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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.

A DISGRACE TO THE PROFESSION (How some real estate attorneys either skate or steal)

Sometimes I receive a phone call from a prospective client, or a referral from an associate, and I can’t believe what I am hearing.  What follows are two recent scenarios that I have witnessed which are beyond belief and hopefully will serve as a cautionary tale to anyone involved in a real estate transaction.   Regrettably, the guilty parties in both scenarios were compromised attorneys who either acted with poor judgment or committed an outright illegal act.  To exacerbate matters, the attorneys involved were all real estate attorneys who were experienced and who knew far better.  Thus, while I typically preach about using an experienced real estate attorney for a transaction, the sad fact is that some attorneys either skate while others steal.  Obviously, I can’t reveal the names of the attorneys involved, so do be advised that their names are being omitted to protect the guilty.

Part 1.   THE SKATER   

The first situation involved a client who was purchasing a short sale and had executed a contract to do so several months ago.  He contacted me as he had an inner sense that something was seriously amiss, which suspicion was further aroused by the fact that his attorney had gone into hiding and was not answering him.  Boy, was he right.

It turned out that he was purchasing a house for a sales price of $320,000 and he was told by the broker that he should be able to close in about three months.  Of course, this is false as short sales normally take far longer and a year is a far more reasonable time estimate.   Then the story got worse.  The client also advised me that when he executed the contract, he had paid $200,000 as and for his down payment thereunder.  Yes, $200,000 or more than 60% of the sales price.  The normal down payment at contract on a short sale is a de minimis $1,000.00.  What made matters worse is that he had borrowed the money and was paying $1,300 per month interest on such loan and had been doing so for more than seven months.  He had also paid the attorney a fee up front, as well as a fee for the title report upon front, which is very unusual and suspicious. 

I then reviewed the contract that he had  given me a copy of.  It was the standard form which remarkably did not contain a short sale contingency.    How could anyone possibly miss this if they were paying any attention whatsoever?   The contract was remarkably missing the single most important element of the transaction which made it rather clear that neither of the attorneys had done any work.

It was quite clear that his attorney had not reviewed the contract, nor the transaction, critically.  He had basically met him and told him to sign and then took his money.   His attorney had not advised him about how obscenely high the down payment was nor advised him about anything else for that matter.   He was either a pawn of the broker or simply skating his way toward a paycheck.  

When I contacted both attorneys for the transaction, they unsurprisingly had no answers for me.  Upon receipt of my initial accusatory email, my client’s former attorney emailed me back to say that I was not aware of the peculiar facts and circumstances involved in the transaction and that he would call me the next morning to discuss them with me.

Before I get to the phone call, a quick aside on my initial phone calls to his office.  It turns out that he also owns  the title company that he was using, the one that he also took a check for.  I later learned that no title report was ever produced, although my client paid for same.

When I asked the woman that was answering for his office a copy of the title report, she gave me the phone number for the title company.  When I called the title company, it was the same woman who answered the phone.  When I confronted her about this, she then couldn't tell me who she worked for and if she worked for either the attorney or the title company.  Then she stopped taking my phone calls altogether as I was apparently too aggressive and instead she took to hiding underneath her desk.

When her boss then called me,  he had nothing to say.  I asked him to tell me what the peculiar circumstances were that had alluded to which would change my mind.   His response was that he would have to go to his office and check his file with regards to what had transpired.  So, in sum, he was unaware of what he claimed that I was unaware of.

His subsequent defense, upon reviewing his file, consisted of him advising me that the parties were related, which statement actually hurt his cause.  Indeed, if the parties were related, then a down payment could be dispensed with altogether.  Also, if they were related, then I asked him how we would tip toe  around the requirement on a short sale that that the parties execute what is referred to as an “Arm’s length affidavit” which basically provides that the parties are in fact NOT related.  Did he expect his client to swear to an affidavit which was clearly and demonstrably false?  By the way, when I spoke to my client about this supposed relation, he advised me that the parties were not related.

My client’s former attorney then advised me that the contract could have been canceled by my client at any time.  I asked him exactly where in the contract it provided for such right and he fell silent.   Eventually his response was “Well he knew could cancel even if the contract didn’t say he could”.  I asked him what other clauses did the client know about which weren't contained in the contract.  He fell silent again.

