The Blog of Proven Resource and David Soble

What Is A Quit Claim Deed And How Does It Work?

Sun, 22 Dec 2019 22:25:17 GMT

I am in receipt of this inquiry from Susan L. from Walled Lake, MI. Back in 2005, Susan and her mother and purchased a small home in Wolverine Lake. They lived in the home together until this year when Susan purchased her own home.

Recently, when Susan was going through some documents, she found that the deed to the home in Wolverine Lake had Susan's name on it only. It did not name her mother. She now wants to prepare a quit claim deed putting the home entirely in her mother's name.

First, a quitclaim deed is a legal instrument that is used to transfer interest in real property. When the quitclaim deed is properly completed and executed, it transfers any interest the grantor has in the property to a recipient, called the grantee. Unlike other types of deeds, it does not guarantee that the grantor even owns the property before the they convey their interest.

Second, legal forms such as quit claim deeds are easily available for download on the internet. But just because you can access and fill in a legal form on your own does not mean you should. Doing so without knowing the impact of the deed can have serious legal and financial consequences.

In this case, while deeding a free and clear home back to your mother seems to be the right thing to do, as a real estate and elder care attorney, the transfer of the asset into her name could affect her eligibility for Medicare benefits in the event you mother needs nursing home care at a later date. Specifically, the government looks to a senior's assets (e.g., money, homes, cars) as a resource that could have been otherwise used to help pay for nursing home care.

Most seniors are trying to get assets out of their name, not have assets placed in their name so that the government does not , let alone a free and clear home.

So placing the property in your mother's name at her age is not a good idea. There are other ways that you can protect your mother's ownership interest in the property. But signing a quit claim deed at this juncture is not one of them as it could cost your mother and your family thousands of dollars at a later date.

Remember, only an attorney can give you legal advice on the far reaching consequences of your actions.

I hope you found my answer helpful Susan.

If you like this video please care to share it with your friends and family. You can also leave a review on what you like about it. Feel free to write in the comment section, other topics that you'd like for us to discuss. If you wish to submit your own legal questions, email us at team@provenresource.com

If you need any further information please feel free to contact me David Soble 888.789.1715 at proven resource.com

Arbitration vs. Court Litigation

Sun, 22 Dec 2019 22:13:58 GMT

James from South Lyon wrote in last week. He and his wife are buying a new construction home in South Lyon, MI. They are having a major disagreement with the builder about the integrity of the foundation. They don't want to move forward and they want their $55,000 earnest money deposit back.

According to James, the builder says that the contract requires that the parties arbitrate their dispute. He wants to know if he can just go to court instead and what the difference is between arbitration and going to court.

Sorry for your circumstance James. Building a home is never easy.

First, Many real estate and sales contracts contain arbitration clauses whereby the parties to a contract agree not to litigate, but go through a less formal decision making process. If a contract however calls for arbitration, then the case cannot be litigated in court unless the parties agree to do so at a later date.

Arbitration and litigation have the same goal, but how they go about resolving an issue is very different.

When it comes to resolving a dispute, Litigation is based upon an age legal process deeply rooted in centuries of English and American history and jurisprudence. It involves determining issues through the court system with a judge or jury. Which court a case is brought before will depend upon the type of dispute , where the matter arose and by how much is in dispute. For instance, circuit court hear handles cases that involve over $25,000 or hey are assigned specific types of cases. In real estate cases, circuit courts hear such as quiet title actions or specific performance matters, District courts will handle matters that involve $25,000 or less. How long a matter takes to resolve also depends upon the complexity of a matter.

In Arbitration, parties avoid the court system altogether. The parties will hire a disinterested third party in an attempt to resolve the dispute. In arbitration, there may be one or more arbitrators who hear both sides of the issue and who make a decision.

Unlike litigation which makes a case open to the public, the court sets the case schedule for hearings and discovery, the parties in arbitration can make the process less formal. Absent any contract terms to the contrary, the parties can pick who will arbitrate the case and decide among themselves the timeline for scheduling their case. They can also decide if they want the arbitrator decision to be binding or non binding. Binding Arbitration decisions cannot be appealed unless there is fraudulent behavior by the arbitrators (a very difficult threshold.)

Arbitration is usually a faster and more private way to resolve a dispute than litigation. My experience is that it can take anywhere from 90 days to about 18 months to litigate a matter.

However, arbitration can be just as costly as going to court as the parties will have to pay for an arbitrator, which can be very expensive. In litigation, the judge is a public servant and the system is paid by the taxpayers. Litigants are paying their attorneys over a much longer period of time.

So the appeal of using arbitration is that is usually quicker to resolve a matter, less costly and less formal.

So, before signing any contract, a party should determine if there is an arbitration clause in the event of a dispute. Courts will not entertain any case where the parties had agreed to arbitration.

I hope you found my answer helpful James.

Releasing a Co-Signor from a Mortgage Obligation

Sun, 17 Nov 2019 22:38:43 GMT

This week's question comes from James in Gross Pointe, Michigan who writes, "I co-signed on a commercial loan for a business that is owned by both my daugher and my son in law back in 2010. Now, they are getting divorced. No one! has paid on the loan since they filed for divorce. The bank just called me for the payment and also sent me a letter demanding that I pay off the entire loan.

My daughter told me not to worry because the court has ordered her soon to be ex, my son in law and not her, to pay the bank.

I am worried. I have my own bills to pay. What do I do? Once the court finds my soon to be ex son in law solely responsible for the business loan, can I be released by the bank?"

My answer: It's not likely James. You see a co-signer is person who also takes full responsibility to pay back a loan in the event that the borrower or maker, fails to make their payment. Often a co-signer will be a family member. The co-signer is obligated to pay any missed payments and even the full amount of the loan if the borrower doesn't pay. Another name for a co signor is a guarantor and the contract guaranteeing payment is known as a guarantee.

Banks rarely if ever release co signors from their obligation until the underlying loan is paid in full, or in certain instances, when the lender receives a substantial pay down on the loan to reduce the bank's perceived exposure. And just because the court may designate your son in law to pay on the loan, it does not release you of your contingent obligations.

In certain legal circles, "co-signors" are known as "idiots with pens." While that sounds harsh, being a co signor for a third party rarely, if ever, has an upside to it. In some cases however, it is necessary. For instance, when a business takes a loan, the owners of the business will be asked to personally sign on the loan as well, essentially guaranteeing the loan. In your case James, it sounds as if the bank felt that your daughter and her husband were not financially strong enough on their own to take out the loan, and so the bank wanted a guarantor.

I would definitely take your loan contract to a finance attorney to review. Obligations under a Guarantees are usually very solid terms, but you should know all of your rights that you have against the bank as well as against your daughter and son in law.

When Can An Ex-Spouse Claim More Equity In A Property Than What A Divorce Decree Initially Provides?

Sun, 17 Nov 2019 22:25:25 GMT

This question comes from Emilio out of Shelby Township who asks: "My wife and I were divorced in 2013. My wife was awarded the home in the divorce, provided that she refinance my interest off the home with in two years after the divorce. The divorce decree does not address if I am responsible for maintaining the home. However, whenever the home does sell, I am entitled to 50% of the equity."

Emilio goes on to asks, "my ex -wife never paid on the mortgage, let alone go to refinance the home. I had to reinstate the mortgage so she would not lose the home. I also ended up putting a new roof on the home 3 years after the divorce."

"Now she is selling the house and there is quite a bit of equity in the home. According to the divorce decree am I entitled to received more than just the 50% of the Equity. Am I not allowed to be reimbursed for the repayment on the mortgage? Am I entitled to be reimbursed for the repair and maintenance of the roof?"

Good question Emilio.

Even though I am not a divorce attorney, very often I am called on to get involved with parties concerning property disputes - usually relating to a home, long after the divorce decree has been issued. Your problem is more common than you think.

In your case, I first look to the divorce decree regarding the property settlement to determine each party's responsibilities. If as you say, your ex spouse has failed to refinance, has failed to maintain the mortgage payments, and has failed to keep the property in good condition, you can contest the amount of proceeds each party is entitled to.

First, You should have all of your receipts for advancing payments on her behalf. You should also have the invoices and cancelled checks for the roof repair.

I believe that you should be fully reimbursed for those advances made by you to reinstate the mortgage since you were not required under the divorce decree to pay on the mortgage.

As for the roof repair, I believe that you will only be entitled to be reimbursed for half of the roof expense. This is because the divorce decree does not address who is responsible for maintaining the home. And since the sales price is usually directly related to the overall condition of the home, both you and your ex wife both benefit from the roof's condition and so you would only be entitled to 1/2 of the repair expenses.

Quiet Title Actions: When The Only Option is to Quiet the Claim to Your Property

Sun, 06 Oct 2019 21:20:23 GMT

This question comes to us today from Alan S. of Harperwoods. He writes:

"I purchased a home at the City's tax sale and now I have found that I cannot get title insurance. I cannot sell the property by any deed and wonder why would I do anything to the property until I can comfortably sell it. My real estate agent says that I have to get an attorney to quiet the title. What does this mean?"

A quiet title action is a lawsuit to establish an owner's title to real property against anyone and everyone, and therefore "quiet" any challenges or claims to a property's title. These suits usually arises when there is some question about clear title, there exists some recorded problem (such as an old mortgage, a deed, an error in the legal description which clouds or questions a property's marketability. Or in your case Alan, clear title is always in question after a property goes to tax sale.

When it comes to a tax sale there is a lengthy and complicated legal process that the government taxing authority uses to disenfranchise or cut the property rights of a property owner who fails to pay their property taxes. Property rights are constitutional rights and therefore government compliance with the proper tax foreclosure process is highly suspect.

Once the property goes to tax sale, the title companies and subsequent purchasers from the bidder will want to ensure that the legal process has been followed before they will either insure or buy the property respectively.

Tax sales, are just one type of the various problems that can affect title, but the process to file a law suit begins the same way. We look at the title search to see who has the purported legal interest that is in direct conflict with a clients ownership interests.

When owners contact me, it is usually because the title problems can not be rectified outside of court, but that does not mean my staff and I wont first investigate once more if there are alternatives to filing a lawsuit that would clear a lien. If not, then we file our action against those interests that affect our clients marketability of title. The action, if not challenged, can take about 90 days. If the action is contested, then plan on a longer time line to resolve the matter.

In a quiet title action, no title problem is ever the same as another. Therefore, it is always best to have a real estate attorney review and discuss with you, your title issues because they present themselves in so many forms, too many and usually too involved to discuss here.

I hope you found this video helpful. I encourage you to view, like and share more of our videos concerning real estate and contract law at ProvenResource.com Please feel free to leave your comments and share your feedback about this video and definitely write in the comment section what legal topics that you are concerned about. Thanks for watching.

Land Contract or Rent to Own: When It Comes To Purchasing A Property, Which Approach is Better?

Sun, 06 Oct 2019 21:11:11 GMT

Hi. Im David Soble, and I am a real estate and finance attorney here in Michigan.

Today's question comes from Greg in Livonia who says, “ I'm considering purchasing a home with my fiance. The seller is offering a rent-to-own program. What I want to know is there a difference between a rent to own program a land contract. At this time we don't qualify for a traditional mortgage, but we are working on that with our loan officer.

A land contract is a purchase arrangement where are the seller of a home “seller financing.” They act as your lender. Usually they have built up a lot of equity in the property and they are looking for a specific rate of return on the financing. The parties agree purchase terms such as how long the buyer will have to pay off the purchase price based on a monthly payment and a rate. The land contract is similar to a mortgage in that it will contain terms that regulate the obligations of each party. Ie. Who pays property taxes. Who is responsible for maintenance etc.

In a land contract arrangement the seller continues to hold title to the property so they still hold the deed while the purchaser makes the agreed upon installment payments for the designated time. When he or she is done with all their payments the seller is obligated to convey the deed over to the buyer. Usually the deed will be held at a title company during the existence of land contract.

In a rent to own agreement, it's a bit different. First, another name for rent-to-own is known as a lease option. When it comes to buying under a rent-to-own arrangement, a portion of the rental payment will be applied to an agreed-upon purchase price in the future. Basically, the parties are agreeing that the tenant can buy the property in the future for a specific price and a part of each monthly rental payment will be applied to the purchahe pricce. The amount applied to the purchase price however is usually not significant. For instance a tenant might agree to purchase a home for $100,000 in the future. The lease payment for the property might be a thousand a month. Of the $1,000 maybe 50 or $100 will be applied towards the purchase price.

A tenant in a rent to own program is legally just leasing a property whereas a purchaser of a land contract has an actual legal ownership right in their property. The land contract buyer has what we call an equitable interest and they can go and get a mortgage when they need to to pay off a land contract. They can refinance the land contract and have access to the equity in the property. This isn’t so in a rent-to-own situation. The tenant has no ownership rights in the property. In fact the tenant could lose all the money that's been designated towards the purchase price if they fail to meet their lease obligations.

Courts however will treat a land contract owner and tenant with a rent to own agreement similarly, even though a tenant in a rent to own agreement has less rights than the buyer on a land contract. If the tenant is meeting their obligations in the lease and is keeping track of their payments, then courts will accord them greater rights in a property than treating them merely as a tenant who is only leasing.

Under a lease with option to purchase access to bank financing is more difficult because unless otherwise agreed to between landlord and tenant, lenders do not give credit for 100% rental payment towards a purchase price and landlords rarerly want the monthly rental payments applied towards rent - not towards building up any equity. What that means is if you're paying $1,000 a month in rental payment you're rarely building up any equity whereas in a land contract situation 100% of your payment will be applied towards the purchase price.

Whether you are considering a land contract or rent to own, remember, that any agreements or transactions that concern real estate and last for over one year, must be in writing to be enforceable.
These agreements concern large amounts of money and so they should be drafted or reviewed by qualified attorneys to protect against any major problems in the future. If you need any further information please feel free to contact me David Sobel proven resource. Com.

Allso if you like this video please like and share it with your friends or leave a review on what you like about it. Also, write in the comments what other topics you'd like for us to discuss. Thanks again for watching.

Mortgage Fraud: Contractor Misstatements

Sun, 06 Oct 2019 21:06:43 GMT

This question comes from Veronica of Commerce who writes:

“We took a construction loan out to purchase a lot and build a 2500 sq. ft. home. The process has not been easy. However, now the builder is coming to us and asking us for an additional $80,000 on the project. That is over and above the amount we agreed to in our agreement and price.It also exceeds what our bank approved us for. He gave us a list of items that total the $80,000 and wants our lender to make a disbursement. We disagree with the amount and the quality of the work. We feel he is lying to us and on the affidavits to the bank. Isn’t this mortgage fraud. What can we do?"

First, there is not a week that goes by that I don’t get a call regarding a matter concerning real estate fraud. Real estate fraud affects all areas of real estate. There is mortgage fraud, deed fraud, realtor fraud, seller fraud and yes builder fraud. etc. Fraud is the intentional misrepresentation or concealment of important facts that cause another person to rely on to their detriment.

Here’s the thing. I don’t believe from your fact narrative at this time that you've been defrauded however, the affidavits themselves are troubling. What I do believe however is that you should be very upset with the surprise $80,000 bump into the construction cost of your home.There's something seriously wrong with the provisions in your Builders agreement and the first question I would want to know is what are the terms in the agreement that relate to change orders. What are the Provisions in the agreement that relate to budgetary items. How did your lender approve your mortgage loan. Where does the appraised value of the home at time of completion. . How was the loan underwriten.

You state that did get a construction loan so there should be lender supervision of this loan between the lending institution the title company and then the Builder. Good lenders keep builders on tight leashes when it comes to approving a project and allowing the dispersement of the proceeds from a construction loan to further the completion of a building project. These numbers are usually known up front - there is not supposed to be a lot of leeway or gap in your construction numbers. Somewhere there is a gap in the communication between the lender and the Builder, and any gap or problem should be addressed by the terms of your contract. It may not be fraud but it could be attributed to poor project management. My suggestion is to send in your contract and lending documents for further review.

It is not my intent to discount your concerns however, and I would wait to pass any judgment until I carefully reviewed your mortgage and builder agreement.

Builder and construction agreements concern large amounts of money and so they should be drafted or reviewed by qualified attorneys to protect against any major problems in the future. If you need any further information please feel free to contact me David Soble at proven resource. Com.

Also if you like this video please care to share it with your friends or leave a review on what you like about it. Also, write in the comments what other topics you'd like for us to discuss. Thanks again for watching

Inheriting a home: Becoming the Personal Representative

Sun, 06 Oct 2019 20:59:14 GMT

I'm Michigan Real Estate Attorney, David Soble. Each week I answer questions that people send in through email or by submitting the question through our website www.provenresource.com.

Today's question concerns inheriting a house and comes from John P. of Harper Woods who writes:

" My mother passed away earlier this year and she left me her home. My sister and I have no need for it as we have our own homes and so we want to sell it. The problem is that my mother had a reverse mortgage on the property. The mortgage company says that they need all the money paid back and they are putting the home in foreclosure if they do not receive full funds. They will not accept payments. We went to list the property but because it is not in our names the real estate agent won't work with us until it is. In fact the mortgage company will no longer speak with us because we are not titled into the home. What do we need to do here. We are very confused?"

First, in order to have any authority over the home, you will need to open a probate file in order to be appointed personal representative of the estate. If your mother's will names you as the personal representative already then the petition is rather simple. However, if you are not named and wish to be personal representative, then you will have to petition the court. In either case, becoming the estate's personal representative will then allow you to list the home for sale. It will also give you the authority to speak with the reverse mortgage company.

As for the reverse mortgage, lenders in these programs do not set up payment plans after the death of a homeowner. The lenders want the entire balance paid back upon the borrower's death. What I would suggest is that you let the lender know that you are going to sell the home with the intent of paying them off soon. Otherwise, if you let the home go to foreclosure, while you can still pay the loan off during the redemption period, prospective purchasers will not likely offer you the fair market value of the home, but try to purchase the home at the foreclosure bid price knowing that the home is in distressed.

You have quite a few moving parts here John, and so because time is of the essence, I would suggest that you first get with a competent real estate and probate attorney as soon as possible. Most good real estate attorneys also work with real estate in probate.

If you need any further information please feel free to contact me.

Also if you like this video please care to share it with your friends and family. You can also leave a review on what you like about it. Feel free to write in the comments what other topics you'd like for us to discuss. If you wish to submit your own legal questions, email us at team@provenresource.com

Foreclosure Notice: What To Do Next

Thu, 15 Aug 2019 01:54:36 GMT

Today's question concerns a notice of mortgage foreclosure for a commercial property. Just so you know commercial property, like residential property can also be foreclosed upon.

The question today comes from Scott S. of Shelby Township who owns a restaurant and the building as well. He states: "I received my notice of foreclosure from the bank 3 months ago but the building has already gone to foreclosure sale. I don't think that the balance as stated at the sheriff sale is correct - it is higher than the figures as I calculated them. Much more than I thought I owed. What can I do to bring this to the attention of my bank? Who do I speak with? Is it too late?

Your question actually has multiple issues.

First, Generally, it is very important that when you initially receive your notice of foreclosure, also known as a notice of default or NOD, that you verify the amount due and owing. You also have the opportunity to demand from the lender or the lender's attorney, a validation of the mortgage obligation - a validation of debt. This means that you have a legal right to request the evidence to show that the lender conducting the foreclosure in the legal chain of title as your lender.

But since the property has already gone to sale, it is usually a bit too late to get the attention of the lender or the lender's agent to recalculate their figures and stop your sale.
Which brings us to the second issue. If there are serious problems or legal concerns that you have and the property does in fact go to sale, you MUST address the problem during the redemption period. Don't wait until it expires.
The redemption period is the time that you have to pay off the entire balance due so that you don't lose your property. In Michigan, the redemption period generally is 6 months -- there are exceptions that will extend the period out further or even shorten the time period---you need to get with a real estate attorney to determine these exceptions. But 6 months is pretty standard.

Here's the thing, if you don't legally challenge, in other words, bring a law suit before the redemption period expires, you will have very little chance or legal opportunity to prevail in court - this is because Michigan courts hold that a mortgage is extinguished after the time for redemption expires. Courts have ruled that without a mortgage left, the property owner does not have any rights to bring their matter at court because there is no longer an underlying mortgage contract. No mortgage, no legal foundation to be in court.

So Scott, if you can show problems with the lender's calculations, you could get the sale set aside, but it is not likely without bringing an action. That is why it is so important to respond and challenge the allegations contained in the notice of default within 30 days from receiving the notice and before the foreclosure sale.

I hope this helps. I'm David Soble , If you liked this presentation, please feel free to leave me comments on this video, or kindly share this video. Also, don't hesitate to write to me your request topics you would like for me to cover. More videos, blogs and slide presentation can be seen at provenresource.com .

What You Need To Know About Free Legal Forms

Thu, 15 Aug 2019 01:46:04 GMT

This question comes from Sarah Milner who I actually had met last week at a real estate investor function. Sarah asks if there is anything wrong with sharing legal forms between friend and colleagues, after all, they're free!!

There is not a day that goes by that someone doesn't call me for help with drafting or review a real estate or loan document that they can have for their transaction. A purchase agreement, a lease, a land contract, a mortgage, an assignment of purchase agreement, a lease option, a claim of lien...the list goes on. That's what I am here for.

Sometimes people will actually send over an already signed document wanting to know about the impact of the contract terms they just agreed to and how they get out of the transaction. Or they're wondering why they are not getting things they thought that they had "bargained for." Nothing is worse however, then when I learn that significant money has changed hands in a transaction, the parties have failed to perform according to the contract terms, and more often than not, the parties have used legally deficient forms lacking proper enforcement provisions or remedies. The forms and documents they used were downloaded from the internet or passed on from a colleague or friend, very often for free. You've heard me say this before, time and time again but, "Nothing of Value is Free."

Whatever business you are playing in real estate, say a landlord, wholesaler or house flipper, it's always best to have a real estate attorney review your original documents that you intend to use for multiple transactions. Provided that you stick to the attorney approved forms and don't make material changes to them, you should be able to rely on those forms until there are changes in your own circumstances or changes in the law. But don't make modifications to your attorney approved forms without first checking with your attorney. Let me give you a favorite example - one of many -
I had a client who came to me after he was being sued by his tenant for double the security deposit. You see, the landlord used his own lease and in his own effort to save on paper and space, he had his lease in 10 point font. The only problem is that Michigan law requires certain Landlord Tenant Notices to be in BOLD FACE 12 point font. Failure to comply with this requirement costs the landlord double the security deposit for violating the statute.

I have another client that took out some terms in a promissory note, not realizing that by doing so, he had given his borrower a 30 year mortgage instead of a 30 year mortgage with a five year balloon. Or how about the one client who inserted a balloon in a contract despite the fact that the law strictly prohibits such terms and now they are subjected to a rebut table presumption that their business arrangement is predatory - leaving him very exposed financially as well as legally.

One more okay. A simple deed form looks harmless enough until the wrong vesting or granting language is used by the draftor. When using free deed forms, poorly generated deeds can wreak havoc on family members, destroy property rights, and cost thousands of dollars in legal fees to correct. Real estate law is steeped in over a 1000 years of history but with the stroke of the pen, a well meaning lay person acting as their own attorney can disenfranchise themselves or a partner from their real estate- never to get it back. So much for "Free"

You see, using a legal document just because its free is a poor way to run your business. It's like copying a book report from a classmate without first putting in the effort to read the book yourself. I assure you that there is going to be a lot of fumbling and flubbing when the teacher asks you later to explain the contents of the book. This is true for the law.
At the very least, when it comes to obtaining free legal documents, read them, understand them and then figure out, with the assistance of a real estate attorney, what legal provisions are missing and which ones should be included to meet the needs for your own circumstances. Spend a little bit on your business to make sure that you are taking the right legal steps - and this includes using proper legal documentation.

I'm David Soble . If you have a question or comment, I encourage you to leave them below the video. If you have a suggestion or wish to explore a legal topic, leave your comments and we will respond. Make sure you also go to www.ProvenResource.com for more articles, videos, slide presentations and also to register for the advance copy of my newest book, Shady, a book about protecting oneself in legal and business relationships among friends or relatives.

Thanks for watching.

Mortgage Dispute Resolution

Sat, 13 Jul 2019 19:55:26 GMT

I'm Michigan Real estate and finance attorney David Soble. Today we are answering a question from a homeowner in Clarkston concerning a mortgage dispute. He's seeking a "mortgage resolution" to his problem. He writes:

"I received a call from a new mortgage company stating that they now own my mortgage. It is for an old second mortgage that I have not paid on in over 8 years. This is because several of my earlier payment were returned to me in 2012 and the old company never responded to my Inquiries. I never heard from them since. i have had several other companies who have written to me and call me, but they never follow up when inquire into my pay history. This mortgage company however has sent a response and threatened me with a lawsuit. Yet nothing legal has happened to me, yet. How should I respond to this mortgage company?"

1. First, you should know that even if the former mortgage companies in the past did not respond, the mortgage that you have most certainly encumbers your property. So at some point, if you go to refinance or sell the home, you will need to contact the appropriate lender for a mortgage discharge.

2. When there is confusion as to what happened to a mortgage, or who has the right to collect on a mortgage, I always request that the purported mortgage company verify or validate how they have come to own the rights to collect under the mortgage. This is usually verified by filed mortgage assignments from one lender to another. This is where you start.

3. Once you get the proper response and documents from the mortgage company proving how they own or have the rights to service the mortgage, then I ask for an accounting. then you need to determine how much will be needed to pay off or reinstate payments under the mortgage. It is very likely that this company has bought the mortgage at a deep discount and so they are looking for a high rate of return for their investment, especially in this prosperous economy where home values have Increased and equity positions have improved.

Finally, you will want to seek the counsel of a qualified real estate or mortgage attorney. Sure you may feel that you're able to negotiate payment terms on your own, but that is just the half of it. You need to generate the best forbearance documentation memorializing your agreement. Without an attorney, you will most certainly miss the little tricks that lenders can play that may worsen, not improve your position. Remember, lenders and banks have attorney who create their documents. If you don't have your own attorney, you are at a serious disadvantage. Trust me, half of every week is cleaning up what I call, people's legal vomit. Good for me, but at first, bad for the client.

I'm Michigan Real estate and finance attorney, David Soble. I can be reached at Proven resource.com or at 888.789.1715 Thanks for watching.

Michigan Legal Forms: Reducing Legal Risks Associated With Free, Online Legal Forms

Wed, 10 Jul 2019 01:46:03 GMT

Reducing Legal Risks Associated With Online Legal Forms

Today's question comes from Frank Teo of Oxford. He asks, "As an investor in real estate, why wouldn't I save money using legal forms off the internet instead of hiring a real estate attorney.

The internet makes it easy to go online and download a legal form. Need a lease, go online. Need a deed, go online, Want a land contract, purchase agreement or a option to purchase? Go online.

Many attorneys are discouraged by the internet. Not me. The internet is the "gift that keeps on giving" for seasoned real estate and finance attorneys just like me. That's because, at their very best, online forms only address the basic contract needs of any transaction. What do I mean by that, well here is an example.

I have a real estate investor purchasing on land contract. The property is an 18 unit apartment building. The seller gave my client, a land contract that he pulled off the internet. A 7 figure transaction without an attorney approved form. This land contract had of all things, a promissory note. In Michigan, you don't use a promissory note when you have a land contract. Creates more personal liability for the buyer.

The transaction did not have a purchase agreement. "Yes" you need a purchase agreement that spells out the terms of the transaction - the land contract is the financial instrument in lieu of a mortgage.

Finally the terms of the land contract did not address the seller's current HELOC nor did it have provisions as to what happens if the Seller defaults on his underlying bank loan, or whether he can still draw off the equity line of credit.

Why am I telling you this Frank? Because having a legal form is not a substitute for having an experienced attorney review and opine on your legal documents.

If you choose to avoid using attorney approved real estate documents tailored to your specific transaction when you are investing thousands, if not hundreds of thousands of dollars, I have news for you Frank, you may not see the consequences of using poor documents right away, but the legal vomit will creep up on you at some point. I make a large part of my living cleaning up after legal form vomit. Those people who are watching this who have paid the price for self induced legal debacles are shaking their heads in agreement Frank. Take your form over to a real estate attorney.

So do yourself a favor. If you want attorney approved legal forms for Michigan real estate and loan matters, check out Provenresource.com.

Legal Issues Encountered When Inheriting A House

Mon, 27 May 2019 23:39:04 GMT

I'm David Soble, a Michigan Real Estate and Finance Attorney. Today I am going to answer a question from a viewer related to inheriting real estate. It comes from Marlene from Shelby Twp who writes:

"I want to sell a home that I inherited from my mother. I owned the home together with my mother before she passed in 2012. I know this because we created the deed together about a year before she passed. My sister says that my mother left the home to both of us, in her will and therefore I cannot sell the home without her permission. I looked at the will and confirmed that it does say that. What do I do now? Do I have to go to probate before I sell this home. I thought I owned it outright.

My Answer: It would be helpful to know when your mother created her will, and also the date of the deed. It is very likely that at the time she had the will drafted, she had intended to leave the home to your sister. However, if at a later date, she had a deed drafted naming you as a co owner, then the deed may prevail.

I say "may" because deeds have to state the "magic conveyance language" when property title is to be held between parties. If the deed names the two of you jointly, with "rights of survivorship," you became the sole owner of the property at the time of your mother's death.

If however, the deed named you and your mother as tenants in common, then you and she owned the property equally, however, upon her death, her interest would go to your sister as stated in the will. So it could be possible that your mother did want your sister to have the her interest in the property upon her death.

In the event that this deed named you and your mother as tenants in common, then the property must be transferred by the personal representative of your mother's estate. In other words you will need to make sure that you and your sister probate your mother's will. And after the probate, for you to convey marketable title to the property, you will need her permission.

You will ultimately have to have a real estate attorney review the deed in question as well as the will.

This was a great question Marlene. It really demonstrates powerful impact that legal conveyance language has. It is so important. Many mistakes occur when people try to create deeds without the benefit of legal counsel. It also shows how different areas of the law are interrelated, and that engaging in one area of the law without professional assistance, may have unintended consequences impacting on your legal rights when it comes to a different area of the law.

I'm David Soble. Real estate and finance attorney. If you have a legal question or concern, feel free to contact me at 888.789.1715 or contact us at provenresource.com Thanks for watching.

The Differences Between Using A Real Estate Attorney VS. A Title Company

Mon, 27 May 2019 23:30:17 GMT

As a real estate attorney in Michigan, I'm often asked, what's the difference between using a real estate attorney and a title company in a real estate transaction?

A title company ensures that a legal title to a piece of property, a piece of real estate is legitimate. And a title insurance company or a title agent searches the public property records. They'll verify a property's chain of title. They confirm all liens on the Property; what's valid and what's not. They also insure the past and present ownership interest in a piece of real estate. Title agents then will issue a title insurance policy for that property. Usually for the amount of the purchase price or for the amount of the mortgage. Title insurance will protect the new owner of a property or the lender. They're doing this to protect against future lawsuits or claims against the property that evolve from disputes between parties over a property ownership.

You can have parties who are no longer on title, but they may have a claim against the property. This is what title insurance will protect against. So title companies will also facilitate closings between a buyer and a seller or a lender, and they handle the money that's exchanged between the parties of the closing. They also will file and record the appropriate real estate documentation with the county records or what we call the county recording office. They also coordinate with the municipalities as well. So a property transfer affidavit, is filed with the city, not with the county.

But issues regarding a valid chain of title pop up on a regular basis. And while a title agent may have experience on how to correct many minor issues, they really don't have law degrees and they can not provide legal advice to parties in a transaction when more serious legal issues arise and these title issues will affect ownership rights. This is when you call, and that's where attorneys, real estate attorneys, come in to play.

Realtors, as well as buyers and sellers and lenders all benefit from working with attorneys, since the attorney cannot only review the purchase agreement but they can also answer legal questions concerning the contract or the negotiations, and how that might even affect a property's title. Attorneys are the only professionals that can give a legal opinion on how a party can hold title to a property. So there's many questions that come up, many issues on a regular basis: Questions such as what's an acceptable exemption or exception to a title policy; what's your legal obligation to your lender when you're closing out a transaction? What are the legal rights of the buyer or the seller?

A very common question I get concern restrictive covenants in a deed, which covenants or which promises are valid and which aren't, and what if a title to a property is clouded? These questions are something that only a real estate attorney can provide an answer to, a legal answer to. Also, will an escrow hold back effect the legal rights to either party? None of these questions can be answered by a title agent or a realtor -only by a licensed real estate attorney in the state in which the property sits.

So obtaining title insurance is required if you're going to go get a mortgage or if you're going to go sell a piece of property to a buyer who wants to make sure that you are the actual legitimate owner of this property. Getting a real estate attorney is not mandatory, where having title insurance is not optional.

It is optional to hire yourself a good real estate attorney to review your legal documents before you close and you want to have one to prevent legal problems in the future. So while it maybe optional it really should be a mandatory item on your list when you're buying or selling a piece of property.

Mortgage Disputes: Time Limitations Borrowers Must Know

Mon, 27 May 2019 23:03:54 GMT

As a Michigan real estate and finance attorney for almost 30 years now, I've dealt with mortgage and financial disputes between borrowers and lenders. Years ago the lending environment was very easy to maneuver and there were very few, if any, federal regulations that gave the debtor any rights against the lending institution or a loan broker.

However, ever since the great financial crisis of 2008 things have really changed. Federal and state laws regulating lending have actually more teeth or penalties in them. When it comes also to enforcement, federal and state and consumer right agencies are much more active and vigilant against bad actors in the lending industry.

One thing has remained constant in my 30 years. The one thing that's been remaining constant since I've been a lawyer is that debtors still have a limited amount of time to challenge what they may perceive as lender misconduct or even lender abuse. Generally speaking, if you, as a debtor or borrower wish to legally challenge a loan agreement for whatever reason, a debtor only has five years from the date of a loan closing to actually bring a lawsuit based upon loan documentation or the actual loan process.

Again, if you're going to challenge the loan process, you have five years from the date of closing. When it comes to a mortgage foreclosure, federal law is clear that a homeowner has to bring any action, any lawsuit, asserting a defective foreclosure or a defective foreclosure process or a foreclosure defense within a homeowners redemption period. Most often the homeowner's redemption period is six months from the date of a foreclosure sale and the rule that once a redemption period has expired, the lender has extinguished the mortgage, so there's actually no mortgage contract left for a homeowner or now a former homeowner to have standing, which is the right to actually bring a lawsuit.

Six months after a foreclosure, five years after you close the loan.

Finally, when it comes to business loan agreements or a promissory note, a lender only has six years to bring an action against a debtor for nonpayment. The six years is calculated from the last day in which a lender accelerates or calls the entire balance on a note due and payable. After hat the lender is barred from bringing any action against a debtor.

I currently have a client who's being sued by a lending institution. In 2010, a law lawsuit was brought against them to collect on my clients business loan. That action was dismissed without prejudice, which basically means that somebody could bring the action again, concerning the same facts and the law again in the future. But no payments from 2010 were made, since the loan, the lawsuit was dismissed. Now, the lender refiled their suit in 2018, six years have passed obviously from 2010 to 2018. So for all intent and purposes, the lender's legally blocked from bringing a lawsuit against the client.

Loan agreements, mortgage and financial contracts, they're all complicated legal instruments and time bars for bringing a legal action are often the easiest defense for an attorney to raise. But I'm going to share with you that there are numerous legal defenses and legal theories that as serious legal practitioners, we invoke on behalf of our clients. If your legal and financial situation is critical, you actually need to contact an attorney for assistance. No other professional can be of assistance, not a realtor, not a mortgage loan officer, not even your neighbor. So get to a contract attorney right away, somebody who specializes in contracts and real estate and finance. That's who you need to speak with.

Why You Want An Attorney To Draft Your Contract

Sun, 28 Apr 2019 13:45:16 GMT

It never ceases to amaze me when somebody engaging in a real estate transaction or a loan agreement, prefers to write up their own documents without the benefit of a licensed and experienced real estate attorney. Instead, what they're willing to do is buy a building, they'll buy a home, they will lease retail space, or even buy into a business for hundreds and thousands of dollars, without taking the time to sit with an attorney to draft their real estate purchase agreement or their loan agreement or their business agreement. They're doing so at their own peril.

An excellent example is when a business owner who was expanding his store front. He and his contractor got into a dispute related to the quality of the workmanship that was performed. Both parties ended up going to court. The contract they drafted actually had, not one, but two provisions dealing with the awarding of attorney fees. They drafted this contract on their own and, just so you know, most contracts usually have only one provision that addresses attorney fees. That's normal; one provision. But in this case, both parties were actually feeling very generous when they created their own document without the benefit of counsel and and they inserted two provisions. These provisions were in conflict.

The first provision that addressed attorney fees, basically meaning who gets the attorney fees in the event that they win a lawsuit, does the loser pay. That's what the attorney fees provision addresses. So this example, the attorney fee provision said that only a prevailing party could collect attorney fees. The judge said that in order for either party to have prevailed, they would've had to be right on all counts in the lawsuit. Because this was just a typical lawsuit, both parties were right, but not on all issues. So no attorney fees were actually awarded under that provision. Maybe both parties won under this provision, they won the battle, but they didn't win the war. Neither party had to pay the other party the attorney fees under that provision.

But there was the other provision regarding attorney fees (if you recall they had inserted two attorney fee provisions) was kind of ridiculous. And basically in the contract that they wrote up, the provision said that whoever brought the legal action was entitled to his attorney fees. Again, not only is this ridiculous, but what it really does is it awards one party for actually bringing the lawsuit first. The court actually decided to read this literally, and it didn't matter if either party was right or wrong, but whoever brought the action first was awarded their attorney fees. So with this type of provision, there's always going to be a loser because the provision encourages filing a lawsuit first. So, this provision cost one of the parties mid $30,000 to $40,000 in attorney fees, which is really unfortunate.

So remember, contracts have many provisions, and if you fail to go to an attorney, if you write your contract without one, and you don't put in the right provisions or you fail to recognize the nuances in the contract language, it could and will cost you. Take the above example as a warning. You're going to thank me later.

