Real Estate Lawyers

Everyone has a story, right? I’d like to share how (and why) I—a guy with a Mechanical Engineering background—got involved in Massachusetts real estate law.

After I graduated from college back in the 80s, I moved down to Connecticut with a college roommate where we started buying investment property. We’d move in, renovate, and eventually sell the property to turn a profit. The money, and the business, were good (at first anyway). My day job in the aerospace and sales fields eventually took me back up to Massachusetts, which is where my personal and professional life took a turn I wasn’t expecting.

See, I had bought an investment property but had problems keeping tenants. Constant vacancies were affecting my bottom line. Normally, you think of investors making a boatload of money. Unfortunately that’s not always the case. As hard as I tried to turn it around and get resources to help me, I never found anything helpful for people in my situation. Why does it end up that people always talk about success and rarely talk about the taboo topic of failure?

Anyway, I ended up losing the property to a foreclosure. After I went through the foreclosure, a totally foreign topic to me, I knew I wanted to get involved in real estate. To explore all the areas I could get into, I met with a commercial agent, residential agent, appraiser, management company, and finally a real estate attorney. And the attorney made the most sense of them all and resonated with me.

I went through law school, graduated, passed the bar, and started from square 1 trying to build my practice. Since then I’ve worked with clients across the spectrum—with both landlords and tenants, home buyers and sellers. I make sure each party understands their rights and I enjoy breaking down legal topics into easily understandable concepts based on how they apply to each individual’s situation.

Because I understand the practical end of real estate (I experienced both the ups and downs) and I know the legal end, I know where my clients are coming from. This is not only my specialty, it’s what I enjoy.

If you need a Clinton or Worcester real estate lawyer, I’d love to be of assistance. Call me, Attorney Jack Morrison, at 508-852-7800. Or, reach out via our contact form. Thank you and I look forward to hearing from you. 

As September comes to an end, we’re wrapping up our Massachusetts foreclosure series with a very important answer to a frequently asked question: after my home is foreclosed, when do I have to move out? As a Worcester real estate and bankruptcy attorney, I think it’s important to answer questions that come up frequently from clients who are going through a foreclosure and need assistance and guidance from an attorney.

If you missed any of our other topics in this series, catch them here:

After a Foreclosure, When Do I Have to Move Out?
As we mentioned in last week’s blog post, a foreclosure auction eliminates the homeowner’s cure rights to save the house. After the auction has occurred and a written memorandum to a prospective buyer at the auction is signed, the homeowner no longer owns the property.

But that fact alone does not give the bank the right to go in and physically remove the homeowner from the property. In other words, the only way a person can be physically removed from the premises is if they voluntarily move out or if a court order is obtained to get them out.

At the conclusion of the auction, as we have mentioned in previous blogs, the bank ONLY has the right to enter a portion of your property to conduct the sale. Neither the lender nor the buyers have the right to come into your home unless you allow them to do so. (Don’t do this.) The significance of an auction is to transfer the ownership from homeowner to lender and in turn to a prospective buyer. That completes the foreclosure. The previous homeowner (now called an occupant) no longer owns the property.

How does the Bank get the occupant out of the property after a foreclosure auction?

This can legally be done one of two ways: 

1. The occupant voluntarily leaves the property:
After the foreclosure auction and before an eviction, the occupant can pack up their stuff and leave. They no longer own the house. The bank has the legal responsibility for the property.

However, there is a better way for the occupant. It’s called “Keys for Cash.” After a foreclosure auction, the bank hires a real estate agent to put the house back on the market to sell. If the occupants (former homeowners) are still in the property, the Keys for Cash program means the bank will give the homeowner $2,000-$3,000 in cash. This is used in exchange for a few things: leaving the property, taking everything out and leaving the house in a clean, broom-swept condition. It becomes a win-win for both properties as the property gets vacated and the homeowner has cash to rent an apartment.

2. The bank gets a court order to get them out:
If the occupant doesn’t move out, the bank has to file an action in housing or superior court to get the former homeowners out of their home. This takes 4-6 weeks and runs the bank $5,000 or more depending upon how many physical possessions the homeowner has when the court order is issued. The advantage to the homeowner in this case is a little more time to stay in the premises. The disadvantage is that if you’re forced to move, the bank will not give you money to leave.

