February Charity Luncheon Reminder…..HELP!!
It’s time to start our monthly charity luncheons again. We begin with our first one of the new year tomorrow, February 3 at noon.
You may have noticed that I put “HELP!!” in the title. That’s because while we believe all our charity events are important, this one’s much more important.
Last week, I learned of a 17-year-old girl who was recently diagnosed with cancer. Prior to this horrible news, she attended a local high school and had a typical teenage life. Now, she has been diagnosed with stage 3 lymphoma. The doctors could not do surgery to remove the mass from her chest because it is attached to one of her lungs and her heart. The mass is the size of a baseball. She began chemotherapy on January 25 and has six months of it to go. During treatment she will be staying at MUSC several days per week.
The reason we are sponsoring this young woman and her family is that, as is all too often the case, her insurance will not cover all of the expenses. In fact, she must go on a very expensive medication and her insurance company has refused to pay for it. She has secured a discount from the pharmaceutical company, but that just means she’ll pay, in essence, what the Canadians pay. There will still be substantial costs for treatment. Our firm and the Steinberg Law Firm will do our best to help with the insurance issue to make sure her insurance company is held accountable for paying all costs they agreed to pay in the policy.
We will be holding a raffle for a framed picture taken by Michael Mulligan. In fact, it’s the same raffle we had about six months ago. My wife bought several tickets and won it. We’ve been planning to put it up for another raffle, and this one seems like it should be the one.
Please join us for this important luncheon and donate whatever you can! And please keep this young woman in your thoughts and prayers.
–Russ DeMott
November Charity Luncheon Reminder
Photo by Michael Mulligan
I wanted to remind you all that Wyckoff & DeMott and the Steinberg Law Firm are having our November charity luncheon this Wednesday, November 4, at noon. This month our sponsored charity is the Charleston Trident Association of Realtor’s reading mentoring program. Please bring age-appropriate books for elementary school children. CTAR will get the books into the hands of children who would otherwise lack the financial means to buy books. In the alternative, monetary donations would be greatly appreciated.
Opa Cafe will be cooking for the event, so come get some delicious Greek Food! You’ll be able to put together your own gyros, Greek salad, and potatoes. Of course, we’ll also have we’ll have some tasty desserts. We hope you can all make it!
–Russ DeMott
Introducing the New RESPA Rule
Photo by Marissa DeMott
The U.S. Department of Housing and Urban Development amended its RESPA (“Real Estate Settlement Procedures Act”) Rule back in November of 2008. Since that time, there have been numerous attempts to derail implementation of the new rule, including legal challenges. However, those efforts have failed, and implementation of the new RESPA rule will occur as planned on January 1, 2010. Since we’ll all be off watching football and eating turkey on January 1, let’s just say the big day’s going to be January 2.
The new RESPA rule affects the Good Faith Estimate (“GFE”) and the HUD-1/HUD-1A settlement statement. For those of you who don’t know, a GFE must be given to a borrower during the loan process. The HUD-1 is the settlement statement used for purchase closing, and the HUD-1A may be used in place of the HUD-1 in a refinance closing. This all sounds like alphabet soup, I know, but it’s just not that much fun. Nevertheless, we’ll all have to deal with this major overhaul, so we may as well start trying to figure it out. Even if you’re not a loan originator, if you deal with real estate clients, you’ll have to understand the HUD-1. I’ll be doing a series of posts on the new RESPA Rule between now and January 2. The posts will address GFE and HUD-1/1-A issues.
My mind works best when moving from the general to the specific. Hopefully, yours does as well because before we get into too much detail, I want to do a general overview. First, the purpose of the new rule is:
- To help consumers shop for the best loan. The idea is that shopping leads to greater competition and lower prices.
- To ensure that the key terms of the loan are disclosed to the borrower. Not all states require attorneys to close real estate transactions. Consequently, there have been borrowers who closed on a transaction they did not fully understand. Hopefully, the new rule will help eliminate the “I didn’t know my rate could change” issue as well as the “what about these extra changes?” issue.
The way the new rule attempts to achieve these goals is to make the GFE–with some exceptions–more of a binding quote than a good faith estimate. (Although, I have not heard anyone refer to the GFE as the GFBQ–”Good Faith Binding Quote.”) Accordingly, the new rule:
- Prohibits deviations in the GFE and HUD-1 (settlement statement) charges. What the lender says the fee will be on the GFE must match the actual charges on the HUD. I call this the syncing of the GFE and the HUD. Again, as with almost all things legal, there are some exceptions. And the exceptions in the new rule actually make sense.
- Requires a loan terms summary to be added to both the GFE and the HUD.
- Regulates the disclosure of fees, including the yield spread premium, title charges, and seller-paid items.
On last point to remember: RESPA provides that the HUD-1 must be used in all federally-related mortgage loans. There are exceptions to this, the most notable being loans primarily for business, commercial, or agricultural purposes. For a complete list of exceptions, see 24 C.F.R. 3500.5(b). So we’re talking about residential transactions where federally-related mortgages are involved. In essence, this means a HUD-1 must be used in almost all residential closings, but not in commercial or agricultural closings.
–Russ DeMott
October Charity Luncheon Reminder
Photo by Kim Held
I wanted to remind you all that Wyckoff & DeMott and the Steinberg Law Firm are having our October charity luncheon this Wednesday, October 7, at noon. This month our sponsored charity is Simply Divine Garden, which was founded by Darcy Whalen. Simply Divine Garden works with cancer patients by helping create gardens at cancer patients’ homes. Darcy started the organization after losing her mother and brother to cancer. Her mother was an avid gardener who took great pleasure in sitting in her garden after cancer treatments. Please visit Simply Divine Garden’s website at www.simplydivinegarden.org.