About the Author: Since 1990, David Soble has been a real estate and finance attorney in Ohio and Michigan. He advises national banks, lenders, loan servicers, consumers and business owners on residential and commercial real estate, financial disputes and mortgage compliance issues. He has been involved in thousands of real estate transactions, being responsible for billions in real estate loan portfolios throughout his career.

Terminating A Contract: The many ways to end a legally binding relationship

Sun, 21 Apr 2019 20:38:37 GMT

There are many reasons why you may want or even need to terminate a contract. There are several legal ways that you can go about terminating a contract. Today I'm just going to discuss briefly nine or 10 ways that you can go about terminating a contract legally, but whatever you do, remember, if you decide to terminate the contract, you should make sure that the termination is going to result in the least amount of damages monetarily for you, and the best way to do that is to consult with a contract attorney.

Attorneys have different specialties. You want to make sure you consult with an attorney who specializes in contract law. Don't go to a criminal attorney if you have a contract issue. It should go without saying.

1. The first item in which you could legally cancel or terminate a contract is to look at the contract provisions. There are things called termination clauses, and many contracts have termination clauses and they give you the steps that you need to take if you want to terminate a contract.

A common termination clause will require that an individual in the contract, in order for them to get out of the contract, they would have to notify the other party of their intent to do so. Usually this notice should be in writing and it should be provided to the other party within so many days from the date that they want to end the contract.

A common are concerns longer term contracts which will have termination clauses in them, but if you don't exercise the termination clause, the contract actually will be automatically renewed. Another item for termination clauses that I see a lot of is in leases. In Michigan, a tenant can actually terminate a lease without penalty if they're medically determined incapable of living on their own. What they have to do again, is they have to provide the landlord with a notice period. It's 60 days in the state of Michigan. They have to notify the landlord that they are incapable of living on their own. And there's some other conditions as well. But the point is to illustrate that early termination clauses are available. Look at your contract.

Termination clauses often have fees for early termination or cancellation fees. So read your contract or at least have your attorney do so.

2. Another way to terminate a contract is that it may be impossible for a party to perform under that contract. So if you're unable to perform your obligations due to some type of impossibility, then you have a legal right to terminate the contract. You can't be responsible for the actual circumstances that you caused yourself to be in a position unable to perform. It's usually an item or an event that's outside of your control. So it's either the fault of somebody else or it could be the result of an act of nature such as a tornado or a storm. That's when impossibility comes into play.

3. Another area for terminating a contract is what we call failure of a condition precedent. So if one party even fails to fulfill his end of a contract, that lack of performance may allow the second party to terminate his end of a contract --but you have to do this termination before the other party actually engages in the contract. It's really important

4. The most common way to terminate a contract, it's actually just to negotiate the termination. You know, if you want to get out of a contract, you just contact the other party involved and you negotiate an end date to that contract. You may have to pay a fee for cancellation. You might want to offer some type of consideration to cancel. But whatever you do make sure that you cancel the contract, and you do so in writing and that it's mutually agreed to by the other party. You don't want to do anything verbally because that individual, the other party can come back and sue you. The best thing to do when it comes to negotiating the termination of a contract is really to have a cancellation fee, you know it's negotiated. Another way to negotiate a termination is to basically offer to continue on the contract for several months and then end the contract.

5. Rescission. One other way to terminate a contract is to rescind a contract. So some contracts legally have a rescission clause or a cancellation period. Canceling the contract returns, the people, or both parties involved to the contract back to the way things were before they signed the contract. These rescission clauses are usually found in consumer transactions. Home improvement contracts are a great example. Usually in a home improvement contract, the homeowner has three days to cancel, but just like the notification or a termination clause, you do need to cancel within the three days. You also have to follow the instructions as specified in the contract to cancel it.

In a sales solicitation, or what we call home solicitation documents or contracts for services, they all have cancellation provisions for rescission. Another area for cancellation is when there's a statue of frauds violation.

6. In Michigan, certain contracts have to be in writing in order for them to be legally enforceable. And these type of contracts would include (1) any sales of goods that have a value over, let's say $1,000 or $500, (2) the sale of land or real estate (3) contracts of marriage (4) where a contract can't be completed in one year. The Statue of Frauds requires that these type of contracts have to be in writing. If not you can terminate a verbal agreement for any of those reasons I just listed since they have to be in writing to be legally enforceable.

7. Fraud. Another way to cancel a contract is to declare the contract fraudulent or that the other party personally intended to lie about something regarding a part of the contract, you believe the lie and and somehow you were injured. So fraud is a reason to terminate a contract, but it has to be something that's material and that can be proven false. For example, you may have signed a contract on April 1, but really everyone thought that the contract was going to start on April 4th --that's not material unless it's some type of a service contract.

8. The last item or second to last would be proving lack of capacity --that's is a great way to terminate a contract. So if people lack capacity, they lack the ability to make certain decisions for themselves. When you lack the capacity to understand, you can't enter into a legally binding contract. Somebody with a mental incapacity, or age could be a factor, or intoxication that interferes with someone's ability to sign a contract -these are good reason to terminate a contract. The party who lacks the capacity is the one who can actually terminate the contract.

9. The last item is when there is a mutual mistake and a great example, of mutual mistake comes directly from a contract law class I had and is a famous case. That example is where you buy a cow at a low price because you and the seller believe that the cow is infertile and it can't bear calves. Later it turns out that after you got this great price on the cow, that the cow is actually fertile. Now what this does is it raises the price of the cow from what you paid and it's not fair to the other party. So in this case, both parties actually made a mutual mistake thinking that this cow is infertile. So it makes the contract unenforceable. A mutual mistake occurs when both parties involved in the contract miscommunicated and really never agreed on anything because they didn't understand what they were agreeing to. We call that meeting of the minds. They lacked the meeting of the minds. These contracts can be voided so long as the other person has not yet fulfilled their part of the contract. So once either one of the parties realizes the mistake, the contract can actually be terminated.

Common Legal Issues for Home Sellers

Sun, 21 Apr 2019 20:10:37 GMT

Common Legal issues for Home Sellers

There are so many legal situations that can arise when selling a home. Here's just a few of the more common issues that Michigan home sellers face.

One of the problematic areas for home sellers concerns what a seller should disclose about a home's condition to a potential purchaser if there are defects the purchaser should know about, and nearly every state in this country, including Michigan, has laws that requires sellers to advise buyers of certain defects in the property. This is done typically by filling out a standard home seller's disclosure form. The form usually has to be completed before the sale is completed.

In Michigan, the disclosure laws are actually more comprehensive than other states. Sometimes there's a feature that isn't even listed on the home seller disclosure list, yet the seller may still be required to actually state there is a problem. But a seller usually isn't required to seek out any problem or problems that they are not even aware of.

However, a seller is required to disclose issues when the seller knows about a problem area or has a reason to know --then a seller is going to have a duty to disclose. So misrepresentations or lies about a homes condition are really never acceptable.

If you have to ask if you should be disclosing something or you should not be disclosing something, you're really best to disclose.

Another issue that home sellers in Michigan deal with concerns whether the real estate agent acts as a "procuring cause" for a sale. Now that's a pretty common issue these days, especially in a very active real estate market. Sometimes a home will be listed by an agent and there are showings to the potential buyers, but then a listing for that agent expires or the seller fires that agent and gets a new agent. The former agent is entitled to a sales commission for those potential purchasers or those purchasers actually who close on a transaction and who had come through and had seen the property. If they've gone through the home with the former agent within 180 days on average from the closing date, it can be a really big issue. So whether an agent is the procuring cause for a real estate transaction creates many disputes. I see it actually really on a very regular basis these days.

The third issue for sellers, that is very common, concerns, seller credits or money owed. This creates a lot of disputes especially when it involves an investment property. For instance, who does a past due rental payment belong to? When we're dealing with the investment property, and a tenant is not paying the seller, but then the seller conveys the property to a new owner, does the past due payment, if it's ever paid by the tenant- who does that belong to? Does it belong to the seller or does it belong to the buyer when the tenant finally pays?

Without a provision in a purchase agreement to the contrary, late payments will belong to the new owner. That's the purchaser. This situation can be avoided if you have an attorney who can address those issues. Another related issue that is very common, concerns the application of tenant security deposits -this creates a lot of contention.

It's really important to have an attorney review and draft provisions in the purchase agreement that would address these issues. So I've just gone through three of the very common issues that home sellers in Michigan encounter.

How to Prepare for Due Diligence in Real Estate Law

Sun, 31 Mar 2019 22:37:54 GMT

Transcript:

I'm often asked to perform a due diligence audit on a real estate or business transactions and a due diligence audit, it's really an investigation into all of those important things or material items that can affect a transactions outcome. And it really refers to the care that a reasonable person would give or should take before they enter into any type of an agreement.

So my job as a real estate attorney is that when we're dealing with property or we're dealing with a loan or any other type of financial transaction, it's really not to be general in my investigation. What it is it allows me to look into really specific elements that can vary based on the circumstances or the nature of the transaction or the property. But my job is really to look deeper into a transaction. And really the job is to protect both the parties, but primarily in my business it's usually going to be either the seller or the purchaser.

Perhaps you've heard that old adage, there's three sides to every story. And in my business there's the buyers, the sellers, and then there's the real estate attorney's opinion. So in real estate my job is to uncover all those potential liabilities and risks that are associated with the property and make sure that nothing is hidden.

One of my first things that I do when I'm doing a due diligence audit is I start by looking at the contract and I review the contract. What I really am looking for is what financial obligations and disclosures does the seller have to provide, or what does the buyer have to provide in the transaction. Also, I'm looking at warranties and guarantees that are being made by the seller and what type of representations that the seller makes, what representations are going to survive that purchase agreement or that sales contract.

So how is the investigation of the property and the financials going to be performed? What is the timeline for the inspection or the permitting when are we going to get approvals? The answers to these questions can give me a better sense and a really good indication as to a party's credibility. I find that if things are on a short leash and a seller is trying to push a buyer into closing rather quickly, they're usually trying to hide something. Not always, but it does happen.

Other than the contract in a property sale, I'm also looking at quite a few items. I'm looking at an appraisal of the property. I do look at the marketability of the title. We see that through title work. Invariably I'm asking for a location survey on the property, which can show us encroachments on a piece of property. Again, I'm looking at the contract and I'm also looking at the home inspection. If it's a residential or commercial would be just a regular contractors inspection. I'm looking at city ordinances. I'm looking at the laws that govern this property, and regulations such as a homeowners association. So I'm looking at those things that we can do, you know, what prevents or restricts a seller or buyer from selling or buying a home or operating a property. I'm looking at operating agreements. I'm also looking at other financials.

Performing your due diligence is not that easy. I had a client once very recently was buying a multi-million dollar apartment complex and the seller provided very limited documentation yet wanted a very high listing price - the sales price was actually the listing price. The contract was very involved and there were several areas of contention, but what killed the deal was the fact that the seller was not going to provide my client with leases or a verified rent roll. His operating agreement was also very poorly maintained and he did not have an accountant, which was kind of crazy, especially for the property that we were looking at.

So it's very important to have an attorney review the documentation and also investigate red flags that go up from that documentation. An attorney who's auditing the file should be able to tell you that there's a problem.

Why Hire A Real Estate Attorney? Things You Need To Know

Sun, 31 Mar 2019 22:24:44 GMT

If you're new to real estate investing hiring an attorney to handle a real estate issue can be pretty daunting. Here are some major concerns that I often hear from newer real estate investors from all over the country.

Attorney Fees. The first item that people have a concern about is billing. So you need to begin by learning the various ways that attorneys bill their time. Most attorneys will bill by the hour yet some are going to suggest a flat fee for more routine matters such as reviewing a contract or a lease or a loan closing package. When it comes to more adverse items is going to be an hourly rate. So make sure that you consult with your attorney about his billing practices and you need to understand what your case is going to entail with that billing. And most importantly, make certain that you get a written agreement between you and the attorney. That's called an engagement agreement. So we need to have that understanding in writing.

Availability. The second biggest area of concern is an attorney's availability, a big complaint among clients concerns is an attorney's response time. You know, you need to ask your attorney to explain their policy for returning a phone call, a text or an email, and don't hesitate to ask before you hire. I have personally a 48 hour email response rule. And so my clients are going to hear from me within 48 hours of an email. But I'm going to suggest to you that I'm not the greatest when it comes to returning a text. So email is my preferred method.

Rapport. The third item is rapport You know, does the attorney that you're dealing with, do they make you feel comfortable and are they confident in your situation have they made an effort to clearly explain your legal options. Really good chemistry will ensure a better relationship and give you a more positive result for your legal matter. So it's really important that you can develop a rapport with the attorney.

Understanding. Another item is understanding, does your attorney show an interest in your goals? Do they explain the process in a language that you can understand clearly? So do they do this with a sense of respect and compassion or do they just quickly bark at you and hang up?

Experience. The last item, which is the most important item, for me is experience. You need to know that your attorney can clearly explain their area of expertise. You know, it's important to find an attorney who specializes in the area where your problem lies. There are so many areas of law, the ABA, the American Bar Association list 85 specialties, and most attorneys will happily explain their experience in the field that they specialize in. But don't go to a criminal attorney or a probate attorney if you need a real estate attorney.

Interviewing an attorney. The last item is take the time to find the right attorney for your needs. Most attorneys, you know, they're going to give you a consultation. So I always suggest if you're looking for an attorney, interview the top three attorneys that you're considering and go in for a consult and be ready to describe your concerns and needs. Take notes and come prepared. Ask good questions. It's important to establish a rapport. Again, in a relationship with your attorney. If you're out of state, just make a phone call. If the attorney is going, take the time. He'll speak with you on the phone and hopefully give you that sense of confidence that you need.

The Right Way To Write A Purchase Offer

Sun, 24 Mar 2019 22:59:56 GMT

I'm looking right now at a purchase agreement that a client brought in the other day. He's a real estate investor and it's a "one pager." If you can see here, I'm not going to show you too much about it, but he brings in a one page purchase agreement. He's a real estate investor and he's purchasing a property for $75,000 and he downloaded this purchase agreement off the Internet. I always like to say "nothing of value is free" and this would be proof positive. So I want to share with you some of the do's and don'ts that you, as a real estate investor should be looking at when you review a purchase agreement. Actually if you use any purchase agreement, you should first have an attorney review it. But if you're trying to save money and cut corners and cut costs, there is a problem with purchasing a $75,000 home cash and then using a document where the paper's worth more than the document and the words, in this document, it's just absolutely terrible.

I want to share with you a couple items here that hopefully will help you when you're looking to purchase a piece of property and invest that you go out and get a more solid, thorough document that you can use comfortably and competently, and also hopefully with the approval of a real estate attorney.

So one of the first things that I note on this purchase agreement, it's again, one page, is the language that says that this purchase transaction is going to close "on or before a certain date." Now, I like to have my clients actually put "on or about a certain time" not "on or before" because if you're a real estate investor who's buying from a distressed seller, you may need to have more time than what you're allowing yourself on the purchase agreement. So let's say you're supposed to close on or before April 1st and something comes up. A title company is not going to allow you to close a transaction without an addendum to the purchase agreement. And that means that you may have to chase down your seller in order to endorse a new addendum that says, "Hey, it's April 2nd and we need to make this purchase offer valid because it's already expired. So I need your signature." So it becomes very difficult sometimes for a real estate investor to trace or a rundown their seller. So a better way to do that is to have a purchase offer that says on or about a certain date. And this gives you around, on average two weeks of time, to work with in Michigan, in order to close your transaction.

Another item that becomes problematic, especially in this purchase agreement is there's two areas that reference the type of deed that the buyer is going to receive from the seller. The buyer in this case is going to be the wholesaler and he needs a deed in order to be able to flip the property to his new investor. Or if you're a real estate investor who is going to be holding this property for awhile, you're going to want to have a deed that is probably better than a quit claim deed. In this purchase agreement, there's language that basically says we're going to give, the seller is going to give marketable title to the buyer. But then in another paragraph, there's a item that says the seller is going to provide a special warranty deed to the buyer. Those are two different types of deeds. Well actually a special warranty deed is one type of deed. It really doesn't reference the other type of deed when it talks about marketable title, you can actually get a quit claim deed from your seller and that would be considered, if the title work comes out okay, a marketable piece of property. So the type of deed that you're going to want to get from your seller is very important and you should specify that deed in writing.

The best type of deed to receive from a seller is going to be a warranty deed and then a special warranty deed. And then lastly, a quit claim deed. Quitclaim deeds are pretty much what the documents that say, "I'll convey to you whatever title I might have." It doesn't give the purchaser a lot of comfort or warranties with regards to the validity of title. And, I have a bunch of articles and some videos dealing with deeds themselves that you should look into. Right now we don't have much time to speak on deeds itself. But here the problem with this purchase agreement is that there are two paragraphs or two provisions that call for two different types of deeds.

The other item that becomes problematic on this purchase agreement it's not in here actually, but my client had told me that they're purchasing this property and there is an occupant, a tenant, and they intend to keep the property and then lease it back or continue with the lease for the current tenant. Here's the problem with this purchase agreement, there is no reference to a tenant being in the property currently or that the property's occupied. There should be provisions within the purchase agreement that deal with who keeps the security deposit. Also, is it the buyer or the seller who gets the security deposit. But more importantly, what about late payments that were incurred prior to the sale of the property? Who do those payments then belong to? Do they belong to the new buyer or do they belong to the former owner? The seller. So you have to be very careful and clear as to who's going to get this property with the tenant. What are the benefits of the lease and who gets those benefits of the lease?

These are three items that I've just looked at in a period of like probably 10 minutes. And so if you're spending $75,000, do yourself a favor - go get yourself a real estate attorney and spend a little bit of money. Invest the time and energy, get a good document that you can use over and over and over again. But don't use this type of document, a "one pager." It's going to get you in trouble.

Why A Real Estate Investor Should Form A Limited Liability Company

Sun, 24 Mar 2019 22:44:48 GMT

Whether you're new to real estate investing or you've been flipping or renting homes for awhile, the question invariably arises, should you form a limited liability company for your properties? A limited liability company is also known as an LLC and it is a legal corporate entity that provides both personal asset protection against personal liability that's usually afforded to larger corporations, also known as "C corps." It also provides the tax benefits at a partnership or individual tax rate for capital gains and for income. So corporate income will pass through to an owner's individual tax return. The owner of an LLC gets the benefit of the protection of a company, but it's taxed then without the double taxation of a C corporation. Both the asset protection and the tax benefits make the LLC very attractive to real estate investors.

As an attorney, I'm providing asset protection to legally shield my clients and their assets with an LLC. So some real estate investors will rely solely on a homeowner's insurance policy to protect their assets in the event they're sued on one of their properties or related to an issue concerning the property. That's not the best way to go. Having a liability policy or a hazard policy is really only one form of protection. If you look at the insurance companies downtown, they own the largest buildings in any city, and that's usually because they love to take premium, but they hate to pay on claims. Insurance policies they have their limits. When they're written by insurance companies, they're really just contracts. They have exceptions and certain nuances, and it may be difficult to have the insurance company protect you on a claim, and the chance of loss that exceeds a policy limit is actually really troubling. So if you have a hundred thousand dollar policy, that protects you, but you're sued on your property for whatever reason, for 1 million bucks, well, guess what? The insurance companies only protecting you for $100,000. Your exposure is the other $900,000.

I had a client landlord who had a tenant. One of their tenants mothers came to visit the tenant's apartment and the mother slipped on the ice and the insurance on the home was for $150,000. But the lady hit her head on the concrete part of a step and ultimately had a closed- head injury. She sued the landlord for $2 million. The landlord's assets then we're completely at risk. So he had no coverage. He ended up filing bankruptcy. Had he formed an LLC, he would have been protected by the LLC.

Only the assets of the LLC are really exposed. So long as you work like a corporation and you're in regulatory compliance and you're in good standing with your LLC, then your properties basically are protected because you're acting like a corporation.

The next common question is how many homes or properties should be given to the LLC or placed under an LLC? I suggest three to five properties per LLC, and you can categorize them or divide them up by geographic region or by date or by different co-owners. But whatever you do, you still have to treat your LLC seriously and follow the corporate formalities and rules and regulations of your state. So, if you don't act like a company again and you don't abide by what we call the operating agreement. If you don't do these things, then the corporate protection of the LLC can be stripped away or pierced, and your personal assets will again be legally and financially exposed.

Who Pays The Legal Fees?

Sun, 24 Mar 2019 17:00:07 GMT

When an attorney brings a lawsuit on behalf of a client, either in the area of real estate or contracts or a financial dispute, the question most often comes up from a client whether or not they're going to get their attorney fees in the event that they win. And that it sounds so reasonable to think that, gosh, if I win the case, I should be reimbursed my attorney fees. But that's not the case in this country what they call the "loser pays" system is more common in what we call the English law. But in the United States, it's called the American rule. And the American rule is that each party is responsible for their own attorney fees.

There are exceptions to the rule, and one of the exceptions is that it can be a contract provision that requires that if one party prevails in a matter, the loser will pay the attorney fees. Also, a judge can look at the statute and if the statute allows for attorney fees, then the judge can award attorney fees to the winner. Now, most statutory provisions will come under let's say a consumer protection laws or even in family court. The judge has a lot more latitude to award the attorney fees there.

The other area, which has an exception to the exception, is that judges can award attorney fees where we have an opposing party who may have brought a lawsuit to harass one party or has caused some form of delay with their legal action. And lastly, if their behavior is outrageous or there's some misconduct, a judge can award reasonable attorney fees. So there's quite a bit of latitude in that area.

But most often, most cases do not allow one winning party to get the attorney fees paid for by the losing party unless it's already been, again, by statute or by contract or in cases where the judge feels that the one party is acted outrageously with misconduct.

Since 1990, David Soble has been counselor and advisor to some of the country's largest lending institutions and real estate companies. He represents business and individuals in the areas of real estate law, contract law and financial disputes. Responsible for over $2 Billion in real estate transactions, he has become a proven legal resource to hundreds of clients.

Attorney Fees: What Clients Need To Know

Sun, 24 Mar 2019 16:50:06 GMT

I'm kind of chuckling because the other day I received an email from somebody who had inquired into the hourly attorney fee that is charged and asked, do we have any student attorneys that we can provide to her? Cause she doesn't want to pay too much for an attorney, which I understand that, people are sensitive to attorney fees. But I had responded back, you know, we don't have student attorneys. There are no such things as a student attorneys. The only thing that there is are experienced attorneys and inexperienced attorneys and her reply was how much for an inexperienced attorney, and I kind of had to laugh because you don't go and hire a doctor or other professional, based on inexperience. Most people want an experienced professional on their side.

When it comes to hiring an attorney, you can pay three ways. There are three fee structures that attorneys engage with. One is a flat fee and flat fee Attorney fees are usually dealing with, not the most complex matters. They're usually more routine matters, such as preparing for a simple will or a real estate closing, things that don't require a lot of complexity or a lot of research and time, that's where a flat fee would would come into play.

Attorneys also charge a contingency basis on a contingency basis. Now with contingency fees, they usually are dealing with a personal injury attorneys, it is not going to be in a real estate transaction. And most often you're not going to be dealing with a matter in a criminal case using contingency. In fact, I think it's illegal to do contingent fee basis in a criminal matter. So contingency is basically that the attorney only gets paid if you win.

The last type of fee that people pay would be the hourly rate. And that's usually the most contentious. People are looking for the least expensive hourly rate. Well, first of all, hourly rate is the amount of time it's based on the amount of time that an attorney will dedicate towards a case. So it's charged by the hour. So a portion of the work that's done, will require then a portion of the hourly rate. So attorneys who are charging by the hour, the more expensive, the hourly rate usually is commensurate with the experience of the attorney. So the more experienced attorney, amount of years the amount of time, more success, that is the type of correlation then that you're going to have with a higher hourly rate. With less experienced attorneys, you will pay a lower hourly fee.

Fees are also based on location. Some areas have a lower hourly rate than let's say a metropolitan area. A more urban area will have more expensive hourly rate than let's say, the country. So those are things to look at, but don't discount experience because you can have a very experienced attorney who's charging you perhaps a little bit more on an hourly basis. However, they're going to be able to get that transaction or that matter done probably faster than somebody who's got less experience and who doesn't, practice in the area who has to find their way, for the first or second time. So if you're paying, if you think you're paying for a lower hourly rate, well, it may be that that inexperienced attorney takes longer to resolve the matter.

Finally, before you hire an attorney and you're talking about a fee structure, remember those points. And also you can always negotiate the hourly rate with your attorney. There are things such as expenses, filing expenses, court expenses that can't be negotiated. So you should also talk to your attorney about those expenses related to your file. But most attorneys want to be competitive and want to work with, good cases and good people.

"Sign On The Dotted Line"

Sun, 03 Mar 2019 22:09:40 GMT

In society people are always rushing. We download our videos fast and our music fast. We like fast food. Not everybody, but most people like to go through a fast food joint once in a while. And also, you know, eat ramen noodles, ramen noodles have been around since I've been in college. The point is that we're always being in a rush. And the last place I can assure you that you ever want to feel compelled to rush is right before you sign on the dotted line for an agreement. The agreement can be a purchase agreement, employment agreement, it can be a sales agreement, whatever it is. If it's in writing, it's important enough for you to take a moment and not endorse that document until you take 24 hours to either review it or to go through the document with an attorney.

Every day at least, well, pretty much, at least once a week I do get a phone call or somebody comes in and what they've done is they've endorsed an agreement, and they're panicked because they didn't know what was in the agreement before they signed. And I'm not here to laugh, quite frankly to me it's the gift that keeps on giving. But I'll share with you, just one story recently I had a young man who was buying a newer construction home for around $600,000, and he had an earnest money deposit that he had already put down on the home for approximately $30,000. And he didn't read the contract and he had second thoughts, probably about a week to two weeks later. And he called me panicked and he wanted to know if he could get out of the agreement. I said, well, did you read your agreement? He says, "honestly, no." And while that's a very big investment, it doesn't surprise me.

So I had him send over the agreement and he had missed the inspection period contingency. So there's a time frame that people have to inspect a property and if they don't like something that comes up in the inspection, they can back out of the contract without any reason given. So he had missed that timeframe. So that was not a contingency that he could invoke. But within the contract, in the financing section, there was a contingency that if he did not get approved within a 30 day period of time, that he could back out of the contract. So as I'm talking to him, I asked him what was the reason why now all of a sudden he had changed his mind and he basically told me, because he found out that his job was not as secure as he thought it was. And I told him that there could be a good reason for him to back out of the contract because his mortgage company would not approve him if he didn't have a position.

So, you know, if you're rushed and you don't know what you're signing, you're going to have a problem later on. It's more expensive. I always like to say, pay me now or pay me later. It's cheaper to sit with an attorney to go through the document that you want to review, that you want to engage with because you're going to be legally bound to it at some point in time.

If you sign on the dotted line, most contracts, the first 20%, they always have positive things in them such as, the consideration, meaning how much you're going to get or how much you're going to give in exchange for an item or a thing or a service. So that's exciting. People, you know, are usually moving forward when they're signing a contract. That's what they're looking forward to. You know, I want to buy a home, I want to buy a car, I want to get a job, whatever it is.

But the other 80% of that contract usually has default provisions in it. And those provisions they are the document. Pardon me? There the provisions that if you breach the contract, they give the opposing party the rights, what they're going to do to you if you fail to meet your obligations under the contract. So take 24 hours called the 24 hour rule.

If you're not sure about a provision, if you don't know what it means, don't sign it until you do.

Legal Platforms: The Pros and Cons of Pre paid Group Legal Services

Sun, 24 Feb 2019 22:20:10 GMT

Everybody these days needs the help of an attorney at one time or another, and having meaningful access to the courts is really a fundamental right under our constitution and the first amendment. So many Americans that really do require legal help, they often fail to seek it, and there are several explanations for this reluctance for why the public fails to go out and get a good attorney. The first is the perceived high cost of having an attorney. The second is that they don't know where to find the right attorney, and the third would be just the general apathy or malaise to confront their legal issue. But the American Bar Association recognizes over 80 areas of legal specialties and in many states attorneys aren't even allowed to say that they specialize in a specific area and that can also be confusing and can deter the public from calling.

So having a legal plan, a group legal plan overcomes a lot of these obstacles. They're more popular these days and they're available through an employer benefit plan or they're also available now through independent insurance providers. And they eliminate many of these obstacles and they help the public get equal access to the legal system. Group legal plans work a lot like medical insurance and the employee pays into the plan if they ever need a lawyer for basic legal services such as a prenup agreement or a real estate closing or a will or even a bankruptcy, they can call on their plan administrator and they'll get a referral to an attorney that's within the insurance network. So even though the plans do not offer blanket coverage for all legal needs, at the very least, at the very minimum, they offer protection for the minor stuff.

Or the more routine services lawyers would call them the more mundane, but they're just as important. They include like adoption, divorce, juvenile court proceedings, property protection in my world, real estate transactions or traffic matters, you know, things like that. The availability of legal hotlines also allows consultations for people over the phone and helps people better understand their legal rights without even having to go to an office. So the public, hopefully can view attorneys less like legal bulldogs and more like, you know, advocates, we're problem solvers, but you know, the legal plans, they have their critics. Number one, if you don't use it, you're paying for a benefit it's a waste of money, but number two, you only get simple services. So the critics say that you know, you're, not getting more important services such as business matter issues, copyrights appeals, tax preparation, well, that's not going to usually be covered.

Neither is litigation if you're bringing a law suit. So the plans will cover like a defensive action or if you're being sued to defend that, but you can't bring an action under these programs. Another criticism is that you are dealing with less experienced attorneys on these plans and they're usually not experienced with more challenging litigation. One other criticism is that when you're paying for lower fees and you're getting less experienced, you're going to be settling sooner and the documents might be rushed. Finally, a lot of the critics will say that, well, you can get a lot of these programs through your homeowner's insurance program or your auto insurance for the bigger cases. So why would you pay for this plan? The last thing I would say is that just because an attorney is in a plan doesn't mean that you can't find a cost effective attorney outside the plan.

There are a lot of attorneys outside the legal network who are willing to work with you on a payment plan or just a more competitive rate. And that's really what the legal program provides. For me, the pros of a legal plan, the public is getting better access to legal advice through hotlines and, through newsletters. But the basic problems can pretty much be resolved by telephone and you're getting basic legal documents. You're not getting the most complicated documents, but you'll get simple wills, short correspondences by phone, if you need something more involved you'll have to go into an attorney's office through the network, but then the network will give you a discount. So take advantage of that. So while the service might not be completely covered, it's still made affordable through the group legal program.

My thing is that with the pro of a group legal plan is just access, but if you have a legal plan in your employee benefit package, you should really take a moment to see what the plan covers and you should take into consideration what I just told you about the pros and cons of using attorneys in a legal plan. Still the best way to find a competent attorney is to check both their professional peer reviews and their client reviews. Also, take some time to interview several attorneys before you hire, regardless if they're in a group plan or not, you know, even if they're not in a legal plan, again, you might find them more accommodating when it comes to legal fees and they might even be more effective, just remember, in my world nothing of value is free, and nothing of value is deeply discounted. So I'm David Soble and I really appreciate you taking the time for watching. Take care.

Land Contracts, Michigan

dsoble@provenresource.com (David Soble ) — Sun, 13 Jan 2019 17:08:49 GMT

Transcript:

A land contract is a written legal contract or an agreement and it's used to purchase real estate such as a house, an apartment building, a commercial building, or even vacant land, so long as it deals with real property. Buying or selling on a "land contract" in Michigan is a transaction involving seller financing. It's similar to a mortgage, but rather than borrowing money from a lender or a bank to buy real estate, the buyer, actually makes the payments to the real estate owner or the seller until the purchase price that was agreed upon between the parties is paid in full. A buyer and seller both signed the land contract and that land contract covers certain provisions in terms as conditions of the sale and when those terms are satisfied and all the conditions are met, including payment of the purchase price over a certain period of time than the legal title of the property transfers from the seller to the buyer by way of a deed. It can be a warranty deed or it can be a quit claim deed, whatever the parties negotiate.

So why are land contracts used when mortgages are so freely available? Well, land contracts are a form of seller financing and as stated, you know there's certain advantages to both buyer and seller. With a buyer, the buyer may not have the greatest credit or they may have some income issues or some other reasons that prevent them from being able to obtain a mortgage from a traditional bank or mortgage lender. Therefore, the parties can enter into a sale by land contract so that the buyer makes monthly payments directly to the seller. When it comes to the seller, the land contract benefits them because it actually can create a monthly income stream provided that there is no underlying mortgage or encumbrance, the seller is going to be getting cash on a regular monthly payment.

The seller can also, get a higher purchase price usually from a buyer because of the buyers at a little disadvantage, the seller can ask for a higher purchase price. The seller may also require a larger cash down payment and that can be used to generate income. Having a land contract is an appropriate document to use when the parties to a real estate transaction deal in seller financing, and there's five things that I like to look for to make things easier for both buyers and sellers on a land contract. The five things and the list is not completely exhaustive. Let me just share with you these five, but there are more.

1. The first is an amortization schedule. You know, the parties need to make sure that they have an amortization schedule attached to the land contract. This way both parties know where the payments stand in any given month regarding payments. It's been my experience that when people are buying on land contract, more often than not, they're newer to financing concepts and such as the declining balance method and therefore having an amortization schedule clearly shows how installment payments are allocated throughout the Michigan land contract relationship. The next provision that should be looked at, is tax and insurance escrows, I discourage sellers from collecting escrow payments for taxes or hazard insurance when it comes to a land contract. Instead, sellers should make it their responsibility of the buyer to confirm their property taxes and insurance are paid regularly. A buyer's failure to pay taxes or insurance can be used as a separate non monetary default in order to maintain a land contract forfeiture action.

2. There's one caveat and it can be argued that under the federal law called Dodd Frank, that the act does not speak to escrow accounts and land contract agreements. So, if you're not an exempt seller under Dodd Frank, that means if you're not selling your primary residence, then there is a presumption that the land contract terms are predatory. So you should really speak with a real estate attorney, a competent real estate attorney when it involves Dodd Frank and when it involves a real estate investment property that you're selling on land contract.

3. The third provision deals with prepayment penalties. Michigan courts are clear against prepayment penalties that exceed one percent of the land contract balance for anything over three years. So within three years, the first three years, the Michigan Consumer Protection Act allows parties to collect a prepayment penalty after that, you know, the buyer could sue the seller for predatory lending. So be very careful there, see an attorney. \

4. Due on sale clauses create a concern for sellers who have an underlying mortgage on their property. Briefly, bank and mortgage provisions generally preclude a seller from conveying their interest in secured or pledge property without first paying off the mortgage thus the mortgage balance is said to be due on sale once the mortgagor conveys title to a third party. So whether a seller selling a property on land contract actually triggers due-on-sale provisions is debatable since the land contract purchaser does not actually obtain title until they pay off the contract. Therefore, memorandums of land contract are recorded in the county to put the world on notice of a transaction. Still it's not a deed and that is the actual conveyance instrument. So the due on sale clause may not even be invoked. Be advised that if you represent, if you're a real estate investor and you represent to a mortgage bank that you intend to use the property as a primary residence and then shortly thereafter you sell it on land contract for investment purposes than the lender can call the mortgage for misrepresentation, so be very careful. You should consider speaking with an attorney before you sell an investment property on land contract.

5. Finally, legal remedies. Failure to specifically provide for legal remedies available to a seller in the event of a buyer default can make collection and eviction under a land contract, a nightmare. In Michigan, the normal default process involves a forfeiture on the land contract. Land contract forfeiture actions do not allow the seller to collect on monetary deficiencies such as selling the home for less than what was actually owed by the buyer under contract. So if a seller is seeking more damages over and above just the payments that were in arrears, then they have to have a provision within the contract that calls for a foreclosure remedy. Notice provisions also need to be complied with otherwise declaring a contract default before the time allows can prove costly and it's a waste of legal efforts. So unlike federal agency mortgages which are nationally standardized documents, land contracts more often than not are drafted to meet the specific needs of the parties that are purchasing the property or in the purchase transaction.

Land contracts are legal agreements with far reaching legal implications and they should be drafted and reviewed by a licensed real estate attorney. I hope you got a lot of information in this very brief period of time.

Quit Claim Deed vs. Warranty Deed

Sun, 13 Jan 2019 16:24:54 GMT

Transcript:

I'm often asked the difference between a warranty deed and a quit claim deed, both convey or purport to grant title to property, but they're actually legal documents and they have very different legal outcomes. First, a warranty deed is a type of deed where the grantor guarantees that he or she holds clear title to a piece of property and that they have a right to sell or to convey it to a grantee. A quit claim deed on the other hand is one in which the seller doesn't guarantee that he or she holds title to a piece of real estate.

Quit Claim Deeds

A grantor or seller is basically is quitting any claim of interest that they have to a property. That's where we get the name quit claim deed. They may not have any interest in the property, but because they're not making any warranties, they have no legal responsibility to a grantee. So when is it appropriate to use a quit claim deed?

Well, attorneys and title companies most often use quit claim deeds, when we're transferring property between relatives or family members, such as a father to son, a mother to daughter. It can be used when a spouse or somebody is getting married or when spouses are divorcing. You pretty much know the people who you're dealing with and that you're hoping that you can trust them, that they own the property. So really no warranties are representations are necessary.

We also use quit claim deeds in a real estate mortgage situation where we're correcting a title defect or an issue between the parties. Again, the parties are known to each other and also to the title company, so usually the quit claim deed is used to take somebody off title, but it can also be used to make a minor correction to a legal description or a misspelling of a name. Also, if there's a notary defect, such as a date or a commission, we can correct that with a quit claim deed. So again, with a quit claim deed title is transferred between family members most often, or it's used to clear a defect on title. If there is a defect or problem with the grantors title at a later date, the grantee actually has no legal recourse against a grantor for any defect because again, the grantor made no warranties or representations as to the marketability or the cleanliness or validity of title that's needed to convey a legal interest.

Warranty Deeds and Covenants

The other type of deed, again is the warranty deed and warranty deeds provide the grantee with the greatest amount of protection concerning the validity of title. The grantee makes these warranties that they have the rights to transfer property free of any other claims to property, otherwise they're going to be responsible to the grantee to correct that defect.

