ZILLOW HOME VALUE INDEX

Data through March 2016

$186,200

• 4.8% 1-year change
• 2.7% 1-year forecast

The median home value in the United States is $186,200. United States home values have gone up 4.8% over the past year and Zillow predicts they will rise 2.7% within the next year.

Foreclosures will be a factor impacting home values in the next several years. In the United States 3.1 homes are foreclosed (per 10,000).

With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth. The percent of United States homeowners underwater on their mortgage is 0.1%.

Recap of NRMLA Eastern Regional Meeting – Day Two

HECM Update from Key HUD Staff

On April 5, 2016, the New York Eastern Regional NRMLA Conference continued, starting with HUD staffers Karin Hill, Erica Jessup, John Olmstead, Phillip Caulfield, Patrick Porter and Kasey Watson.

The average age of consumers approved for HECMs dropped continually over the years to a low of age 71 in 2013, while the current average age bumped up to just over 72 years old.  There are 650,000 loans outstanding now.

A revised HECM Financial Assessment and Property Charge Guide is in the works ans will be published soon. Some notes on Financial Assessment:  Fully funded LESAs (Life Expectancy Set-Asides) may be required based upon credit history and/or property charge history.  Residual Income shortfalls may be dealt with using compensating factors, including income from the HECM itself.

Reverse Mortgage Counseling:  There are 270 agencies, with 460 active counselors.  Interestingly, 62% of all counseling is done by only 10 agencies, and alarmingly 54% of all counseling is done by just 4 agencies.  There is a 70% “pull-through” rate, or percentage of consumers counseled who actually closed loans.

Mortgagee Letter ML 2016-07 gives options for loss mitigation, including an “At-Risk” extension for borrowers age 80 and over.  The HUD FOC (Financial Operations Center) handles all claims.  In 2015 approximately 40,000 claims were paid.

How Reverse Mortgages Fit Into Americans’ Retirement Plans

This last session of the New York conference was presented by Professor Wade Pfau of the American College of Financial Services.  He spoke about our assets, including Human Capital (our jobs), Home Equity, Financial, Insurance, and Social Capital (Social Security, Medicare, Pensions, Community Support).

His suggested uses of a Reverse Mortgage were for housing expense (by paying off a mortgage), to delay Social Security until an optimal age of 70, to support retirement spending, and strategic use to manage a retiree’s tax bracket.  He discussed “success” as a measure of having enough money into the future.  The use of a reverse mortgage to pay off a current “forward” mortgage has the highest rate of success in the models he has created, and using a tenure payment disbursement from a reverse mortgage has a high rate of success compared to an income annuity.

Details of his models and recommendations can be found in the NRMLA conference slides, and in his recent articles in Forbes.

JDSUPRA Business Advisor: Real Property & Title Insurance Update: Week Ending April 8, 2016

 

