.  Perhaps instead the documents were misindexed against another lot?  I did a name search and the relevant documents were still missing.

Curious, I asked the client to bring their entire file to my office so that I could review it as there must be something in such documents that would be both valuable and helpful.  I could then forward the same to the foreclosing mortgagee and the house would be saved.  However, the documents that the homeowner was given were rather sparse and were conspicuously missing pages that were vital.  Also, there were inconsistencies as there were three versions of the HUD and there were bits and pieces from title reports from two different title companies.  By some coincidence, the title company listed on the HUD as having been the one that closed the deal happened to be the company that I use as well.  When I contacted them, they advised me that a certain attorney had ordered a title report from them but that such deal had never closed.  I then contacted the other title company that had also issued a report and they mentioned that the same attorney had ordered a report from them as well, but that the deal had never closed either.

When I eventually pieced everything together, it was clear what had transpired.  One attorney had represented everyone and had controlled everything and she had stolen ALL of the money for the transaction.   Thus, the deed into the homeowner was not recorded and as she pocketed the funds to payoff the homeowner's mortgagee, this is why the foreclosure action was still continuing.   The new mortgage executed by the Purchaser was also not recorded as well, as why would she bother to do so if she was pocketing all of the other funds?
Remarkably, she had convinced the two parties that she should represent the seller, the purchaser as well as the incoming mortgagee for the purchaser.  To make things look legitimate, she had some person attend the closing pretending to be a title closer who had notarized documents, but nothing was ever done with those documents.  This is why conspicuously all of the notary pages were missing from the copies that the homeowner had.

The new loan was NOT a fiction.  The Purchaser had indeed applied and been approved and the new mortgagee wired money to this attorney.   However, instead of using such funds to pay off the outstanding mortgage, as well as paying all closing costs, she had just kept the money, which was approximately $500,000.

You might then ask if the new homeowner was protected as he had title insurance.  No.  Unfortunately, as she stole the money, the title insurance policy was never paid for and thus the Purchaser was not covered.   Ditto for the incoming mortgagee, as their title insurance policy was not paid for, there were not covered as well.

When I confronted the foreclosing mortgagee and told them my remarkable story, they were decidedly unimpressed as they said that they already knew what had occurred.  Indeed, they forwarded to me  a memo from the District Attorney’s office about the attorney in question and how she was being prosecuted for various offenses, like the one involving the homeowner.  Sadly, she was still practicing even though the transactions in question were several years old and had caused the ruin of several families.

She had apparently gotten away with this for so long for two reasons.   First, she blamed her boss and made the excuse that she was just am employee.  However, nothing had happened to her boss as he claimed that she was a rogue employee.  Second, her family was apparently politically connected as her father was a federal judge.

The hope was that the foreclosing mortgagee would be compassionate and would voluntarily stay its foreclosure action.  However, their position was that as they were never paid, their sole and their natural recourse and remedy was to foreclose.  Indeed, by simply relating what had occurred, you were also admitting to the fact that they had not been paid.   Thus, they felt that they had every right to foreclose.  

Moreover, they should not be punished for the crimes of the guilty party and while they felt bad for the homeowner, his recourse was to seek restitution against the attorney that stole all the money.  Indeed, they were victims as well.

My solution was to enlist the help of the mortgagee for the new owners, the ones that had purchased the house.  I implored them that if the old mortgagee was permitted to consummate its foreclosure action, then they would lose their collateral and they would be left with nothing.  Thankfully, their attorneys then filed a final last ditch motion to stay the foreclosure sale that was scheduled to take place this past Friday October 30, 2015 so as to save their house.  The court denied their request...

Friday, November 6, 2015


Well, that may be a bit hyperbolic, but you get the idea.  While Chase may not be the worst, it is certainly in the top 5.  I have had a few recent mind numbing experiences with Chase that have irretrievably scarred me.  Let me relate two of them quickly.

The first was simply trying to obtain a mortgage payoff from Chase for a second mortgage that they held for a client.  It took our office nearly a week and over ten (10) hours of phone time with them.   During the course of those conversations, we were remarkably told ALL of the following things:

– That the loan did not in fact exist;

– That the loan was paid off a couple of months earlier;

– That the loan was forgiven;

– That a payoff had already been ordered at a specific date and time;

– That they had no record of any prior phone calls that were made (which was right after the conversation where we were told that the payoff had been ordered and after at least 6 phone calls to them);

– That it wold take 2 to 3 hours for them to send a payoff;
– That it would take them 6 to 10 business days to send a payoff

– That they had no idea when they were going to be able to send a payoff.

A few tips then if you are thinking of calling Chase for a payoff:

 1) Don’t speak to the initial person that answers the phone and tries to help you.  They know nothing and they can’t help you.  Always ask for a supervisor;

2) Make sure that you have another activity to amuse yourself with as you are going to be on hold for a long time;

3) Be  prepared for the grave disappointment of being on a lengthy phone call and then being asked if you would like to hold, when you have no other  option.  After you are placed on hold indefinitely, the Chase employee will disconnect the call and you have just lost an hour of your life and everything that transpired during that time has no record with Chase.

4) Laugh at anyone who claims that they are going to help you.  At one point, someone from Chase emailed us and advised us that his job was to provide immediate help to homeowners in distress.  After a couple of email exchanges, it became clear that the one thing that he couldn’t do was help and instead his job merely consisted of him saying that he helps people.

The other scenario that occurred when a client obtained a mortgage from Chase and for some reason the employees at Chase thought that the real estate taxes on the house were $34,000 per year when they were  instead actually about  only $4,500 per year.  We kept sending them proof  from the title report of what the actual taxes were and they nevertheless delayed the closing and kept charging our client additional fees.  They finally advised us that they had corrected their system and when we went to the closing, they still had the taxes listed incorrectly as $34,000 and we had to sit and wait a few hours for them to correct it.

While the mortgage division at Chase is horrid, their banking division is top notch.  Indeed, while their mortgage division seemingly hires the most unqualified, rude and mindless individuals who surely have, at best, a single digit iq, their banking division hires typically very well mannered and professional people who genuinely wish to help.  Alas, the two seem to cancel each other out rendering Chase rather mediocre overall.