So in the warranty deed, there's actually six covenants, that are implied covenants or promises, and they're made by the grantor to the grantee. And they are as follows;

1. The first one's called a covenant or a Promise of Seisen . And the grantor basically covenants to the grantee that the grantor has title and possession of the property. So if the grantor has a lease on the property and they convey the property with a warranty deed they are actually breaching the warranty because they really don't have possession of the property. Okay, see how that works.

2. The second one, the second covenant is called a Right to Convey and the grantor covenants to, to the grantee that the grantor can validly grant or convey the property. So again, if the grantor owned the property jointly with another party, you might need to have both parties to convey title. But if only one person signs off on the deed, guess what? It's going to be the grantors responsibility to get that other person to sign off.

3. The third covenant is called the Covenant Against Encumbrances and that basically is a promise to the grantee that any mortgage or any lien or easement, any encumbrance on the property does not exist. So the warranty deed basically will protect the grantee against any underlying encumbrances. And if they don't, guess what the grantors responsible to take care of and defend that property.

4. A covenant of a Warranty of Title basically is a future covenant, and this one basically says, I will agree to the grantee to defend, and I have a duty to defend the grantee against any claims to the property.

5. The fifth covenant is called the Quiet Enjoyment Covenant , and this is one where the grantor covenants to the grantee that the grantee will have unimpaired use and unrestricted enjoyment to the property. So if there's an easement on the property and the grant or knows of this easement and it's going to interfere with the grantees, quiet enjoyment or use, the grantee can go after the grantor. And the grantor has to correct that issue.

6. Finally, there's something called the Covenant of Future Assurances . And that's where the grantor takes actions reasonably necessary to perfect the grantors title, if there's an issue with regards to a legal description if something was not done correctly with regards to a notary or name, the grantor is going to take care of it. So the quit claim deed comes again with none of these warranties, only the warranty deed.

So if you're a buyer of a property, you're always going to want to strive to take a warranty deed. Where as if you're a seller, you're going to rather, give a quit claim deed to convey a property so that you don't have that high threshold of legal responsibility. Again, with a quit claim deed, there's less legal responsibility if any, and it when it comes to negotiating a purchase contract or refinancing a property, attorneys, buyers and lenders, they're going to want to see a warranty deed with all of those six warranties. Whereas the seller, where they're unsure of a property's title, they're going to look to try and give a quit claim deed. A lot of investors, these days, they take quit claim deeds, sometimes a quit claim deed and a warranty deed aren't even acceptable to either party. And so another deed that attorneys arrange is called a special covenant deed. And this is a conveyance where it doesn't have all the warranties in the deed, so they're not all the guarantees, but again, it's just one level up, above a quit claim deed, so it will give some level of protection of title.

Regardless of the level of protection offered by either deed, both deeds can and do have the effect of conveying property. So if you're unsure of which deed suits your needs, then you should really contact a competent real estate attorney. I'm David Soble. I'm a Michigan real estate and finance attorney and I can be reached at 888.789.1715 or www.provenresource.com

Firing Your Realtor In Michigan

dsoble@provenresource.com (David Soble ) — Tue, 25 Dec 2018 17:58:28 GMT

Whether you hire a real estate agent to help you sell or buy a home, the relationship you have with your agent can have its challenges, especially in the fast paced business of real estate sales, which by its very nature involves significant financial and emotional pressure. Many variables impact the success of a real estate transaction, and most sellers and buyers have their agents to thank for getting their deal to closing. But what happens when a real estate agent is not up to the task? They’re inexperienced, non-responsive, or they’re just poor at sales? How do you fire a real agent who fails to perform or meet expectations?

Beyond the personal relationship between agent and client, there is the legal relationship to consider. Its created and regulated by a written, exclusive real estate agency agreement. For a seller, this is most often called an Exclusive Listing Agreement. For a buyer, the agreement is referred to as an Exclusive Buyer’s Agreement. In both types of exclusive agreements, the agreement is unlike having a written agreement with any other service provider such as an attorney, a builder or even a roofer. Except for an agent’s unethical conduct, one cannot just terminate the real estate agent, or change to a new agent, and then move on with the business of selling or buying a home. The sales agreement is an exclusive arrangement, meaning that the real estate agent represents the buyer or seller only, and that the parties are bound or obligated to each other for a specified time in the contract. These agreements do not allow a seller’s or buyer’s unilateral withdrawal from the exclusive agency agreement.

The key enforcement provision in an exclusive agency agreement is called the real estate agent’s protection period. Essentially, the agency protection period acts as a financial deterrent against sellers and buyers from circumventing the real estate agent and undermining the agent’s sales efforts. The protection period has a time frame, (usually 180 days) where agents are entitled to their real estate commission for the sale or purchase of a home.

Some protection periods only apply when a seller sells their home to a purchaser who had previously been through the home while it had been listed with the former agent, but not sold by that agent. More severe protection provisions apply to any sales or purchases during the protection period, regardless if the agent was involved in the transaction. For instance, a buyer who has signed an exclusive buyer’s agency agreement will be responsible to their agent for a real estate commission if they purchase a home through another agent during the 180 protection period. This is regardless if the first agent showed them the sold home or not.

So how then, can an unhappy seller or buyer terminate their business relationship with their real estate agent?

1. Obtain a Mutual Release. Both parties to the exclusive agency agreement must agree to a written mutual release. Only with a written release can a seller or buyer avoid paying an real estate agent their commission under the protection period. A mutual release is easier to secure when the real estate agent’s conduct is unethical or inappropriate. Lying and misrepresentation are good causes for their dismissal.

2. Work with the real estate agent’s real estate broker. Every real estate agent works under, and is responsible to, a real estate broker. If you are unhappy with your real estate agent’s services, but still want to move forward with selling or buying a property, then it’s best to speak with the agent’s broker. The broker has the authority to change agents or amend the contract provisions or even issue the written mutual release.

3. Let the contract expire. Plans change and when it may have been a good idea to list or buy a home, a buyer or seller may decide to to stay put. In such cases, the parties can let the contract expire on it’s own terms. However, should something change later in the near future, remember the protection period provision will protect the real estate agent’s right to their commission on average of 180 days.

Should a seller or buyer choose to move forward with their sale or purchase without their contracted real estate agent and ignore the contract’s protection period completely, they risk being sued by their agent for their real estate commission and could be liable to pay a real estate commission twice; once to the agent who closed the transaction and once to the aggrieved agent.

So, you can legally terminate your real estate agent, but be mindful of the agreement’s protection provisions. Before you engage a real estate agent, it is best to review the exclusive listing agreement or buyer’s agreement with a real estate attorney who may suggest among other things, a limited or shortened protection period. Do not be dissuaded by any real estate professional who tells you that you do not need to review their exclusive listing contract. Contracts have legal consequences and it’s far cheaper to call an attorney before signing. After all, it is a small price to pay when thousands or even hundreds of thousands of dollars are at stake.

About the Author: Since 1990, David Soble has been a Michigan real estate and finance attorney He provides legal advice to national banks, lenders, loan servicers, individuals and business owners on real estate matters, business law, compliance and contract issues. Now you can reference Soble's no nonsense legal approach to nagging real estate issues by claiming his new book “What’s Keeping You Up At Nights? An Attorney’s Practical Approach to Resolving Real Estate Nightmares.”

Real Estate and Probate In Michigan

dsoble@provenresource.com (David Soble ) — Sun, 16 Dec 2018 15:00:16 GMT

What happens when a loved one dies without making final provisions to convey the family home.

The Problem

It seems that at least several times a month I receive calls from someone regarding a home or property that belonged to their parent or other family member who has died.

Usually they encounter a problem that their parent has failed to leave the family home to their heirs, such a child or other family member. Either the parent failed to leave a will or they failed to deed the property to their heirs before passing. To be clear, when it comes to leaving a home to adult child, a parent does not necessarily need to have a will provided that the parent names their intended beneficiary in a deed. Even then, if there is no deed or the deed is drafted incorrectly, then legal title to property still cannot be conveyed.

When a decedent dies without a will or proper deed, then a home cannot be legally sold, refinanced or owned by anyone other than the decedent’s estate. Therefore, at some point heirs will be compelled to file a probate action in order to legally dispose or distribute the family home. Probate can be a frustrating experience, especially when heirs learn that they must probate an estate right when they are trying to transfer real estate or get a mortgage.

Real Estate and Probate

There are several ways to administer an estate in the probate court. Depending on the circumstances, an heir may be able to use a simplified process where there is minimal probate court involvement. When choosing the ‘simplified” route, there are two avenues to take: Informal unsupervised administration or formal unsupervised administration.

Informal (Application for Informal Probate and/or Appointment of Personal Representative)

If the decedent dies testate (with a will) or if all those with equal right to appointment as personal representative agree on who should be appointed, then it is best to apply for an informal probate proceeding.

Informal proceedings are commenced by filing an “Application for Informal Probate and/or Appointment of Personal Representative”. In addition to the Application, one must file the decedent’s will (if there is one), and a certified copy of the death certificate with the county probate court where the decedent lived. The Application is for the Probate Register to admit the will, if any, to probate and/or appoint a personal representative.

The Personal Representative is usually named in the will. Within certain legal limits, a Personal Representative has the authority to perform administrative duties on behalf of the estate and the estate’s beneficiaries. They notify those who are entitled to part of the estate’s property, deal with the estate’s finances, which can include real estate. With court approval, they can sell or refinance real estate.

When the Application is granted, the Register will sign a form called “Register’s Statement” admitting the will and/or appointing a personal representative. It is important to note that since the appointment can be contested at any time in a formal proceeding, any person with equal right to appointment as Personal Representative must renounce that right, especially if there is no will. Thereafter, an appointed Personal Representative becomes qualified to act by filing an Acceptance of Appointment and any required bond. The Personal Representative will proceed with unsupervised administration until the estate is closed.

Formal (Petition for Probate and/or Appointment of Personal Representative)

When the decedent dies without a will or those persons with equal right to appointment of personal representative cannot be found, the next option is to petition the court through a formal proceeding. Formal proceedings are commenced when an “interested person” files a “Petition for Probate and/or Appointment of Personal Representative” and properly notifies all interested persons. After a court hearing, if the petition is not contested, or if the judge decides to continue the proceedings over the objections, the judge will enter an order called an “Order of Formal Proceedings.” This order may admit a will, determine the heirs of the deceased and appoint a Personal Representative. Once the order is entered, the personal Representative qualifies to act by filing an Acceptance of Appointment and any required bond. The Personal Representative will proceed with the unsupervised administration until the estate is ready to be closed.

When a parent with real estate assets fails to either leave the home in a will, or fails to deed the property to an heir before they pass, then a probate action is unavoidable. Any disagreement about the appointment of a Personal Representative, or disputes on how estate assets will be disbursed will cause legal delays. When it comes to transferring real estate upon a death, the best way to avoid the legal frustration and problems is to plan ahead with an estate plan.

About David Soble: For over 25 years, David Soble has resolved frustrating legal and financial issues for individuals and business owners as they relate to real estate, contracts and financial disputes.

Before Signing A Contract You Should Know...........

Sat, 08 Dec 2018 15:38:20 GMT

Many people fail to read and understand the provisions of their contract for goods or services until it’s too late. I estimate that almost eighty percent of a standard contract regulates the positive relationship between parties, focusing on the excitement of “who gets what, for how much and when.” This is true in almost any contract we endorse. Think about the last time you bought or leased a house, apartment, a car, took a new job or hired onto a new service.

We use or encounter contracts regularly, and most often parties spend little if any time to understand the legal consequences they face if they fail to abide by the terms of a contract. A contract’s default provisions regulate the outcome of a breach that invariably includes an aggrieved parties damages, attorney fees and costs. A default provision in a contact can even dictate the jurisdiction or the process by which a dispute can be adjudicated. Will a disputed matter get heard in court, or at arbitration.

What is Arbitration. Arbitration is a formal alternative to litigation and is generally considered a more efficient process than litigation because it is quicker, less expensive, and provides greater flexibility of process and procedure. While they may seem efficient, arbitration provisions tend to be found in more boilerplate (standard or difficult to change) contracts that often puts the an individual at a disadvantage.

Arbitration clauses can dictate where a dispute can be heard, and by a pre-designated arbitration board. Signing a contract with an arbitration clause can be expensive for an aggrieved party who might find themselves having to pay to travel out of state for a hearing or hire out state legal representation.

In arbitration, the parties to a contract agree to have their case reviewed by a third-party that is not a judge (although many arbitrators are retired judges). Arbitration involves the use of a neutral party to both review and help settle the dispute. Arbitrators are bound to apply the laws of their jurisdiction. Arbitration helps keep a legal matter from going to the court, and can be either mandatory or voluntary.

Mandatory or voluntary arbitration . Mandatory binding arbitration is a contract provision that requires the parties to resolve contract disputes through arbitration. If an arbitration clause is included in a contract, and if the contract itself is valid, the parties are required to abide by the clause. Once you have signed a contract with a mandatory arbitration clause, you will have no choice but to settle your dispute through arbitration.

Another possibility is voluntary arbitration. In this instance, the parties agree on their own to use arbitration to settle their dispute. No contract or law requires this action. Most often, parties choose to use arbitration to save money, ensure confidentiality, time and sometimes, even good will. If the matter is personal, such as in a divorce proceeding, voluntary arbitration can be equally valuable to both sides.

In arbitration, the parties agree to accept the ruling of the arbitrator and understand that the arbitrator’s decision is final. An aggrieved party may only take the decision to Court by appealing or in order to collect from their judgment.

Appealing A Decision. Appealing an arbitrator’s decision is difficult. Case law states that when a court reviews an appeal from the arbitration, courts should avoid looking at the facts of the case or the merits of the decision. Rather, the court should determine if the arbitrator was fair, biased or even tainted by fraud. This is an extremely high standard and the courts most often defer to the arbitrator absent fraud or overt bias. The courts must find that an arbitrator’s decision was so unfair as to be manifestly unreasonable.

When a party fails to comply with an arbitration award, the award recipient may take their award to court and seek judicial enforcement. Absent any showing of deprivation of due process, the judicial review will generally affirm the award rendered through the arbitration process, and allowing for it’s later enforcement.

About the Author: For over 25 years, Michigan attorney David Soble has advised business leaders, banks, lenders, real estate investors and individuals on their legal matters concerning real estate, business, financial and mortgage disputes. He has authored three books and has had hundreds of articles published monthly in over 250 national periodicals and newspapers. Disclaimer: This article is for educational purposes. Always consult with a competent attorney before you sign any contract or internet forms.

Michigan Seller's Disclosure Act and The Seller's Legal Obligations.

Mon, 03 Dec 2018 00:33:56 GMT

Consider this scenario: The Sellers were having problems with their furnace. They had different heating contractors inspect and attempt to fix the furnace. Some said the furnace should be replaced, while others would make repairs that would last temporarily only to be called back again when the furnace would cease to work again. Finally, after a month of frustration a furnace contractor figured out that the furnace drip pan had a crack in it. He told the Sellers that the crack caused a water leak that created condensation. The condensation would shut the furnace off several minutes after each ignition. The contractor told the Sellers that after replacing the drip pan, the furnace should work fine, and it did. No further repairs were needed thereafter.

About a year later, the Sellers listed their property for sale. They stated on the Seller’s Disclosure Statement that they had replaced the drip pan on the furnace and that it was working fine. Six months after the sale, the furnace finally went out - this time for good. The Buyer had to replace the furnace due to a faulty circuit panel. The furnace contractor the Buyer hired (not the same contractor who repaired the drip pan) told the buyer that he had worked on this same furnace about a year earlier and that it had problems. After the Buyer replaced the furnace, he sued the Sellers for failing to disclose the repair history and condition of the furnace.

Question: Are the Sellers responsible to the Buyer for failing to disclose the repair history of the furnace, when the Sellers believed in good faith that replacement of the drip pan had fixed it?

In Michigan, seller’s of owner occupied residential property up to 4 units, are required by law to complete a Seller’s Disclosure Statement. When it comes to be a home’s condition, there is often confusion on when and what needs to be disclosed by a seller to a prospective buyer. Under the Michigan Seller Disclosure Act, the transfer of any interest in real estate consisting of not less than one or more than four residential dwelling units by: sale, exchange, land contract, lease with an option to purchase, any other option to purchase, ground lease coupled with proposed improvements by the purchaser or tenant, or a transfer of stock or an interest in a residential cooperative is subject to the seller disclosure requirements of the Seller Disclosure Act.

Under the Michigan Seller Disclosure Act, the transferor of real property must deliver to the transferee a seller's disclosure statement. In this statement the seller must disclose the condition of the property and any other information concerning the property that is known to the seller. Each disclosure required by the act must be made in good faith. Essentially, the Seller Disclosure Act only requires a transferor to honestly disclose information known to the transferor at the time the Seller’s Disclosure Statement is completed. Therefore, a transferor has no duty to use ordinary care to discover defects, but he or she must use ordinary care in transmitting the disclosure information.

However, what happens if information disclosed becomes inaccurate as a result of any action, occurrence, or agreement after the delivery of the required disclosures? So long as (1) ordinary care was used in transmitting the information and (2) the inaccuracy was not within the personal knowledge of the transferor, the resulting inaccuracy does not constitute a violation of the Seller Disclosure Act. Thus, a seller has not violated the act where undisclosed and unknown information could be obtained only through inspection or observation of inaccessible areas of the home or could only be discovered by a person with expertise beyond the knowledge of the seller. However, a seller has violated the act if the seller possessed personal knowledge about the undisclosed item, but failed to exercise “good faith” by disclosing that knowledge. Further, a seller has violated the act if they actively conceal information or the true condition of the property.

Lastly, although a seller could be liable for fraud or silent fraud under the Seller Disclosure Act, a transferor cannot be found liable for innocent misrepresentation regarding a disclosure. An innocent misrepresentation claim would be contrary to the Seller Disclosure Act as it would allow liability for erroneous information even if the transferor lacked personal knowledge that the information was false and was acting in good faith.

In the case of our Sellers, they believed that the cracked drip pan was the cause of their previous furnace problem. In fact, once replaced, they had no further problems with the furnace. Other contractors’ attempts to fix the furnace had failed. Therefore, the Seller exercised good faith when disclosing what they thought was the cause of the furnace issue. Their disclosure was based upon a professional contractor’s opinion. They cannot be held accountable for later issues with the furnace that were not discovered by earlier furnace technicians. It can be argued that they complied with the spirit of the law. A transferor should honestly disclose information known to them at the time the Seller’s Disclosure Statement is completed.

5 Practical Tips For Land Contract Sellers

dsoble@provenresource.com (David Soble ) — Sat, 13 Oct 2018 13:02:30 GMT

Making Seller Financing Easier.

Having a land contract is the appropriate document to use when the parties to a real estate transaction engage in seller financing. Here are 5 tips for making the experience easier on a land contract seller. The list is by no means an exhaustive list.

1. Amortization Schedule. Make sure you provide your buyer with an amortization schedule. This way both parties know where the payments stand in any given month regarding payments. It has been my experience that when people are buying on land contract they, more often than not, are newer to financing concepts such as the declining balance method. Having an amortization schedule clearly shows how installment payments are allocated throughout the Michigan land contract relationship.

2. Tax and Insurance Escrows. I discourage sellers from collecting escrow payments for taxes or hazard insurance when it comes to a land contract. Instead sellers should make it the responsibility of the buyer to confirm that property taxes and insurance are regularly paid. A buyer’s failure to pay taxes or insurance can be used as a separate non -monetary default in order to maintain a land contract forfeiture action.

One caveat, while it could be argued that the federal Dodd -Frank Act does not speak to escrow accounts in land contract agreements, if you are not an exempt seller under Dodd Frank, (selling your primary residence) then there is a rebuttable presumption that the land contract terms are predatory. You should speak with a real estate attorney when it involves Dodd Frank.

3. Prepayment Penalties . Michigan courts are clearly against prepayment penalties that exceed 1% of the land contract for more than three (3) years. A higher prepayment penalty for any longer than 3 years can place the seller in direct violation of the Michigan Consumer Protection Act which allows the successful party in a lawsuit to collect their attorney fees.

4. Due on Sale Clauses. Due on sale clauses create concern for seller’s who have an underlying mortgage on their property. Briefly, bank and mortgage provisions generally preclude a seller from conveying their interest in a secured or pledged property without first paying off the mortgage - thus the mortgage balance is said to be ‘due on sale” once the mortgagor conveys title to a third party. Whether selling a property on land contract actually triggers “due on sale” provisions is debatable since the land contract purchaser does not actually obtain title until they payoff the contract. Memorandums of land contracts are recorded in the county to put the “world on notice” of a transaction. Still it is not a deed, which is the actual conveyance instrument.

Be advised that If you represent to a mortgage bank that you intended to use a property as a primary residence and then shortly thereafter, you sell it on land contract for investment purposes, then the lender could call the mortgage for misrepresentation.

5. Legal Remedies and Notice. Failure to specifically provide for the legal remedies available to a seller in the event of buyer’s default can make collection and eviction under a land contract a nightmare. In Michigan, the normal default process involves a forfeiture on the land contract. Land contract forfeiture actions do not allow for the seller to collect on monetary deficiencies such as selling the home for less than what was actually owed by the buyer under contract. If a seller is seeking more damages over and above just the payments in arrears, then they have to have a provision within the the contract that calls for a foreclosure remedy. Notice provisions also need to be complied with, otherwise declaring a contract default before the time allows can prove costly a waste of legal efforts.

Unlike federal agency mortgages, which are nationally standardized documents, land contracts, more often than not, are drafted to meet the specific needs of the parties to a purchase transaction. Land contracts are legal agreements with far reaching legal implications. They should be drafted and reviewed by a licensed real estate attorney. David Soble has been in real estate and finance law for over 25 years and can be reached at 888.789.1715. If you find this article helpful, please share it.

Reducing A Real Estate Investor's Legal Exposure: The Importance Of Having An Operating Agreement

dsoble@provenresource.com (David Soble ) — Sat, 16 Dec 2017 15:33:34 GMT

Real estate investors should consider forming a limited liability company (“LLC”) for their business. Forming a LLC has two benefits. It allows for simple tax reporting at the owner’s tax rate, while limiting the owner's legal exposure and financial risks.

An LLC is meant to be a separate legal entity from the owner. In order to establish this “separateness of the business” the owner needs to create an Operating Agreement along with the LLC. Without an Agreement, it is more difficult to demonstrate to the public that your business is separate from your personal assets. This is critical in the event of a lawsuit, where a judge could find that personal assets are subject to a judgment creditor and collection. Unfortunately, the more property an investor owns, the more likely it is that they will be the subject of a lawsuit. Therefore, investors need to maintain a clear distinction between their company operations and their personal business by having an Operating Agreement in place.

The Operating Agreement. An Operating Agreement defines a business' financial and management rules by which the company functions on a day to day basis. It regulates the business relationship between company members. Members of the company are bound by the duties and their defined responsibilities as provided in the Operating Agreement. It should be noted that without an Operating Agreement, less favorable state default provisions will be applied to a company. That’s why it is so important for company owner(s)to dictate its their own rules on how their business should operate.

Aside from the more obvious reasons for having an Operating Agreement, such as detailing ownership interests, rights to financial distributions or voting rights, listed below are the top 3 reasons a real estate investor needs a properly drafted Operating Agreement:

1. Define Member Authority. The Operating Agreement will define the duties and responsibilities of its members. When a company has more than one member, it is crucial to define which member has the authority to sign documents and legally bind their company. When it comes to real estate, title agents and lending institutions will want to know who has the authority to endorse loan documentation or sign deeds. They’ll ask to see the Operating Agreement to ascertain the responsible party. Without the Agreement, they cannot proceed with an anticipated transaction.

Having an operating agreements also helps to prevent fraud and bad actors. Business “misconduct” happens more often than we would like to think. Where multiple members have defined duties, an Agreement can help a company protect against fraudulent or unauthorized acts of a rogue member by restricting their duties. For instance, a company will not be bound to a contract when a member without authority attempts to contract on behalf of the company.

2. Provides for Succession or Incapacity. Operating agreements should also include provisions detailing how the company will be managed in the event of an owner’s incapacity or death. Failure to address these contingencies will often create legal havoc, leaving company

members, family, or other heirs to fight over how the company should be managed or whether it should continue business at all. For real estate investors, the absence of succession provisions can prevent the disposition or sale of property or impact the company’s daily operations. Without a succession plan, state default provisions will be invoked; a once healthy business can quickly find itself in a financial death spiral.

3. Protection from creditors. A well drafted operating agreement can protect a company against having its assets attached by an individual member’s creditors. For instance, if a creditor obtains a personal judgment against a member, the right contract provisions will prevent the creditor from attaching or liening the member’s corporate interest. If a member files for bankruptcy, the provisions in the Operating Agreement can automatically dissolve or terminate that member’s corporate interest, thereby protecting the company against further creditor actions,, actions that should be directed against the individual bankrupt member’s personal assets instead.

Failure to draft proper provisions against creditors can result in a creditor’s lien attaching to a company’s assets or a member’s financial distributions. This will certainly affect a company’s daily business operations because the business now has to deal with third party creditors.

Conclusion: Having an legal Operating Agreement is just one legal component that reduces a real estate investor’s financial risk and legal exposure. For the reasons set forth above, real estate investors who are serious about their business should consider having their Operating Agreement drafted or reviewed by a real estate or business attorney.

About the Author: Since 1990, real estate and finance attorney David Soble has been a “big bank insider” representing lenders, loan servicers, consumers and business owners in real estate, finance and contract matters. He has been involved in thousands of real estate transactions and has successfully saved millions of dollars for his business and consumer clients. Claim Soble's Free Ebook: " What's Keeping You Up At Night? An Attorney's Practical Approach For Resolving Real Estate Nightmares." bit.ly/PRbook4u New investors also should consider Soble’s Real Estate Launch Pack.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own, qualified real estate attorney.

Protecting A Senior's Real Estate Assets: 5 Ways to Help Seniors Avoid Elder Financial Fraud

dsoble@provenresource.com (David Soble ) — Sun, 05 Nov 2017 20:51:13 GMT

Industry Studies Suggest That 20% of Seniors Are Victims of Financial Fraud.

I recently had a client who came to me complaining about an investment home that their 74 year old father had owned. He had sold the property to a real estate agent’s son for substantially below market value. Considering the neighborhood, the overall condition of the home and the current and active market conditions, the low sales price was concerning. When I called the agent to inquire further, she said that they had negotiated a fair price and that my client’s father “knew what he was doing.”

Upon further investigation, I learned that my client’s dad had a serious back injury just months before the transaction closed and was pretty much ‘homebound,” recuperating. He did not have a care giver and had no family members living nearby. He also relied on the monthly rental income of the home in question. Finally, I learned that the buyer, besides being the real estate agent’s son, was a landscape contractor for the rental property. Soon after the dad’s surgery, the buyer had become a frequent visitor to the father’s residence. Because of the circumstances surrounding the real estate transaction, I began to suspect that my client’s father was a victim of undue influence or financial fraud.

According to a recent survey conducted by the American Banker’s Association Foundation, Americans over the age of 50 account for 70 percent of all bank deposits, and 20% are estimated to be targeted by financial fraudsters. (ABA Banking Journal, November 1, 2017). Both the AARP and the Better Business Bureau say that seniors are more vulnerable to financial scams because of their physical frailty, isolation, or poor mental recall. In incidents where real estate is involved (often the most valuable asset that seniors own) the results are most costly and disastrous.

Here are 5 things that seniors and their family can do to protect their real estate and property interests from financial fraudsters:

1. Tax Statements and other bills. Regularly review all of your real estate tax statements and other documents. While a tax statement does not definitively document property ownership, it will usually name the "owner? of record. So twice a year, when the tax statements issue, verify the name of who is listed as owner. Other items to monitor in the mail: bank statements, unpaid bills, utility shut off notices or worse, eviction notices.

2. Create a trust. Put the real estate in a trust on a senior’s behalf. Unscrupulous. high pressure real estate sales agents or investors often try to weasel a power of attorney, will, other legal document from unsuspecting seniors. These documents give them access to a senior's property. They get seniors to sign these documents through deception, and intimidation. But when a property is placed in a trust on behalf of a senior, it is the trustee who must endorse the sales or other legal documents for a real estate transaction to be legally binding. This arrangement would have served my client’s father well had he had a trust and at the very least, slowed down the transaction.

3. Open and review the mail. Fraudsters can tap into equity lines long thought to be dormant by a senior home owner. Caregivers or family members should monitor checking accounts and be alert to large deposits and withdrawals in a senior’s bank account. Always encourage the use of checks or credit cards instead of cash. This leaves a paper trail. Most importantly, verify signatures on checks or other documents and report any unauthorized or suspicious signatures.

4. Use monitoring services. Consider using real estate monitoring and credit monitoring services. There are services that monitor property transfers and track unauthorized liens in the county public records. Credit monitoring services, such a Lifelock, are also effective to protect against credit card forgeries or other accounts opened fraudulently. With the recent Equifax hacking, it is a good time to pull your senior's credit report to ensure they are not victims of identity fraud.

5. Strength in numbers. Collaborate with a senior's caregiver, family members and financial and legal advisors. Fraudsters take advantage of isolated seniors who may not have a caregiver or family member living nearby. Encouraging good communication amongst a senior’s family members and / or advisors fosters a layer of protection against fraudsters. The more professionals who work on behalf of a senior, the better.

For more information on this topic, see the Better Business Bureau, or the Federal Bureau of Investigation: See Elder Financial Fraud

About David Soble: Since 1990, David Soble has represented lenders, loan servicers, consumers and business owners on residential and commercial real estate, finance and compliance issues. He has been involved in thousands of real estate transactions, being responsible for billions in real estate loan portfolios throughout his career. He has over 27 years of real estate and loan law experience to support his good-tempered cynicism.

The Fear Is Real: What NOT To Do After The Equifax Data Breach

dsoble@provenresource.com (David Soble ) — Sun, 29 Oct 2017 11:00:44 GMT

Excerpt from Cleveland Plain Dealer

September 29, 2017

By Teresa Dixon Murray, The Plain Dealer

CLEVELAND, Ohio -- In the week since Equifax disclosed its horrific data breach, much has been written about what to do. Now, it's time to talk a bit about what NOT to do:

Don't think that because you've never heard of Equifax before, or never agreed to give them your information, that Equifax doesn't have it. They don't need your permission to compile your information. Banks and other creditors furnish all of your info to the credit bureaus. What the banks don't have is obtained by the bureaus from court records and other public records.

Don't click on links you get by email or from your friends that say it's a link to help you figure out whether your SSN was compromised. There are links being circulated by data theft rings or by people who just want to cause mischief. Don't click on links from sources you don't trust. The official link being provided by Equifax is www.equifaxsecurity2017.com Your best bet: Type this address in your browser yourself, rather than clicking on any link, including mine.

Don't feel safe if Equifax says your personal data wasn't compromised. Some people type their information into Equifax's online tool and are told their information wasn't stolen. Then they try again the next day and are told their information was indeed stolen. Just assume your information has been compromised and take steps to protect yourself.

Don't believe that a credit freeze, credit monitoring and a fraud alert all accomplish the same thing:

A credit freeze locks your credit file to creditors and should keep bad guys from taking out new loans or opening credit cards or buying cellphones in your name.
Credit monitoring doesn't keep thieves from using your stolen information; it simply notifies you after something bad has happened.
A fraud alert placed on a credit file cautions creditors that the person's information may have been stolen. But many creditors don't even check this; they're not required to. It's like pretty please.

Don't provide your credit card number to Equifax in connection with any of its services. The credit freezes are free through Equifax through Nov. 21. Its other protection services are free for a year. For now, you'll have to pay $5 in Ohio to freeze your credit files through TransUnion and Experian. The lesser-known fourth bureau, Innovis, doesn't charge a fee. There's regulatory pressure on Equifax to cover everything or reimburse people.

Don't think if you freeze your credit file that it also covers your spouse or kids. Couples have different Social Security numbers, so do each of the kids in a family. A freeze affects only one SSN, not an entire household.

Don't click on ads you see online or links you see in news stories or anything like this, not even my links! Re-type the addresses in your browser. Only click on links when going directly to sites like Equifax, TransUnion, Experian or Innovis.

Don't provide information to entities that send you emails or text messages or letters, or call you on the phone. They're most likely imposters. Fraudsters connected with this breach may try to lull you in because they'll already know your SSN, your date of birth, your home address and a whole bunch more. Reputable companies don't contact you out of sky blue and ask for personal information. Call companies using on a number your find independently (back of credit or debit card, bank statement, company website, etc.)

Don't worry about changing the numbers on your deposit accounts, like checking and savings. These numbers are not in your credit files. But you still need to monitor deposit and investment accounts more closely in case thieves use your stolen information to impersonate you and steal your money.

Don't be scared into not freezing your credit. For example, TransUnion is working hard to discourage credit freezes. If you contact them online or by phone, TransUnion will try to convince you to "lock" your credit instead of freezing it. They gush that it's free and easy, while cautioning that freezes can be a hassle and cost money.
I think all of the bureaus may start pushing some kind of "lock" instead of a freeze because freezes are regulated by law, locks aren't. Plus, if you're file is frozen, the bureaus may not be able to sell your information to creditors and other companies for those pre-screened credit offers and other marketing purposes.
If you want to freeze your credit, then do it. Don't be talked out it by a pushy credit bureau.

Don't believe that if you freeze your credit that you can just kick back and relax. About 88 percent of fraud involves existing accounts, not new ones. You still need to regularly monitor your credit card, debit card and bank accounts in case someone has your stolen information to gain access. Sign up through your bank and credit cards for email or text alerts so you're notified about activity. Also, monitor your accounts at least once a week online.

Don't use data that was in your credit files as part of any online user name or password, for your email, financial accounts, Facebook, etc. Not your date of birth, not a past phone number or street address, nothing.

Don't think that if you froze your credit files years ago that you're safe from this breach. The theft involved Equifax's internal files, not just the ones available to creditors. The information stolen could be used in all sorts of nefarious ways, including to answer security questions for bank, credit, insurance and investment accounts.

Don't give up. If you've tried to freeze your credit files and haven't been able to get through, wait a week or so. The bureaus have been inundated with volumes that their websites and customer service call centers were never designed to handle. Go on to other protection tactics like signing up for alerts through your bank and credit card, making sure your online passwords are secure, etc.

Don't go to any other source for a free copy of your credit report except www.annualcreditreport.com or by calling 1-877-322-8228. You will NOT be asked for a credit card or debit card number. Or you can fill out a paper request and mail it certified to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, Georgia 30348-5281. Other web sites may say they're free, but there most likely is a free trial period before you have to pay for credit monitoring, or the site may just be a total scam.

Don't freeze only your Equifax credit file. Even though Equifax is the one that suffered the breach, the information stolen from Equifax could be used to open accounts with companies that only check your files through TransUnion or Experian. Truthfully, most creditors don't check all three of your files, unless you're getting a mortgage, because most of your information is the same on all of them.

FREEZING YOUR CREDIT FILES

Equifax by mail:
Write a short note that you're requesting a free credit freeze and include your name, address, Social Security number and date of birth. Mail your request through certified mail to Equifax Security Freeze, PO 105788, Atlanta, GA 30348.

Here are the phone numbers to call
Equifax 800-685-1111
TransUnion 888-909-8872
Experian 888-397-3742.
Innovis: 1-800-540-2505 (a lesser known bureau, used more for business accounts)

Or you can go online:
https://freeze.transunion.com/sf/securityFreeze/landingPage.jsp
https://www.experian.com/freeze/center.html

Alternative Business Loans: A Source of Capital or Problems?

dsoble@provenresource.com (David Soble ) — Tue, 15 Aug 2017 10:47:17 GMT

The “ Great Recession ” in 2008 has had a lingering effect on how banks lend money to small business owners and entrepreneurs. Gone are the days when small businesses have fast access to bank credit at competitive interest rates. Instead, alternative non-bank lenders, led by companies such as On Deck, Yellowstone, and Cash King, are filling the lending void, growing rapidly on the backs of unwary small business owners.

Here are 5 things small business owners should consider before taking out an “alternative” business loan:

1. Rates That Make Former Sub-Prime Mortgage Lenders Blush. High rate loans are the rule rather than the exception for alternative lending sources. These lenders are not banks and therefore are not federally regulated, unlike companies that provide loans to consumers. Instead these loans are often funded by private investors selling credit at effective annual rates that commonly exceed 30%.

2. Non -cancellable Daily ACH’s . Since alternative business lenders don’t look at individual or business credit ratings, their risk of not getting paid back is high. They rely on a business’s cash flow only and expect to be paid daily rather than monthly, by using a non-cancellable automatic payment deduction (“ACH”) out of the borrower’s account. The lender can immediately call a loan in default should a business owner fail to replenish their designated account. This exposes the borrower to litigation and further expenses. Borrowers should be confident that they can meet their daily, rather than monthly, obligations.

3. Arbitration. Alternative loan contracts generally have expensive arbitration clauses where the debtor agrees to forgo the traditional legal process for a binding decision from designated arbitrators. Arbitration clauses are not favorable to borrowers. They often dictate where a legal case can be heard, usually in a creditor friendly state far removed from the borrower. This creates added expenses to a case even before it’s heard on the merits. Arbitration decisions usually cannot be appealed (“ binding arbitration ”). Finally, professional arbitrators have been criticized for having biases in favor of lenders since successful arbitrators make their living from work referred to them by the lending industry.

4. Consent Judgments. Many lenders have business borrowers essentially endorse a “consent judgment” before the the ink is even dry on the original lending agreement. In a consent judgment, the borrower admits to a default and to the terms of a judgment against them, waiving any legal protections that they might otherwise have. Lender’s will say that this instrument is harmless and only used in the event of an actual default. It’s a disturbing trend because it sets the borrower up for failure and legally neutralizes them. (Imagine a hospital locating a corn beef stand next to the cardiac care unit or meeting a bank’s REO bank officer right after you close on the purchase of your home.)