REAL PROPERTY UPDATE

• Sovereign Immunity: DOT prohibited from using sovereign immunity defense in negligence action resulting from railroad crossing accident where DOT bound by crossing agreement, including indemnity clause; liability amount also not limited by caps set forth in section 768.28(5), Florida Statutes (2002) – Fla. Dep’t of Transp. v. Schwefringhaus, No. SC14-69 (Fla. Apr. 7, 2016) (affirmed)
• Foreclosure/Standing: bank failed to establish through documents or testimony that it owned or held the indorsed note with allonge when bank filed foreclosure complaint –Sorrell v. U.S. Bank Nat’l Ass’n, as Trustee, No. 2D14-3883 (Fla. 2d DCA Apr. 6, 2016) (reversed and remanded for dismissal)
• Partition/Disbursement of Sale Proceeds: disbursement of proceeds from sale of partitioned property to party in connection with interlocutory attorney’s fee orders improper because counterclaims arising from same transaction and occurrence remained pending – Sieber v. Gil, No. 3D15-2270 (Fla. 3d DCA Apr. 6, 2016) (reversed and remanded)
• Foreclosure/Standing: bank did not prove that endorsement of note occurred and allonge was affixed prior to filing original complaint – Elman v. U.S. Bank, N.A., as Trustee, No. 4D14-2520 (Fla. 4th DCA Apr. 6, 2016) (reversed and remanded for entry of judgment for borrowers)
• Foreclosure/Business Records: bank failed to prove amounts due and owing because bank’s witness did not lay proper foundation for admission of payment history under business records exception to hearsay – Maslak v. Wells Fargo Bank, N.A., as Trustee, Nos. 4D14-4672, 4D14-4673, 4D14-4707 (Fla. 4th DCA Apr. 6, 2016) (affirming judgment of foreclosure but remanding for further proceedings to establish amounts due and owing)
• Foreclosure/Reformation: in bank’s action seeking foreclosure and reformation of mortgage, bank introduced clear and convincing evidence showing that a mistake was made, as required for reformation, but did not show what the actual agreement was between originally contracting parties– Losner v. HSBC Bank USA, N.A., as Trustee, No. 4D15-493 (Fla. 4th DCA Apr. 6, 2016) (affirming trial court’s judgment with respect to standing, reversing on reformation count, and remanding for entry of money judgment in lender’s favor)
• Foreclosure/Standing: trial court did not abuse its discretion in determining bank’s witness was competent to testify and in admitting loan history records into evidence; bank’s notice of default substantially complied with paragraph 22; unclear whether HUD notice and face-to-face meeting conditions precedent applied but borrowers’ evidentiary burden to establish – Diaz v. Wells Fargo Bank, N.A., No. 5D15-1612 (Fla. 5th DCA Apr. 8, 2016) (affirmed)

TITLE INSURANCE UPDATE

• Nature of Title Insurance: a title insurance policy is a contract of indemnity, not of guaranty or warranty, and once a claim is tendered a title insurer has the option of paying the insured’s loss, clearing the defect within a reasonable time, or showing that the defect does not exist or is excluded from coverage – Wells Fargo Bank, N.A. v. First American Title Ins. Co., No. 15-2882 (D. Md. April 6, 2016)(memorandum and order denying motion to dismiss)
• Statute of Limitations: a title insurance policy is breached not at the time notice is given but only after the insurer fails to perform any of the options available to it pursuant to the policy – Wells Fargo Bank, N.A. v. First American Title Ins. Co., No. 15-2882 (D. Md. April 6, 2016)(memorandum and order denying motion to dismiss)
• Late Notice: late notice coupled with prejudice may give rise to a defense to a claim on a title insurance policy, but prejudice due to late notice is not a question that can be resolved on a motion to dismiss –Wells Fargo Bank, N.A. v. First American Title Ins. Co.,, No. 15-2882 (D. Md. April 6, 2016)(memorandum and order denying motion to dismiss)
• Subrogation: claim that insured suffered no damage because it was made whole by its title insurer, thus precluding the title insurer’s claim for subrogation not the law of subrogation and is without merit – First American Title Ins. Co. v. Dundee Reger, LLC, No. 15-C-5053 (E.D. Ill. April 5, 2016)(memorandum opinion and order denying motion to dismiss)
• Jury Instructions: the plaintiff insured’s general objections to title insurer’s jury instructions, failed to preserve objection to the inclusion of affirmative defense that the insurer complied with the policy by timely investigating and tendering payment in breach of contract instructions, and jury verdict for defense left insured without a claim, even for the amount tendered – Millies v. Landamerica Transnation, No. 91301-3 (Wash.  March 31, 2016) (affirming jury verdict for defense)
• Liability for Agent: title insurance agent’s theft of funds could not be imputed to title insurer where the theft was not in the course of the agent’s agency, did not it further the insurer’s business, the agent was not acting with apparent authority, and thus the agent’s theft did not preclude the insurer from pursuing claims against the parties to the transaction –Commonwealth Land and Title Ins. Co. v. Howard, No. 5:14-24 (E.D. Ky. March 29, 2016) (opinion and order granting summary judgment)
• Guilty Plea: defendant’s plea agreement admitting he falsely represented the value of the property estops him from denying that fact and entitles title insurer to summary judgment on fraud count – Commonwealth Land and Title Ins. Co. v. Howard, No. 5:14-24 (E.D. Ky. March 29, 2016) (opinion and order granting summary judgment)
• Vexatious Litigant: order deeming plaintiff a vexatious litigant and showing that plaintiff, in this action and two prior lawsuits alleging the title insurer misappropriated funds and failed to give her clear title, engaged in a pattern of baseless and repetitive motions which merely harassed and unduly burdened defendant and judgment was narrowly tailored to fit the specific abuse and thus within the court’s discretion – Saylor v. Chicago Title Ins. Co., No. 15-0303 (Az. App. March 29, 2016) (memorandum decision affirming trial court order dismissing action and deeming plaintiff a vexatious litigant)