Which of the two situations is better? It depends upon what the former homeowner is looking for. If the former homeowner has found an apartment and needs money to move, then option 1 is better. If the former homeowner needs more time, then having the bank go through the legal eviction process give them more time to move, option 2 is better.

If you have questions for a Worcester real estate and bankruptcy lawyercall me, Attorney Jack Morrison, at 508-852-7800. Or, reach out via our contact form. Thank you and I look forward to hearing from you.  

This week we’re continuing to explore common Massachusetts foreclosure scenarios. As a Worcester real estate and bankruptcy attorney, I think it’s important to answer questions that come up frequently from clients who are going through a foreclosure and need assistance and guidance from an attorney.

Many times, people will come to me after their home is foreclosed and they want to know if they still owe the bank money. Many Massachusetts residents find themselves in this very unfortunate position. They’re behind on payments and their attempts at a loan modification were unsuccessful. They finally succumb to the bank’s foreclosure. Legally, this means that you, the homeowner, no longer own the property.

The difference between what the bank is owed (the full amount of the loan) and what they recover from the auction is called a deficiency. If the bank has not recovered all the money that is owed on the note from the foreclose sale, they have the right to pursue the deficiency.

Massachusetts Statute of Limitations
In Massachusetts, there’s a statute that states a lender must file a legal action within 2 years from the auction date to be able to collect on the deficiency. This is called a statute of limitations. It’s a provision that protects homeowners from lenders taking a number of years to sue them for a deficiency.

The advantage of the 2-years statute is that the lender has to act relatively quickly in filing a lawsuit against the homeowner. If the two years expires, the lender cannot sue the homeowner for the mortgage.

So how does this affect the homeowner? If two years have gone by, then you are out of the woods. If you’re within the two years, you might have to be looking over your shoulder to see if the bank is chasing you for that deficiency.

If the bank does go after you, what can you do?

1. Make arrangements to make payments or negotiate or
2. File bankruptcy and eliminate that debt.

If you have questions for a Worcester real estate and bankruptcy lawyercall me, Attorney Jack Morrison, at 508-852-7800. Or, reach out via our contact form. Thank you and I look forward to hearing from you. 

 

Because our foreclosure series has generated so much interest, we decided to expand on this theme for the month of September.

This week we’re going to delve into the reasoning why a bank forecloses when you get behind (or don’t pay) on your mortgage. Let’s get started.

Go back to when you first bought the home you’re living in. You sat with your closing attorney and signed a stack of papers for about an hour straight. Most of it you didn’t know what you were signing, although your attorney probably gave you a quick overview.

Two of the most important documents you signed were 1) the Note and 2) the Mortgage.

The note was your promise to pay.  You agreed to borrow a certain amount of money at a certain interest rate over a certain period of time.  The bank gave you money…you used it to purchase your home.   You have a legal obligation to repay the money you borrowed.

Banks generally don’t lend money unless the loan is secure. This is where your mortgage comes in.

In addition to your promise to pay back the loan, you’re agreeing to pledge your new home as additional collateral. The mortgage is the legal document that secures your promise to pay by legally pledging your home as collateral. When you don’t pay on the note and you default, the bank has the right to come onto your property and sell your house and use the proceeds to pay the note. The process is called foreclosure.

So what does foreclosure mean?
Well, spelled out in the mortgage document you signed is a condition that states – in the event you are behind on your mortgage payment – you have the right to “cure” such payments.

For example, if you’re behind 5 months on your mortgage, the bank can start the foreclosure process. In the cure provision of the mortgage, you have the right to pay all the money you owe, including: late fees, interest, foreclosures fees, attorney fees, etc. BEFORE a foreclosure auction date. If you do, you get to keep your house.

The bank has to accept your money, under the cure provision, if you pay the entire balance owed in full.  Partial payments are not acceptable. Once the payment is accepted by the bank, the foreclosure is stopped.  You’re back in the good graces with the bank…until…your next scheduled monthly mortgage payment.

When the bank foreclosures, what they’re legally doing, is eliminating the cure rights and taking title to the property. The bank forecloses and legally takes ownership of the property and eliminates the homeowner control over the property…even the right to cure the arrearages. The mortgage on the property is now merged with the new owner, the bank.