5. Personal Guarantees. While the business loan is given to the business in name, the small business owner often personally guarantees the payments in the event that their business fails. Personal loan guarantees are an integral part of the lending agreement, so borrowers should think carefully before signing. Lenders will look to the former business owner to make payments long after a business closes it doors.

Alternative business loans appeal to business owners because the loan process is much faster than traditional lending sources (some lenders say a loan approval can be given in less than 48 hours) and there are no personal credit requirements. If you don’t need the money “yesterday” (these type of lenders anticipate that you do) then one should seek assistance through a non-profit dedicated to helping business owners in all areas of business and finance, a SBA lender ( Small Business Administration ), or the assistance of a knowledgeable business attorney who can help you negotiate a far better loan agreement.

About the Author:

Since 1990, David Soble has represented lenders, loan servicers, consumers and business owners on residential and commercial real estate, finance and contract issues. He has been involved in thousands of real estate transactions and has been responsible for billions in real estate loan portfolios throughout his career.

Opening a New Business: Top 3 Things New Business Owners Shouldn't Ignore

dsoble@provenresource.com (David Soble ) — Tue, 15 Aug 2017 10:35:29 GMT

According to business periodicals such as Entrepreneur Magazine , Inc. and Forbes , with the beginning of each year comes an increase in new business start-ups. Perhaps this is because people are seeking an increase or alternative means of income, job independence, or a more rewarding career. Whatever the reason, since the Great Recession of 2008, new business filings trend upwards this time each year.

Regardless of the time of year, new business owners tend to overlook 3 important considerations that expose them to financial risk and legal liability. They are:

1. Meet Filing Requirements. Corporate filing and licensing is a mundane but necessary task. Without proper paperwork, a business may not have “standing” to bring a suit in court because they are not recognized as a legal entity authorized to perform business. Seeking to collect past monies owed or to enforce a contract? “ Lack of standing ” is a valid defense to a lawsuit On another note, if you intend to conduct business in another state, you must also meet that state’s corporate filing requirements as well.

2.Create A Meaningful Operating Agreement. Creating a business entity without an operating agreement falls short of good business planning. Failing to detail your own operating agreement generally means that in the event of a dispute or corporate governance problem, less favorable ‘boiler -plate” language from a legal form “factory” or state statutory language could be substituted and control how your business relationships operate -contrary to your initial intent. This is especially true where multiple owners are involved as disputes will invariably arise.

If a business relationship falls apart (The Small Business Administration statistics state that one-third (⅓) of all new businesses close in the first 5 years) it’s best that business owners have predetermined termination terms in their operating agreement, as opposed to having terms imposed upon them by statute or third parties such as an arbitrator.

3. Read and Understand Contract Terms . Conducting business on a handshake, however sincere, is a thing of the past and impractical in today’s fast -paced global economy. Business owners encounter contracts in all forms: service agreements, leases, loan agreements, guarantys, joint ventures, co-marketing, purchase agreements and client agreements are to name but a few. Reading through just one of these documents can be daunting and time consuming. Most “boiler -plate” contracts are drafted by attorneys and have extensive and onerous “default” provisions. Don’t “ sign on the bottom line” until you have read your contract for meaning. If you don’t understand how a contract provision affects you and your legal rights, then by all means consult with your own attorney–not a real estate or leasing agent, not your cousin in law school, and certainly not ‘their’ attorney. Consult with your O-W-N attorney. And do it before, not after, you sign a legally binding document.

Never is the old adage, “an ounce of prevention is worth a pound of cure” more appropriate than in today’s business climate. Experienced business and real estate attorneys regularly address countless variables experienced by businesses just like yours. Many attorneys will provide new entrepreneurs with a free initial consultation and it’s a solid business decision to take such a meeting.

About the Author: Since 1990, attorney David Soble has been responsible for billion of dollars in real estate and finance matters representing the interests and legal needs of both small business owners and consumers alike. David can be reached at 888-789-1715.

Disclaimer: You should not rely or act upon the contents of this article without seeking independent legal advice from a qualified attorney.

Practical Debt Advice That Works: Obtaining Debt Relief Without Hurting Yourself

dsoble@provenresource.com (David Soble ) — Tue, 01 Aug 2017 19:23:16 GMT

I just read about a tragic and avoidable event that happened last week. According to The Washington Post, a Manhattan couple jumped to their deaths from the ledge of their 9th floor apartment. The couple, a chiropractor and his wife, reportedly left a suicide note citing their ever increasing debts as the reason for their despair. Apparently, they were good people; They were well liked by their friends and patients. They are survived by their two children. ( See The Washington Post, July 29, 2017 .)

After reading this article, I was immediately taken back to the events of 2008 and the devastating financial wake of the Great Recession. Many businesses and lives were ruined - all because of debt. I know. As the chief enforcer / attorney for several national lending institutions, I was in the thick of it. I was responsible for the collection of billions in defaulted loans and my job was to vigorously pursue delinquent debtors and ‘cure’ non-performing loans.

Even in today’s economy there are still people who struggle financially for a number of reasons that include, but are not limited to, underemployment and stagnant wages. Here are 5 things I wish to impart to those who are burdened with mounting debt and the ever-advancing debt collectors:

1. Communicate. While it may not feel good, keeping the lines of communication between creditor and debtor benefits both parties. Believe it or not, banks and creditors want to work out payment arrangements as opposed to litigation. Ignoring and avoiding creditors gives a creditor no alternative but to escalate a collection action. This increases debtor anxiety and reduces opportunities for a reasonable settlement.

2. Contact a professional early in the process.

For those who are uncomfortable with negotiations or confrontation, contacting a professional about a debt issue may be the answer. For small loan balances, reach out to a non-profit credit or debt counselor early in the process. Larger note obligations or guarantees require the attention of a seasoned professional.

I am frequently retained by clients only after they have already been “steam rolled” by their creditor. These clients thought they could “go it alone.” I can tell you that cleaning up a legal and financial mess after the fact is far more challenging and expensive than when someone comes for legal advice at the onset of their problem. (See my article, “Just What Is The Law of Holes?” at http://bit.ly/prholes ). Dealing directly with a creditor without proper representation is not the best approach and most often costs a debtor more money in the long term.

3. Don’t bring a knife to a gunfight.

The American Bar Association lists over 75 practice areas of law. Not all attorneys specialize in debt or loan law. Speaking with the appropriate attorney can prevent costly mistakes. While at the banks, there were many occasions that I had the pleasure of sitting across the table from a debtor’s divorce attorney or personal injury attorney. It made my job easy and I welcomed them. The old adage, “don’t bring a knife to a gunfight” is never more true than in lending and finance law where debt agreements are usually complex and highly regulated.

4. Beware of scam artists - they’re everywhere .

Avoid individuals and companies that aren't properly credentialed and that have not been rated by their industry peers. In fact, when it comes to consumer issues, almost all professionals working with the public require a state or federal license. Verifying an adviser’s competence and reputation should be a debtor’s top priority. Today as I sit to write this article, The Washington Post features an article about how a California modification scam recently swindled thousands of homeowners out of their home equity, and many lost their homes because of it. Remember: “Trust but verify.”

5. It really will be okay. Sure it sounds simplistic and trite, but with the right professional guidance and some patience, the sting of debt issues subsides over time. There are many ways to successfully approach serious debt issues without filing bankruptcy, such as seeking a court ordered installment payment plan, graduated settlement options, structured debt forgiveness, and being declared ‘uncollectable.” To learn more about these and other options one has to actively seek help. (According to a CreditCards.com poll, 85 percent of respondents said they were unlikely or somewhat unlikely to talk with a stranger about credit card debt -- a subject that is more taboo than religion, politics, salary and love life details.)

Conclusion. Nothing is more professionally and personally gratifying than helping a business owner or individual through the darkness that is mounting installment or revolving debt. I have ushered thousands of people through their debt issues, without bankruptcy, and after they successfully enter into a negotiated settlement, the difference in their demeanor is truly night and day. Once debt problems are resolved, it is as if you can see the heavy financial burden lift off a client’s shoulders. I only wish the poor couple from Manhattan could have known this relief as well. R.I.P.

About the Author: Since 1990, Michigan attorney David Soble has represented lenders, loan servicers, consumers and business owners with legal matters related to finance and real estate. He has been involved in thousands of real estate transactions and has successfully negotiated and saved millions for his clients.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own, qualified attorney.

With The “Ongoing” FBI Investigation of Ralph Roberts, Here Are 7 Things Michigan Homeowners Can Do to Protect Their Property Rights

dsoble@provenresource.com (David Soble ) — Fri, 30 Jun 2017 12:18:52 GMT

This week, the FBI and local law enforcement officials raided the business offices of realtor Ralph Roberts . Roberts is the subject of an ongoing criminal investigation and several news probes. In controversy is his alleged ‘misuse’ of the Michigan public administrator system. It’s supposed that Roberts finds properties of deceased homeowners, uses a public administrator to open an estate in probate court, and then bills the estate for his sales commissions and other “services.”

At first blush, I find Robert’s alleged sales practices ignoble, to say the least. But until the authorities release more of their findings, I am not convinced that this contentious salesman has done anything illegal. What this investigation does confirm however, is that in the business of real estate, people are always looking for another ‘angle’ to make ‘big’ money, and every so often, they will knowingly cross the line to the detriment of unwitting homeowners.

Here 7 things you can do to protect your real estate from “charlatans’ and (frankly) from yourself:

1. Say no to blank documents. Never sign any blank documents. If you are unsure, make a large “X”on the blank page, and then sign beneath it. Similarly always retain a copy of your signed contracts.

2. Know before you sign. In the real estate business, written contracts define relationships, obligations and one’s legal rights. If you read a contract and don’t understand it, don’t sign it. Also, never rely on an explanation of “how things work” from the party who stands to benefit from your lack of knowledge.

3. “Fake” attorneys . Similar to the preceding paragraph, don’t accept legal advice from someone who is not a licensed attorney. Accountants, doctors, real estate agents, mortgage brokers, or the county clerk are not attorneys and cannot dispense legal advice or draft legal documents. In other words, ignore the outside chatter of your “mother’s friend’s sister’s son.” Odds are (1) they aren’t an attorney, (2) their situation has a different set of facts and is not completely on point, and (3) they won't be there for you when @#$%@# hits the fan.

4. Record your property interest. Always record your property deed with the county in which your property sits. Holding onto an unrecorded deed does little good to notify the world that you have ownership in a particular piece of real estate. If you ‘snooze’ and don’t record your property interest, you can ‘lose’ your property rights.

5. Save the D.I.Y. for Home Depot. Drafting your own deeds or other legal documents without the proper language and legal guidance is a recipe for disaster. Unwinding a real estate transaction (or any contract for that matter) involving a person(s) that you have grown to hate, can be very expensive and emotionally draining. It only becomes worse when you find out that your D.I.Y. contract inadvertently gave another party more legal rights and protections than you gave yourself.

6. Open your mail, @#$% - it. Unless you’re a clairvoyant, open your mail. Important legal notices that affect legal rights come in the mail. They aren’t often texted. Legal processes have sensitive timelines. Miss a legal deadline and it becomes almost impossible and very expensive to reinstate your rights. People pay more attention to what they’re going to “binge watch” on Netflix than they do to their legal rights. Give your legal issue the proper attention it deserves so that later on you don’t have to devote all of your time, energy and money to cleaning up a legal mess.

7. Consult with an attorney before “Google.” Our property laws are deeply rooted in centuries of legal history and case law. Lawyers devote years of their lives to their legal education and to their practice to perfect their craft. One or two Google search results cannot adequately address a legal problem. Consult with an attorney who specializes in your area of concern.

Bonus Item. In the real estate business, nothing of value is free. There is tremendous value in seeking “preventative” legal advice, but beyond that and above all else, when it comes to all of those “great” real estate deals that your friend or family member has turned you on to...remember this one axiom, ”nothing of value is free..”..repeat….”nothing of value is free” ..”.nothing of value is free....”

About the Author: Since 1990, Michigan real estate and finance attorney David Soble has represented lenders, business owners and individuals in real estate, loan, and contract matters. He has structured countless real estate transactions worth millions, and has successfully saved millions of dollars for his business and consumer clients.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own, qualified attorney.

Protecting Property Title Interests: In Real Estate, You Have To Show Up 100% of the Time

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:42:42 GMT

HOW TO LOSE $1,729,631

Over the last two months, several clients ( prior to hiring me) lost a combined total of $1,729,631 because (for whatever their reason), they failed to file their real estate documents publicly with the county recorder. Their property rights as evidenced by various deeds, trusts, assignments, land contracts, mortgages, and liens, simply went unnoticed. Most of the properties were lost to the taxing authorities or through foreclosure, because the clients were never notified of a property auction. Other properties were sold or mortgaged to third parties who had no idea that my clients also had prior property claims. Whatever the cause, $1.7 million is an alarming figure when the solution against such loss is so easy.

MULTIPLE TRANSFERS

Nationwide, state property laws encourage, but do not require, anyone with property interests to record them in their county recording office. Recording real estate transfer documents protect against situations where the same property interest is transferred multiple times, (ie. seller grants a mortgage for the same property to two different lenders). State laws all but determine which party’s interest prevails based upon when a deed, a mortgage or other documented interest is filed with the recording office. The laws predominantly favor those who properly record their property interests over those who don’t.

NOTICE TO THE WORLD

Recording real estate documents into a property’s ‘ chain of title ’ provides “notice to the world” (known as “constructive notice”) of one’s property interest. By not appearing in the title chain, interested parties will not receive legal notices concerning the property, such as tax notices or lien filings. More importantly, in almost all instances, good faith purchasers, lenders and other lien holders who are unaware of prior outstanding, but unrecorded property interests, have superior claims when challenged by property owners who failed to record their property interest.

WHO AND WHAT SHOULD BE FILED

The list is not exhaustive, but generally all real estate deeds need to be filed. Where land contracts are concerned, it is important that the buyer have a Memorandum of Land Contract recorded. Too often is the case where a seller has sold a property out from underneath a land contract buyer, all because no evidence of the sale was ever recorded with the county. Most title or closing agents will file real estate transfer documents as part of their business for a small fee. Lastly, mechanic liens, judgment liens or claim of liens against a property need to be recorded in a timely manner to be effective. If you are unsure about filing requirements, contact a real estate attorney.

CONCLUSION: SHOW UP!

Remember, in order to protect your property interests against title claims or loss, it’s important that your real estate documents show up in the public records 100% of the time.

About the Author: Since 1990, attorney David Soble has represented lenders, loan servicers, consumers and business owners in real estate, finance and compliance matters. For over 25 years, he has been involved in thousands of real estate transactions and has successfully negotiated and saved millions for his business and consumer clients.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own, qualified attorney.

Don’t Be The Test Case: 5 Tips For New Real Estate Investors Severing Detroit Property Interests through Foreclosure, Forfeiture and Eviction

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:42:34 GMT

With the steady influx of property investors seeking to stake their claim in the phoenix that is Detroit, comes various investment property management challenges. Listed here are 5 common problems that new real estate entrepreneurs face when moving to sever the property rights of a delinquent property owner or tenant:

1. The Tenant / Occupant Won’t Leave. Avoid ‘self- help.’ Landlord ‘self-help’ for locking out an occupant is, with rare exception, illegal and has serious financial and legal consequences. The same is true for investors who seek to extinguish a mortgage or land contract . An eviction action is required when the former homeowner or perhaps event their tenant, remains in the property after the foreclosure redemption expires. The mere fact that the redemption period has expired does NOT give the lender rights to enter the property. Shutting off utilities or changing door locks is considered ‘self help” and can expose an investor to liability in actions of trespass, property damage, and even emotional distress.

Solution: Legally sever the possessory interest by filing an action for eviction and secure a judgement and writ for eviction. I know of several cases where an investor is ready to close on the sale of their property, only to be sued by a former owner or tenant whose legal interest in the property had not been properly extinguished.

2.The Former Property Owner or Occupant Files Bankruptcy . Equally as serious as landlord ‘self help’ is when a creditor violates an automatic stay after the tenant or homeowner files bankruptcy. An automatic stay halts all collection activities and this includes eviction and foreclosure actions. The ‘stay’ has to be lifted by a federal court order. Creditors, such as landlords and mortgagees, who knowingly violate a bankruptcy stay face severe fines, sanctions, and attorney fees. They may even have to pay damages.

Solution: Once notified of an occupant’s bankruptcy, stop any and all collection efforts until you have a signed order “lifting the stay”. When in doubt, consult with legal counsel.

3. Failing to Understand Choices of Rights and Remedies. Investors, particularly those who purchase out of state properties, should know what type of property interest they hold and the legal rights that the interest affords. In Michigan, mortgage holders do not have a fee simple interest in a property, only a lien interest. So when a former property owner abandons the collateral, an investor cannot legally sell the home until they foreclose out the homeowner’s interest or unless they obtain a Deed in Lieu of foreclosure.

More importantly, investors need to know which legal process to use in order to accomplish a specific goal. For instance, in a land contract matter, a judicial sale can be used to preserve a deficiency for a vendee’s default, whereas a land contract forfeiture gives the land contract vendor possession only.

Solution: Investors should consult with a real estate attorney licensed in the state where they plan to invest and clarify their legal rights before they engage in purchasing investment properties or pursuing legal action.

4. Property Tax Foreclosure . It is not uncommon for investors to run up against property tax foreclosure deadlines as delinquent taxes are an inherent part of purchasing distressed properties. Until proper due diligence is performed, it makes little economic sense to initiate any legal actions for foreclosure, eviction or forfeiture, if the property would only be lost to tax sale before an investor’s legal action is completed.

Solution: Perform a title search and make arrangements to pay the taxes before initiating legal action.

5. Deeds in Lieu of Foreclosure . A Deed in Lieu of Foreclosure (“DIL”) is a deed executed by the homeowner that satisfies a loan in default in exchange for the mortgage holder to forgo the foreclosure process. However, taking a DIL without performing a title search or without drafting the proper supporting documents is rife with problems.

First, a DIL is similar to quitclaim deed in that the mortgagee takes title to the property with all liens, encumbrances and assessments that the former property owner incurred on the property. Sometimes the amount of liens are so excessive that it makes more sense for the investor to foreclose on the property and pursue a deficiency action against the former property owner.

Second,, specific legal provisions are required in the DIL documents, without which, an investor can experience difficulties foreclosing out subordinate lien interests or in obtaining title insurance for a later sale of the property.

Solution: Perform a title search and if you plan to take a DIL, don’t do so without having a qualified attorney first prepare DIL documents.

6. Boilerplate or Self -Generated Documents. There is an old adage that ‘ a contract is valid until someone legally challenges it.’ Property investors are often surprised to learn that their self- prepared documents may actually violate federal or state laws. Unfortunately they only discover this at court placing their own legal interests in jeopardy. Indiscriminately using online or “boilerplate” forms to prepare a land contract, private mortgage, or lease back can be legally hazardous. For instance, selling back a property to a former homeowner raises federal compliance issues under RESPA (Real Estate Settlement Procedures Act) and leasing back a property to a former homeowner creates a landlord / tenant relationship that ironically requires the investor to obtain a certificate of occupancy and make city required repairs on the former homeowner’s home.

Solution: Rely on an experienced real estate lawyer to review and draft the state- specific contracts that will be used in property transactions. It will reduce future legal headaches, losses, and uncertainties.

Conclusion: Don’t be the ‘Test Case.” When in doubt of how to legally proceed with severing a former property owner’s rights, it is best for the new real estate investor to seek out an experienced real estate lawyer.

About the Author: Since 1990, attorney David Soble has represented lenders, loan servicers, consumers and business owners in real estate, finance and business matters. He has been involved in thousands of real estate transactions and has successfully negotiated and saved millions for his business and consumer clients alike.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own, qualified attorney.

Eating a Whale: Best Practices To Tackle Tough Problems

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:42:18 GMT

When clients are confronted with a complex legal problem that has a lot of moving parts, it can be difficult for them to ‘see the forest through the trees’. I offer clients overwhelmed by a complicated real estate or finance problem, the following 5 items to consider so they can effectively tackle their source of stress.

1. Get organized . Staring at a pile of miscellaneous documents can weigh on one’ moral and motivation. Take the time to sort important paperwork in manilla folders. For example organize papers by a vendor, an antagonist, chronologically, by subject or concern, by contract, loan(s) or lease(s). You’ll feel better once you’re organized and you’ll help your advisors address the problem more quickly.

2. Define the “what” “when” and “how ”. Complex matters often have a series of tangled and interrelated problems. Write down all the problems that present themselves in a particular situation. Then define how you intend to solve each problem. There may be several ways to approach each problem. List them. Ask yourself, “what can I do to create any movement that will make me happy with my progress?” Now realistically define the time frame that you expect to address and be done with the problem.

3. Prioritize. Resolving complex problems requires one to prioritize each step or action necessary for a resolution. Prioritize and strategize what has to occur first before you can move ahead to the next task.

4. Don’t make quick decisions . Never let anyone, particularly the antagonist in your situation, push you into making a decision. Consider the “24 Hour Rule”. Take 24 hours to weigh the pros and cons of a decision. Remember, complex problems took time to create. Take time to think about the consequences of a decision.

5 Give yourself a break. Ruminating about a problem 24/7 does not solve the problem. In fact it can stress your physical and mental health. Think about all of the good decisions that you have made in the past under stress. Eat well, rest and exercise for a clear head.

A mentor once told me that successful problem solving is like eating a whale –you have to eat it one bite at a time. Envision setting a table to feast on your problem — calmly organize your documents, define the problem(s), and prioritize your proposed solutions using realistic time frames that will make you happy with your progress.

Keeping Control of An Aging Parent’s Property

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:41:54 GMT

Keeping Control of Aging Parent’s Property

Greater longevity for Americans has expanded the population aged 75 and over. The U.S. Census Bureau states that the number of people reaching their 80s and beyond will sharply increase in the ensuing decades and as elderly parents age, more financial responsibilities are placed upon the shoulders of their adult children. Senior housing issues are a genuine concern for adult children who want to ensure that their elderly parents can maintain personal dignity, safety and a sense of control while still living in their home. Homes too, are filled with much sentimental values and memories and these must be respected.

Here are several financial and housing considerations adult children should explore so that their parents can remain in their home:

Reverse Mortgage

A reverse mortgage is a residential loan specifically designed for seniors. A reverse mortgage allows the homeowner to convert a portion of the home’s equity into cash, while eliminating the possibility of having to sell the home. Aside from the fact that a reverse mortgage will deplete assets left to potential heirs, they must be paid off in the event the owner leaves the home for a year or more. So in the event that an elderly parent will have to move to a different housing environment because of illness, the entire loan balance becomes due if the parent fails to return to their primary residence within one year.

Reverse mortgages generally require that the homeowner pay annual property taxes and in my experience this is a source of many senior homeowner defaults. So before obtaining a Reverse Mortgage, one should consult with a real estate or elder care law attorney.

Conversion to Rental Property

One option that is often overlooked by adult children is leasing the home to family members. This provides some security that the home will be well maintained and cared for by a relative or close friend while one’s parent still remains in the home. As with any business transaction proper due diligence should be taken with regards to drafting a lease agreement. Consult with an attorney for a thorough agreement.

Professional Home Maintenance

Hiring a professional property maintenance company is one way to make sure that the home is maintained both mechanically and visually, reducing the physical demands of upkeep on one’s parent. Having maintenance services will also free up the time and energy needed to attend to a parent’s physical care. Another consideration is that a well -maintained home is much easier to sell at a later date when necessary.

Make sure that the property management company is licensed and bonded. In many states a real estate agent can provide property management services without holding any additional licensing. But property management is a profession unto itself. It’s best to confirm that an agent devotes a large majority of their business to home preservation and even better to hire a property management company that is referred by a trusted source.

Professional Personal Assistance

Most seniors want to live as independently in their homes for as long as possible. There are options that exist to make this as convenient and dignified for senior homeowners. Housekeepers can do the heavy cleaning, a visiting nurse can do home check ups and attend to other medical issues. Seniors can even receive meals delivered daily. Unskilled Home Care Services are increasingly popular these days, but adult children should perform a thorough background check on such services. See below.

Protect Seniors From Scams Targeted at Homeowners

The U.S. Federal Trade Commission (“FTC) regularly reports scams that are focused on senior citizens. Senior homeowners are easily targeted because they are often isolated from their neighbors and become easy ‘prey.” Advise family members to never give out any sort of information over the phone or to respond to door to door solicitations. Assist them with checking their bank records and credit reports often and to offer immediate assistance if their are any warning signs of abuse or fraud.

David Soble is the principal of Soble PLC and founder of Proven Resource LLC. He has been a real estate and finance attorney for over 25 years and as a member of the National Care Planning Council (NCPC) he focuses on senior issues as they relate to real estate and finance.

Real Estate & Advance Directives: Options for Assisting Seniors With Real Estate

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:41:46 GMT

Assisting loved ones who begin to lose their ability to think clearly and make rational decisions is not easy. It’s not uncommon for some elderly to become unable to make sound decisions about a variety of issues including finances , health care and managing themselves at home. Below are a few legal options for children of aging parents to consider when assisting a loved one.

Power of Attorney

A Power of Attorney grants legal authority to an individual to make decisions on behalf of another. Laws for creating a Power of Attorney vary from state to state. They can be limited to specific issues or broadened to handle many issues such as personal and financial matters, including real estate . In Michigan, a Power of Attorney addressing the sale or refinance of real estate must be filed in the county records where the property is located.

Advanced Directive

A person can use an advance directive to make provisions for health care decisions in case that person becomes unable to make such decisions. There are two main types of advance directives : a Living Will and Durable Power of Attorney for Health Care . In some cases, a hybrid of these two directives can be established.

Living Will

This is a signed, witnessed document called a declaration or directive which instruct an attending physician to withhold or withdraw medical intervention from its signer if the signer’s condition is terminal and is unable to make decisions about medical treatment.
Durable Power of Attorney for Health Care

This is a signed, witnessed document in which the signer designates an agent to make health care decisions on behalf of the signer if the signer is temporarily or permanently unable to make such decisions. The agent in this case will have the authority to decide if health care will be provided, withheld or withdrawn from the signer.

Only a Power of Attorney that specifically addresses real estate will give the agent of the signor, usually an adult child, the authority to deal with a mortgage, loan or disposition of real estate while the signor is living. The other ‘directives’ concern health care and related health issues. All three are significant to good asset planning and protection.

Consider speaking with a qualified attorney to learn more.

Wills Aren’t Just for the Wealthy

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:41:36 GMT

MarketWatch

March 17, 2015

By: Bill Bischoff

Chances are you’ve spent plenty of your free time thinking about the money you’ll have available at retirement. But what have you done to plan out your estate? The sad truth is that most of us — some 70% of adult Americans — have neglected to write a will. Some think their assets are just too puny to worry about, others worry that the costs of writing a “last will and testament” are too high. But wills aren’t just vehicles for the wealthy or the morbid. If you’ve got a family and a home — not to mention a savings account — you should definitely have one. Cost is no excuse. While the average will drawn up by a lawyer typically runs from $500 to $1,000, you can get a simple will at a legal clinic for as little as $75 or create your own with an online vendor for even less. For most people, the first time in your life that a will becomes imperative is when you have children. Forget about your assets for a minute. In the terrible event that you and your spouse die at the same time without a will, it falls to a probate court judge to name a guardian for your minor children — not a pleasant prospect. That is why it is a crucial first step to name a guardian for your minor kids. Our experts recommend naming an alternate guardian in the document, as well, in case something happens to your first choice.

Writing a will, of course, is also your chance to clarify who gets what in your estate. Before you can do that, however, you have to tally up your assets. That includes your house, your investment portfolio, the value of your retirement plan account(s), and the payout(s) from any life insurance coverage . After adding these things up, most folks discover that they are worth more than they initially suspected. Find your new home now ... Address, City, Zip Price Advertisement Once you’ve got your assets listed, you can decide what you want to leave to whom and who will be executor of your estate. One important caveat: Make sure that the beneficiaries listed in your will match the beneficiaries you name for your insurance policy and for your 401(k) and any other retirement accounts. If not, the beneficiaries named in these other documents will be the ones who actually get the money. Now, if you want to do any more complex estate planning, chances are you’ll have to set up a trust, which isn’t cheap.

They cost as much as $2,000 to $3,000 or more. The primary reason people go to this kind of trouble is to protect their heirs from having to pay hefty estate taxes that can turn their carefully built nest egg into chicken feed. Or to protect their heirs from themselves if they are — to put it kindly — not very financially astute. Remember: for every dollar you leave behind over the unified federal gift and estate tax exemption amount ($5.43 million for 2014), the IRS will take 40 cents for the federal estate tax. Once you have a will in place, don’t forget to update it regularly. You’ll need to amend it whenever there is a big change in your family’s circumstances — a birth, a death or marriage, or even if you move out of state. A will might seem like a hassle, but that is nothing compared with the hassles your heirs will experience if you die without one.

Real Estate Dreams: Positive Outcome with Real Estate Investment Income

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:41:20 GMT

Detroit, Michigan, January 30, 2015

According to numerous “real estate investing” or “note buying” websites (A Google search of real estate “note buying” prompted over 19 million results), real estate investing is “fun” and “easy," which it can be, but not without “work.” Proven Resource managing attorney reviews important steps investors can take to protect their investments.

After a 4 year court battle to obtain title to a foreclosed Florida condo, a Florida State Appellate Court for the Fourth District ruled that Bank of America must restart the entire foreclosure process from the beginning because of a clerical error, namely an incorrect property legal description. (Case No. 4D13-4066) On the same date, Florida's Daily Review quoted one bank attorney involved in a similar case as saying, “It was a case that should have never happened.” Famous last words.

Investing in real estate mortgage notes and flipping properties can be financially rewarding. According to numerous “real estate investing” or “note buying” websites (A Google search of real estate “note buying” prompted over 19 million results), it’s even “fun” and “easy.” Perhaps it can be, but not without “work.” As seasoned real estate and note investors know, buying real estate notes and distressed property can be a great source of income, but as in the Bank of America matter above, it can also a be source of problems.

Here are 5 things real estate and note investors can do in order reduce headaches before rushing in to acquire income producing commercial or residential properties:

1. Audit the loan file. It's good business to have an attorney or compliance professional review loan documents before purchasing a note. Any legal defenses that a borrower has against a lender, they can have against the loan assignee or note buyer. Have a professional review loan documents such as federal loan disclosures, deeds, legal descriptions, issue an opinion on potential title defects and verify back property taxes and IRS liens. Note buyers want to buy a note, not a lawsuit.

2. Understand the implications of invoking certain loan provisions. For instance, in commercial loans, it's common to have provisions for an Assignment of Rents. This means that the note holder can require tenants currently at a property to make payments directly to the investor in the event of a landlord - borrower’s default. This sounds straightforward until one considers that in most jurisdictions, note holders who exercise the right to collect rents become responsible for property repairs even when the investor does not yet own the property. Tenants could withhold rent from the investor until prior neglected repairs, such as a roof repair, are addressed. It can be quite costly especially when tenants in distressed properties often request rent abatement.

3. Don’t ignore title insurance. Note buyers usually have three options to make their investment profitable. If they can’t modify an existing note, taking a deed in lieu from a property owner, or initiating a foreclosure action are they only ways to take legal title to sell a property. In both instances, having title insurance is very important. Taking a deed in lieu from a borrower without having title insurance can be folly since any and all liens on the property will be transferred to the grantee. Starting a foreclosure action without knowing what’s on title could expose the property to IRS liens that affect the investor’s clear title. At the very least, perform a title search.

4. Make sure the entity acquiring a note or property is in compliance with state and federal law before taking any action against a tenant or borrower. For instance, evicting a tenant without a recorded title interest can be legally challenged. It’s the same for investors who issue notices of loan default. Recording one’s legal interest in a property is paramount. It’s also important that incorporated investors register their business with the state in which their investment property sits, otherwise their authority to enforce provisions concerning their own investment can be challenged. Finally, make sure all collection and default notices comply with federal and state laws.

5. Expect ‘push back’ and time delays. Making properties profitable or collecting timely payments does not happen right away. True, there are times when a borrower agrees to a loan modification, brings themselves current or even refinances off the note, but these instances are uncommon. Instead, anticipate little, if any, tenant or borrower response to correspondence and prepare for eviction, foreclosure or even bankruptcy actions.

About the Author: Since 1990, attorney David Soble has represented lenders, loan servicers, consumers and business owners in real estate, finance and compliance matters. For over 24 years, he has been involved in thousands of real estate transactions and has successfully negotiated and saved millions for his business and consumer clients.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own, qualified attorney.

Buying Property Over the Telephone! 5 Precautionary Tips for Aspiring Real Estate Investors

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:40:45 GMT

Detroit, Michigan (PRWEB) November 28, 2014

On November 24, 2014, the FBI Detroit Field Office issued an official press release that it had arrested 16 people in a telemarketing and real estate ponzi scheme netting the offenders over $20 million from 290 victims nationwide, who thought they were investing in bank owned homes. According to the authorities, telemarketers lied about the values of the homes, telling investors that they were purchasing homes worth many times more than the current sales prices.

It seems that every year law enforcement exposes an unscrupulous real estate or mortgage scam, but what is even more incredulous is that there are people willing to purchase real estate over the telephone. The old adage is true: “A fool and his money are soon parted.”

Here are 5 things to seriously examine before purchasing investment property:

1. Visually inspect the subject property. In real estate, variables such as property location and structural integrity, affect value. A physical inspection of the property is imperative. If it’s too inconvenient to personally visit an asset, hire an independent, licensed professional appraiser to assign a property value .

2. Order a property title search. Every property comes with its own unique title history. Mortgages, delinquent taxes, assessments, and judgments are but a few types of liens that will directly impact a purchaser’s ownership rights. Order a title search from a reputable title company or get a ‘ title opinion ” from a real estate attorney.

3. Investigate participants. State and federal law require licensing for most real estate services and activities that involve real estate investments, sales, or loans. When in doubt, contact state licensing authorities to see if an activity is regulated or contact a real estate attorney for an opinion.

4. Funding. When purchasing property, use a title or escrow company to disburse purchase funds to a seller, even in a cash transaction. Title companies will also provide title insurance to verify property ownership, address property liens, confirm property taxes and itemize money disbursements in a transaction.

5. Documentation. Real estate transactions involve many documents that include, but are not limited to sales agreements, deeds, mortgages, discharges, liens, settlement statements, authorizations and resolutions. Review these documents with a real estate agent , or a real estate attorney. Most importantly, never endorse any documents that are blank or contain incomplete or blank fields. Never relinquish original documents without retaining copies.

Successful real estate investing requires patience and reliable information. Rushing into a transaction without thoroughly performing one’s own due diligence or hiring experienced professionals to do the same is an open invitation to deep financial disappointment.

About the Author: Since 1990, attorney David Soble has represented lenders, loan servicers, consumers and business owners in real estate, finance and compliance matters. For over 24 years, he has been involved in thousands of real estate transactions and has successfully negotiated and saved millions for his business and consumer clients.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own, qualified attorney.

5 Tips for a Successful Loan Modification

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:40:36 GMT

Earlier this month, CNBC news reported that nationally, consumers and business owners are at greater risk of losing their assets as the number of foreclosures and repossessions have spiked. The need for payment modifications and more flexible loan guidelines persists. Here are 5 tips debtors should review when contemplating a consumer or business loan modification:

1. Bankers today. In banking today, bankers at the retail level have very limited authority to make significant financial decisions without first obtaining approval from an underwriting committee or from a higher bank authority. Don’t don’t rely or act on any bank communication that is not on paper containing a signature. Important decisions do not come quickly so be patient.

2. Disclose. If you are seeking a reduction in a monthly payment obligation, be prepared to disclose all personal financial information. No competent lender will provide relief based upon verbal statements of financial hardship alone. Provide thorough documentation supporting the reason for the hardship request and be prepared to answer further questions concerning the same.

3. Creativity is not valued here. Use the documents that the bank provides to complete any request. Supplying information on one’s own format just delays the process. Creditors have numerous requests for payment adjustments or debt forgiveness so don’t expect the lender to take time to decipher your “customized” presentation. Standardization is key to efficiency and a lender’s timely response.

4. Be consistent. Nothing generates more questions than when financial information provided to a creditor fails to match up with earlier submissions of one’s financial representations. Red flags will go up when, for instance, a large account balance listed on a loan application is not reported on a later statement for financial hardship.

5. Don’t piecemeal documentation. Its common for lenders to request a list of documents needed to process a hardship request. These documents are valid for a certain time after submission. For example, bank statements are valid for 30 days while other. financial papers may be valid for or 90 days. It’s best to submit all requested documents at the same time to avoid a document ‘leap frog’ effect--where the lender is ready to make a decision but can’t because some documents have expired while others are newly submitted.

Failure to address the above listed items will certainly delay, if not kill one’s opportunity to modify a loan agreement. Proceed cautiously, thoroughly, and maintain reasonable expectations.

About the Author: Since 1990, attorney David Soble has represented lenders, loan servicers, consumers and business owners in real estate, finance and compliance matters. For over 24 years, he has been involved in thousands of real estate transactions and has successfully negotiated and saved millions for his business and consumer clients.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own, qualified attorney.

Bank Foreclosures & Repossessions Spike Again: 5 Tips for Requesting a Loan Modification

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:40:28 GMT

Failure to address the above listed items will certainly delay, if not kill one’s opportunity to modify a loan agreement. Proceed cautiously, thoroughly, and maintain reasonable expectations.

About the Author: Since 1990, attorney David Soble has represented lenders, loan servicers, consumers and business owners in real estate, finance and compliance matters. For over 24 years, he has been involved in thousands of real estate transactions and has successfully negotiated and saved millions for his business and consumer clients.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own, qualified attorney.

Real Estate Tricksters: How Consumers Can Avoid Property Horror Stories

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:40:23 GMT

“Fraud is the daughter of greed.” ― Jonathan Gash

David Soble Esq., Detroit, Michigan October 30, 2014

Federal consumer protection agencies regularly warn consumers about scams involving everything from the recent false Ebola charities to student loan scams. But nowhere are the warnings more prevalent and the loss of citizens' hard -earned money so great, as when it comes to the various cons surrounding real estate and property loans. Because of the high dollar value of real estate, these scams tend to be sophisticated. Those people who consider themselves too smart or “immune” from any real estate scam need only consider the sophisticated schemes like that of the infamous Bernie Madoff . “Successful and smart” investors in his funds are still reeling from their own investment horror stories.