The real estate broker, who was abroad, then chimed in.   He started with a bombshell as he gave me the shocking news that the short sale had been denied by the mortgagee a couple of months ago.  My client, however, who was never advised of such denial, was incensed when I did.  The seller’s attorney was still holding his $200,000 and he was paying interest on same and the transaction was dead, except no one bothered to tell him.   

When I subsequently spoke to the seller’s attorney, the hilarity continued.  My prior experience with him was three years earlier when I had met him on a Saturday afternoon outside of a supermarket as he had held onto my client’s certified check for several days and made excuse after excuse of why he couldn’t return it to me.   When I finally told him that I was going to file a complaint with the District Attorney’s office, he relented and agreed to meet me.  Thus, he didn’t have the greatest credibility with me when our conversation began.  Remarkably, his credibility sank to new depths during the course of our phone call.  

He advised me that he didn’t know that the transaction involved a short sale.  He advised me that he didn’t know what a typical down payment was on a short sale.  He then advised me that he didn’t know what a typical down payment was on a regular deal.   Basically, despite the fact that he regularly practiced real estate law, he knew nothing about real estate law. Unfortunately for this attorney, Hogan’s Heroes was canceled a long time ago as he would have made a perfect modern day Hans Schultz.

While the story has not yet been concluded, so far my client has gotten back his $200,000 and I am going to make sure that both attorneys involved reimburse my client for every penny that he paid out of pocket to date.

(The second situation will follow soon in another post and it is infinitely more serious and troubling than the one related above.)

Sunday, June 14, 2015


    While this may be a bit esoteric, and beyond the scope of what most people come to this blog to read, there is a little known rule about a party filing bankruptcy and its effect on judgments against them.  

    The narrow context in which we are focusing our attention on is the situation where a party had a money judgment entered against them and they subsequently filed a bankruptcy petition and they are now selling real property to a third party.  The issue is whether the judgment was wiped out by virtue of the bankruptcy filing. That answer, while clear, may not be as widely known as it should be.

    The simplistic thought that most people have, even many attorneys, and their level of inquiry, is simply this.  Did the Seller receive a discharge in connection with their bankruptcy filing?  If so, then they reason that the judgment must have been wiped out.  This assumption is wrong.  The judgment will only be wiped out if they named the judgment creditor in their bankruptcy petition.  However, we aren’t done with the inquiry.  Not close.

    If, upon reviewing the bankruptcy petition, it is determined that the judgment creditor was indeed named, most people think this is sufficient and think that it is then ok to proceed with their purchase of the judgment debtor’s real property, as the judgment will no longer affect their property.  Unfortunately, this isn’t true, although this is a false assumption that most people hold.

    Instead, what most people don’t realize is that what the bankruptcy filing only serves to release the judgment debtor from their obligation to pay the judgment and nothing more.  The judgment is still attached to the property, and is still a lien against the property, and any subsequent purchaser of any real property owned by the judgment debtor will take subject to the judgment.

    What is actually required from the judgment creditor, other than to vacate the judgment, is a property release for the property in question.  This is typically obtained by paying the judgment creditor a negotiated sum, which should be somewhat lower than what they would demand in order to vacate the entire judgment. 

    Even if a property release is obtained, such judgment will still be attached to any other properties that the judgement debtor may own.   This is why the judgment creditor may take a reduced sum to provide a property release, as they will continue to hold the judgment against other properties that the judgment debtor  owns and thus the judgment creditor expects that the same scenario will play out again and that they will be paid for a property release for such other properties.  Of course, the judgment creditor may also see this as their only bite at the apple and may seek a princely sum to release the property.

    One final thing to remember is that foregoing applies even in the context of a short sale where the judgment debtor has no equity in their real property.  Whether or not they have equity is simply irrelevant. 

    As can be expected, this issue actually comes up most often in the context of short sales as a seller of a short sale property may unfortunately have had various financial reversals that caused them to have a judgment filed against them, and which may led them to file a bankruptcy petition.  It is accordingly imperative that you have an experienced real estate attorney representing you when purchasing a short sale as there are a myriad of title issues that can have serious consequences post closing if they are not both identified and properly addressed prior to closing.