Mortgages

Massachusetts Appeals Court Sides with MERS in Mortgage Assignment Case

Published on: March 2, 2015 | by Pulgini & Norton, LLP

The Massachusetts Appeals Court recently reached an important decision on the assignability of mortgages by mortgagees. The issue arose out of a foreclosure case in which the plaintiff was attempting to challenge the legality of the process by attacking the underlying mortgage situation.

In the case, Shea v. Federal Nat’l Mortgage Assn., Mass. App, Ct. (2015), the plaintiff had purchased the property at issue in 2005. Then, as part of a refinance of the property, the plaintiff secured a mortgage loan from IndyMac Bank in the amount of $281,600.

Relevant to the case, the mortgage outlined the following. It defined IndyMac, the owner of the debt, as the “Lender.” It identified Mortgage Electronic Registration System, Inc. (MERS), as the mortgagee for purposes of the document.

Younger Buyers Giving Boost to Massachusetts Real Estate Market

Published on: February 16, 2015 | by Pulgini & Norton, LLP

The lower mortgage rate and more stable inventory in the Massachusetts real estate market has several sources, including the real estate website Zillow, predicting that millenials will be the largest group of homebuyers this year.

One young woman claimed that a major motivation for her decision to buy a home was due to difficulty in finding a suitable location to rent.

Additionally, in December, Fannie Mae and Freddie Mac announced they would reduce the minimum down payment on certain mortgages from 5% to 3%, among other changes that are aimed at getting more first-time homebuyers back into the market of buying residential real estate.

Record Low Mortgage Rates in Massachusetts, Good Time to Buy, Great Time to Refinance

Published on: February 2, 2015 | by Pulgini & Norton, LLP

According to a prominent Boston news outlet citing to the mortgage giant Freddie Mac, earlier this month mortgage rates hit an almost two-year low of 3.73 percent.

The volume of home sales are reportedly slightly lower than they were at this time last year. Despite the volume of actual home sales being lower, December sales data reflected that home sales agreements and prices are both rising since last December. The median price of a single family home rose 4.1 percent, from $319,900 to $333,000. Additionally, the number of home sale agreements signed (though not yet closed on) also rose from 2,406 to 3,096 during the same time period (December 2013 compared with December 2014).

Massachusetts Mortgage Laws and Avoiding Foreclosure

Published on: January 13, 2015 | by Pulgini & Norton, LLP

The threat of a foreclosure is scary. Whether you have lived in your home for many years, or just a few months, having to leave due to falling behind on payments is something that no one wants to have to do. However, if you receive a foreclosure notice, it is imperative that you do not just ignore it.

Massachusetts law has a very generous grace period for homeowners facing foreclosure, but in order to take full advantage, you have to address the default payments head on. If you are not sure how you want to proceed, but you know that you don’t want to lose your house, hiring an experienced Massachusetts real estate attorney is one way to ensure that your rights will be zealously advocated for.

Mass. G.L. Ch. 244 Section 35A (b) provides that, “a mortgagor of residential property shall have a 150-day right to cure a default of a required payment as provided in the residential mortgage or note secured by the residential property[.]” The default is cured by a full payment of all amounts that are due.

Massachusetts Mortgage Holders Benefit From Extension of Tax Break

Published on: December 10, 2014 | by Pulgini & Norton, LLP

U.S. Congress Set To Extend Relief For Mortgage Holders

More than 30 percent of federal income tax filers in Massachusetts claim the mortgage interest deduction. Many of these mortgage holders in Massachusetts could potentially benefit from the proposed Tax Increase Prevention Act of 2014. Congress is expected to enact this extension of an earlier mortgage holder relief law before taking its recess at the end of 2014. The House of Representatives already passed the extension, as H.R. 5771. The Senate is expected to pass its own version of the bill, and then the two will presumably be reconciled and presented to President Obama for his signature.

The new law is the extension of the federal Mortgage Forgiveness Debt Relief Act of 2007. This provision in the IRS Code was enacted by Congress in the aftermath of the collapse of the real estate market after the financial crisis of 2007. The Act relieves taxpayers from the previous provision of the IRS Code that had required a mortgage holder to report as income any mortgage debt forgiven by a lender, such as if a homeowner whose mortgage was more than the value of his or her home made a short sale and the bank accepted the sale price instead of the full amount of the mortgage debt.

Former IRS Code Provisions Will Be Superseded

Under the former IRS Tax Code provisions, if a homeowner borrowed money from a commercial lender and the lender later canceled or forgave the debt, the taxpayer might have had to report the canceled amount as income for tax purposes. The rationale was that when the taxpayer borrowed the money, he or she was not required to report the loan proceeds as income because of the obligation eventually to repay the lender. When that obligation was subsequently canceled, the amount received as loan proceeds became reportable as income because there was no longer any obligation to repay the lender. Under the former tax provision, the lender reported the amount of the canceled debt to both the borrower and the IRS on a Form 1099-C, Cancellation of Debt.