Recap of NRMLA Eastern Regional Meeting – Day One

There were several educational sessions on Day One of the 2016 Conference in New York.  Here is a summary, session by session.  If you are a NRMLA member, slide presentations will be available on their website.

April 4, 2016

Helping Families Fund Caregiving

Robert Blancato and Barbara Franklin discussed the differences between Healthcare (medical care by doctors and nurses, usually covered by insurance) and Homecare (help with activities of daily living, not usually covered).

There are 43.5 million unpaid caregivers in the US today, comprising 17% of the American workforce.

There are strategies for paying for care, one of which is Long Term Care Insurance.  An individual has 75% chance of needing it, but there has been a 20-50% increase in premiums recently.  The industry is moving towards shorter term coverage.  The average age when people take out a policy is 57.  There is a newer type of policy which combines life insurance with long term care.  Women pay higher premiums.

The use of community (home) based Medicaid care has increased from 13% – 47%, and the  average age of initial participation is 53.

Financial Planning: Managing Your Assets

Jamie Hopkins, Esq., JD, CLU ®, RICP ® of The American College spoke about the language of the financial planning community.

One-third of Americans are planning to live on Social Security alone, even though using the advice of a financial planner could increase future income significantly.  Advice on Social Security planning could result in a 9% increase in income, while advice on tax efficiency may result in an 8.2% increase.  Help in a variety of strategies could conceivably result in a 34% bump in retirement income.

People planning for retirement face risks that affect their income – the #1 risk is Longevity, followed by Inflation, Excess Withdrawal, and Health Expenses.

Some strategies discussed included sticking with a safe withdrawal rate, and using home eqquity instead of liquidating other assets in a low market.

Compliance Management for Brokers and Correspondents

There was discussion of UDAAP (Unfair Deceptive  Abusive Advertising Practices) and emphasis on adhering to the NRMLA Ethics Advisory on Advertising.

Details are found here:

Click to access Ethics%20Advisory%20Opinion%202012-01.pdf

Despite regulation, there are continuing infringements, and voluntary registration with CFPB may help keep an individual on top of violations.

HECM Math

Loan origination software computes all of the important numbers:  background and interpretation help was presented by Craig Barnes.

Service Update:  Tax and Insurance Defaults and Non-Borrowing Spouse Regulatory Changes

Panelists from the various servicers (Ryan LaRose of Celink, Linda Bridges of Wells Fargo, and Leslie Flynne of Reverse Mortgage Solutions) discussed new FHA regulations.  The latest is Mortgagee Letter 2016-07 (read it here:   http://portal.hud.gov/hudportal/documents/huddoc?id=16-07ml.pdf   ).

New options to cure a Tax and/or Insurance default include the Servicer making the payment and being repaid on a payment plan, a re-finance if eligible, and an “At Risk” extension when all borrowers are 80 years old or older and there is a critical circumstance.

A Non-Borrowing Spouse may be eligible for a deferral of repayment if they are able to satisfy all other HECM obligations.

Foreclosure options and procedures vary by state.

 

Look for a recap of Day Two coming soon!