Here are 5 popular real estate scams that cause severe financial distress to unwitting participants:

1. Lease Scraping.

The rental market is hot as bank credit has tightened and home sale inventory remains low. The recent "Great Credit Recession" saw millions lose their homes to foreclosure. Con artist take advantage of this high demand for rentals by “scraping” the contact information of legitimate home rental listings and divert rental inquiries to fake web sites and telephone numbers. They take rental deposits on vacant properties that they do not own, from prospective tenants under pressure to secure a place to live. The con disappears once the true home owner returns but not until they've fleeced deposit money and monthly 'rental payments.' Solution: Verify ownership to a property with the county recording office before paying a complete stranger any money.

2. Home Sale Scams .

Using the advance technology of the internet, scammers “lift” legitimate real estate agent listings as well as the agent's telephone numbers and license numbers. Similar to lease scraping, con artist target homes that sit vacant for a long period of time such as a foreclosed or a vacation home. They often pose as real estate agents and collect deposit monies from prospective home buyers eager to secure homes priced “below market." Solution: Verify the identity of a real estate agent through their main sales office and write checks to the agent's broker only.

3. Tenant Scams.

Homeowners who fail to sell their home may opt to lease their property instead. Pressured for any cash flow, they rent their home to people with substandard credit or choose to ignore documentation that would otherwise be red flags in less hurried situations. Frustration and financial heart ache soon follow once they stop receiving rent. Bad tenants can remain in a home months after they stop paying rent, costing landlords not only thousands in back rent, but on utilities such as water bills, home repairs and legal fees. Solution: Novice land lords should have income and credit documentation verified by a reputable property management company not affiliated with a homeowner's real estate agent.

4. Exacting up front fees for residential loans or mortgage modifications.

Scam artists pressure applicants for up front fees to process mortgage loans or for loan modifications. In cases of the former, there are very few exceptions where a loan applicant should ever pay money in advance. Homeowners should never pay for a lender's commitment to lend. In the case of mortgage modifications, federally regulated lending institutions never require monies in advance to process a loan modification request. Solution: When in doubt, loan or loan modification applicants should contact their state's mortgage regulatory agency or state attorney general.

5. Real Estate Seminars .

"Free" real estate seminars are back in droves after the Great Recession . They're hosted by “legendary" real estate personalities with captivating stories, purporting to teach house “flipping” to innocent pensioners eager to make “millions” in investment properties. Buy enough of their CD's, books, or coaching classes and thousands of dollars later a student might be lucky enough to have the “expert” invite them to participate in a real estate deal. Solution: Don't attend these seminars with your wallet. Check out local real estate investment clubs that does not require its participants to buy anything.

About the Author: Since 1990, attorney David Soble has represented thousands of consumers, businesses and lending institutions in their real estate and finance matters. His writings are based upon his clients' past experiences.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own attorney.

The Best Way to Pay Off Debt: 5 Precautions for Paying on a Negotiated Account

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:40:22 GMT

"Some debts are fun when you are acquiring them, but none are fun when you set about retiring them.” -Ogden Nash

It's quite a feeling to pay down or pay off lingering credit card debt especially after negotiating a high balance account down to something that is more affordable. But before one rushes to pay on a “settled” account, among the best ways to pay off debt is by taking these 5 precautions:

1. Beware of verbal agreements.

Before paying on an account, have the credit card representative or collector email or mail a letter that specifies the terms of the account payoff. The settlement letter should be dated, signed by an identifiable representative, state a daily interest, and have an expiration date. Its more than likely that without a written confirmation of payment terms, ones payment will be applied to an account differently than what was intended.

2. Have a third- party disburse funds.

In instances involving a real estate closing, it's best to present the title company or closing attorney with a written copy of the proposed negotiated loan payoff. Instead of paying the money directly to the creditor have the closing agent disburse the appropriate funds to the creditor from the proceeds of the transaction. Otherwise, in some states it could take up to 90 days before a creditor issues a receipt or releases a lien. When a closing agent disburses funds based upon the negotiated payoff, the amount can be verified as paid on the closing paperwork.

3. Always reference the account number.

These days Its common for people to have several credit accounts with the same creditor. So when sending in a payment, put the corresponding account number on the check or attach a settlement check to the written payoff. When in doubt, write the intended purpose for a payment right on the check memo.

4. Stick to the schedule.

In circumstances where a debt modification or forbearance agreement is involved, stick to the payment schedule as agreed. Avoid sending lump sum payments in advance, or monies that don't match with the agreed upon payments Forbearance and modification agreements by their very nature are exceptions to most lenders loan accounting systems and payments that don't match a payment schedule will create confusion, no matter how good the intentions.

5. Follow -up and keep a receipt.

Pull a credit report within a reasonable time after making final payments to confirm that the account is reported as “paid,” “settled for less than original balance,” or “closed”.

Most importantly, retain a copy of the payment receipt with the payoff letter and file it away for the future. Murphy's law will be sure to work the day after a receipt is discarded. It's best to keep the receipt until all three credit bureaus reflect a once troubled account as "paid".

About the Author: Since 1990, attorney David Soble has represented thousands of consumers and businesses in their finance and real estate matters.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own attorney.

'Zombie Debt' Survival Guide: What to do when former debt obligations rise again!

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:40:20 GMT

Resolving a legal or financial problem can be difficult. But imagine the surprise and frustration when a former debt obligation, retired long ago, rises again. Below are four of the common "zombie" debt scenarios that clients often encounter and how to address them:

1. Divorce. Generally, in a divorce, a divorce decree or separation agreement will shift monthly credit obligations from one ex-spouse to another. Contrary to common belief, these court orders do not release either spouse of the underlying joint credit obligation. Only ones' creditor can do that. So when one ex- spouse fails to make a payment to a joint creditor, a creditor can still sue both parties to the loan obligation for a loan default . Suggestion: In the event of an ex-spouse's default, go back to court and try to enforce the divorce decree. Also, make sure to monitor the monthly payments carefully, and review a credit report frequently. Unless a creditor provides a written release, which seldom happens, be vigilant.

2. Loan Guaranty. Many lenders and banks will require an individual to personally guarantee a loan. A loan guarantor cannot unilaterally revoke a loan guaranty. Tearing up or providing a written revocation of one's personal guarantee has little effect, except to agitate the creditor. A guaranty only expires when the subject loan is paid off, or when both parties to a loan agreement mutually rescind or revoke the guarantee in writing. Careful: Make sure one's loan guaranty specifically references the date and amount of the loan so that there is no confusion that when the loan is paid off, the corresponding guaranty is extinguished. Lenders have been known to attach otherwise old extinguished guarantees to newer or outstanding unrelated multiple loan obligations.

3. Bankruptcy. When a debtor files bankruptcy under a Chapter 13 wage earner plan, they pay back their creditors according to a legal formula and court order. Mortgage balances and monthly payments can be reduced and unsecured credit card balances can be lowered by as much as 10% of the existing balances. But if a debtor fails to maintain payments according to court sanctioned payment plan, the bankruptcy can be dismissed. If dismissed, all of the debtor's former balances on obligations will come rushing back to the debtor as if nothing had ever happened. The debtor starts at the beginning. Recommendation: Ensure that when filing a Chapter 13, that the proposed repayments are affordable. Check the payment history with the court frequently.

4. Zombie debt. Each year, billions in unpaid bad consumer debt is written off by lenders. Often the right to collect on this bad debt is sold to collection companies. Some debt is so old that it is considered worthless. It is out of "statute'. This means that the legal right and time to collect such old debt has expired by law, and the debtor can no longer be pursued on the debt. Collection companies that purchase old debt do so in hopes to receive even a small payment from an unsuspecting debtor. This small payment resets the time limitation for collection back to the beginning and the obligation, or "zombie debt", rises again.

Conclusion.

It is important to maintain a safe place for legal documents and to monitor monthly payments. Banks, lenders, or title company maintain loan documents for their own benefit. So good record keeping is helpful to defend against retired obligations that reappear as unpaid obligations. Knowing the dates and amounts for loans and keeping releases and discharges of the same, in a safe place, can mean the difference of hundreds, even thousands of dollars, and so is vital to one's financial and legal planning.

Forfeiture vs. Foreclosure of Michigan Land Contracts: 5 Things to Consider for Seller Financing

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:40:13 GMT

Forfeiture vs. foreclosure of land contracts in Michigan? 5 things to consider

When a buyer defaults on a land contract, the seller can generally pursue one of two legal remedies: forfeiture or foreclosure. Both remedies have advantages and disadvantages. In general, forfeiture is faster, cheaper and easier than foreclosure but does not allow you to accelerate the debt or obtain a deficiency judgment. Forfeitures are summary proceedings filed in District Court governed by MCL 600.5701, et. seq . and MCR 4.202. Foreclosure takes longer and is more costly, but may be appropriate when the buyer is chronically delinquent or when the seller wants to pursue a deficiency judgment. Foreclosures are governed by MCL 600.3101 et. seq. and MCR 3.410 and are filed in Circuit Court. Below are five things for vendors to consider when deciding whether to pursue forfeiture or foreclosure as a remedy for default under a land contract

1. Does the value of the property exceed the remaining debt? If the value of the property exceeds the remaining debt, forfeiture may be a better remedy since a deficiency is not needed and the forfeiture process is quicker. In forfeiture, if the purchaser does not pay the past due payments under the land contract after receiving a 15 day forfeiture notice, the seller may file suit for a judgment for the monthly payments which remain unpaid. If the buyer fails to redeem, the seller can keep the property in satisfaction of the debt and realize the value of the equity.

2. Is the value of the property less than the remaining debt? If the value of the property is less than the remaining debt, foreclosure may be the better remedy since in foreclosure the seller may accelerate the debt and obtain a deficiency. After a 45 day notice period on a default, the vendor may accelerate the debt and pursue judgment on the entire balance due. After a foreclosure sale of the property, if the sale price is not sufficient to pay the remaining debt, the seller may obtain a deficiency judgment for the difference between the sale price and the debt. This remedy is only available if the land contract: (i) permits acceleration; and (ii) does not contain a non-recourse provision.

3. Is the vendee chronically in default? If the vendee is chronically in default and bringing the balance current, and the seller wants to recover the property, foreclosure may be better if the land contract contains an acceleration clause. In forfeiture, the seller cannot accelerate the debt. Therefore, the vendee can cure by paying the past due monthly payments. If the seller wants to terminate the land contract and evict a vendee in chronic default, in a foreclosure the seller can accelerate the debt making it harder for the tenant to cure.

4. Is the property contaminated? If the vendor does not want the property back because, for example, it is contaminated; the vendor does not have to pursue forfeiture or foreclosure, but rather can pursue an action on the debt only.

5. Is the litigation complicated by title issues or counterclaims? Claims for money damages in excess of district court jurisdiction of $25,000 will get removed to Circuit Court. In addition, the District Court does not have jurisdiction to hear quiet title actions. Therefore, if there are disputes as to title, these will need to be heard in Circuit Court. For these reasons, a foreclosure in Circuit Court may make sense since the seller will not be able to take advantage of the speed of the summary proceeding in any event.

In short, if you are a vendor on a land contract and your vendee is in default, think carefully based on the language of the land contract, the value of the property and your particular situation as to whether forfeiture or foreclosure is the right remedy for you. The above are just some of the things to consider when pursuing remedies against a land contract vendee in default.

About the Author. Since 1990, attorney David Soble has represented lenders, loan servicers, consumers and business owners in real estate, finance and business matters. He has been involved in thousands of real estate transactions and has successfully negotiated and saved millions for his business and consumer clients alike.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own, qualified attorney.

Attorney Soble Lists 5 Reasons Why You May Not Even Need An Attorney

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:38:53 GMT

When a legal matter arises, most people seek legal representation from a licensed attorney well- versed in the area of law that addresses their problem. But there are no laws against pursuing a matter without an attorney, and not all matters actually require professional guidance. Here are 5 reasons why you may not even need an attorney:

1. You proceed Pro Per or Pro Se. These latin terms mean that one is advocating on one's own behalf before a court, rather than being represented by a lawyer. If you feel confident that you can educate yourself about the relevant area of law that concerns you, then perhaps you could represent yourself in either civil or criminal court. When proceeding "pro se", you will be held accountable for adhering to the court procedures and decorum in the applicable jurisdiction. Your tasks will include conducting proper legal analysis, preparing and writing proper legal pleadings and conducting the legal research and discovery necessary to prevail in your matter. You will still be responsible for filing fees, fees for depositions and other items related to handling your matter. If you are not sure what "discovery" involves...look it up! There's no better time to start your pro se status than the present.

2. You hire a paralegal. A paralegal is a good person to seek help from if you have a matter that requires a lot of standard forms to complete. For instance, in a bankruptcy or a probate matter, the paralegal is limited to advising their client with filling in the answers to the legal questionnaires. A paralegal is similar to a physician assistant for a doctor. They are trained professionals who are legally limited to perform certain tasks. Like a real estate agent, or financial adviser, a paralegal cannot provide legal advice and can lose their license if they do so.

3 Your matter could be heard in Small Claims Court. In a small claims matter only the actual parties can represent themselves in civil matters. In most jurisdictions, the amount of the controversy is limited and ranges from $2500 to $5000 dollars. If you have seen Judge Judy, Okra, Kevin, or Evelyn on T.V., then you already have an idea of the less formal and more simple procedures found in a small claims court, with hopefully much less drama. But the small claims court is a great venue for people to seek redress and receive a binding judgment. When considering the costs and benefits of using an attorney, sometimes it's best to pursue the maximum amount in a small claims action even if it doesn't satisfy the total balance of the amount disputed.

4. You consider mediation. There is a recent trend in the law known as "alternative dispute resolution." In an attempt to save on costly litigation lay people and companies will often go to one attorney for assistance even though the parties may have opposing interests. While an attorney can represent both sides with proper written disclosures, the parties that I have known to use one attorney, leave unhappy. A more cost effective alternative is to use a trained mediator. A mediator is usually an attorney who is well versed in the law. They are supposed to be impartial, and depending on what the parties to mediation agree, the mediators opinion can be binding. Even if the parties choose not to have a binding decision, a mediator's analysis is often a good indication of what outcome one can expect in a court of law.

5. You have time and the fortitude. Pursuing or defending a legal matter can be exhausting, both financially and emotionally, and this is usually when one retains an attorney. So consider the best use of your time. Could you be earning more investing your time into your own work instead of taking on larger and less familiar tasks? Do you have the emotional fortitude to withstand professional assaults on the integrity of your position? If you have the time and an iron stomach then you should consider pursuing your own claim.

Having an attorney is similar to hiring a real estate agent. In a real estate deal, one can sell their own home and save substantially on a sales commission. But the benefit of having a real estate agent is more than just about commission or having someone sticking a sign on your lawn or place a lock box on your door. A good agent performs so many administrative tasks behind the scenes. But most importantly, the agent acts as a professional buffer between a buyer and a seller. Not everyone has the emotional constitution to deal with criticism or unhappiness surrounding the sale or purchase of a their home. The real estate agent takes on the burden of softening the emotional blows and focusing on all the "working parts" needed to move a deal forward. That is what an attorney does for their clients, but on a higher level of the risk - reward equation.

Conclusion. There are times when using an attorney may not be necessary. But try not to cite "money" as the reason to forgo proper legal representation since there are different types of affordable fee arrangements that attorneys can structure for clients. If you are ever in doubt of your legal rights, absolutely no one but a licensed attorney (practicing in the area of law that concerns you) can advise you of your legal rights and remedies.) Attorneys, like most professionals, can briefly give you time to discuss and assess your matter and advise you accordingly. Only then should the options enumerated above be considered.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own attorney.

6 Things For Debtors to Consider Once a Judgment is Filed Against Them

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:38:50 GMT

Recently, a $37 Million Dollar default judgment against an Alabama restaurant owner was set aside by the Alabama Supreme Court. A default judgment is awarded when a defendant to a civil suit fails to answer a legal complaint in a timely fashion. In such cases, the court is unable to make a ruling based upon the law or the facts of a case. Until the Alabama court found that the plaintiff had failed to properly notify the defendant of the law suit, there was little doubt that this Alabama defendant was sitting on pins and needles awaiting the outcome of this case.

Here are 6 things a consumer or business owner should consider in the event a default judgment is filed against them:

1. Have the judgment set aside. Without extenuating circumstances, it can be very difficult for a judge to set aside a default judgment. Most courts are reluctant to enter a default judgment against a defendant without first ensuring that the defendant had multiple opportunities to respond to a law suit. Therefore, in instances where a judgment debtor was unaware that a judgment had been taken against them, its best to file a request to set aside the judgment within a reasonable period of time from the date that they discovered the judgment. Time is not on a judgment debtor's side.

2. Make contact before collection activities start. The party with the judgment is called a judgment creditor, and the party that has the judgment filed against them is known as the judgment debtor. Once a judgment is taken, the judgment creditor can begin activities to collect on their judgment. This includes, but is not limited to, taking a creditor's exam to determine where any of the defendants assets are located, garnish or attach a debtor's wages, bank accounts or even seize a debtor's property. Before things become even more financially painful, debtors should contact the judgment creditor as soon as possible to work on a settlement or repayment plan. Be advised that when judgments are fresh, creditors may feel “emboldened” and are less inclined to negotiate favorable terms. But as time passes the value of an uncollected judgment can diminish and creditors tend to be more flexible with terms.

3. Ignore it. Statistics show that not all judgment creditors actively pursue the debt owed to them once a judgment is obtained. I am aware of one bank that has stacks of judgments against borrowers that sit piled in a drawer. Still even when a judgment creditor fails to actively pursue their judgment, the judgment alone can still impact a debtor's daily finances. Judgments are reported to the credit reporting agencies and negatively affect credit scores. Having a judgment can increase the cost of borrowing or can be a reason for credit denial. An outstanding judgment can affect a job opportunity since many employers equate having unpaid judgments with poor character. So while it may seem that one can just ignore a judgment, experienced creditors know it is only a matter of time before a significant money judgment can make things financially difficult for a debtor; so much so that a judgment debtor will feel compelled to resolve their collection matter.

4. Time. The right to collect the money on a judgment has an expiration date that depends upon the type of case that was initially brought, or where the judgment was obtained. This means that while a judgment debtor may not hear from a judgment creditor for years, the creditor still has rights to collect on their outstanding judgment balance with interest. If a judgment has aged and is set to expire, the creditor can still file an extension of the judgment with the court. For example if a judgment is set to expire in 7 years, in the 7th year, a creditor can renew the judgment with the court for a term equal to the original judgment, or in this example, another 7 years. In these next 7 years, the creditor might take a more aggressive collection efforts, especially if the debtor's finances have improved since the time from when the original judgment was taken. So don't wait. This writer feels its best to try and cut a deal with a judgment creditor when a debtor's finances are still at their worst.

5. Consider payment options. More often than not, settling a judgment does not require a lump sum payment on the original judgment balance. True, judgment creditors are less likely to negotiate on fresh judgments, but their outlook tends to change with time. Contrary to common belief, debtors can offer to make payment arrangements on a filed judgment to avoid having their accounts or paychecks garnished or property seized. Making payment arrangements means that there is a written agreement on how monthly or partial payments will be applied to the judgment balance before the first payment on a plan is made. An experienced legal practitioner can negotiate a plan and work on cutting post judgment interest and fees. They can usually negotiate a better deal than the terms of the original judgment.

6. Bankrupt. Some judgment debtors would rather file bankruptcy instead of paying on a judgment. But depending upon the nature and size of one's debt and income, not all judgments can be liquidated through federal court. If a debtor makes a reasonable income, they may have to repay a portion of their judgment through a reorganization of their liabilities. In certain circumstances a judgment can never be forgiven in bankruptcy. For instance, if the underlying judgment was part of a lawsuit that alleged fraud, then the debt is not forgivable. Also, if the judgment is for a defaulted student loan or certain IRS matters, these judgments cannot be discharged.

A filed default judgment means that at some point, both parties to a law suit have incurred substantial financial or emotional capital, or both. When considering the above listed items, it's best for judgment debtors to seek professional legal representation and develop a viable legal or economic strategy for addressing their judgment.

About the Author: Since 1990, attorney David Soble has represented thousands of consumers and businesses in their finance and real estate matters.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own attorney.

When Debt Buyers Escalate Collection Efforts: What to Do in a Collection Lawsuit

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:38:45 GMT

When Debt Buyers Escalate Collection Efforts: 5 Things to Do in a Collection Lawsuit

Aggressive debt buyers make big business out of purchasing and collecting on old credit card, medical, and charged- off consumer debt. Recently, California passed its new Debt Buyers Fair Practices Act in part because old consumer debt accounts that have been bought and sold by debt buyers multiple times are a source for much consumer confusion and abusive debt practices. The California act requires, among other things, that collectors must provide a chain of title for such accounts, disclose when they are barred from legally enforcing an old debt, and it restricts how bad debt is reported to the credit rating agencies.

These recent legal developments are encouraging but are specific to California residents only. Listed below are 5 things consumers can do under current federal law before and even after a debt buyer escalates their collection efforts into a lawsuit:

1. Get a Receipt.

If a debt buyer / collector files a lawsuit against a consumer, they must show the court that they purchased the debt from the original creditor. They have to essentially provide a receipt for the purchase in the form of an affidavit, bill of sale, or assignment of the consumer's specific account. A copy of a credit application or past statements is not sufficient. Be alert: the affidavit of transfer of ownership is from the original creditor, not the debt buyer.

2. Request Documentation.

Under the Fair Debt Collect Practices Act, consumers have 30 days from contact by a collector about a debt, to dispute the validity of the debt. Once disputed, the collector has to provide evidence that supports the validity of the debt. Consumers should review any documentation with caution. Be alert: Don't mistake receipt of excessive documentation as valid documentation. Seek assistance from a qualified legal professional if there is uncertainty.

3. Consider Aging.

If an account is old, then the debt buyer may be prevented from filing a lawsuit to collect. Check your state's Statute of Limitations, because even if the account is valid, lawsuits to collect the debt can be "time barred". Be alert: Consumers should take extra caution not to reactivate a time barred account by making a payment on account. Once 're-activated" the Statue of Limitations is no longer a valid defense. When uncertain, seek legal counsel on the proper way to proceed.

4. Monitor Communication.

Federal law restricts how debt collectors can communicate with a debtor. They cannot discuss a debt matter with a third party (such as an attorney) unless you have authorized them to do so. They cannot use harassing language, provide misleading information or call at unreasonable hours or places of work. Stay alert: Consumers should never ignore written communication from a debt collector as there are serious timing considerations that if ignored could cause a consumer to lose their rights. Most importantly, always respond to a filed law suit because a debt, while otherwise invalid, could be enforceable if a debt buyer secures a default judgement against a consumer who fails to respond.

5. Knowledge and Action.

Few debt collectors are successful without being persistent, intimidating, and assertive. Unscrupulous collectors have been known to make their communications appear as if it comes from a court, looks like a lawsuit or legal summons, which is illegal. However, they count on consumers to be intimidated into paying on accounts they would not otherwise be legally responsible to pay. Stay alert: Consumers who pro-actively challenge the validity of a debt are most apt to discourage or even defeat a collection lawsuit because a debt buyer would rather focus their attention on easier accounts.

About the Author: Since 1990, attorney David Soble has represented lenders, loan servicers, consumers and business owners in real estate, finance and compliance matters. For over 24 years, he has been involved in thousands of real estate transactions and has successfully negotiated and saved millions for his business and consumer clients.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own, qualified attorney.

10 Years Ago Today - Sound Familiar? "Incomes Flat but Americans Still Buying"

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:37:39 GMT

I actually cut out and saved this article from the August 27, 2004 USA Today because at the time, this tag line struck me funny.

It foreshadowed the things to come....

Americans hang on to bigger, better lifestyles

Incomes Flat, but people still buying homes, cars

By Haya El Nasser and Paul Overberg, USA TODAY

Americans' passion for living large is growing, even if their incomes aren't, a Census survey released Thursday indicates.

Since the beginning of the decade, their homes have gotten substantially bigger and more expensive. Almost half of all homes, about 46%, have six or more rooms. More than 15% have eight rooms or more.

Almost one in five families have three or more cars. And more workers are opting out of carpools and mass transit to drive to work alone.

But this lifestyle comes at a cost when incomes are stagnating and housing prices are soaring.

In a separate report on poverty and income, the Census Bureau reported that median household income, when adjusted for inflation, remained flat last year. ( Related story: Poverty rises in USA )

But the survey of how Americans live finds that more than 22% of homeowners spent at least 35% of their income on housing in 2003, up from 19% in 2000. And 38% of renters spent as much, up from 33% in 2000.

"Our wages stopped growing, but our wants kept going," says Robert Lang, a demographer who heads the Metropolitan Institute at Virginia Tech.

"People will just suffer a little and pay a bigger mortgage to hold on to their dreams," he says.

The latest snapshot of American life comes from the Census Bureau's American Community Survey. The annual survey of 800,000 households asks the same questions as the Census that is taken every 10 years. The 2003 numbers offer a look at how the nation has changed in the wake of recession and terrorist attacks, and they hint at social trends shaping the decade.

"Even though the economy took a dive, the initial shock of 9/11 has worn off," says William Frey, a demographer at the Brookings Institution in Washington. "People are buying bigger homes, more cars."

Riding record-low interest rates, housing prices have skyrocketed. The percentage of homeowners who live in houses valued at more than $500,000 doubled since 2000, to more than 6%.

And one in eight homeowners live in homes valued at $300,000 to $499,999.

About half still live in homes that cost less than $150,000, the typical price range for working-class families and young couples buying their first homes. But that number has dropped sharply from almost 64% in 2000.

Even in North Dakota, which has the lowest housing value in the nation, prices rose. The median value of a house there went up 10% to $81,796 since 2000. Nationally, the median value rose 22% to $147,275.

The survey reflects other changes:

• The percentage of homes without telephone service rose to 3.8%, from 3% in 2000, which reflects the increased dependence on cellular phones.

"A lot of dorms have no phone service now," Lang says. "Kids go to college, and not one of them has a real phone. They're all cells."

• The educational level is on the rise. More than a quarter of the population has a bachelor's degree or higher. And the percentage of high school graduates continues to climb, up 2 percentage points to 83.6%.

The ratio of college grads to high school dropouts has increased. There are 1.62 college grads for every dropout, up from 1.35 in 2000.

This "brains-to-brawn" ratio reflects the shift from a blue-collar to a knowledge economy, Frey says.

• Americans are spending about the same 24 minutes commuting to work, but almost 78% are driving alone, up from 76.3% in 2000. The exception is so-called "exurban" counties across the USA, such as Pasco County, north of Tampa, and McHenry and Kane counties outside Chicago. They experienced significant increases in commuting times.

Use of other forms of transportation, from walking to riding a bus, dropped. But the percentage of people working from home increased slightly.

• All racial groups are growing, except for whites who are not Hispanic. Whites make up 76.1% of the population, down from 77.3% in 2000. They're expected to make up half of the population within 50 years.

• The foreign-born population continues to grow but so does the share of immigrants becoming citizens: 41.4%, up almost 1 percentage point since 2000.

Because naturalized citizens can vote, there has been a push to encourage naturalization before the upcoming presidential election.

• Veterans, who have taken center stage in the race for the White House, make up a relatively large share of several battleground states such as Maine, New Mexico, Florida, Nevada and Arizona.

• Although still in the minority at 48.9%, men make up a growing share of the population. Frey attributes the change to male-dominated immigration flows from Latin America.

The Impact of Having An Estate Plan: 3 Reasons for Creating A Plan Regardless of One's Station in Life

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:35:56 GMT

This August is National Will Month. It precedes September's National Preparedness Month and somehow, National "What Will Be Your Legacy" Month manages to fit snugly between the two. In truth, there is never a better time than "now" to be prepared and create an estate plan to protect one's family and assets. Yet, while responsible people agree with the importance of having a plan, it's something that people still like to delay. Their reasoning is that “they'll do it when they get older” or “when they accumulate 'real' assets.”

Having the protection of an estate plan is akin to installing a roof on one's house. A new roof adds value to a property because it protects a dwelling and its contents. It's not 'sexy', it can be expensive, but it's very necessary.

Here are 3 reasons to have an estate plan regardless of your station in life:

1. Control. If you own something of value and you want the item(s) to be left to someone you care about, a Will is needed to ensure your wishes are honored. An heirloom, money, or even certain conduct can be addressed by an estate plan. Having a Will gives you the control to select who gets the assets that you own at the time of death.

2. Money. When you or your family starts to accumulating more assets, you are building an “estate” that ultimately needs to be distributed. Even modest estates have to probated without a Will, and Probate can be expensive.

3. Protection. Estate plans are about more than just protecting the welfare of “small children”. Having a plan to address outstanding debts or ensure college funding can be important. Who will have to continue to pay on a remaining mortgage, or who gets the family home? These questions and others, are efficiently addressed by having a plan.

The real impact of having a comprehensive plan is felt after a death. However, even in life, comprehensive estate plans have estate plans contain advance directives , such as a Living Will, that can, and do make a huge difference for our clients and their families.

About the Author: Since 1990, attorney David Soble has represented thousands of consumers and businesses in their finance and real estate matters.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own attorney.

CFPB Warnings on Student Loan Consolidation Scams

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:35:36 GMT

American Public Media, Marketplace Money

Candace Manriquez

Friday, July 18, 2014

Here’s a handful of student loan numbers for you. According to the Consumer Financial Protection Bureau, current student loan debt is nearing $1.2 trillion. An estimated 7 million borrowers are now in default; behind on $100 billion in debt.

All of which adds up to a juicy market for companies looking to cash in on people with student debt troubles.

This week, Illinois Attorney General Lisa Madigan filed suit against two student-loan debt-settlement companies. The suits allege that Broadsword Student Advantage and First American Tax Defense tricked borrowers into paying upfront fees for student loan help the companies didn’t provide.

According to one of the filings, First American Tax Defense promised enrollment in a fake “Obama Forgiveness Program.”

Madigan said these companies run ads that entice people excited to call, “and what they really find out is that these are scam artists [who] want their money.”

In a 2013 report , the National Consumer Law Center found that “a new ‘student loan debt relief’ industry has sprung up in response to the demand for borrower assistance and the dearth of reliable resources.”

“There’s a lot of debt, it’s very confusing,” said NCLC attorney Persis Yu. “I think some borrowers are desperate and they are turning to places that look like they might be an easy fix.”

She says many of these debt-settlement companies mischaracterize government programs as their own.

They charge borrowers as much as $1600 for services, like debt consolidation, that are available from the government for nothing.

“What’s making this possible is a lack of awareness of repayment options,” said Mark Kantrowitz, student financial aid expert from Edvisors.com.

He says the government should run an ad campaign of its own, so students with debt know what help is available for free.

If you are struggling to pay back your federal student loans, here are your options:

Direct consolidation: If you have multiple federal student loans you can consolidate them into one payment and extend the life of the loan to 30 years to lower monthly payments.
Extended repayment: Borrowers with more than $30,000 in debt can extend the repayment period from the standard 10 years up to 25.
Graduated repayment : Borrowers who choose extended repayment can also set up monthly payments that start low and grow every two years.
Income-based repayment: Your monthly payment is pegged to your income and can be adjusted annually to account for income fluctuations. The term of the loan can also be modified to go beyond 10 years.
Income contingent repayment: Your payment based on your monthly income and any outstanding debt is cancelled after 25 years.
Pay-as-you-earn: For borrowers who took out loans after 2007 and have a family or financial hardship. This income-based plan offers the lowest monthly payment options of any income-based plan.

How to spot a scam:

High-pressure sales tactics, like suggesting your interest rates are about to skyrocket, without debt consolidation.
Charging fees before debts are settled
Touting a "new government program" or suggesting they have special access to government programs
Claiming to represent the Department of Education or other government agency
Offers of discounted pay-back rates, gifts or special incentives
The hard sell, plain and simple

Sound Familiar? Overbuilding, Inflated Prices and Almost No Local Demand.

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:35:34 GMT

If you think this sounds like a repeat from national headlines about the U.S. Housing Crisis in 2007, you're not too far off base, or perhaps you are. It's happening on the other side of the globe; this time in China. Check out today's story from NPR Morning Edition:

China's Booming Real Estate Market Finally Begins To Slide

by FRANK LANGFITT , July 10, 2014 NPR Morning Edition

After years of stunning growth, China's go-go real estate market is now in retreat.

Prices fell last month in 79 out of 100 cities, according to the China Real Estate Index run by SouFun Holdings, a real estate website. Land sales dropped nearly 30 percent this spring from a year earlier.

Real estate has been one of the engines driving the world's second-largest economy, which is why economists in China and around the world are watching the market closely these days.

Among the harder hit cities are mid-sized provincial ones like Wuxi, in eastern China's Jiangsu province, about an hour's bullet train ride from Shanghai. Drive into town at night and you'll pass rows of 25- to 30-story apartment blocks with just a handful of the apartments illuminated.

"There's nothing you can do," says Huang Jiqiang, an agent with Central Plains Real Estate here. He says supply and demand are completely out of whack.

"Now all the new housing complexes are dropping their prices and doing promotions because there are just too many homes. There aren't that many buyers and the pool of buyers is getting smaller and smaller. Homes are still under construction out there."

Huang says prices in Wuxi, which has a population of nearly 5 million, have already dropped 15 to 20 percent this year. He estimates it would take nearly 2 1/2 years to sell off all of Wuxi's current housing stock.

In private comments leaked online, an official with one of China's biggest developers, Vanke, estimated the city's unsold inventory was actually double that, almost five-years-worth of empty apartments. By all accounts, the culprits are overbuilding, inflated prices and almost no local demand.

"Every local family has at least two or three apartments, so they have already enough space to live," says Huang, sitting in a noisy office on a recent, rainy morning. "If an outsider wants to buy a new apartment, they can't afford it. A 970-square-foot apartment on average costs more than $116,000. The way they see it, that's a lot of financial pressure."

That's especially true in a city where the average annual salary is just $8,200.

Wuxi has been trying to lure in people from elsewhere to prop up the market.

Buy a 650-square-foot apartment and the government will throw in a much-coveted local residency permit, which entitles your children to public schooling among other benefits. So far, Huang says, that's not enough.

"Many clients are still waiting and seeing and hoping there will be further price cuts from the current levels," he says.

It isn't just small, middle-class apartments that lie dormant. So do many luxury compounds. Wuxi is building a new city to the east of downtown. Employees at one development, Country Garden, say half of the compound's $600,000-plus, stone villas are sold, but after more than a year, they're still empty. The only sound in Country Garden is of water pouring from the mouths of fish statues into a pond.

Oliver Rui, who teaches finance at China Europe International Business School in Shanghai, says the housing glut is driven by a political system that has rewarded local officials for economic growth over everything else.

"If they want to be promoted into the next level of the political hierarchy, they have to show the GDP growth rate is better than their neighbors," Rui says. "What is the easiest way to increase the GDP growth? It's through investment, through real estate."

That's true even if the real estate doesn't actually sell. Rui says Chinese officials are banking that migrants from the countryside will move to the cities and buy up the empty apartments, but he doubts that will happen without a big price drop. That's because, Rui says, it would take a Chinese person 15 years of earnings — without spending money on anything else — to pay for a home, a ratio that's at least double the international standard.

Rui doesn't expect the market to crash. He says the government has many tools — from cutting interest rates to lifting restrictions on home purchases — that can prevent free fall.

Sam Crispin, who has spent two decades following China's real estate sector, thinks prices will gradually drop and people, eventually, will buy. He cites the history behind Shanghai's Pudong New Area, which had huge vacancy rates in the 1990s.

"The whole of Pudong was a bit of a basket case," Crispin says, sitting in an office in the area's Lujiazui financial district, overlooking the cruise ship terminal along Shanghai's muddy Huangpu River. "Fifteen years ago not many people wanted to make the move, but now we see some of the most desirable, most expensive real estate here in Pudong. It's been a massive success for Shanghai."

Of course, Shanghai is a prestigious, coastal city and a magnet for the wealthy and ambitious, dramatically different from Wuxi. As for Crispin, earlier this year, he moved home to England for family reasons.

He says no one should read too much into this, but he's sold all but one of his properties in China. He says he's looking for better rent revenue.

"I can see the capital growth is slowing and it's time to go and invest elsewhere where there might be better income," Crispin says.

Seems like a good time to diversify.

Banks Prepare for End of Draw: Consumers Should Too

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:35:26 GMT

by Sabri Ben-Achour

Tuesday, July 1, 2014 - APM Marketplace

It’s not every day that five government agencies, including the Federal Reserve and the FDIC, all come out with the same warning on the same day. That’s what happened this morning, and it amounted to a collective "watch out" to banks over homeowners ability to pay back lines of credit in the next few years.

Back in the early 2000s, right up to 2008, a lot of people took out lines of credit on their homes – this is where you can borrow money and use your house as collateral. They’re known as HELOCs (Home Equity Lines of Credit).

“Anybody who had a breath, any house still standing, seemed to be eligible for these kinds of loans,” recalls Nicolas Retsinas, senior lecturer in real estate at Harvard Business School.

HELOCs can typically last 10 years in what’s called a “draw period,” where people can continue to draw on the line of credit. After 10 years, they can’t draw any longer and they have to start paying back the principal. Starting about now, 10 years have gone by. Now it’s time to pay up.

“This is another bill coming due from the lending binge of the early 21st century,” says Retsinas. A bill that, according to the Office of the Comptroller of the Currency, now totals around $218 billion, of which $199 billion will be due by 2018.

If homeowners haven’t been paying down the principal, the change in bills may be substantial when they have to start doing so.

“We’re seeing that payments can go up 100 percent or even 200 percent or higher,” says Bob Piepergerdes, director of retail credit risk at the Office of the Comptroller of the Currency.

Given median incomes are lower than they were in 2007 and unemployment is higher, some borrowers may experience problems paying up.

