Real Estate Investing

I have no intention - none whatsoever - of suing my mortgage lender.  However, if you want to take this kind of action, there’s new help available for homeowners, according to the Foreclosure Industry blog,

I’ve established a relationship with a law firm that is ready to help homeowners fight their lenders in court with meaningful court action. This is the “big stick” I’ve been talking about for homeowners – a loan audit and an attorney who isn’t afraid to stand up to the bank.

If this is you, I’d like to hear from you to figure out your goals with the property and what your desired outcome is. At a minimum, you will need to have a loan audit done first and the ability to pay a reasonable amount for legal fees. The law firm will use the loan audit report for the basis of the lawsuit around your specific fact pattern.

I think clearly there are cases where homeowners have legitimate reason to seek litigation against their lender.  I found an article from MSN Real Estate that was published several months ago that outlined reasons someone would have to do this,

• Your broker falsified your income;

• Your broker hid his or her fees;

• You weren’t immediately given a copy of the good-faith estimate and weren’t given an accurate HUD-1 statement breaking down all fees at closing;

• After signing the contract to refinance your mortgage, you didn’t walk out with a “notice of rescission” that explains your rights to cancel the refi within three business days;

• You were led into a subprime loan though your credit would’ve qualified you for a better loan; or

• In short, you were lied to or deceived.

As I talk with buyers and sellers alike, it distresses me greatly to hear their stories of what was done illegally to get them in a home.  This should help!

When I bought my first and second homes, I wanted to know what the square footage was.  Is it 1400 square feet or 2400?  Do you measure the outside of the house and add, or measure rooms and add them up to get the square footage?  According to an attorney who visited our office today, none of the above.

His advice to agents?  YOU should never measure a house yourself.  While it seems straightforward, figuring out the square footage of a dwelling can be tricky business.  There is no standard methodology for measuring - in fact three different appraisers, a professional measurer (is that a word?), an appraiser, and an agent could quite possibly ALL come up with a different number.

His next bit of advice?   If you publish the square footage of a home, always attribute where you got the number.  If it’s from the tax records, say that’s where you found it.  Additionally, agents would be wise to state in the MLS listing, “Information here not warranted or guaranteed” and add, “If square footage is important to you, you need to measure it yourself.”

Interestingly, in Texas - and perhaps other states - state law prohibits real estate agents from revealing the square footage according to the attorney today.  While I was unable to find evidence of that via my friend Google, I did see that square footage has not been listed for years in California.

Here’s an interesting discussion about the subject with points of views from many states.

Photo by Aussie Gall via Flickr Creative Commons.

The adage, “When in doubt, throw it out.” can certainly be applied not just to questionable food in the refrigerator, but also many times to real estate.  For agents and sellers our mantra could be, “When in doubt, throw it out there.”  In other words, disclose disclose disclose.

By disclosing known defects or problems with a home or property IN WRITING, you are protecting yourself, the seller, and the buyers of potential court proceedings.  If there is a sink hole, tell about it. If there had been termites in the past but they were treated and repairs made, disclose it.  If there is a cemetery under the house, disclose it.  Of course, how unlikely is that?  Just ask anyone who’s ever watched the movie Poltergeist.

So the question about a house being used as a meth lab inevitably came up.  Do we disclose if a home for sale had been used for the production of meth?  According to Cookeville, Tennessee’s Herald-Citizen, yes it should be disclosed if the agent is aware of it.

… real estate agents can only disclose that information if they are aware of the problem. It is the property owner’s responsibility to make agents aware of all property defects including the house having been used in the manufacturing of meth. Putnam County Sheriff David K. Andrews said anytime a property is quarantined due to a meth lab the law enforcement agency quarantining that property will file paperwork with the register of deeds stating that the property has been quarantined.

When in doubt, disclose.  Disclose disclose disclose.

Photo by Maveric 2003 via Flickr Creative Commons.