What can the Bank do if you owe them money?
Any money that is not paid to the Bank after the foreclosure auction is called a deficiency. Under the terms of the note,  the persons who signed the mortgage document are legally liable to pay a deficiency.   The bank has 2 years to bring a lawsuit to collect on the deficiency. If they fail to file a lawsuit within the 2 year period after the auction date, they can’t. This is called the Statute of Limitations.

Join us next week as we continue discussing foreclosure challenges you might face.

If you have questions for a Worcester real estate and bankruptcy lawyercall me, Attorney Jack Morrison, at 508-852-7800. Or, reach out via our contact form. Thank you and I look forward to hearing from you. 

 

August Real Estate Foreclosure Series: Week 2

by Jack Morrison on August 11, 2011

This is the second week in our monthly real estate foreclosure series. Last week, we discussed a general overview of what happens in a foreclosure. Due to the sheer amount of Massachusetts residents facing finally troubling times, this is a topic that many people ask about in my Worcester bankruptcy practice.

Let’s continue on with week 2, where you’ll learn about the timeline of a Massachusetts foreclosure.

Foreclosure Series Week 2: The Timeline of a Massachusetts Foreclosure
According to the Boston Herald, foreclosures are on the rise. Foreclosed homes increased 42% to 931 in June 2011. With this grim statistic in mind, it’s important for you to understand the timeline of a foreclosure in the state of Massachusetts.

Typically, a foreclosure begins when you default on your mortgage. Every month you have a grace period of 15 days to pay your bank. In the event that the bank receives your payment on the 16th through the 30th of that month, a late fee will be assessed.  Any payment received by your bank after 30 days is considered a default.  In addition to the default, non-payment or late payment  has a negative impact on your credit score.

Recently, Massachusetts legislation enacted a law requiring lenders to give homeowners who defaulted 150 days to “work with” the lender. In most cases, the lender will try to make an arrangement to get caught up in payments. This might involve a loan modification, which we’ll discuss later in this article. Unfortunately, the reality is that most people have had either a dramatic loss of income or a job loss, which makes keeping up with house payments unrealistic and unaffordable. Then, an internal struggle ensues about whether or not to keep the house. It’s a very emotionally devastating to lose a home.

Once you are behind or in default on your mortgage, the lender may offer you a loan modification. As crazy as this may sound, to qualify, you have to be at least 3 months behind on your mortgage. Many homeowners contact their lender ahead of time, knowing they’ll be late on their payment. Unfortunately lenders won’t even talk to you about a loan modification unless you’re 3 months late.

Once the 150-day period is over, the “legal” foreclosure begins (the homeowner will be served with the Soldiers and Sailors Act notification).  There is approximately a 45-day period where you can respond to the foreclosure notice.  If you are active in the Military, you get more time to respond.  The Soldiers and Sailors Act notice is also filed at the Registry of Deeds where the property is located.   That’s why homeowners facing foreclosure are inundated by people soliciting services to “help” them resolve their finances. It’s public information.

After the expiration of the 45 days, the Bank can schedule the foreclose auction. A notice of the foreclosure must be published in a local newspaper at least 3 weeks prior to an auction date. You’ll also receive, via registered certified mail, a letter from the attorney who will be handling the foreclosure.

So the MINIMUM timeline from a mortgage default to a foreclosure auction date in Massachusetts is approximately 8 months.  Any delay by the bank in the foreclosure process will extend the time.

Thanks for tuning in. Next week, we’ll discuss what happens at an auction and give you specifics on what to expect.

If you have questions for a Worcester real estate layer, call me, Attorney Jack Morrison, at 508-852-7800. Or, reach out via our contact form. Thank you and I look forward to hearing from you. 

When you’re upside down on your mortgage, it may seem like things are hopeless. That there’s no chance of ever getting back on track. Fortunately, there’s a little-known insider secret only a few professionals know about—and I’m going to share it with you today: how you can eliminate your second mortgage. 

First, you have to meet two conditions:
1. You have to have a 1st and 2nd mortgage on your property.
2. The market value of your house has to be less than what you owe on the first mortgage.

There are two ways to figure out the market value. First, you can talk to a real estate agent who will give a market analysis of your house by doing comps in your area. Second, if you want a more official analysis, you should get an appraisal. This is done by contacting an appraiser, who costs anywhere from $250-$350. 