Darcy will be selling raffle tickets for two wrought iron planters with fall flowers and will also have registration forms for her 1st Annual Run that will take place on Saturday, October 10.
Pete will be cooking barbecue, and we’ll provide a variety of side dishes and desserts as well. We hope you can all make it!
–Russ DeMott
Back Links for Realtors, Originators, and Goat Farmers!
Photo by Michael Mulligan
Tonight I had an epiphany. What could I give to my loyal subscribers in addition to useful information? Then it came to me! I can link back to their websites on the blog. If you don’t understand the value of this, you need to know a little about SEO, which stands for Search Engine Optimization. The point of SEO is to be found when someone searches for the product or service you sell. Two main forces drive SEO: (1) back links from other sites (like this one) and (2) content. I can’t help you with the content, but I can back link to your site.
If you’d like me to do this, let me know. All you have to do is be a subscriber, and there’s no charge for that. Also, if you want me to back link to you, please let me know what you want in the anchor text, which is the text associated with your back link. (For example, “Charleston Area Realtor,” “Loan Originator,” or “Goat Farmer.” The choice is yours. You can email me at russ@wyckoffdemott.com.
One more thing: I am not requesting a reciprocal link because reciprocal links are not as valuable. You’ll get a link from this site to yours. No need to return the favor.
I look forward to hearing from you and will be sending out an email to most of my real estate contacts in the area. If you know someone who’s interested, please let them know.
–Russ DeMott
Nightshirts, Bikinis, and Using a General Power of Attorney for Closing
Photo by Marissa DeMott
You or your client has a document entitled “general durable power of attorney.” Will it be sufficient for the closing?
First, let’s discuss exactly what a general durable power of attorney is and what it’s not. Powers of attorney are documents giving attorneys-in-fact or agents power to act on behalf of the principal. By way of example, if Mom names Son as her attorney-in-fact, Son may act on her behalf. Exactly what Son may do depends on how the document is drafted. That’s what the “general” means in a general durable power of attorney: that the attorney-in-fact has authority to do anything the person granting it can do. The attorney-in-fact can buy property, sell property, file tax returns, bring lawsuits, open and close accounts-anything. A general durable power of attorney is a lot like Grandma’s night shirt: it covers everything.
Where’s the “durable” come in? Durable means that the authority remains even if the principal-in our example, Mom-becomes physically or mentally incapacitated. A typical durability provision might read like this: “This durable Power of Attorney is not affected by my physical disability or mental incompetence which renders me incapable of managing my own affairs and shall continue in effect until my death or until revoked by me in writing.” This makes perfect sense, because the reason general durable powers of attorney are given is to insure that the principal’s affairs will be managed if she can’t act on her own behalf. If Mom has a stroke or gets into an auto accident, she wants Son to be able to manage her financial affairs.
So if a general durable power of attorney covers everything, won’t it work for closings? The answer depends on whether the title insurance company permits the document to be used. Usually, a general durable power of attorney can be used if it’s not more than two or three years old and, of course, grants the necessary powers to the attorney-in-fact. However, different title insurance companies have different policies regarding general powers of attorney. To complicate things further, some lenders allow them to be used, and others don’t.
However, “special” powers of attorney are almost universally allowed by title insurance companies and lenders. If a general power of attorney is like grandma’s night shirt, a special power of attorney is more like a string bikini: it covers very little, just the essentials. A special power of attorney will provide that the attorney-in-fact has authority to purchase (or sell) the particular property at issue in the closing. Beyond that, it won’t say anything more. Nothing about tax returns, bank accounts, or anything else. It’s clear, therefore, that the person granting the speicial power of attorney knowingly authorizes the attorney-in-fact to do the one thing the form deals with: buy or sell property.
The lesson here is that with either type of power of attorney, you need to check with the closing attorney to make sure the document is properly drafted, properly executed, and acceptable to the necessary parties to the transaction. And remember, sometimes less is more!
September Charity Luncheon Reminder
Photo by Michael Mulligan
We’ll have our September charity luncheon on Wednesday, September 2. Our sponsored charity will be Hand Tools for Hope. Hand Tools for Hope gets hand tools to those in need in Third World countries. As always, there will be plenty of good food. Please bring a hand tool or donation if you are able to do so. We look forward to seeing you all on Wednesday!
–Russ DeMott
Like Getting Smacked with a Mallet
Photo by Michael Mulligan
Transferring property to your children to avoid probate causes a multitude of legal problems. See my recent post on Bankruptcy Law Network for a brief discussion on why this is such a bad idea. http://www.bankruptcylawnetwork.com/2009/08/10/transferring-property-to-avoid-probate-like-getting-smacked-in-the-head/
August Charity Luncheon Reminder
Photo by Michael Mulligan
Just a reminder that we’re having our August charity luncheon this Wednesday, August 5 at noon. We took a month off in July and are looking forward to seeing you all again. Our sponsored charity is Operation Home, which makes emergency home repairs for disadvantaged residents of Berkeley, Charleston, and Dorchester counties.
We look forward to seeing you!
–Russ DeMott
Got a Dog of a Business Picture?
My good friend and photographer, Tammy Wolfe, will be taking pictures right here in my office on July 31 and August first. My daughter, Marissa, is just completing an internship with Tammy up in Pennsylvania. Tammy and her business partner, Tamar London, have some slots available for professional head shots. So if your pics are a bit out-of-date, give them a call. They also specialize in digital photo editing, so they’ll make you look your best (and then some)! There are also slots available for senior pictures and family pictures in Azalea Park. THERE IS NO SITTING FEE! If you don’t like the pictures, you owe nothing. Their website is: www.londonwolfe.com. See below for more information.
–Russ DeMott