“There is some risk of repayment so we’re asking institutions to evaluate where their borrowers are,” says Piepergerdes. And then he needs them to prepare accordingly

“The good news,” he says, “is that institutions have taken action.” The guidance put out by different agencies “is really to set forth the expectations of what we would like to see institutions do from a risk management stand point, but the institutions have been preparing for this for as long as we’ve been talking about it.”

JPMorgan Chase, for example, says it’s stocked up on reserves and is reaching out to customers.

“We are looking for ways to limit payment shock for our customers by being hyper-focused on communicating options to them,” the bank, which holds $49 billion in HELOCs, of which $29 billion will require higher payments through 2017, said in a statement. “We want to make sure customers are making enough of a payment so when they go into the repayment period of the principal it’s a step up not a leap up.” The bank estimates that more than half of the $29 billion will refinance or pay off before payments jump higher.

Overall, the largest lenders have reduced exposure by 20 percent through refinancing.

Homeowners would be advised to dig out their old loan agreements and look at the fine print, says Bob Davis, Executive Vice President at the American Bankers Association. “That’s one thing consumers ought to do right now, they ought to look at the payments they may have to make,” Davis says, “and if they want to change the loan arrangement and pay off their home equity line of credit by refinancing, they ought to be aware of their access to credit and whether their credit rating will allow them to.”

Featured in: Marketplace for Tuesday July 1, 2014

National Banks Are Making Riskier Loans: 3 Precautions Business Owners Can Take Against Rogue Lenders

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:35:25 GMT

On June 25, 2014, The U.S. Treasury Department, through the Office of the Comptroller of the Currency (“OCC”), issued a press release that banks nationwide are making riskier loans in an effort to compete with other banks. The OCC is charged with regulating and supervising all national U.S. Banks, and this latest comment shows its concern over banks loosening their credit and underwriting standards for all types of loans that include commercial lending.

For some, relaxing loan credit standards to accommodate small business is welcome news, but for those financial and legal professionals still helping business owners clean up from the commercial loan mess after 2008, this federal “notification” comes too soon off the heels of the Great Recession that supposedly ended in 2009.

Small business certainly needs access to capital, but in preparation for the next financial debacle, here are 3 precautions business owners should strongly consider when taking a commercial loan:

1. Never sign blank documents or sign documents without reading them. Sounds simple, right? Numerous business clients come to me with a common bank problem: they failed to read the fine print or quickly signed paperwork that their loan officer pushed, often in a rush, in front of them. Also, make and keep copies of any loan paperwork that you endorse, before it leaves your control.

2. Verbal promises are meaningless. If the loan officer makes verbal representations as a means to induce a business to take a loan, the business needs to get any promises in writing. This is especially true with loan renewals, loan extensions or modifications. Everything that is important to the loan relationship must be documented. Don't be fooled into signing on terms that you are unhappy with, in anticipation that any significant verbal representations will be reduced to writing at a later date. I have news for you: they won't.

3. Hire a legal professional before you sign any loan term sheets, agreements, loan guarantees, renewals, extensions, or modifications. You can't afford not to have an attorney experienced in commercial lending review your loan agreements. Who do you think created the loan agreements for your bank? The old adage: “An ounce of prevention is worth a pound of cure,” is an understatement when it comes to ensuring your livelihood.

About the Author: Since 1990, David Soble has represented lenders, loan servicers, consumers and business owners on residential and commercial real estate, finance and compliance issues. He has been involved in thousands of real estate transactions, being responsible for billions in real estate loan portfolios throughout his career. He has over 24 years of real estate and lending law experience to support his tempered cynicism.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own attorney.

5 Myths Buyers and Sellers Have About Working with a Real Estate Agent

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:35:23 GMT

http://bit.ly/PRAgents

"Mastery" means a highly developed skill in or knowledge of something. Some big thinkers believe that one cannot master anything until they have successfully performed a required task over 10,000 times. So it comes as no surprise that successful real estate sales people are those who have "mastered" the art of maneuvering the ever challenging mine fields common in the business of selling real estate. A person who buys or sells an average of three homes in their lifetime is at a distinct disadvantage when engaging with a professional real estate sales person.

When it comes to buying or selling real estate, here are 5 common misconceptions that people have when working with successful professional real estate sales representatives:

1. They believe the real estate sales process is always "rushed." Don't be tempted by agent statements that in many real estate circles have become "cliche." Some agents will represent that they have a buyer in order to get a listing, and once they secure the listing agreement, the prospect disappears. "My prospect is leaving out of town" or "is in town for only a day" is meant to compel a showing or rush a signature. Odds are that the prospective purchaser does not have a Leer Jet waiting for them on the tarmac. Remember, professional real estate agents are commissioned sales people with an agenda that sometimes causes them to "oversell" their own client. Never feel rushed to sign any documents without understanding the terms and consequences of an agreement.

2. They confuse the number of real estate listings with the importance of closings. The number of listings an agent has does not necessarily reflect the agent's experience in getting tough deals closed. Ask a prospective agent how many deals they have closed over the past years. It's a great indicator of how they and their staff deal with problems that almost invariably arise in real estate. No matter how glitzy the marketing efforts, selling real estate must equate into real estate closings – otherwise what's the point?

3. They accept agent referrals without further evaluation. The real estate transaction requires a number of services from third-party providers. Title insurance companies insure the legal title to the property for owners. Mortgage applications can be originated in the same office as the real estate company. Federal law requires that any affiliation between a real estate broker and a third party provider to a transaction be disclosed. However, experienced agents have providers that they frequently use and are not required to disclose, such as an on-going business relationship. Take for instance, home inspectors (always have the property inspected) who determine the overall condition of a property for a buyer. They are largely dependent upon referrals from agents. Therefore, buyers should ask the nature of the agent's relationship with their referral in order to avoid later disappointment should they find an opinion or service was improperly influenced.

4. They accept legal advice from agents. Disclaimer: There are highly experienced agents who are as knowledgeable as some attorneys on how the law treats real estate, but they are smart enough to reserve comments on the law with clients. This is because agents that fail to heed the distinction between advising on real estate marketing and dispensing legal advice sooner or later find themselves in hot water for practicing law without a license. Agent opinions regarding the legal consequences of property title, legal relationships, and legal definitions cannot be relied upon. Don't assume than an agent has any "legal knowledge" just because they handle large amounts of paperwork common in real estate deals. The sure-fired litmus test for when to seek competent legal advice is when an agent or other party to the transaction says "you don't need to get an attorney."

5. They feel they're stuck in their agency agreement. Once a seller signs a listing agreement or a buyer hires a buyer's agent, a legal relationship is created. However, in most cases, the relationship can be terminated long before the agency agreement was written to expire. People often confuse an agreement's expiration date with the agent's legal protection period. The protection period is the time where an agent is entitled to their full commission should a seller or buyer close a transaction with someone the agent had found during the existence of the agreement. This prevents people from taking advantage of an agent's hard work and commonly extends 180 days from the date the relationship between the agent and client terminates.

Numerous variables affect the successful outcome of a real estate deal. Having an experienced professional tops the list. Good agents know how to usher a deal through completion with as little friction as possible. But the most satisfying deals are done when all parties to a transaction are kept well- informed and have reasonable expectations about the outcome as set by their advisers.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own attorney.

No Left Turns - Nothing to Do With Real Estate - Everything to Do With Living

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:35:19 GMT

This is a wonderful piece by Michael Gartner, editor of newspapers large and small and president of NBC News. In 1997, he won the Pulitzer Prize for editorial writing. It is well worth reading, and a few good chuckles are guaranteed. Here goes...

My father never drove a car. Well, that's not quite right. I should say I never saw him drive a car.

He quit driving in 1927, when he was 25 years old, and the last car he drove was a 1926 Whippet.

"In those days," he told me when he was in his 90s, "to drive a car you had to do things with your hands, and do things with your feet, and look every which way, and I decided you could walk through life and enjoy it or drive through life and miss it."

At which point my mother, a sometimes salty Irishwoman, chimed in:
"Oh, bull shit!" she said. "He hit a horse."

"Well," my father said, "there was that, too."

So my brother and I grew up in a household without a car. The neighbors all had cars -- the Kollingses next door had a green 1941 Dodge, the VanLaninghams across the street a gray 1936 Plymouth, the Hopsons two doors down a black 1941 Ford -- but we had none.

My father, a newspaperman in Des Moines , would take the streetcar to work and, often as not, walk the 3 miles home. If he took the streetcar home, my mother and brother and I would walk the three blocks to the streetcar stop, meet him and walk home together.

My brother, David, was born in 1935, and I was born in 1938, and sometimes, at dinner, we'd ask how come all the neighbors had cars but we had none. "No one in the family drives," my mother would explain, and that was that.

But, sometimes, my father would say, "But as soon as one of you boys turns 16, we'll get one." It was as if he wasn't sure which one of us would turn 16 first.

But, sure enough, my brother turned 16 before I did, so in 1951 my parents bought a used 1950 Chevrolet from a friend who ran the parts department at a Chevy dealership downtown.

It was a four-door, white model, stick shift, fender skirts, loaded with everything, and, since my parents didn't drive, it more or less became my brother's car.

Having a car but not being able to drive didn't bother my father, but it didn't make sense to my mother.

So in 1952, when she was 43 years old, she asked a friend to teach her to drive. She learned in a nearby cemetery, the place where I learned to drive the following year and where, a generation later, I took my two sons to practice driving. The cemetery probably was my father's idea. "Who can your mother hurt in the cemetery?" I remember him saying more than once.

For the next 45 years or so, until she was 90, my mother was the driver in the family. Neither she nor my father had any sense of direction, but he loaded up on maps -- though they seldom left the city limits -- and appointed himself navigator. It seemed to work.

Still, they both continued to walk a lot. My mother was a devout Catholic, and my father an equally devout agnostic, an arrangement that didn't seem to bother either of them through their 75 years of marriage.

(Yes, 75 years, and they were deeply in love the entire time.)

He retired when he was 70, and nearly every morning for the next 20 years or so, he would walk with her the mile to St. Augustin's Church. She would walk down and sit in the front pew, and he would wait in the back until he saw which of the parish's two priests was on duty that morning. If it was the pastor, my father then would go out and take a 2-mile walk, meeting my mother at the end of the service and walking her home.

If it was the assistant pastor, he'd take just a 1-mile walk and then head back to the church. He called the priests "Father Fast" and "Father Slow."

After he retired, my father almost always accompanied my mother whenever she drove anywhere, even if he had no reason to go along. If she were going to the beauty parlor, he'd sit in the car and read, or go take a stroll or, if it was summer, have her keep the engine running so he could listen to the Cubs game on the radio. In the evening, then, when I'd stop by, he'd explain: "The Cubs lost again. The millionaire on second base made a bad throw to the millionaire on first base, so the multimillionaire on third base scored."

If she were going to the grocery store, he would go along to carry the bags out -- and to make sure she loaded up on ice cream. As I said, he was always the navigator, and once, when he was 95 and she was 88 and still driving, he said to me, "Do you want to know the secret of a long life?"

"I guess so," I said, knowing it probably would be something bizarre.

"No left turns," he said.

"What?" I asked

"No left turns," he repeated. "Several years ago, your mother and I read an article that said most accidents that old people are in happen when they turn left in front of oncoming traffic..

As you get older, your eyesight worsens, and you can lose your depth perception, it said. So your mother and I decided never again to make a left turn."

"What?" I said again.

"No left turns," he said. "Think about it.. Three rights are the same as a left, and that's a lot safer. So we always make three rights."

"You're kidding!" I said, and I turned to my mother for support.

"No," she said, "your father is right. We make three rights. It works." But then she added: "Except when your father loses count."

I was driving at the time, and I almost drove off the road as I started laughing.

"Loses count?" I asked.

"Yes," my father admitted, "that sometimes happens. But it's not a problem. You just make seven rights, and you're okay again."

I couldn't resist. "Do you ever go for 11?" I asked.

"No," he said " If we miss it at seven, we just come home and call it a bad day. Besides, nothing in life is so important it can't be put off another day or another week."

My mother was never in an accident, but one evening she handed me her car keys and said she had decided to quit driving. That was in 1999, when she was 90.

She lived four more years, until 2003.. My father died the next year, at 102.

They both died in the bungalow they had moved into in 1937 and bought a few years later for $3,000. (Sixty years later, my brother and I paid $8,000 to have a shower put in the tiny bathroom -- the house had never had one. My father would have died then and there if he knew the shower cost nearly three times what he paid for the house.)

He continued to walk daily -- he had me get him a treadmill when he was 101 because he was afraid he'd fall on the icy sidewalks but wanted to keep exercising -- and he was of sound mind and sound body until the moment he died.

One September afternoon in 2004, he and my son went with me when I had to give a talk in a neighboring town, and it was clear to all three of us that he was wearing out, though we had the usual wide-ranging conversation about politics and newspapers and things in the news.

A few weeks earlier, he had told my son, "You know, Mike, the first hundred years are a lot easier than the second hundred."

At one point in our drive that Saturday, he said, "You know, I'm probably not going to live much longer."

"You're probably right," I said.

"Why would you say that?" He countered, somewhat irritated.

"Because you're 102 years old," I said..

"Yes," he said, "you're right." He stayed in bed all the next day.

That night, I suggested to my son and daughter that we sit up with him through the night

He appreciated it, he said, though at one point, apparently seeing us look gloomy, he said: "I would like to make an announcement. No one in this room is dead yet"

An hour or so later, he spoke his last words:

"I want you to know," he said, clearly and lucidly, "that I am in no pain. I am very comfortable. And I have had as happy a life as anyone on this earth could ever have."

A short time later, he died.

I miss him a lot, and I think about him a lot. I've wondered now and then how it was that my family and I were so lucky that he lived so long.

I can't figure out if it was because he walked through life, Or because he quit taking left turns. "

Life is too short to wake up with regrets. So love the people who treat you right. Forget about the ones who don't. Believe everything happens for a reason. If you get a chance, take it & if it changes your life, let it. Nobody said life would be easy, they just promised it would most likely be worth it."

The Safe Way to Consolidate a Chunk of Consumer Debt

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:35:09 GMT

http://bit.ly/RYyfYm

Author: Kaitlin Funaro, MarketPlace Media

We’ve all seen the late night infomercials promising to lift us out of a mountain of crushing debt: It’ll only take a phone call. Just three minutes of your time. And you, too, could be debt free forever.

You don’t need to consult with your financial adviser to figure out that calling that 1-800 number probably isn’t going to solve all of your money woes.

But is there a safe and practical way to consolidate a big chunk of consumer debt?

Gerri Detweiler, the director of consumer education for Credit.com says absolutely. You just need to know where to look.

Debt consolidation vs. credit counseling

“A lot of those ads that you see are not actually companies that will consolidate your debt,” Detweiler says.

"They’re credit counseling agencies and they will work with your creditors to get you on one monthly payment, lower your interest rate and lower your payments but they aren’t actually paying off your debt like a true consolidation loan would do.”

Instead, a debt consolidation loan is one new loan that will pay off all your existing debt, put you on a fixed monthly payment with a set plan for when the debt will be gone. “With a consolidation loan you know, in three, four or five years this loan will be paid off.”

So where do you get one?

Oh, how things have changed. Traditionally if you wanted a consolidation loan you’d have to apply through your bank or credit union or even tap into your home equity.

"But that industry has changed dramatically in the past few years thanks to the P2P, or peer-to-peer lenders, who take money from investors like you and me and lend it to other people who need to consolidate their debt.”

You can save money, Detweiler says, by using a P2P lender because the interest rates typically are much lower.

How to spot a scam

We’re used to doing everything online these days but when it comes to giving out personal financial information here’s one area where we need to be extra careful.

“There are sites out there that look very professional and they typically promise money with very little in terms of credit standards,” Detweiler says.

“What they’re doing is they’re gathering your personal information and turning around and selling it to scammers. Even if you don’t get a loan from them there’s a good chance that in a year or two you’re going to start hearing from debt collectors who are telling you that they’re going to have you arrested or sue you in court for paying this debt, whether or not you took out the debt.”

If you’re considering consolidation for student loans you need to be even more cautious. Head directly to the Department of Education for information and bypass any other companies who claim they can consolidate your student loans.

“The big risk with consolidating student loans is you may lose some of the protections you have right now with federal student loans including graduated repayment, deferment and forbearance,” she says.

“If you consolidate a federal student loan with a private student loan you lose those protections.”

Featured in: Marketplace Money for Friday, May 30, 2014

Speedometer Confusion - Great Read

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:35:05 GMT

Speedometer confusion, By Seth Godin - Entrepruner /Author / Motivator of New World Economy

The number on the speedometer isn't always an indication of how fast you're getting to where you're going.

You might, after all, be driving in circles, really quickly.

Campbell's Law tells us that as soon as a number is used as the measurement for something, someone will get confused and start gaming the number, believing that they're also improving the underlying metric, when, in actuallity, they're merely making the number go up.

Here are a few measurements that are often the result of speedometer confusion:

Book sales vs. Impact

Money vs. Happiness

Twitter followers vs. Anything

Money raised vs. Votes earned

Weight vs. Health

Income vs. Skill

Facebook likes vs. Liked

Tenure vs. Competence

Length vs. Quality

Faster? How about better?

When the Bank Demands Payment in Full: 3 Options for Borrowers with Matured Business Loans

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:35:02 GMT

Although the economy appears to be on the mend, many business owners still struggle. Especially those with commercial loans taken between 2007 and 2009. They either received, or will receive bank demands that their loans are now due in full. Commercial loans typically have 5 year maturities and most banks will not provide more than a one year loan extension of the maturity date to pay back a loan. For example a business owner who took a loan out in 2008 with a 2013 maturity, and received a one year extension is most certainly feeling intense pressure from their bank to pay back the money --this year!

There are 3 realistic options that a business owner should consider when their bank demands payment of the loan in full:

1. Pay off the loan. In today's restrictive banking climate refinancing sounds much easier than it really is. Banks infrequently rewrite their own commercial loans upon maturity. This is because the financial position of many small businesses has diminished since 2007. Also lending guidelines were more' flexible' then, with commercial properties reportedly having higher values. So unless a business owner has a load of cash to pay off the loan, refinancing with the same bank is almost impossible, and securing funds from an outside bank is increasingly difficult.

2. Negotiated Exit. Be assured that if a loan has matured and the borrower is not prepared to pay if off, the bank will begin a lawsuit. Defending a law suit can be expensive, but in most cases it will only delay the inevitable. Absent real legal defenses for bank misconduct or the mishandling of a loan, the best approach for a business owner is to negotiate a realistic "exit" from the bank with the assistance of experienced counsel. There are a numerous variables for consideration when negotiating a forbearance or settlement agreement, so unless a business owner is familiar with bank work out or special asset protocol, retain an experienced attorney.

3. Reorganization. Chapter 11 reorganization can be expensive, but it is an excellent remedy for business owners when a bank acts in bad faith or has become a relentless and unreasonable collector despite all of the borrower's repayment efforts. . A Chapter 11 bankruptcy should be a final option, but it will halt collection actions and enable a business owner to restructure its business debt under court supervision. Chapter 11 legal practice is highly specialized and complex so seek a business bankruptcy attorney who can demonstrate past results.

There are few choices a business owner can make when their bank issues a demand for repayment: refinance, fight, negotiate or file business bankruptcy. Doing nothing however, is unacceptable. It's an all -around recipe for financial disaster, and while a business owner may experience temporary paralysis upon receipt of a bank demand, weigh the options, seek experienced representation and take action.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own attorney.

"Keep Your Money!"

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:35:00 GMT

When Is It Acceptable to Forgo Payments to Your Creditor or Landlord?

Credit card, loan and lease agreements contain terms that regulate the debtor / creditor or landlord / tenant relationship. Not surprisingly a large portion of these contracts are dedicated to the creditor's or landlord's rights in the event that the debtor or tenant defaults under the terms of an agreement.

Unfortunately, a job loss, a reduction in income, an illness or other unforeseeable event can cause a payment default. In other cases, a lender's or landlord's action or inaction can make it difficult for one to continue making payments. But no matter the reason, without receipt of timely payments, its certain that one's creditor will declare a default. Sure, the easiest way to cure a default is to catch up on back payments. But here are 3 situations when it is inadvisable to send money after a "default" is declared:

1. Settlement Proposal. When a debt collector calls and offers to settle a past due balance for a reduced amount, make sure that they provide the terms of the offer in writing no matter how appealing the settlement. Don't be pressured by their arbitrary deadlines into paying over the phone without first reviewing written settlement terms. With today's technology, obtain the settlement and release through email. Otherwise, they can use "snail mail." Review the written offer and if agreeable, make payment over the telephone. Making a payment based upon a debt collector's verbal representation is unacceptable and if you do, don't be surprised to learn that your original outstanding balance was reduced by the payment, and nothing further.

2. Landlord -Tenant Dispute. When a landlord repeatedly fails to address a problem under the terms of the lease, withholding rent may be the only leverage a tenant feels they have. But a tenant's failure to make monthly payments is legal grounds for eviction. If a tenant feels compelled to withhold rent because of a legitimate issue, then the best method to show good faith is for the tenant to set up an escrow account at their bank or credit union. Designate the account as the rent account for the landlord's benefit. Maintaining an account without verifiable deposits is pointless. In the event of an eviction, this demonstrates to a judge that payments are being made under the terms of the lease but that the landlord's corrective action is necessary. (By the way, if it gets this far, its time to find a new rental.)

3. Mortgage Lender. When a mortgage company declares the mortgage in default, this means the borrower is in jeopardy of losing their home to foreclosure. But once a default is declared, all back payments and any applicable administrative fees become due. Sending in partial payments will not cure the default, nor will it stop a scheduled foreclosure sale unless the lender or its attorney has agreed to accept the partial payments. Seek out legal assistance to help you negotiate a payment plan to reinstate your mortgage.

One item common to all three of the above scenarios is the need to have written documentation of the original agreements and all subsequent agreements in writing. Read and understand the terms that bind the parties. Remember, don't accept explanations about terms and conditions of a contract from the very party that at a later date could be one's adversary. Finally, too many times people fail to read the provisions of the initial agreement thinking that the terms therein will not apply to them, yet they act surprised when these same terms are enforced against them.

Why Perform Bathroom Surgery?

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:34:58 GMT

I recently met two successful business partners in the real estate investment business. They were frustrated about a real estate transaction they have been involved in for a while. They proceeded to tell me how many hours they spent on doing the legal research that ultimately brought them to my conference table. They said they spend an estimated 300 hours of their time researching whether they had a case or not. That's 300 hours! After reviewing their documents, the time it took for me to tell them that they did indeed have a legitimate legal concern and claim? 45 minutes.

Why is this so important? Let's assume the 300 hours is pretty accurate. At the bare minimum they make $100,000 per year. With 2080 hours a year, that means a person makes about $50 hourly. 300 x 50 is $15000. One investor could have used their time more wisely and spent the equivalent of 10% of this money with an expert, who would not have only reviewed the matter, but given a professional legal opinion regarding ready and available courses of action.

Imagine what better deals these partners could have found using their 300 hour on research, due diligence, and networking.

One deal would more than adequately have paid for the cost of a legal opinion multiple times over.

My point: Bathroom surgery can be messy and expensive. The scenario above brings new meaning to the adage..."if you think dealing with a professional is expensive, just wait until you hire an amateur. "

So House Flipping is Your Thing? Really.

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:34:51 GMT

Believe it or not, house flipping is back with the housing recovery. And while there’s money to be made from flipping houses, there's also money to be made from selling things to would-be flippers. Flipping workshops are crowded again.

At a recent workshop just outside Baltimore on a recent Saturday, Terry Royce, who’s been flipping houses for seven years, was sharing some of his secrets. Everything from how to find a seller, or a buyer, even time management tips.

“I always like to say, this is work, stuff gonna go wrong," he said later. "It is. And it’s the reality.”

It was Royce’s first workshop. He charged $97 for a morning seminar and afternoon bus tour of some homes that are being flipped.

Zane Watkins was among those on the bus. He said he’d been to four or five other workshops, one that cost him and his wife $300 and ended with a hard sell for another series of seminars.

“They had three different versions of the package,” he recalled. “One was like $10,000, and $15,000 and $22,000 that you would pay overall.”

The Better Business Bureau rates these types of workshops. It's now tracking 130 of them.

“Of that, only one is a BBB accredited business with an A," said spokeswoman Katherine Hutt. "We have one that has a B+, 13 that have Cs and all the rest have Ds or Fs.”

Hutt said the BBB gets several hundred complaints a year from consumers saying they didn’t get what they paid for from flipping workshops. And, when they tried to get their money back, they ran into a brick wall. Hutt said, just like buying a home, when it comes to flipping workshops, it’s buyer beware.

Featured in: Marketplace Morning Report for Thursday May 15, 2014 , by Nancy Marshall-Genzer

The Meaning of 'Where is -As is' in Real Estate

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:34:01 GMT

Common Misconception
“Where is -As is” is a real estate term whereby the subject property is being sold in its present condition or current state. A Purchaser is taking a property with the understanding that there will be no “moving, cutting, shifting, replacing, redoing, changing, repairing, relocating, or refacing” anything related to the property. However, it is a mistake for a Purchaser to think that since they are buying a property in its current state, that they should forgo a property inspection or waive receipt of a Seller's Property Disclosure.

A property inspection may reveal property conditions unknown by a Seller or worse, known but undisclosed by the Seller. Unless a purchaser is an experienced builder or contractor, its important to always have a property inspection. Defects discovered through a property inspection may help with price negotiations regardless of a Seller's intention to sell "as is".

In Michigan residential sales, Sellers must always provide the Purchaser with a Seller's Disclosure, and I strongly encourage commercial real estate purchasers to receive the same. Depending on how a Seller completes the disclosure, if a Purchaser discovers defects that are inconsistent with a Seller's earlier representations, there could be grounds for Seller liability for misrepresentation.

Does Having More Money Make You Less Empathetic? Surprising Psychology Behind Money.

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:33:59 GMT

http://www.npr.org/programs/ted-radio-hour/295260995/the-money-paradox

People who were shown a picture of their "future selves" tend to save more (by 20%) than those who are shown pictures of their current selves. Studies show that as a person's wealth increase, empathy decreases. Unreal...Love Ted Talks!

Tenant Pay History on Credit Reports?

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:32:48 GMT

Does your landlord report to the credit bureau?

Photo: multiple sources

Saturday, July 6, 2013 - Joy’s Personal Protection Financial Management Tips by Joy Mal

WASHINGTON, July 6, 2013 – In today’s economy, it’s a universal truth: a good consumer credit score is one thing that most if not all people consider to be of great importance. Or if they don’t, they certainly should. That’s because our individual credit scores can have an effect on numerous significant aspects of our lives including our finances, our jobs and even the homes in which we will live, either by renting or making mortgage payments.

Speaking of renting, did you ever consider the relationship between your landlord and credit bureaus? Did you know that they can both actually have an effect on your credit score?

It is true that landlords can make reports to the credit bureaus. In 2011, one of the major credit reporting agencies in the country started including residential rental payment data in credit reports. This paved the way for millions of consumers to improve their credit with regular timely rental payments.

In response to this, months later, a number of websites started offering related services to assist consumers wishing to take advantage of their rental payments to help increase their credit scores.

This is quite significant because the U.S. Census Bureau estimates that there are about 100 million renters in the country, approximately one-third of the total population of the United States. So it is becoming obvious that there is a real need to help show the true potential credit rating of people who pay their rent on time.

Pay your rent, help boost your credit score

There are several ways by which your regular and on-time rental payments can help improve your credit. For example, RentBureau, under the credit reporting agency Experian, uses rental payment data to help people who are not credit users to increase their credit score.

Similarly, information from PRBC (formerly Payment Reporting Builds Credit Consumer Reports), such as bill payment data on rent, cable, insurance and even daycare provider payments, is being included in credit scores.

These kinds of services aim to help consumers who were previously neglected but creditworthy, but did not have the usual forms of credit, like bank credit cards, personal loans or mortgages.

The importance of credit monitoring

If you are among the estimated 100 million renters in the country, it would probably make sense to perform regular credit monitoring. Why? Well, the landlords may also be checking your credit report as they generally want to know your credit scores too.

According to Kathy Braddock, co-founder of independent real estate firm Rutenberg Realty in New York, it is “perfectly normal” for landlords to request a credit report from prospective renters, so they “can see where their standing is in the financial community.”

With this in mind then, it would be quite helpful if consumers made checking their credit scores a regular habit.

On credit reports and credit scores

If you’re looking for other reasons to check your credit report, consider this: Millions of other people do it, so you most probably should too. In fact, the Consumer Financial Protection Bureau, a watchdog agency formed in July 2012 under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, reports that credit reporting companies issue over“3 billion consumer reports a year and maintain files on more than 200 million Americans.”

Credit reporting companies perform a number of tasks, such as monitoring the number and types of credit accounts consumers use, how long these have been open, and whether or not consumers have made timely bill payments. They can also create reports that show your credit history, unpaid balances and other things that potential landlords (and lenders) may want to know.

Checking your credit report regularly will also be useful because if you detect any errors in it, you can report them and have them corrected immediately. This is important. Many times, errors in credit reports can also mean you have become a victim of identity theft or credit scams, which can lead to a world of other problems.

Other ways to help improve your credit score

Aside from paying your rent on time and regularly checking your credit reports, here are other things you can do that may help raise your credit score:

If you are a credit card holder, maintain a low credit balance. Do not use up all your available credit.
Try to avoid having too many new credit applications, because these can negatively affect your credit score, especially when you are looking to apply for a car loan or mortgage. This applies even to applications for department store cards.
Pay off your debts little by little, even if you can only afford to pay just a little more then the minimum amount due.
Pay your bills on time.
Check your old accounts, including those you have not used for a while, as these may help boost your score.
Do your best not to combine your balances or move your debt around so that payments can be easier, because this may have a negative effect on your credit score.
If you are applying for a loan, ask your lender what scoring model they use. Sometimes, a number score by itself won’t tell you your true credit standing.
If credit counselling that shows up on your credit report is considered a negative factor, you must be aware that this should not be the case. It should actually be considered a positive factor.

In the end, whether you are renting or not, it pays to monitor your credit and do all you can to help raise your credit score.

Unlike Some Promises, These Guaranties Really Stick

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:32:22 GMT

When it comes to signing a loan contract, whether it be for real estate , a lease, a car, boat or any type of service, most people will sign a contract with the intention of complying with its terms. In the event a borrower defaults on a loan agreement , one of the more potent provisions in a lender's arsenal of legal remedies is to pursue the borrower on their personal loan guaranty.

A loan guaranty is an agreement by which one person assumes the responsibility of assuring payment of another's debts or obligations . A guarantor can be an individual or a company. In the event of default , the guarantor will be called upon to make the payments, pay the entire loan balance, or step in to perform the required service. Under a loan guaranty, a guarantor, if not the borrower, is not obligated on a loan until a default is actually declared by the lender.

There are four ways to limit a guarantor's legal and financial exposure, and all parties to the agreement must agree to the terms of the guaranty before signing. The four ways to limit exposure under a loan guaranty are:

1. Place a limit on the amount of the guaranty. For example, the guarantor agrees to be responsible for the first $100,000 of a $500,000 loan.

2 . Reduce the amount of the loan guaranty over time. For instance, the guarantor will not be held responsible for the loan once the borrower has performed on the note for a specified period of time, say 48 months. Or after the first three years, the amount of the guaranty is reduced by $X amount of dollars.

3. Make the guaranty enforceable against the guarantor only after the lender has sought all other legal remedies against the borrower. Only then is the guarantor responsible for the amount that the bank could not collect from the borrower.

4. Multiple loans. Guarantors should use caution if and when a borrower has multiple loans with a particular bank. Make sure that the guaranty specifies the loan obligation that it intends to secures. There should be no confusion that when a loan is paid off the obligation is extinguished. Otherwise it is feasible that the guaranty could continue to secure any of the remaining multiple loans.

On a final note, tearing up a signed loan guaranty while standing in the middle of a bank lobby does not relieve a guarantor from their obligation.

Agreeing to be a loan guarantor is a serious legal and financial responsibility. It is a legal arrangement that should not be entered into lightly. It's exciting to be approved for a long awaited business loan or equity line of credit. Defaulting on a loan is the last thing business owners and consumers contemplate when borrowing money, yet the provisions written in the loan agreement are there in the event that one does. Seek competent legal representation before you close your loan . Always remember that bank attorneys drafted the loan documents.

About the Author: Since 1990, David Soble has been a real estate and finance attorney in Ohio and Michigan. He advises national banks, lenders, loan servicers, consumers and business owners on residential and commercial real estate, finance and compliance issues. He has been involved in thousands of real estate transactions, being responsible for billions in real estate loan portfolios throughout his career. And while he may at times seem overly harsh, he has 23 years of real estate battle scars to support his tempered cynicism.

When Any Movement Counts: 5 Ways to Kick- Start the Process of Resolving a Legal or Financial Challenge

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:32:15 GMT

Tackling a legal or financial problem can wear on one's psyche. Proven Resource managing attorney explains how to address the issues that commonly weigh people down.

"Every worthwhile accomplishment, big or little, has its stages of drudgery and triumph: a beginning, a struggle and a victory."

Detroit, Michigan ( PRWEB ) September 25, 2013

Nothing is worse than learning that a potential client has ignored a legal or financial problem that could have been easily resolved had they just paid attention to some lender correspondence, or had entrusted their issue to the right professional. True, sometimes this is easier said than done . When it comes to what the Federal Reserve Chairman Ben Bernanke calls "the worst financial crisis in modern history," there is little that struggling business owners or consumers could have done to prepare them for their financial or legal challenges. People experiencing overwhelming financial or legal matters are quite often stuck battling some degree of depression or anxiety.

Here are 5 professional recommendations that will help loosen the vise of "economic" and "legal" depression, and increase the prospects for a positive resolution to one's legal or financial problem:

1. Stop ignoring your mail. Creditors are required by law to send written notices informing delinquent borrowers of important legal rights and critical time limits to exercise these rights. Missing a deadline could cause one to forfeit these various rights and defenses. Recognize that it is much more difficult to reverse a judgment or re-open a legal proceeding than it is to initially respond to a complaint. Take for instance, a mortgage default; certain federal and state time lines allow a borrower to have their mortgage modification request re -evaluated even after it was denied at the underwriting level. Miss that cut-off date and it is near impossible to reapproach the lender.

2. Answer your phone. It sounds counter - intuitive, but instead of letting numerous creditor calls go unanswered, only to increasing one's anxiety, answer the collection call once and tell the caller to stop calling pursuant to federal law ( Fair Debt Collection Practices Act ). Should a debt collector call after that first warning they expose themselves to a lawsuit. Instead of focusing on the fear and anxiety redirect the negative energy into developing a plan to seek professional assistance.

3. Develop a plan. Nothing makes lenders and collectors feel better about a delinquent file than when the borrower offers up a realistic plan on how they will repay a loan. Filing bankruptcy should be the last consideration. It benefits neither party. Take some time to sketch out a repayment plan. In matters more serious than some late medical bill or credit card payments, say a mortgage or commercial loan , it is better to make a timely and reasonable proposal to the lender before they unilaterally proceed to invoke their legal remedies and impose even less favorable terms.

4. Get organized. Take correspondence and documents and sort them by creditor. Stack them in chronological order and separate them into manila folders. This will make meetings with an adviser more efficient. Most importantly, going forward, keep a written log of who said what and when. Never discount a written log because it keeps creditors and collectors accountable for their words and actions.

5. Find the right expert . The Martindale Directory is a legal directory that lists over 100 areas of law and another 81 sub specialties. Understand that not all lawyers are the same. A divorce attorney is not a real estate attorney and a real estate attorney may not be a commercial real estate attorney. The right professional will help you develop a plan of action suitable for one's situation. Now is not the time to become one's own "jail house" lawyer. It takes years of experience to refine legal skill and knowledge. Time is not a luxury when it comes to addressing imminent financial or legal hardship.

Conclusion: Recognize that life is not static. Ghandi once said, "Every worthwhile accomplishment, big or little, has its stages of drudgery and triumph: a beginning, a struggle and a victory." Move forward by taking just one of the five steps listed above. Be assured that things will only improve once action is taken.

About the Author: Since 1990, David Soble has been a real estate and finance attorney in Ohio and Michigan. He advises national banks, lenders, loan servicers, consumers and business owners on residential and commercial real estate, finance and compliance issues. He has been involved in thousands of real estate transactions, being responsible for billions in real estate loan portfolios throughout his career. He has 23 years of real estate and lending law experience and the battle scars to support his tempered cynicism.

Get Real. Providing Fake W-2's for a Loan is Called Loan Fraud!

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:32:04 GMT

Teresa Giudice Fraud Update: ‘Why Is This Happening To Me?’ ‘RHONJ’ Star Wonders [VIDEO]

By Maria Vultaggio

on September 29 2013 11:19 PM

“The Real Housewives of New Jersey” star Teresa Giudice tearfully wondered why she and her husband are facing legal prosecution on Andy Cohen’s “Watch What Happens: Live” Sunday night. She and her husband Giuseppe “Joe” Giudice are accused of bank fraud, bankruptcy fraud, mail fraud and mortgage fraud, among other charges in a 39-count indictment returned by a federal grand jury on July 29.

Teresa Giudice wondered why she was in trouble with the law on Sunday night. Bravo

After “RHONJ” was shown on Bravo Sunday night, the reality-television star spoke out for the first time on “WWHL” since she and her husband entered pleas of not guilty to the slew of fraud charges pending against them. When the host asked Giudice how she felt about the allegations and the possibility of jail time, she broke down in tears.

“You go through things in life, I don’t know why, I mean I’m asking, ‘Why is this happening to me?’” she said.

Giudice said her daughters gave her strength: “I can’t fall apart, Andy, I mean my daughters -- they mean the world to me,” she said. The couple have three daughters together: Gia, 12; Gabrielle, 9; and Milania, 8.

The 41-year-old reality-TV star was even able to find a silver lining in the 39-count indictment that could reportedly get them 50 years in jail: “Maybe it’s something my daughters could learn from.”