Once you know that these two conditions are met, here’s how you eliminate your second mortgage: by filing for Chapter 13 bankruptcy. A Chapter 13 is a part of the Bankruptcy Code that allows you to repay individuals or companies some or all of the money you borrowed from them. Under a court approved plan, you are given from three to five years to repay the debt. Eliminating a second mortgage is achieved because of a component of Chapter 13 that differentiates between secure debts and unsecured debts

If you want more information about Chapter 13, visit this resource page for more details.                                                                    

To speak to a Clinton and Worcester, MA real estate lawyer who also specializes in bankruptcy, call me, Attorney Jack Morrison, at 508-852-7800. Or, reach out via our contact form.

Not being able to keep up with your monthly mortgage payments is scary and can leave you feeling overwhelmed and anxious. If this describes you, you’re not alone. Thousands of Americans are currently in this position and are looking for ways to avoid foreclosure. In fact, last year more than five million households were behind on their mortgage and risked foreclosure. So what’s the answer? Look into selling your home as a short sale. 

To explain a little more about this, we’ve put together a few helpful points: 

  • What does short sale really mean? A short sale takes place when you sell your home for less than the amount due on the mortgage. All the proceeds go to the lender. A short sale is how you avoid foreclosure, which ruins your credit for a number of years.
  • How do you get a short sale approved? Convincing your lender to do a short sale may be a little challenging. Reach out to the customer service department and explain your situation. You might be transferred to a specific department, or you can speak with a supervisor or manager. Then you need to convince your banker that you deserve approval. If you’ve experienced a recent hardship, such as divorce or a medical issue, this will help your case. Also, don’t go on a spending spree. Your lender will see these purchases and most likely deny you short sale approval.
  • What professionals do you need to consult with? During a short sale, it’s important you hire professionals who have experience working with individuals who have gone through a short sale. That includes speaking with and possibly hiring a CPA, real estate agent and Massachusetts real estate attorney. Speaking with a qualified attorney who also specializes in bankruptcy will help you determine if a short sale is the best route for you, or if filing for bankruptcy would be a better alternative.

When speaking with an attorney, do your homework and know what questions need to be asked. For example, “Would a short sale be better than a foreclosure?” and “Should I explore bankruptcy before moving forward with a short sale?”. 

There are many resources available if you wish to explore pursuing a short sale. Here is one helpful article from AOL Real Estate.

If you have any questions about buying or selling a home in the Worcester and Clinton, MA area, don’t hesitate to call. As a Massachusetts Real Estate Attorney and bankruptcy attorney in Worcester, MA, I help clients every day with the legal end of buying and selling their home. Call me, Attorney Jack Morrison, today at 508.852.7800 or reach out via our contact form.

Going through the process of buying or selling a home can be one of the most exciting—yet stressful—experiences in your life. Understandably, you’re going to have questions about what the process will be like. 

That’s why we’ve dedicated the entire month of May to an educational real estate series for buyers and sellers. Here’s what’s in store for you over the next few weeks: 

Week 1: Buyer: What Happens When You Find a House You Like?
Week 2: Seller: What Happens When You Get an Offer?
Week 3: What Happens After an Offer is Signed?
Week 4: What Happens At Closing? 

If you have any questions at all over the next few weeks, don’t hesitate to reach out to me at The Law Office of Jack Morrison at 508.852.7800 or reach out via our contact form. 

Part 1: Buyers: What Happens When You Find a House You Like?
It can take days, weeks, months or even years—but finally, you find a house that you love. And, you’re ready to make an offer. So what happens next? The answer depends upon if you’re representing yourself or if you have a realtor. 

If you’re buying a house on your own, you have to submit an offer. The offer should include several different pieces of information, including these 4 components: 

  1. The property you’re buying
  2. The amount you’re willing to pay
  3. When you want to close
  4. The limitations on your ability to buy the property
    -Subject to obtaining financing and subject to a home inspection, at a minimum.

If you’re working with a realtor, he or she will assist you with providing documentation you just have to complete and sign. But, you must still make sure it has the four pieces of critical information listed above. 

Typically, at the time you make an offer you’re required to put down a deposit. And, you list when you’ll do the home inspection (such as 10 days from the time the offer is accepted by the seller). You’ll then present the offer to the seller, who can accept the offer, reject it or issue a counter offer. Most of the time the seller will issue a counter offer. And, the seller can change any of the terms of the initial offer. Negotiations can go back and forth until all parties come to an agreement. 