 

Real Property & Title Insurance Update: Week Ending April 1, 2016

from JDSupra Business Advisor 

REAL PROPERTY UPDATE

• Foreclosure: remittitur, rather than reversal of summary judgment, is proper where lender failed to provide sufficient evidence of late charges at summary judgment – Newman v. Ocwen Loan Servicing, LLC, No. 2D14-1953 (Fla. 2d DCA Mar. 30, 2016) (affirmed in part, reversed in part, and remanded)
• Associations/Post-Foreclosure Assessments: foreclosing mortgagee not liable for condominium association’s interest, late fees, attorney’s fees or costs in connection with assessments, per Section 720.3085(2)(c), Florida Statutes – Catalina West Homeowners Ass’n., Inc. v. Fed. Nat’l Mortgage Ass’n, No. 3D15-271 (Fla. 3d DCA Mar. 30, 2016) (affirmed)
• Foreclosure/Standing: bank filing original mortgage note with court in same condition as copy attached to complaint sufficient to establish possession at time complaint filed  – Ortiz v. PNC Bank, N.A., Nos. 4D15-242 (Fla. 4th DCA Mar. 30, 2016) (affirmed)
• Foreclosure/Business Records: where bank’s corporate representative testified that she had no knowledge of policies and procedures of entities that created payment history and notice letters, such documents amount to inadmissible hearsay–Cassell v. Green Planet Servicing, LLC, Nos. 5D14-3369 (Fla. 5th DCA Apr. 1, 2016) (reversed and remanded)
• Foreclosure/Dismissal: order dismissing foreclosure action for failure to appear at case management conference was reversible error where failure to appear was from either lack of notice or incorrect calendaring – U.S. Bank N.A. v. Martinez, No. 5D15-2928 (Fla. 5th DCA Apr. 1, 2016) (reversed and remanded)

TITLE INSURANCE UPDATE

• Settlement Agent: purchasers could prevail in consumer collection practices action against closing agent where they alleged that agent failed to disclose (i) relationship with sellers, and (ii) the absence of permits and zoning nonconformities that made the property incapable of being lawfully occupied – Simon v. Hofgard, No. 15-cv-00929 (D.D.C. March 28, 2016) (memorandum opinion granting motion to remand)
• Settlement Agent: whether a reasonable consumer would consider the provision of settlement services and title insurance relating to the purchase of a property to encompass ensuring that the property had obtained the necessary permits and conforms to applicable zoning regulations is a novel legal issue – Simon v. Hofgard, No. 15-cv-00929 (D.D.C. March 28, 2016) (memorandum opinion granting motion to remand)
• Settlement Agent: agent not entitled to damages under contract with HUD based on allegation that HUD precluded it from charging purchasers a fee in connection with closings in accordance with industry custom where the contract between agent and HUD was unambiguous –Northwest Title Agency, Inc. v. United States, No. 15-248 (Fed. Cl. March 25, 2016) (opinion granting motion for summary judgment)
• Evidence: testimony about industry custom about title agent’s fees is irrelevant where the parties’ contract is unambiguous on the matter of fees – Northwest Title Agency, Inc. v. United States,, No. 15-248 (Fed. Cl. March 25, 2016) (opinion granting motion for summary judgment)
• Malicious Prosecution: borrower who alleged that title insurer was liable for slander of title for allowing an allegedly fraudulent deed of trust to be recorded was not entitled to maintain a second anti-SLAPP motion against title insurer’s cross-complaint where prior motion had already been denied Fidelity National Title Ins. Co. v. Corthran, No. B258692 (Cal. App. March 23, 2016)(affirming order denying second anti-SLAPP motion)
• Abstractor Liability: purchaser’s claims against title abstractor previously dismissed as barred by statute of limitations were barred by collateral estoppel – ALR Oglethorpe LLC v. Henderson, No. A15A2336 (Ga. App. March 23, 2016) (affirming order granting motion to dismiss)
• Tort: affirming summary judgment on Plaintiff’s claim for damages for negligent misrepresentation against title insurer – Arjune v. Commonwealth Land Title Ins. Co., No. 2015-02304 (NY App. March 23, 2016) (affirming summary judgment)