Although it is possible the Giudices could face jail time, Alfredo F. Mendez, director of the white collar criminal law and governmental investigations practice at Abrams Fensterman in New York, told the International Business Times in a phone interview phone interview that the number “50” is arbitrary and not definite.

“Sentencing is tricky and sophisticated in the federal courts,” the legal expert said, adding that any sentence “could be less,” assuming either or both are convicted. And, obviously, they must be found guilty “beyond a reasonable doubt” to be given time in the slammer.

“Intent is a key element the government has to prove beyond reasonable doubt to convict someone,” Mendez said.

5 Steps Real Estate Experts Take to Reduce Headaches and Confusion When Buying, Selling or Leasing Property

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:31:56 GMT

Detroit, Michigan (PRWEB) August 29, 2013

The Statute of Frauds is based on old English law and requires that certain contracts be in writing in order to be enforceable against the parties to the contract. The statute applies to real estate sales and transfers or leases for more than a year. The Statute of Frauds is a misnomer and instead should be called the statute "against" frauds since its purpose is to memorialize a transaction to writing, preventing confusion and fraud.

But "getting it in writing" is not always easy. Sometimes people become a party to a contract because they feel rushed or simply take "the word" of the other party or agent. Disagreements abound between strangers, professionals and family members alike, when real estate agreements are not reduced to writing.

Here are 5 steps that buyers, sellers, landlords, tenants, real estate agents, investors, borrowers, and lenders can take to reduce legal contention when working with a real estate agreement:

1. Real estate closings. Reduce surprises at a real estate closing by asking for a preliminary closing package, including a settlement statement, several days before the scheduled closing. Another name for a preliminary closing package is an "attorney's package". A lender, mortgage broker, title company or real estate agent should always comply with the request to provide for advanced documentation.

2. The walk-through. A new home buyer should always go through a final walk- through in advance of a home closing. Likewise, a tenant should do a walk -through with a check list noting any and all repairs or issues with the premises. Never take someone's word that a noted repair will be done. Have the responsible agent put it in writing with a time set for completion. Make sure to retain a copy of the checklist.

3. Loans. When applying for a mortgage, applicants are required to receive a written estimate of their anticipated loan costs. Known as a Good Faith Estimate of Settlement Charges ("GFE"), it must be sent to applicants within 3 days of making an application, and its purpose is to allow the consumer to compare the mortgage fees from different mortgage companies as well as to prevent sticker shock. Unless there are problems with a loan applicant's initial qualifications, the terms of the final loan should be relatively similar to the final loan approval, and the terms of the loan should remain the same at the closing.

4. Modifications. Changes to an original loan term, real estate purchase or lease agreement require both parties to sign and agree to the proposed changes. These signed changes are evidenced on a amendment or addendum. Changes to a written contract must be agreed to by both parties and evidenced by their signatures in order for the change to be valid. Sometimes, just a term or date may be changed. In that case, both parties need to initial the changes.

5. Specificity. When reviewing a real estate agreement (or any contract for that matter) if there are any ambiguous terms, it's best to take the time up front and get specific with a term or provision so as to reduce headaches and confusion later. For instance, a landlord may provide that a leased apartment is for three tenants. Name each tenant. A home buyer may be unsure if a household item they like in a home will be included in the purchase. They should specify it in the offer. Don't rely on oral promises. Rely on the written word.

Conclusion. Reducing an agreement to writing is important not because people aren't honest, but for when things don't go as planned. When there is a problem, the parties can refer to the contract and what was meant and memorialized in writing. Each day numerous lawsuits are filed on behalf of parties that dispute the meaning and intent of written contract provisions. So imagine the legal problems and financial angst generated by disagreements surrounding an oral real estate agreement. Taking the steps as discussed above will ensure a smooth outcome to one's real estate transaction.

Stop Agreeing To These 5 Contract Provisions

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:31:54 GMT

Real Estate and Finance Attorney David Soble Warns: Small Business Owners and Consumers Must Stop Agreeing To These 5 Contract Provisions

Detroit, Michigan (PRWEB) August 01, 2013

When it comes to signing a contract, whether it be for real estate, a loan, a lease, a car, boat or any type of service, most people will sign a contract with the intention of complying with its terms.

They enter into a contract feeling that its provisions would never apply to them, because they have no intention of defaulting. But in the event of unforeseen circumstances, these terms and provisions are meant for when one defaults.

Here are the five harshest provisions commonly found in financing agreements. They are listed in no particular order of severity, but suffice to say, a borrower should avoid having these terms included within the contract if they can. If they can't, a solution is suggested on how to reduce the intended consequences of such provisions.

1. Prepayment penalty ("PPP"). Essentially, this term makes one pay an additional percentage of the loan balance when paying the balance off in advance of the intended due date. For instance, a 3% prepayment penalty on $100,000 means that a fee of $3000 is owed to the lender. What a waste.

Solution: If the lender insists upon having a prepayment penalty, then limit the time for which the term is valid. Limit a prepayment penalty for the first 3 years or negotiate a penalty that gets reduced in every passing year. For example, a 5% PPP in the first 2 years, gets reduced to 3% for the next 2 years, and 1 % thereafter. The best solution is to have no PPP, or wait until the time for the PPP expires.

2. Balloon Payment. Having a balloon payment on a loan or promissory note means that the loan may be amortized over a specified time, but the entire balance is due prior to the loan being fully amortized. For instance, a $50,000 loan with a 30 year amortization and a 5 year balloon, means that the payments are spread over 30 years, but the remaining balance on the $50,000 is due in 60 month. Failure to pay the balloon payment means that the borrower is in default.

Solution: Try to extend the balloon out for a longer period, say, a 10 year balloon instead of a 5 year balloon. Also condition the balloon's effect on consistent payment history: the balloon is extended to another time, or goes away all together if all payments are paid timely. Please note: A PPP provision can exist even when there is a balloon payment provision, but the PPP cannot be charged when paying off a balance pursuant to the balloon requirements itself.

3. Guaranty. A guaranty is a provision. A guarantor is an individual or company that signs an obligation on behalf of another bound to a contract, usually to ensure that the primary borrower will perform under the contract's terms. In the event that the borrower fails to perform a service or make payments, the guarantor will be called upon to make the payments, pay the entire loan balance, or step in to perform the required service. Being a guarantor is different than being a co-maker (discussed in item 4). Neither status is good. but a guarantor is not obligated on a loan until a default is actually declared by the lender.

Solution: Limit exposure as a guarantor by agreeing to be liable for a service or balance for a specified amount. For instance, a guarantor can guaranty only the first $100,000 of a $700,000 loan, or negotiate a fading guaranty which means that the exposure is reduced as time goes by. "After 5 years, the guaranty is null and void or reduced by half the original balance." Another solution is to have the guarantor liable only when the lender has exhausted all legal options against the original borrower and has failed to collect.

4. Co-Maker. Co-makers are basically joint borrowers on an obligation. If one borrower doesn't pay, then the other remains liable for the debt. There are no requirements for a lender to pursue and exhaust all legal remedies against one co-maker before pursuing the other. The lender can pick and choose who to pursue; one or both. It also doesn't matter that one co-maker may get all the benefit of a contract (known as consideration) while the other may have received nothing from the contractual relationship.

Solution: Co-makers or co-signers are jokingly called "idiots with pens". That;s harsh. But there are times when a co-maker is needed, such as on a student loan or car note. The best solution is to reduce the time frame in which the co-maker's liability remains in effect, or base the provision on performance. For example, when one borrower pays timely for 24 months, then the co-maker shall be released from the obligation.

5. Negative Amortization. Negative amortization occurs when there is an increase in the principal loan balance because the monthly payments are deficient and fail to cover the monthly interest. The remaining balance of interest due is added to the principal balance. A provision against negative amortization can be included in a contract and a default can be declared.

Solution: Negative amortization can occur if the borrower needs a lower payment for a short period of time. Ask the lender to modify the loan to accommodate a lower payment. If not, then the lender may spread out the difference in interest over several payments at a later date. Also, one can ask to extend the time before a default would be declared.

Conclusion.

There are many scenarios concerning the above listed provisions and their impact. In some instances, the easiest way to prevent against a lender from invoking a material default is to simply "cure" a the default, or have the lender waive the default, by giving the borrower a "second chance". Times remain difficult for some lenders, just as it does for businesses. Understanding the implications of contract provisions is the first step to crafting and negotiating terms that one can live with when endorsing a contract. Terms that may or may not ever apply to one's own situation.

Avoid Even More Debt After Using a Debt Settlement Company

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:31:16 GMT

Millions of Americans are still struggling with growing debt even though the economy is recovering.

Many feel desperate for help.

But be leery of debt settlement groups, you may end up further in debt.

"Basically, this company was saying "ok, you have all this debt and we can settle it for approximately 45% of the debt,"" said US Postal Inspector Robert Clark.

That is the pitch some debt settlement firms are making to consumers.

"They tell the customers stop making the monthly payments to the creditors, stop speaking to the creditors as long as you can make one monthly payment to us," said Clark.

Customers are asked to sign a three-year contract - and if they do, all of their debt will be paid off. Sounds like a great deal until you see all the hidden fees and charges.

"Some of the victims that we've spoken to admitted I didn't even ask what the fees were because they were so happy to stop paying all the credit cards and pay one monthly fee that was affordable," said Clark.

Relief quickly turned to anger when consumers realized the money they were paying had not been sent to creditors.

(Robert Clark, US Postal Inspector)
"A lot of the victims called once they realized there was no money in their escrow accounts," said Clark. "The company would then point to the stipulation in the contract that says they're allowed to collect these fees."

Postal Inspectors say in one case there were more than 1,300 victims and $3 million in dispute. Lincoln Police encourage anyone interested in the service to run the idea by someone else first.

"Someone that you trust that would have good financial sense," said LPD Officer Erin Spilker. "You don't want places that are going to end up charging you extra fees and really it's not helping you get your debt taken care of."

Moral of the story: Read a contract very thoroughly. If you don't, you could end up being a victim of a scam.

KOLN-TV - Chad Silber, June 10, 2013

Zombie Debt: Reasons Certain Debt Wont Die

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:31:10 GMT

Detroit, Michigan (PRWEB) May 28, 2013

1. Divorce. Generally, in a divorce, a divorce decree or separation agreement will shift monthly credit obligations from one ex-spouse to another. Contrary to common belief, these court orders do not release either spouse of the underlying joint credit obligation. Only ones' creditor can do that. So when one ex- spouse fails to make a payment to a joint creditor, a creditor can still sue both parties to the loan obligation for a loan default. Suggestion: In the event of an ex-spouse's default, go back to court and try to enforce the divorce decree. Also, make sure to monitor the monthly payments carefully, and review a credit report frequently. Unless a creditor provides a written release, which seldom happens, be vigilant.

2. Loan Guaranty. Many lenders and banks will require an individual to personally guarantee a loan. A loan guarantor cannot unilaterally revoke a loan guaranty. Tearing up or providing a written revocation of one's personal guarantee has little effect, except to agitate the creditor. A guaranty only expires when the subject loan is paid off, or when both parties to a loan agreement mutually rescind or revoke the guaranty in writing. Careful: Make sure one's loan guaranty specifically references the date and amount of the loan so that there is no confusion that when the loan is paid off, the corresponding guaranty is extinguished. Lenders have been known to attach otherwise old extinguished guarantees to newer or outstanding unrelated multiple loan obligations.

Conclusion.

About the Author: Since 1990, David Soble has been a real estate and finance attorney in Ohio and Michigan. He advises national banks, lenders, loan servicers, consumers and business owners on residential and commercial real estate, finance and compliance issues. He has been involved in thousands of real estate transactions, being responsible for billions in real estate loan portfolios throughout his career. And while he may seem harsh, he has 25+ years of real estate battle scars to support his tempered cynicism.

Never Make Your Buyer Your Tenant

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:31:05 GMT

Proven Resource Attorney Cautions Against Making Your Buyer Your Tenant: Four Reasons for Home Sellers to 'Cut and Run.

Detroit, Michigan (PRWEB) April 22, 2013

With home sales activity increasing throughout the country, sellers are feeling excited about better prospects. Some national mortgage programs are less restrictive than in recent years and buyers needing home financing feel relieved. Despite the optimism, sellers and buyers must still keep their wits about them to avoid making silly real estate mistakes that can have financial or legal consequences. Making your buyer your tenant, ("buyer/tenant") is but one avoidable mistake that sellers often make.

Understand that selling a home can be a lengthy and often frustrating process. Perhaps a seller is seeking a short sale with their bank, or a buyer's financing arrangements hit a snag. When things don't go as planned, eager sellers and anxious buyers may consider allowing the buyer to move in the home prior to a closing. Regardless of pressure from the buyer, their real estate agent, or your own good intentions, here are four reasons a seller should never let their buyer become their tenant:

1. The buyer's new legal status as "tenant". When a seller allows a buyer to move into the subject home before a closing has occurred, they now have created a landlord -tenant relationship. And like some tenants, they may not pay rent, or they don't leave when they should. So when a buyer, in anticipation of securing a mortgage is later denied, the buyer should leave the home voluntarily, right? If they refuse to leave, then the seller must legally evict them since their buyer now has the same rights as a tenant under the law. Unless there is a mutually beneficial relationship that remains after the buyer's financing falls through, there is no further reason to allow the buyer to stay in the home.

2. Buyer's remorse is quickly amplified. The excitement of buying the seller's home is short lived. The buyer / tenant now living in the home may begin to notice the little things that they may have overlooked when they first fell in love with the home , or they realize a deficit in their earlier buying decision. Perhaps the location isn't as good as they thought, they found a cheaper home, or worse, they met your neighbors. As "tenants", they are free to look elsewhere for a more "suitable" home.

3. The "test drive". Once the buyer moves into the home, unless specifically stated otherwise, the seller is obligated to make any repairs to the home while both parties are awaiting the closing. Suddenly items that would normally be a new buyer's "wants", become their "needs" and at the seller's cost. From having simple blinds replaced, to having a furnace or air conditioner replaced, a sharp buyer won't close on the home until their "needs" are met. Don't be a sucker and let a buyer "test drive" your home.

4. The "garage" scenario. Often there may be a small window of time between the buyers move from their former residence and the time for closing on the new home. When the buyer's real estate agent asks if the buyer can set their items in the garage before the closing for a few days, be careful. Resist the temptation. If the sale does not close, will the buyer remove their belongings from the garage? If so, when? Next week? Next month? Next year? If and when the buyer does remove their items, is the seller prepared to answer for the disappearance of a priceless heirloom that was allegedly in the buyer's belongings, now termed "antiques"? Should the seller have to underwrite the risk posed by storing the buyers items, now "treasures", in their garage? Avoid the needless headaches and pass on this request.

Considerations. Seek the advice of an objective legal professional. Yes, there are good real estate agents out there. They are essentially the sales person that ushers a buyer and seller through the home sale process, and good agents make the job look easy. It isn't. But despite these accolades, agents are still commissioned sales and marketing people. And what may be good for them and their client, may not be good for you. What happens when your deal doesn't close? If the buyer / tenant fails to leave voluntarily, the agent will not be paying for, nor performing the eviction. If the buyer / tenant destroys the inside of your home, you will be paying for repairs in order to get the home back on the market. If a buyer fails to remove their items from the garage, you will be hauling these items away, or walking through a mess every day. Not the agent.

No one says that the buyer/tenant relationship is completely untenable, Certainly the examples above are provided for the seller to stay alert and take precautionary measures. Sellers need to obtain maximum protection by consulting with outside real estate counsel so that they may protect their biggest investment, and themselves from becoming an unwitting landlord.

About the Author: Since 1990, David Soble has been a real estate and finance attorney in Ohio and Michigan. He advises national banks, lenders, loan servicers, consumers and business owners on residential and commercial real estate, finance and compliance issues. He has been involved in thousands of real estate transactions, being responsible for billions in real estate loan portfolios throughout his career. And while he may seem overly cynical, he has 23 years of real estate battle scars to support his comments.

Just What Is the Law of Holes?

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:30:44 GMT

Detroit, Michigan (PRWEB) April 30, 2013

The "Law of Holes" states that "when you find that you've dug yourself into a hole, stop digging". It's a simple rule, yet so difficult for many people to follow. Here are three reasons why people who "go it alone" should seek professional guidance for a problem before it becomes worse or before it's too late to fix.

1. Emotion.

Hiring a professional representative, such as a real estate agent, attorney or accountant, has as much to do with these agents serving as an emotional buffer as it does their education or experience. Take for instance real estate agents. There's a long list of instructional materials available for selling a home "by owner." Hidden obstacles (too many to name here) and the emotional roller coaster that comes with it, make hiring an experienced agent sensible. Perhaps the home fails an inspection or the buyer's mortgage financing falls through. Emotions can, and do run high. A good agent can tackle the issue, smooth out the wrinkles, and keep emotional parties focused. An experience agent is not only a professional problem solver, but acts as an emotional buffer between parties to get an purchase offer to the closing table.

Likewise, people who insist on handling important legal or financial matters on their own proceed without the benefit of good counsel. Often these people they lack clear focus and objectivity, They generate excessive and needless costs to themselves, leading to more of their own frustration and time wasted. A professional adviser helps take emotion out of a particularly difficult process so that reasonableness prevails.

2. Price.

There is an old adage, "if you think that a professional is expensive, wait until you hire an amateur." Being thrifty has its place and time, but when it comes to personal safety, health, or legal responsibilities, hiring a professional at a reasonable price is a far better choice than paying for future consequences. For instance, performing electrical, structural, or plumbing work without a permit comes with hidden costs. Insurance carriers will deny property damage claims when the source of damage was a repair or remodeling project performed without a permit .

Recently, in a debt settlement matter, a business woman proudly proclaimed that she had personally negotiated down a substantial portion of her debt on a large promissory note. That she was now paying smaller monthly payments to her creditor. But later, she learned that this settlement was really a consent judgment and it allowed the creditor to attach all other assets owned to reduce the balance. Unknowingly the settlement allowed the creditor to garnish her bank accounts. In terms of price, forgoing the use of a professional in order to save money is silly and is costly in the end. If the work was done poorly or without full knowledge of a subject matter, there will be a higher price to pay down the road. Seek out professional advisers who are competent and reasonably priced.

3. Experience.

With technology, people have access to all types of information on almost any topic. Besides a professional education, practical experience developed over years in a profession is just as valuable to a client. Consider for a moment that most C.P.A.s are skilled in the U.S. Tax Code. But the C.P.A. who spends years negotiating with a particular IRS department has the contacts and understands the procedure better than a colleague who may only deal with state sales tax issues. If this CPA has a good reputation among IRS agents for being prompt, thorough, knowledgeable, and respectful, then chances are that his services will be most valuable to his client, and a particular problem may be resolved more smoothly, efficiently and less costly.

Another example of hiring for experience is when one hires an attorney who understands how to clear a complicated title issue that prevents the sale of a building. The attorney's relationship with a title underwriter is based upon years of past and positive experiences and can save his client thousands of dollars by not having to litigate the matter. Professionals are rarely asked by their clients about their alma mater, but they are frequently asked about their professional experience in handling a particular matter. Experience is worth paying for if one wishes to advance their cause efficiently.

Conclusion.

Emotion, price and experience are all good reasons for people to seek out competent professionals in their respective fields of concern. Lay people who wish to do work that is commonly within the scope of trained professionals, either have too much time on their hands, or are masochists...or both. But one thing is for certain, it costs more time and money reinventing the wheel than it does hiring the right adviser. So to them I say, "keep digging".

About the Author: Since 1990, David Soble has been a real estate and finance attorney in Ohio and Michigan. He advises national banks, lenders, loan servicers, consumers and business owners on residential and commercial real estate, finance and compliance issues. He has been involved in thousands of real estate transactions, being responsible for billions in real estate loan portfolios throughout his career. And while he may seem harsh, he has 23 years of real estate battle scars to support his tempered cynicism.

Watch Out for Misleading Titles

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:30:21 GMT

Misleading "Professional" Titles, Such As "Foreclosure" or "Short Sale" Expert Harm an Unwary Public Warns Veteran Real Estate Attorney.

Proven Resource Managing Attorney, David Soble, Says Keys to Successfully Resolving a Financial or Legal Crisis Begin with Selecting the Right Licensed Advocate

Detroit, Michigan (PRWEB) February 25, 2013

When experiencing financial or legal trouble for the first time, be assured that while the poor economy has affected virtually everyone, one's financial or legal fact pattern is unique to each person. And after years of experience working with troubled clients, the following recommendations for a successful outcome remain constant no matter how serious the issue:

1. Hire a specialist. Imagine for a moment, having severe chest pains. Should a cardiologist, a general medical practitioner, or a naturopath be consulted? The choice is obvious, a cardiologist of course. The cardiologist specializes in the heart after years of medical training and experience. Now imagine a financial “heart attack”. A bank or creditor has secured a judgment and is raiding a bank account or garnishing wages. For some, the nightmare begins with an eviction or foreclosure notice. What type of specialist should be summoned in this matter? A real estate agent, a paralegal, a lawyer who maintains a general practice, or a lawyer who specializes in banking or real estate law. When faced with a serious financial or legal problem, treat your situation like the financial “heart attack” that it is and obtain a legal specialist.

2. Don't go it alone. Using the same analogy above, performing your own “bathroom surgery” instead of seeking a qualified special to perform heart surgery will be messy and ugly. Managing one's own financial or legal crisis instead of retaining an experienced licensed professional is no different. Clients who were initially representing themselves usually come for professional help after spending countless hours compiling vast libraries of documents and having extremely long and complicated stories that are made worse by their own inaction or actions. They relay exhausting stories of disappointment only after their creditor has divested them of all of their valuable assets. In short, “going it alone” is messy and when a professional has to clean up the mess it gets extremely costly and ugly.

3. Investigate your advocate. Work only with licensed professionals. Each state has their own occupational code and requires a professional to have achieved a core education as well as a demonstrated minimum competency to obtain a license. If your “adviser” does not have a current state or federal license, they shouldn't be your adviser. Avoid someone who calls themselves a “foreclosure specialist” a “short sale” specialist, a bankruptcy consultant or a loan consultant. There are no such licenses for such titles. A licensed real estate agent sells real estate and can obtain numerous professional designations from within their professional organization. They should state they are a licensed agent that has experience in a specific area, and that they have a designation earned by having taken classes through their professional organization. Likewise, most people know that an attorney is a legal advocate, but may not be aware that attorneys have their own specialties that can range from health care law to equestrian law. Ask the lawyer what area of practice they specialize in. A bankruptcy attorney practices bankruptcy law, a real estate attorney deals with real estate and foreclosure defense. Understand these specialties and investigate your options.

When seeking out the best advocate for a legal or financial crisis, remember that it is your home, your credit, your mental health that is in jeopardy. Take some time to investigate and choose the professional that will specifically address and resolve your need.

For the original version on PRWeb visit: http://www.prweb.com/releases/prweb2013/2/prweb10462901.htm

Signs of Household Credit Stress on the Rise: 6 Things To Do To Improving Your Credit Score and Reducing Expenses

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:30:17 GMT

Household credit use is at historic levels. Not since 2007 has credit use and home equity lines been higher, and homeowners are once again starting to feel the pinch. These days my work has been focused on issues related this crazy real estate market, I am starting to see the signs of credit stress among Michigan homeowners and consumers. My office is becoming busier with credit issues once again.

Here are six suggestions that can make handling household finances easier– today.

1. Know the “score”. Everyone has the right to a free credit report annually. Obtain a credit report on line. Some banks have been providing clients with a free credit report. Review each trade line on the report for accuracy. Look for any items that report negatively. Investigate any collections, late pays, or unfamiliar items. Dispute or explain any erroneous reporting by writing to the credit bureau. Retain copies.

2. Review all important bank and monthly statements. Check statements for errors, including unnecessary bank fees. Do it regularly and do it soon. As time passes, the harder it is to rectify an error. Research may have a cost, or information may no longer be available. Certain providers will not waive fees for errors found after 60 or 90 days.

3. Enroll in a bank’s automatic online payment service or use a third party service. Making timely payments is important to maintaining a good credit score. Technology makes paying bills on line efficient. Most banks and third party providers make payments at no cost, and most bill payment platforms integrate into financial software such as Quicken or Mint.com. Securely enroll utility, car and mortgage payments online, now.

4. Switch retail cards for one debit card. Carrying a credit card balance with high interest is waste of money. For many, it is easier said than done. It can be difficult to go “cold turkey” by cutting up every credit card. Keep the main credit card, but replace the gas and retail cards with one debit card. Most retail credit cards carry very high rates of interest and can only be used at the corresponding store. Retail cards are not useful in a financial emergency. It takes some discipline, but edging out these minor gas and retail cards is a great place to start.

5. Account for your past years monthly mortgage payments and compare the interest paid for the previous year to the amount the lender reports on tax form 1098. As a loan amortizes, the interest paid per year should be reduced in comparison to the amount going towards principal. Use an online amortization calculator to double check what the bank reports and what you have actually paid. Also, every year, your 1098 should state the amount of principal left on your mortgage. If not, contact the lender immediately. If there is no response, contact the state regulatory agency that regulates mortgage lenders.

6. Reduce unnecessary expenses. Review a list of monthly expenses and determine where changes can be made. Cable and cell phone plans are a good place to start. View favorite shows without costs by going to a network website. Don’t buy books or movies that can otherwise be borrowed from the local library. Many libraries now have free on-line lending. Also, cancel magazine subscriptions. Use the library’s periodicals. Look at gym dues, sell unused home gym equipment. With on line technology, visit You Tube for a variety of free exercise videos. Communities often offer exercise programs for free. Get physically fit while getting fiscally fit.

Making one of the preceding recommended changes will have a positive impact on your personal economy.

The Best Way to Working with Your Creditors

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:29:49 GMT

Deep in Debt? Crucial Steps to Winning Over Your Creditors & Successful Debt Negotiation

Real Estate and Finance Attorney of 23 Years Gives 5 Critical Points on Successfully Dealing with Creditors.

Detroit, Michigan (PRWEB) November 09, 2012

DEEP IN DEBT?

Critical Steps to Win Over Creditors

Whether a debt obligation is $1,000 or in the millions, the overall advice for handling debt negotiation remains the same, according to David Soble: communicate, consult with the appropriate experts and proceed with caution.

An attorney for 23 years, Soble has worked both sides of the debtor-creditor negotiation table,
representing various multi-billion dollar banks and national finance companies as well as helping small business owners and homeowners. Here are five critical pointers he says have helped his clients succeed in negotiating their debt.

1. Stay in touch with creditors.

Times are tough for everyone. While it may not feel good, keeping the lines of communication open benefits both parties. Banks and creditors want to work out a payment arrangement. Ignoring and avoiding creditors gives them no alternative but to escalate collection action.

2. Contact a credit professional early in the process.

For those who are uncomfortable with negotiating, contacting a professional about a debt issue may be the answer. Reach out to a non-profit credit or debt counselor early in the process. Procrastinating can make the situation worse.

3. Consult with the right kind of attorney.

“Short sales”on properties are more common these days, yet going through a “short sale” does not automatically relieve the obligation to the bank. Mortgage obligations are written contracts, and real estate agents cannot interpret or provide advice on the law. Not all attorneys specialize in real estate or debt resolution either. Talking with the proper professional can prevent costly mistakes.

4. Never sign a blank document and watch those page numbers.

How many business owners have lost thousands of dollars by signing blank forms? Plenty. Don’t become one of them. If a document has a blank page, draw a large “X” across it and initial it to prevent later insertions. Another safeguard is to make sure the document is properly numbered; if it has 7 pages, they should read “1 of 7,” “2 of 7″ and so on. It’s a protection against fraudulent or doctored paperwork.

5. Be on the lookout for scam artists.

Avoid individuals who aren’t properly credentialed. That should be a top priority. Anyone involved with a real estate transaction needs to be licensed — from federally regulated loan officers, to state regulated real estate agents and attorneys. And even then, ensure that the professional has the experience and reputation necessary to help out in a financial or legal crisis.

Not so fast! Understanding the Real Estates Agents Conflicts of Interest

dsoble@provenresource.com (David Soble ) — Wed, 14 Jun 2017 15:29:45 GMT

As if purchasing or refinancing a home wasn’t stressful enough, the key professional players in a real estate transaction don’t necessarily have their client’s best interest in mind, according to real estate and finance attorney David Soble of Proven Resource: contractual limitations, professional conflicts of interest, and lack of proper professional guidance are prevalent throughout the real estate transaction.

An attorney and real estate broker for 23years, Soble has been involved with thousands of residential and commercial real estate sales and refinances. He has represented multi-billion dollar banks and national finance companies as well as helping small business owners and consumers.

Here are 7 things purchasers need to know about the real estate process that are not frequently discussed:

1. Home Inspectors. First. never waive the right to a home inspection. Never. Second, purchasers should select their own home inspector. Real estate agents sell real estate every day, and may have a stable of these home pros, and therein lies the potential conflict of interest that compromises the integrity of the inspection in favor of “getting a deal done”. Third, avoid blurring the distinction between an appraisal and an inspection. An appraisal is a professional opinion as to the value of the subject property. That’s it. While the appraiser may note deficiencies in the property’s condition, it cannot ever be mistaken for a home inspection. An inspection should consist of a thorough examination of a home’s mechanical and structural condition. Finally,a home inspector’s liability is often limited to the cost of the inspection itself, and no more. So an inspector who fails to note a leaky roof may only be liable for $300, the average cost of an inspection. Therefore, if a specific item is questionable, call on a licensed contractor to delve further and give you peace of mind.

2. Real Estate Agents. It is not surprising that many legal issues involved with real estate transactions involve the real estate agent as they are the center of the transaction. But understand an agent’s limitations. Work with a buyer’s agent or seller’s real estate agent, but not both. Known as a “dual agent”, the real estate agent is responsible for representing both parties. There is absolutely no way that a professional can represent the competing interest of a buyer and seller. Purchasers can remove the potential for conflict of interest by hiring their own buyer’s agent. Finally, understand that a seller’s agent has their professional duty to the seller. Not the buyer. So tread carefully. Purchasers should not disclose information to a seller’s agent that they don’t want the seller to know.

3. Lending Officers. Residential lenders are required to disclose all of the third party vendors, that they intend to use in a transaction. Appraisers and title companies are third party vendors and loan applicants are not legally required to use them. Find a licensed appraiser or title company before you apply for your mortgage. Also, get “pre-approved” by a lender before going house hunting. Purchasers should avoid using the real estate agent’s lender referral unless they are having difficulty securing a mortgage on their own. Loan officers often rely on referrals from agents and they can, and will discuss your finances and credit with the agent.

4. Insurance Agents. Buying a home requires home insurance. After closing on the property, keep the insurance agent informed of significant changes planned for the home. When making any material structural changes that involves wiring or plumbing, or any other change that requires pulling a building permit, don’t skimp, pull the permit. No matter how handy a homeowner may be, if there is a fire, flood or other home disaster, the insurance company could deny your claim because your improvements were done without a permit. This is true even when homeowner repairs were not the direct cause of a structural problem.

5. Title Agents. It is standard in the real estate industry to secure title insurance with a home sale or refinance. In a sale, the seller customarily pays for an owner’s policy for the buyer equal to the purchase price. If the buyer financed the purchase, then a lender’s policy in the amount of the mortgage is paid for by the buyer. Review the title policy. Title insurance has exceptions and exclusions which is based upon what is revealed in the public real estate records. A buyer needs to know these exceptions as it could impede their ability to sell their property in the future. Moreover, when a buyer purchases a home below market value, they should purchase title insurance equal to the home value, not the purchase price. For example, a buyer who purchases a home for $75,000 and valued at $100,000, would be exposed to $25000 in the event of a title claim. No one is ever precluded from purchasing more title coverage. Finally, If there is a title issue, consult with a real estate attorney as no other real estate professional is qualified to comment on the legal consequences of clouded title.

6. Real estate attorneys. While is sounds self -serving, for most people, purchasing real estate is one of the life’s most significant legal and financial transactions. Hiring a real estate agent costs about 3 to 6 percent of a home’s purchase price. Secure home financing cost anywhere from 1 to 3 percent of the loan amount. Why people sign a purchase agreement, a mortgage loan agreement, or sign off on warranties, title schedules, insurance declarations, or other various third party legal agreements, without the expertise of a real estate attorney, is puzzling. Real estate transactions are all about legal contracts in the end. A loan officer is not an attorney. A real estate agent is not attorney. A neighbor or cousin, may or may not be an attorney. Don’t skimp. And when any real estate professionals pushes or “encourages” a home buyer to forgo legal advice, then that in itself is a pretty good sign that a real estate attorney is needed.

The Importance of a Memorandum of Land Contract

dsoble@provenresource.com (David Soble ) — Tue, 13 Jun 2017 11:40:29 GMT

Don't exclude one of the most important documents in a sale under a land contract.

The Importance of a Memorandum of Land Contract

I recently prepared a land contract for the Seller of an investment home to her current tenant. As part of the process, I drafted a Memorandum of Land Contract (“Memorandum”) for the parties' endorsement. In the past, my seller had sold several properties on land contract, but had never seen a Memorandum before. She questioned it's need and importance. I explained to her the following:

The Memorandum of Land Contract

A Memorandum of Land Contract (“Memorandum”) is a legal document that evidences the relationship between a property owner and the purchaser under land contract. To be effective, it needs to be filed or recorded in the county property records where the property is located. The Memorandum of Land Contract will specify the name of both the seller and the buyer of the property, the common and legal address of the property and the date on which the agreement was entered. Inserting additional terms into the Memorandum is at the discretion of either party, but one of the reasons to use a Memorandum is to keep details to a transaction private.

What a Memorandum isn't.

A Memorandum can elaborate on the terms of the purchase such as the term of the agreement, or the monthly payment, but that really isn't necessary. The real purpose of the Memorandum serves as notice to the "world" that a subject property is under a seller -financed purchase agreement. There is no law that requires a Memorandum for a land contract to be valid, however, it is highly recommended for both Seller and the Buyer that one is properly drafted and recorded.

Why a Memorandum is important to the Purchaser.

Without a Memorandum filed in the county property records, third parties wouldn't be aware that the buyer's intended property is already under a purchase agreement. Otherwise, an unscrupulous seller could impair the marketability (the ability to sell free of any encumbrances) of the property by, for instance, taking a mortgage out on the property. Or even worse, the seller could turn and and sell the property to another buyer. Generally, in most states, this 'second buyer's" interest is protected against the initial purchaser who failed to file their land contract interest. The only time a lender or prospective purchaser could even know that a property has already been purchased or pledged, would be when a title search revealed the recorded Memorandum.

There are other precautions and provisions that one can use when drafting a land contract that would prevent a seller from encumbering a property without notifying the buyer, but none is more effective than the recording of the Memorandum. I have counseled many a purchaser buying on land contract who has come to me only after they had learned that their seller sold the property out from under them. A filed Memorandum would have stop this type of seller misconduct.

Why a Memorandum is important to the Seller.

The seller should also record the Memorandum if they ever want their buyer to pay them off by obtaining financing elsewhere. True, land contracts serve as a good investment vehicle that generates income, especially in this low interest environment. But sellers finance their buyer's purchase for various reasons such as when the condition of a home would not pass a bank inspection, or when a purchaser does not qualify for a bank loan. When the economy was soft several years ago, banks were not willing to lend and the need for seller financing using land contracts exploded.

Most lending institutions require that the land contract as evidenced by the Memorandum, be recorded before the bank will lend. The bank is usually looking for at least 12 months of 'seasoning.' A loan is considered "seasoned" when their is a verifiable payment history for a specified length of time. A lender is not likely to lend otherwise. Recorded Memorandums serve to legitimize the existence of a transaction with the essential terms of the underlying contract: start date, parties, property address and amount of the sale.

Conclusion

Comprehensive documents for a property sale under land contract include a Memorandum of Land Contract. Both sellers and buyers should insist that their real estate attorney draft and then record one for everyone's legal and financial protection.

About David: As a real estate attorney and “former bank insider, ” author David Soble not only 'talks the talk, but "walks the walk, " with over 25 years of practical real estate and legal experience gained from his ownership interests in hundreds of mortgages, notes, and income producing properties. David has successfully represented numerous banks, lenders, investors and consumers on both sides of the negotiation table in thousands of transactions.

Now you can reference Soble's straight forward approach to real estate concerns and put those nagging real estate issues to rest! Claim David Soble’s Free Ebook, ' WHAT'S KEEPING YOU UP AT NIGHT? AN ATTORNEY'S PRACTICAL APPROACH TO RESOLVING REAL ESTATE NIGHTMARES.

Embroiled in a Lawsuit? 5 Things to Consider for Negotiating a Legal Settlement

dsoble@provenresource.com (David Soble ) — Sun, 14 May 2017 13:20:28 GMT

According to the American Bar Association relatively few lawsuits ever go all the way to trial. Most parties to civil (non- criminal) cases are settled long before trial. Once a suit is filed, the legal process itself can actually help opposing parties understand the strengths of their respective positions, often facilitating a settlement.

Here are 5 things parties to a lawsuit should consider about negotiating a settlement:

1. Define Liability. Contrary to popular belief, settling a legal matter usually does not require either party to admit right or wrong. A settlement can define a new relationship between the parties by specifying their new responsibilities or just reaffirm old ones.

2. Define Issues. In a legal complaint, lawyers list all legal theories of why a defendant is liable to the plaintiff. It not only can create confusion, but this practice tends to raise emotions. A settlement can resolve some of the less important issues while leaving other issues to be heard by the judge or a jury.

3. Reduce Expenses. Many legal professionals will agree that settling a legal dispute can be far less expensive than litigation. A law suit involves pleadings, motions, discovery, pre-trial hearings, status conferences, case evaluations, jury selection, trial preparation, a trial, post trial motions, appeals, etc. Time and financial commitments as well as risk of financial exposure act as great motivators for negotiating a settlement.

4. Manage Risk. When parties to a lawsuit reach a settlement, they themselves are controlling the outcome of a dispute. This reduces their risk of having a third- party, such as a judge or jury, decide the final outcome and terms of a dispute.

5. Strategy. Known as a “strategic default” among some legal circles, parties can often negotiate settlement terms more favorable to them than those terms and provisions found in an original agreement.