One very important note: the unique situation about buying real estate is that the contract MUST be in writing to be enforceable. This is what’s known as the statute of frauds. The offer can have strikethroughs, cross-outs and additions, but it’s still an effective contract as long as both parties agree to the terms and conditions on paper. If it’s not in writing—no deal. 

Stay tuned as we get ready to discuss what happens after an offer is signed and what happens at closing. Again, if you have any questions, don’t hesitate to call. As a real estate attorney in Massachusetts, I help clients every day with the legal end of buying and selling their home. Call me today at 508.852.7800 or reach out via our contact form.

“Do I need a real estate lawyer?” 

This is a good question that comes up more often than you know. Last month, we told you about the easiest way to find out the answer. If you want to find out whether you can buy or sell a house on your own or whether you need to consult a real estate attorney, we have the answer in the form of a simple, 12-point checklist for first-time buyers and a 10-point checklist for first-time sellers.  

Ready to get started? Here’s a sneak peak for what’s in store:

Sample Questions

12-Point Checklist for First-Time Buyers

  • Have you decided when you want to purchase your home? Yes or No
  • Have you determined if you can afford to buy? Yes or No
  • Are you scared or unsure of making the commitment to buy a home? Yes or No
  • Have you selected a mortgage loan officer? Yes or No
  • Have you selected an insurance agent? Yes or No

10-Point Checklist for First-Time Home Sellers

  • Have you determined the balance owed on your mortgage (if you have a mortgage)? Yes or No
  • Do you need to sell your home to buy another property? Yes or No
  • Are there issues when you purchased your home that are not resolved? Yes or No
  • Have you made the conscience shift from looking at your house as a home and vice versa? Yes or No
  • Do you have to pay capital gains on your property when you sell? Yes or No

3 Important Things You Need to Know
Here are three important things you should know before you request the checklist: 

  1. Who are you? My name is Jack Morrison and I am a licensed real estate attorney in Massachusetts. I have helped hundreds of clients navigate successfully through the real estate transaction process.
  2. Who should take this? Massachusetts residents looking to buy or sell a house.
  3. Why should I take this? The questions are very easy – you only have to answer “yes” or “no.” After you finish the report, you’ll email it to our office and a confidential, customized response will be sent back to you within 24 hours.

Ready to get started? All you need to do is call our office at 508.852.7800 and request a copy of your checklist. Or, email us at mel@jackmorrison.com and ask for your free checklist.

 Once you send in the report to us (by emailing it to jack@jackmorrison.com), you’ll get a confidential, customized response emailed back within 24 hours.   

As a Worcester real estate lawyer, I help individuals and families purchase and sell homes every day. Call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form.

Making an Offer: What Should You Include?

by Jack Morrison on April 5, 2011

Congratulations! You’re thinking of buying a new home. This is a fun and exciting time in your life. But, there are some basic fundamentals you’ll want to know before you’re too far down the road in the home-buying process. For example, you need to know what to include when you finally decide to make an offer on your dream home. 

Here are five things you’ll want to make your offer subject to: 

  1. A home inspection: Sure, you’ll have to shell out a little money for the inspector and you’ll have to take a few hours off of work. But a home inspection is critical – do not skip this important part of the process. If you want to know more, sign up to receive my free ebook, “How to Avoid the 5 Biggest Blunders When Buying Your First Home.”
  2. Financing: It’s always smart to get pre-authorized for a loan. But before you find yourself fully committed, it’s smart to add in a provision to ensure you’ll get the loan amount you were initially authorized for. 
  3. A minimum deposit: Although you want to put down 10% with the bank, you don’t want to put that much down with the seller for the earnest money deposit.
  4. A clear title for the property: Basically, you want to make sure that the seller is the real owner of the property and that he or she owns it free and clear.
  5. Closing costs: A specified amount to be paid by the Seller. In today’s real estate market, you, the buyer, have much of the negotiating power. Make sure to stipulate and request all, or a certain amount, of closing costs be included in the purchase price.   

As a Mass real estate lawyer, these are the basic “subject to” stipulations that I advise my clients about. For more information on first-time home buyer services, call my office today at 508-852-7800. I look forward to speaking with you.