It's often said that a good settlement is reached when both parties leave the negotiation table a little unhappy. Negotiating a reasonable settlement takes time and patience and is influenced by at least one of the above- listed factors.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own attorney.

The Waterfall That's In Your Basement: Home Seller Liability and Buyer Remedies for Basement Water Damage

dsoble@provenresource.com (David Soble ) — Thu, 06 Apr 2017 21:01:36 GMT

With the change in seasons, snow melt and the onset of spring rain, some home buyers, who had recently purchased their property during the winter months, have come to discover to their surprise that their basement leaks or worse, floods. Nothing is more disappointing, frustrating and disruptive as having a basement leak or flood, especially when the buyer relied upon a seller’s statements concerning a home’s condition and a home inspection. They relied upon their seller’s representations that the seller had no knowledge of basement water problems. In almost all cases, had the buyers known of existing water problems, they would not have written an offer on their home.

With very few exceptions, Michigan real estate law requires that a home seller must in good faith, provide a complete disclosure of their home’s condition to prospective purchasers prior to selling the property. Sellers are not liable for errors in the disclosure statement which are not within their personal knowledge. But when they know of a current water problem or had a former water issue, they had better disclose this fact to their buyer. Yet, there still are sellers who think they can get away with misleading their buyer and it's this misguided attitude that continues to contribute to my job security.

Seller Misrepresentation

In Michigan, a seller may be legally and financially culpable to a buyer for making statements contained in the disclosure form that they knew or should have known are inaccurate. Sellers are committing “misrepresentation,” when the seller had personal knowledge of the problem, but failed to exercise "good faith", by not disclosing that knowledge. In cases of water damage that allege a seller’s misrepresentation, Michigan courts look at whether or not a “reasonable fact finder” could determine if the seller knew about a leak, yet allowed the transaction to move forward without disclosing the water problem to the buyer.

Seller Fraud on the Buyer

When a seller fails to disclose known water leaks and then tries to conceal the damage, they are committing fraud. It is deceitful and if the seller is found culpable, they will be responsible for triple the damages. An example of knowingly concealing water damage is when a seller installs new paneling or drywall over a water damaged area so as to prevent the buyer or their inspector from discovering the water problem.

Buyer’s Remedies Against the Seller

Rescission

In both instances where a seller has been found to misrepresent or intentionally mislead the seller by hiding or concealing water damage, Michigan courts allow a buyer to rescind or cancel the entire purchase transaction. This can come months after the buyer has moved into their home. The purchaser of the home is permitted to transfer the property to the seller, and the seller must return the purchase price, plus interest.

Triple Damages

Buyers don’t have to actually rescind the transaction. They can sue for their money damages if they elect to remain in their home. Damages can include the cost to remove the material that concealed an offending leak, as well as the costs for repairs and restoration needed to stop the leak in the future. In cases of fraud, sellers are responsible for triple the damages. For example, a $10,000 problem can cost a deceitful home seller $30,000.

Conclusion

Real estate transactions are serious business and the related home disclosure requirements should not be taken lightly. If a seller is uncertain as to whether they should disclose a known defect in the home that cannot be observed in plain sight, always remember that it’s best to disclose. A competent real estate professional can address the defect in the sales price. The alternative choice to hide a known defect from a home buyer will be far more costly later. When in doubt, or if you are having problems with the condition of your home after the home sale, consult with a real estate attorney. Effective April 15, 2017, claim your free book: What's Keeping You Up At Night? An Attorney's Practical Approach to Resolve Real Estate Nightmares at www.provenresource.com/book4U .

Deep in Debt: Financial Relief Feels Great!

dsoble@provenresource.com (David Soble ) — Wed, 22 Mar 2017 18:47:24 GMT

DEEP IN DEBT? Financial Relief Feels Great!

Financial Relief Feels Great

Critical Steps to Win Over Creditors

1. Stay in touch with creditors.

2. Contact a credit professional early in the process.

3. Consult with the right kind of attorney.

4. Never sign a blank document and watch those page numbers.

How many business owners have lost thousands of dollars by signing blank forms? Plenty. Don’t become one of them. If a document has a blank page, draw a large “X” across it and initial it to prevent later insertions. Another safeguard is to make sure the document is properly numbered; if it has 7 pages, they should read “1 of 7,” “2 of 7” and so on. It’s a protection against fraudulent or doctored paperwork.

5. Be on the lookout for scam artists.

Avoid individuals who aren’t properly credentialed. That should be a top priority. Anyone involved with a real estate transaction needs to be licensed —- from federally regulated loan officers, to state regulated real estate agents and attorneys. And even then, ensure that the professional has the experience and reputation necessary to help out in a financial or legal crisis.

Just What Are Your Intentions? Problems Associated with Letters of Intent

dsoble@provenresource.com (David Soble ) — Tue, 07 Mar 2017 20:58:43 GMT

Imagine for a moment, a small business owner, "Sally", is considering a new location for her business when she happens upon a small retail building that would serve as a perfect location for her future success. One problem. The building is not for sale. But Sally is eager to buy the property, and wants to show the property owner that she is serious about purchasing the building. The building's owner wasn't anticipating selling the property when Sally approaches her, but would consider selling it for the right terms. Together, both parties can write up a letter of intent, which is a document that details their wishes to enter into serious negotiations at a later date.

Essentially, letters of intent are agreements to create an agreement in the future and are commonly used in the purchase of real estate, a business, or contracting for goods or services. Letters of intent outline important elements of what parties intend to have placed in a future agreement. They help to gauge how serious a party like Sally is about something. They include provisions addressing things like purchase price, time lines, confidentiality, exclusivity, financial considerations, property or product condition.

Rushing to draft a letter of intent can have legal consequences. Letters of intent can create real legal problems and expensive litigation when one party, such as Sally above, wants only to enumerate the beginnings of a future contract, but the other party, the building owner, now considers the language to be more than just an intent to negotiate, but rather, to Sally's surprise, a binding agreement itself. In certain situations, courts have found that letters of intent that memorialize terms for an agreement at a later date can be enforced as a binding contract.

Here are 4 things to do to avoid having a letter of intent litigated and enforced as a contract:

1. Avoid Specificity. The more specific the terms, the more the letter of intent begins to look like the contract itself. For instance, in a letter of intent to lease, stating the lease term and payment would be sufficient, but detailing the various responsibilities of the landlord or tenant, or listing default remedies tends to appear more like a lease itself.

2. Qualify the Language. Make sure that there is language in the letter of intent that clearly states: "This is not a legally binding contract." Some legal experts go so far as to insert the language multiple times throughout the letter of intent. Without such language, courts will look at the surrounding circumstances and the parties behaviors to determine what the original intent was at the onset of negotiations.

3. Have an attorney review or even draft the letter of intent. Some courts have found that where the elements of a contract are present in a letter of intent: an offer, an acceptance, mutual obligations and remedies, the more likely then that it can be construed as a contract. The language is what counts, and an attorney can ensure that certain elements of a legally binding contract are excluded from the letter of intent.

4. Don't sign the letter of intent. The recipient of a letter of intent shouldn't sign it. If the proposal is enough to peak one's interest, then the parties should instead engage in drafting terms for a contract with a qualified attorney.

The above items are the best way for a letter of intent to remain non-binding and enforceable. Before creating "self-inflicted legal wounds" and endorsing a letter of intent, it is always best to consult with an attorney.

About the Author: David Soble has been a real estate and finance attorney for over 25 years. He has advised both business owners and consumers in thousands of real estate and business / finance transactions.

DISCLAIMER: This article is not intended to serve as legal advice. When it comes to legal concerns always seek the advice of an attorney.

Why Quit Claim Deeds Are Like Bad Tattoos

dsoble@provenresource.com (David Soble ) — Tue, 21 Feb 2017 16:59:13 GMT

Each month, I receive more than a handful of calls concerning quit claim deed forms. Usually the callers are not looking to me to obtain the legal forms - they can be easily downloaded online. No, instead, they are usually calling me for legal advice on how to "reverse" or "undo" the real estate transaction that they've created - and what has been created is usually a real legal mess.

Quit claim deeds "gone bad" are like an unsightly or embarrassing tattoo. Reversing the transaction can be painful and expensive and involves a healthy dose of regret.

The "Lowly" Quit Claim Deed

Deeds are the documents that legally transfer property interests. There are a few types of deeds that convey title, depending upon your jurisdiction. Among them are: (1)Warranty,(2) Covenant , (3) Trustees, (4) Ladybird, (5) Sheriff, and (6) Quit Claim. This list is not exhaustive, but suffice to say, each type of deed has its own purpose, conveying different 'guarantees' of ownership to a grantee. But only the 'lowly" quit claim deed comes without grantor representations or warranties. In essence, a grantor of a quit claim deed basically says to the grantee, "I may own this property, but I can't guarantee you that someone else doesn't have a better claim to it. Oh, and by the way, if someone else does have a more superior interest or claim to the property that I am deeding to you here, don't expect me to do anything to help in defending your rights to the property." As a legal document it sounds pretty useless doesn't it? Yet, with the proper legal guidance and due diligence, a quit claim deed can be an effective transfer instrument.

What Went Wrong?

With access to online legal forms readily accessible to the general public, it is easy to forget that with these legal documents comes "great responsibility." "Practicing" law without the requisite knowledge has consequences, usually financial. Nowhere is this more evident than when "John Public" creates a quit claim deed. Here are two of the most common problematic scenarios:

A father deeds his investment property valued at $200,000, to his daughter and her husband using a quit claim deed. Several years later, his daughter and her husband divorce. The father wants to sell the property. Daughter quit claims her interest in the property back to him. The now ex-husband decides that he wants 50% of the proceeds when the property sells. Father wants ex-husband off the deed. but since he was a grantee, that 'boat has sailed." The transaction is over. Now Father and ex-husband own the property as tenants in common, and short of a legal partition action, there is very little Father can do.

Same scenario above, but right after the father deeded the property over to his daughter, the IRS put a $50,000 tax lien on the property. When the daughter later deeded the property back to her father, the ex-husband's creditor attached a judgment lien in the amount of $100,000 to the property. The $200,000 investment property now has $150,000 of liens on it. The liens go with the property. Therefore, when the house sells, the ex -husband can't complain about how the Father's earlier $50,000 tax lien on the property is eating into the proceeds, and the Father can't complain about taking back the property with an additional $100,000 judgement lien. They both accepted quit claim deeds.

Could the above scenarios happen with other types of deeds, such as a warranty deed or covenant deed? Certainly, they could. But I can assure you that these scenarios don't occur quite as often when using these type of transfer instruments. Unlike the quit claim deed, the other deeds come with inherent warranties and remedies available to the grantee.

From my vantage point, if you are using a quit claim deed as a "quick" from of action, beware! Quit claim deed forms, which the public frequently calls "quick" claim deeds, should come with a 'cooling off' period...come to think of it, that wouldn't be good for business.

About the Author: Since 1990, attorney David Soble has represented investors, lenders, loan servicers, business owners and consumers in real estate, finance and contract matters. He has been involved in thousands of real estate transactions for his clients and has successfully saved his clients millions in lending agreements and contract negotiations. He can be reached at 888-789-1715 .

Disclose, Disclose: 8 Reasons Why a Rushed Real Estate Deal Still Requires Disclosures

dsoble@provenresource.com (David Soble ) — Sat, 24 Dec 2016 13:09:16 GMT

As originally published in Miami Herald and Boston Globe (September 2013) by David Soble

With the spike in home sales, buyers and sellers alike are feeling the pressure to quickly close on their purchase transaction before mortgage rates go up and demand for new homes slip. But before rushing to "ink the deal," understand that real estate professionals are required to provide written disclosures to their clients on a variety of important items necessary to the transaction, as they directly affect the buying or selling decision. Here are 8 areas where written disclosure should be or are required:

1. Affiliate Disclosures. These days, it's common for a mortgage company to have a business interest in a title company or a real estate brokerage to also own a mortgage company. These are called "affiliate" relationships, and the relationship must be disclosed to the potential end users of these services. For instance, a mortgage company must disclosure in writing to its loan applicants that is also owns a title company that will close on the mortgage and purchase transaction. A loan applicant is not required to use the "affiliate" title company and can use another suitable title provider instead. Most importantly, a home seller or buyer cannot be pressured to use an affiliate service or be prevented from seeking a loan or making an offer on a home, just because one chooses to do business with an "unaffiliated" business.

2. Third- party services. Similar to the above paragraph, a home seller and real estate agent cannot require someone to use a third party service in order to purchase a home. A third- party could mean a lender, a title co, an appraiser or inspector. However, one can give better pricing to a buyer who uses their services. For example, a lender
can waive fees if the buyer uses one of their "affiliates," however, they cannot prevent you from making a loan application or denying a loan for refusing to use their business affiliates.

3. Real estate agent disclosure. If a real estate agent is selling a home that they own, they must disclose that they are a licensed real estate agent. Some states limit this disclosure to only an agent's primary residence. Other states require the disclosure for any properties that the agent owns.

4. Dual agency. In a real estate transaction , a seller's agent or "listing agent" represents the seller. The seller's agent does not have any professional duty to a buyer who is not represented by their own agent. The buyer should hire their own agent. A dual agent is an agent or real estate broker that represents both parties in the transaction. Agents must provide written disclosures to both a parties when they act as dual agents. In theory this disclosure is supposed to make a dual agent in a transaction neutral. However, a real estate deal is never without some controversy and give and take, and therefore this writer suggests that a prospective purchaser hire their own "buyer's" agent.

5. Title agency. A title company's function is to insure that the ownership to a specific property is valid according to public property records so that a lending institution can provide a mortgage on the property or a purchaser can take proper title from the rightful owner. Title agents represent the insurance companies that provides this coverage. They do not dispense legal advice to buyers or sellers. They do not represent lenders or real estate brokers. Title companies must disclose when they have an affiliate relationship with a real estate service provider, meaning that they are owned by the lender or real estate brokerage, or even an appraiser.

6. Provide all offers. A real estate agent is required to provide its sellers with all offers. Unless a seller specifically instructs an agent not to bring certain offers, say one below a certain price or time frame, the agent must present the offer. Therefore, if a buyer feels that an offer was not presented, they should contact the agent's broker. In some states, it's customary for a buyer or their agent to present the offer directly to the seller. But nothing prevents an enthusiastic buyer from directly speaking with a seller, it's just not commonplace.

7. Terminating a real estate agent. It is a common misconception among sellers that they cannot fire or terminate their listing agent. They can. However, the best way to still market one's property without bad feelings is to approach the agent's broker and have the broker assign a new agent to the listing. Understand that the agent and broker still have a "protection period" that protects them against the seller closing a transaction with a buyer that the agent, through their business efforts, had previously procured. The period is usually for 180 days, but at time of listing a property this period can be negotiated down to 90 or even 60 days. Regardless of the time limits, it is wrong for a seller to take advantage of the agent's efforts and is grounds for legal action.

8. Attorneys. Like a real estate professional, an attorney cannot represent a buyer and a seller in a transaction unless the attorney discloses the conflict in writing and both parties sign the disclosure. If two parties to a transaction have completely different versions of a transaction, then it's time that one party hires their own attorney.

In a residential real estate transaction written disclosures comprise most of the real estate package. For those new to real estate, hire the right adviser to guide one through a successful transaction. But make sure to read and understand the disclosures and how they apply to one's deal, as they are there for the buyer or seller's benefit.

About the Author: Since 1990,David Soble has been a real estate and finance attorney in Ohio and Michigan. He advises national banks, lenders, loan servicers, consumers and business owners on residential and commercial real estate, finance and compliance issues. He has been involved in thousands of real estate transactions, being responsible for billions in real estate loan portfolios throughout his career. He has 23 years of real estate and lending law experience and the battle scars to support his tempered cynicism.

Leasing With An Option to Purchase: Landlords Proceed with Caution

dsoble@provenresource.com (David Soble ) — Wed, 07 Dec 2016 19:04:04 GMT

A lease with option to purchase is a real estate agreement that allows a tenant to lock in the purchase price of a home while the tenant is still leasing. Lease with options ("lease options") appeal to both landlords and tenants. Landlords use lease options as a means to keep good tenants interested (and paying) in the Landlord's property. Landlords can usually negotiate a higher sales price and these agreements are used more often in depressed real estate markets or where a property is in fair to poor condition. Tenants have the opportunity to "tie up" a property that they like to own, without having to put down a large down payment.

Before entering into a lease with option to purchase, Landlords should review the following emotional, legal and financial considerations:

Emotion. Just because a tenant pays for a purchase option, once the 'tenant' is in the home, they may grow 'out of love' with the home. At times, tenants try to renegotiate the purchase price in the agreement or they decide not to move forward at all and just continue to rent. (This consideration should already be built into your option price and your monthly rent.)

Legal. Lease options may prolong the time in which a landlord can exercise available legal remedies in the event of the tenant's default. Generally, when a tenant purchases the option they have an equitable interest in the home. An equitable interest means that the tenant has financial interest or claims to legal title in a property. Courts tend to treat tenants with an equitable interest more favorably and a tenant's defenses under federal laws such as the Dodd-Frank act afford legal protections for purchasers on lease option.

Financial. Consider the financing 'end game" for the tenant who wants to purchase the property after the term for their purchase option expires. Usually mortgage lenders do not credit the full amount of the rental payment towards the purchase price without first calculating the fair market rental value. Additionally, under Dodd -Frank, if challenged, lenders will not be able to credit any monies collected for rent or the option price, towards a down payment. Remember, when a tenant purchases an option, there is not a guaranty that they will close on the agreed sales price in the future. Tenants who don't close on their option often attempt to offset their spent option money by withholding rental payments. (See legal considerations above.)

The considerations as stated above are but a few factors landlords need to consider when offering a tenant an option to purchase a home. If you are not clear on how to properly proceed with a lease with option, consult with an experienced real estate attorney.

About the Author: Since 1990, attorney David Soble has represented lenders, loan servicers, consumers and business owners in real estate, finance and compliance matters. He reduces legal and financial exposure of real estate investors so that they can focus on growing their investment portfolio and has been involved in thousands of real estate transactions and has successfully negotiated and saved millions for his clients.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own, qualified attorney.

A "Big and Fluffy" Cloud on Title: What Real Estate Investors Need to Know About Proactive Due Diligence

dsoble@provenresource.com (David Soble ) — Sun, 04 Dec 2016 18:17:38 GMT

A Client Walks In...

I recently had a client who, along with his partner, had owned a Detroit investment property for many years. He had come into my office very excited about a recent purchase offer they had received. They had owned their investment property for decades, weathering numerous Michigan economic cycles, but with all of the sales activity happening in and around Detroit, they could finally realize a significant return on their investment. "This is the year!" he exclaimed. "We're going to finally sell this baby!" Happy for them, I began the typical due diligence work which included, among other things, pulling title work.

Three days later, title came back showing several items affecting the partner's title interest. Nothing was too severe, except for one lien showing an old security interest still on title. This old lien had to be addressed or the partners could not complete their sale. "Oh, we paid that off years ago," the client explained. But when asked to produce a copy of signed lien release, the partners, after days of searching, could not produce one.

Excitement Turns Into Panic

And so it began...by "years ago," my client meant he and his partner had paid their loan off in the late 1980s. A further investigation revealed that this old lien was formerly owned by 3 partners, and as my clients' luck would have it, all were now deceased. We would soon learn that their accountant was deceased. So too was their lawyer. Only one of the partners had a surviving spouse. My client's excitement quickly turned into frustration, slowly deteriorating into panic, and without proper legal intervention, was on a clear trajectory to major disappointment. Suffice to say, it was only several months later, after much anguish and additional legal expense, that the deal thankfully closed.

Conclusion

My real estate law practice is almost exclusively based on clients who are reactionary. Most real estate investors are not proactive in their approach to their business. But it doesn't have to be that way in real estate. Ensuring a property's marketable title is but one example. A property has marketable title when it can be sold without any encumbrances, liens or 'clouds' affecting clear title. A cloud on title prevents a buyer from taking clear title to a property, and with few exceptions, why would they? Unless your buyer is taking a quit claim deed (a deed without any representations as to ownership) your deal is dead until you clear the cloud on title. A cloud on title may arise when there is no recorded lien release for an old interest in a property such as a mortgage lien, tax lien, judgment lien or any other claim of interest by a third party. It can also occur when a deed or transfer document has not been recorded or was improperly signed.

Before you list your property for sale, perform your due diligence, which includes, but is not limited to, ordering title work, beforehand. If you are not "clear" about any issues that affect your ability to transfer your property, its best to consult with a real estate attorney.

About the Author

Since 1990, attorney David Soble has represented real estate investors, lenders, loan servicers, consumers and business owners in real estate, finance and contract matters. He has been involved in thousands of real estate transactions and has successfully negotiated and saved millions for his business and consumer clients alike.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own, qualified attorney. Remember, only attorneys can provide legal advise.

You Have Every Reason to Be Skeptical: What You Should Know About Detroit Real Estate and House Flipping

dsoble@provenresource.com (David Soble ) — Mon, 31 Oct 2016 14:10:55 GMT

Investing in Detroit single family homes is really hot, and each week I receive calls from prospective investors from all over the world, lured by the sirens of big profits, wanting to know if this market is as good as the media portrays it to be. My answer these days is a highly qualified “yes, but….”

Here are several things that smart real estate investors need to be skeptical of:

1.Property managers and contractors. In Michigan, property managers need to have a real estate broker’s license. The have a fiduciary duty to their clients to manage and maintain properties. Before sending a property manager any money to perform construction or manage remodeling projects, screen property managers carefully. Too often, unvetted property managers abscond with significant client monies without performing the work. (I was recently hired to sue a property manager who stole over $25000 from an out of state investor.) Using unlicensed contractors can be just as disappointing.

Solution: Work with reputable property management companies and licensed contractors who have a history in business and referrals from happy clients. Trust but verify licenses and insurance.

2. Documentation. I am busier than ever cleaning up after ‘self-inflicted” legal problems caused by non-lawyers. They create various real estate and finance agreements that include, but are not limited to mortgages, loan assignments, leases, purchase agreements, contractor agreements, and lease options. Trust me, I am not complaining, but the last time I checked, the real estate business is hard enough without having to deal with the frustration, delays and setbacks caused by poorly drafted documents and weak due diligence. Recently a purchase agreement earned my client a high 5 figure settlement, all because the draftor, a non-lawyer, failed to include one sentence in their agreement. Yes, one sentence.

Solution : Do yourself a favor, have an experienced real estate attorney create or review your documents and assist you with legal due diligence.

3. Inspections and Certificates of Occupancy. Relying on third party inspections without personally checking on a property can generate a host of problems. Many investors use their own money or money procured from small investor groups. Purchasing a property without knowing the estimated repairs needed to obtain an Occupancy Certificate (“C of O”) is like flushing money down a drain. Last year, in order to get her C of O, a client lost substantial equity when the city required her to replace an entire pea gravel circle driveway with a concrete one.

Many clients and other smart Detroit investors come far and wide to inspect properties before they purchase. Recently, an investor believed they had purchased a vacant property. When they went to secure the property they soon learned the home was ‘tenanted.” The cost of a contested eviction delayed their ‘flipping” plans for over 5 months. Those who invest in properties sight unseen have only themselves to blame.

Solution : Personally inspect your investment property or hire a reputable agent. Would you invest in a stock without reading the prospectus?

4. Title and property taxes. Understand the property tax forfeiture and foreclosure process and verify a property’s lien and tax status before you close. Nothing is worse than restoring a property only to find that it was sold to another party at tax sale or that title is such as mess that the investment does not have marketable title.

Solution : Hire a real estate attorney and pull a title abstract before you buy. Why buy into a lawsuit?

Conclusion. Every real estate investor has their ‘‘war story” and these challenging experiences contribute to their continued success or become a source of financial stress and even ruin. Detroit real estate is Michigan’s modern day 'gold rush' and news of the fantastic opportunities has been broadcasted throughout the country and the world. But it’s okay to approach this market with some healthy skepticism, because investors who fail to exercise caution will get burned. And you can “take that to the bank.”

About the Author: Since 1990, attorney David Soble has represented investors, lenders, loan servicers, business owners and consumers in real estate, finance and contract matters. He has been involved in thousands of real estate transactions for his clients and has successfully saved his clients millions in lending agreements and contract negotiations. He can be reached at 888-789-1715 .

Zombie Debt: Four Reasons Certain Debt Just Doesn't Go Away and Die

Sat, 15 Oct 2016 18:56:50 GMT

1. Divorce. Generally, in a divorce, a divorce decree or separation agreement will shift monthly credit obligations from one ex-spouse to another. Contrary to common belief, these court orders do not release either spouse of the underlying joint credit obligation. Only ones' creditor can do that. So when one ex- spouse fails to make a payment to a joint creditor, a creditor can still sue both parties to the loan obligation for a loan default. Suggestion: In the event of an ex-spouse's default, go back to court and try to enforce the divorce decree. Also, make sure to monitor the monthly payments carefully, and review a credit report frequently. Unless a creditor provides a written release, which seldom happens, be vigilant.

Conclusion.

About the Author: Since 1990, David Soble has been a real estate and finance attorney in Ohio and Michigan. He advises national banks, lenders, loan servicers, consumers and business owners on residential and commercial real estate, finance and compliance issues. He has been involved in thousands of real estate transactions, being responsible for billions in real estate loan portfolios throughout his career. And while he may seem harsh, he has over 25 years of real estate battle scars to support his tempered cynicism.

5 Myths Buyers and Sellers Have When Working with a Real Estate Agent

dsoble@provenresource.com (David Soble ) — Sat, 15 Oct 2016 18:56:44 GMT

When it comes to buying or selling real estate, here are 5 common misconceptions that people have when working with successful professional real estate sales representatives:

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own attorney.

Getting It Right: 5 Things That Frustrate Legal Clients

dsoble@provenresource.com (David Soble ) — Sat, 15 Oct 2016 17:04:55 GMT

Hiring an attorney can be a daunting task. Once that hiring decision is made it can be equally frustrating to encounter the following things.

1. Unclear Billing: Begin by learning the various ways attorneys bill their time. Most attorneys bill by the hours yet some will suggest a flat fee for certain routine matters, such as reviewing a contract or closing a loan. Make sure that you consult with your attorney about his billing practices and understand what your case entails. Make certain to get a written agreement.

2. Availability: Has your attorney explained his policy for returning phone calls, texts and/or emails? Don’t hesitate to ask before hiring.

3. Rapport: Do you feel comfortable with and confident in your attorney? Have they made an effort to clearly explain your legal options? Good chemistry will ensure a better relationship and more positive results for your legal matters.

4. Understanding: Does your attorney show an interest in your goals? Do they explain the process in a language that you can understand clearly? Do they also do this with a sense of respect and compassion?

5. Experience: Does your attorney explain clearly their area of expertise? It's important to find an attorney who specializes in the area where your problems and concerns exist. There are many areas of law (the American Bar Association lists about 85 specialties) and most attorneys will happily explain their experience in the field they specialize.

Take your time to find the right attorney for your needs. Interview the top 3 attorneys you are considering. Many attorneys will offer an initial consultation without charge. Be ready to describe your concerns and needs. Take notes and come prepared with questions. It is important to establish a relationship with your attorney. Life has many twists and turns and your attorney should be with you for a long time.

DISCLAIMER: This article is not intended to serve as legal advice. When it comes to legal concerns always seek the advice of an attorney.

America's "Most Trusted" Professionals

Sat, 01 Oct 2016 21:11:41 GMT

In the Fall of ‘87 I was a first year law student. I have a distinct recollection of my first day surrounded by equally nervous first year students listening to a lecture by our contract law professor. He told us that the practice of law was akin to having someone come in and vomit all over your desk. “Your job as an attorney” he said with a smirk “was to clean it up.” 25 years later, there is not a week that goes by that I don’t take a moment to reflect upon that day. But my professor wasn’t completely right. You see, while most people come to see me with a high sense of urgency concerning real estate, loan or contract issues, a significant segment of clients entrust us with their asset planning. And as much as I love negotiating real estate deals and resolving loan and debt problems, I am passionate about proper asset planning.

There is a reason why I am so passionate about asset planning...my father, Ken. He was a terrific father, friend and mentor. He was also a pharmacist for almost 50 years and a smart businessman. Several years ago my Dad passed away after a very long illness. He hadn’t been well since I was a teenager. Despite his poor health, he loved to tell funny stories and joke around. He had an infectious and deep laugh. Even after his illness prevented him from working, he insisted on maintaining his pharmacy license and renewed it faithfully every year. In fact each year when Gallup published their annual list of America’s “most trusted” professions, my father would call me up to tell me that once again, “pharmacists were listed as the number one trusted profession.” Then, without fail, you could sense through the telephone, his finger slowly sliding down a long list of professionals, and with a slight pause, he would announce what double digit spot “lawyers” and / or “bankers” occupied. Not wanting to rub it in, he’d end the call assuring me not to worry, that ‘used car salesmen” still remained towards the very bottom of the list.

Because of his illness, my father was always a planner. He had to be. He had a wife, six kids and a business. Never knowing how or when his health would turn, he was diligent about his estate planning and that his business affairs were in order. Many times as a teenager, I felt uncomfortable talking with him about his poor prognosis and his last wishes. But in his later years as his eldest son and as an attorney, I admired him for being so responsible. Never more so than when, after 6 months after his death, my mother came to my office to drop off some important papers.

As I walked up to the reception area, sitting on the couch opposite my mother, was my 11 a.m. appointment, a woman in her late 50’s. Her husband had passed about a year after my Dad. He had owned a plumbing business and several months after his death their bank had demanded full payment on their business loan secured by a small store front. As I took the papers from my mother, I looked over my shoulder and smiled at my client. Just then, it struck me. Both of these women had lost their husbands, each on opposite sides of the asset planning spectrum. After all those years of listening to my father’s worries and concerns over what would become of my mother, his business and property, it finally came home to roost when looking at both women and seeing what could have been. It was a bittersweet observation and one which I felt compelled to share with you now.

There are many ways to begin an estate plan. Just so you know, everyone has an “estate.” Estate plans are more than just wills. When appropriate, they also include a durable power of attorney, a healthcare power of attorney, letters of intent, guardianship designations and trusts. You can go online and learn more about estate planning by visiting www.ProvenResource.com. Should you have any questions, you are welcome to call me at 888-789-1715 to discuss your concerns. It is always a good time to begin the discussion.

David Soble

P.S. In Gallup’s most recent survey ranking America’s Most Trusted Professions, pharmacists and nurses ranked as among the “most trusted” professionals. It’s no surprise that used car salesmen outranked members of Congress this year.

The Next Big Deal or Gnawing Dispute: 5 Strategies for Successful Negotiations

dsoble@provenresource.com (David Soble ) — Mon, 26 Sep 2016 21:26:18 GMT

There is an old adage that when two opposing parties in a legal matter proceed to litigation, then they have both lost their case. Having negotiated thousands of real estate and finance deals in my career as an attorney, I have listed below what I call the 5 “B’s” of successful negotiation:

Be prepared. Know your facts and have the relevant information to support your position readily available. Nothing stalls negotiations better or undermines your position more, then when you have to scramble and seek out the information necessary to bolster your position.
Be Patient . With good negotiations, reaching a resolution takes time and is not like ordering “fast food.” Don’t feel compelled to make a decision right away. If you are unsure about something, there is absolutely nothing wrong with waiting 24 hours to make a decision. If there are several items to accomplish in a negotiation, focus on those points that the parties are more agreeable on, and tackle the more difficult issues at a later time.
Be Consistent. Have a goal of what you want to accomplish going into the negotiations. If need be, “map out” a strategy to reach your goal(s) and plan for contingencies. Most importantly, once you’ve reached an agreement regarding a point of contention, stick with it. Don’t agree to something with the real intent to address and “change up” the issue at a later time. That approach wastes time and undermines one’s own credibility.
Be Reliable . Imagine a car that starts only half the time. That’s how adverse parties feel about someone who fails to perform on past promises and then approaches their opposition for new concessions. Granted, in an ideal world, people would perform on their agreements 100% of the time. But in life “things happen” and parties are often called upon to make accommodations and exceptions to agreements long after the negotiations are over. It’s reasonable for a party to be less flexible in their accommodations for people who repeatedly fail to perform. It becomes increasingly difficult for repeat ‘offenders’ to persuade the opposition that “this time things will be different.”
Be Civil . This point should go without saying, but negotiations move towards success much faster when parties practice civility. If being civil to the other party proves difficult, then you have an excellent reason for engaging an attorney, a real estate agent, or any other professional intermediary on your behalf.

There are times when parties to a settlement leave the negotiation table not getting everything they wanted. That’s fine. In most good deals, the parties need to concede some, but not all, of their position in order to reach a resolution. Those people who insist on going to the negotiation table with an “all or nothing” attitude, do not make good negotiation partners initially, but by using the preceding 5 points, they will in time.

5 Significant Indications You Are Approaching “The Last Minute”

dsoble@provenresource.com (David Soble ) — Mon, 26 Sep 2016 21:24:00 GMT

How can a person recognize that they are approaching the proverbial “last minute” when facing a pressing legal or financial matter? The “last minute” is the time in a crisis where the balance teeters against one’s favor, placing them beyond any significant help; help that can have a real impact on a desired outcome. It’s true that there are people who can “pull one off at the last minute” but this is only noteworthy because it is the exception rather than the rule. So why go through all of the anxiety? When experiencing a financial or legal crisis, here are 5 significant indicators that one is approaching “the last minute” and it is a good time to seek professional intervention:

1. When key decision- makers stop responding to your inquiries. So you’ve taken your concerns to the highest level
of the corporate “food chain” and the person in charge stops responding to you even after you have exercised professional persistence. This is a good indication that they cannot or will not provide a solution to your problem. If there is no reasonable explanation for their lack of follow- up, then you are approaching “the last minute”. Seek out an independent advocate as soon as possible.

2. A complicated fact pattern is “growing even more hair,” and creates new problems. When one problem begets another problem that has far-reaching financial or legal implications, so that you soon are acting as a circus plate juggler, you are approaching “the last minute”. If you are experiencing a crisis in the “circus arena” that you are just not knowledgeable about, or comfortable with, contact a professional problem-solver licensed in the area of your concern.

3. You hide from calls, avoid opening the mail, or “slip out” an alternative exit; You are approaching “the last minute.” If you were to do just one thing, despite how difficult it may be, open your mail. Written legal notices are meant for the recipient’s benefit, not the sender’s. They most often contain time sensitive notices that have legally enforceable expiration dates. Failure to respond by a certain date will cause one to forfeit their legal rights. It’s like letting the genie out of the bottle. It’s very hard to undo. If you can’t bear to open the mail, go to someone you trust, who will.

4 You’re “robbing Peter to pay Paul”. Address this slippery slope as soon as you recognize it. Contact a financial adviser to help you review your budget or direct you towards resources for financial relief. If you’ve dug yourself a large enough hole and feel financially paralyzed, then you are approaching “the last minute”. Escalate the problem to an experienced attorney who can help you sort through your financial crisis and negotiate with your creditors.

5. You are losing sleep, feeling more apathetic, eating less, and/or withdrawing more; these are classic signs of depression. Depression is most often created by a crisis. You are approaching “the last minute” if you recognize that you are experiencing any of these symptoms of depression. Your mental health directly impacts your ability to constructively resolve a pressing problem. Seek medical attention immediately. Your personal well-being is paramount to any problem that you are facing, so give yourself a break and hand your matter over to a specialist.

About the Author: Since 1990, David Soble has been a real estate and finance attorney in Ohio and Michigan. He advises national banks, lenders, loan servicers, consumers and business owners on residential and commercial real estate, finance and compliance issues. He has been involved in thousands of real estate transactions, being responsible for billions in real estate loan portfolios throughout his career. He has over 25 years of real estate and lending law experience and the battle scars to support his tempered cynicism

Bank Demand for Payment: 3 Options for Stressed Borrowers With Matured Business Loans

dsoble@provenresource.com (David Soble ) — Mon, 26 Sep 2016 21:21:35 GMT

Although the economy appears to be on the mend, many small business owners still struggle. Especially those with commercial loans taken between 2007 and 2009. They either received, or will receive bank demands that their loans are now due in full. Commercial loans typically have 5 year maturities and most banks will not provide more than a one year loan extension of the maturity date to pay back a loan. For example a business owner who took a loan out in 2008 with a 2013 maturity, and received a one year extension is most certainly feeling intense pressure from their bank to pay back the money –this year!

There are 3 realistic options that a business owner should consider when their bank demands payment of the loan in full:

Pay off the loan. In today’s restrictive banking climate refinancing sounds much easier than it really is. Banks infrequently rewrite their own commercial loans upon maturity. This is because the financial position of many small businesses has diminished since 2007. Also lending guidelines were more’ flexible’ then, with commercial properties reportedly having higher values. So unless a business owner has a load of cash to pay off the loan, refinancing with the same bank is almost impossible, and securing funds from an outside bank is increasingly difficult.
Negotiated Exit. Be assured that if a loan has matured and the borrower is not prepared to pay if off, the bank will begin a lawsuit. Defending a law suit can be expensive, but in most cases it will only delay the inevitable. Absent real legal defenses for bank misconduct or the mishandling of a loan, the best approach for a business owner is to negotiate a realistic “exit” from the bank with the assistance of experienced counsel. There are a numerous variables for consideration when negotiating a forbearance or settlement agreement, so unless a borrower is familiar with bank work out or special asset protocol, retain an experienced attorney.
Reorganization. Chapter 11 reorganization can be expensive, but it is an excellent remedy for borrowers when a bank acts in bad faith or has become a relentless and unreasonable collector despite all of the borrower’s repayment efforts. A Chapter 11 bankruptcy should be a final option, but it will halt collection actions and enable a business owner to restructure its business debt under court supervision. Chapter 11 legal practice is highly specialized and complex so seek a business bankruptcy attorney who can demonstrate past results.

There are few choices a business owner can make when their bank issues a demand for repayment: refinance, fight, negotiate or file business bankruptcy. Doing nothing however, is unacceptable. It’s an all -around recipe for financial disaster, and while a borrower may experience temporary paralysis upon receipt of a bank demand, weigh the options, seek experienced representation and take action.