New York

Four years after Superstorm Sandy devastated the coastal properties in the Northeast
Foreclosures in New York City saw a 79 percent year-over-year increase in the third quarter, according to new data from PropertyShark, which also reported a 145 percent year-over-year spike in the Bronx, a 118 percent year-over-year surge in Brooklyn.
 
What do these percentages mean? The Bronx saw 247 first-time foreclosures in the third quarter, but only 101 in the third quarter of 2016; PropertyShark noted this activity was concentrated in the eastern half of the borough. In Brooklyn, the 205 first-time foreclosures in the third quarter was up from 94 one year earlier, and PropertyShark also noted concentrated activity in a relative handful of communities. The greatest foreclosure leap was in New York City’s smallest borough: Staten Island recorded 105 first-time foreclosures in the third quarter, compared to 22 one year earlier—a 246 percent year-over-year skyrocket.
 
Nonetheless, the third quarter activity was below the second quarter 2017 peak of 911 new foreclosures spread across the city’s five boroughs, which represented a six percent quarter-over-quarter decline.
 
An affordable housing complex in Brooklyn that is home to 15,000 people has been sold for approximately $850 million
An affordable housing complex in Brooklyn that is home to 15,000 people has been sold for approximately $850 million—and the sale would turn a profit for President Trump, who owns a four-percent stake in the property.
 
According to a Bloomberg report, the owners of Starrett City are selling the 46-building complex to a joint venture led by Brooksville Co. The president is a limited partner in Starrett City Associates, the property’s owners, and he received more than $5 million in income from his investment last year.
 
The sale is subject to approval by state and federal regulators—although the latter might raise concerns of conflicts of interest because approval would need to come from the Department of Housing and Urban Development, which administers the complex’s rent and mortgage subsidy programs. Brownville Co. has already announced it will rename Starrett City as Spring Creek Towers.

 
A complaint was unsealed in federal court in Central Islip, N.Y., charging Edward E. Bohm, Edward J. Sypher Jr., and Matthew T. Voss, senior executives at Long Island-based mortgage lender Vanguard Funding LLC, with conspiracy to commit wire and bank frau
A complaint was unsealed in federal court in Central Islip, N.Y., charging Edward E. Bohm, Edward J. Sypher Jr., and Matthew T. Voss, senior executives at Long Island-based mortgage lender Vanguard Funding LLC, with conspiracy to commit wire and bank fraud in connection with obtaining more than $8.9 million of warehouse loans for Vanguard to fund mortgages. The defendants allegedly misused the loans to pay personal expenses and compensation, as well as to repay earlier fraudulently obtained loans.
 
“As alleged, the defendants–executives of a mortgage lender–defrauded banks into lending them money by stating that the money would fund new mortgages or refinance existing ones,” said Bridget M. Rohde, Acting U.S. Attorney for the Eastern District of New York. “We will continue to address dishonesty in the mortgage industry whether the victims are financial institutions, investors, or homeowners, as it ultimately hurts all of us as a community.” 
 
According to the complaint, between August 2016 and March 2017, Voss, Vanguard’s Chief Operating Officer; Sypher, the Chief Financial Officer; and Bohm, the President of Sales, engaged in a scheme in which they obtained warehouse loans, or short-term loans, for Vanguard by falsely representing that Vanguard would use the proceeds of those loans to fund mortgages or mortgage refinancing for Vanguard’s clients. Once Vanguard received the loans, however, the defendants used the monies to pay personal expenses and compensation and to pay off loans they had previously obtained with fraudulent loan submissions for improper purposes. Nearly $9 million of fraudulently obtained, and subsequently misused, loans have been identified so far.
 
“These defendants, for their own gain, allegedly defrauded the financial institutions that provide funding for individuals to buy homes, and they must be held accountable,” said Maria T. Vullo, Superintendent of the New York State Department of Financial Services. “As the regulator and protector of financial services companies in New York, the Department of Financial Services is proud to have assisted the Acting United States Attorney in bringing these defendants to justice.”
 
In a recorded conversation with a co-conspirator in 2017, Bohm expressed confidence that they would evade criminal liability because the victims of their fraudulent scheme were financial institutions.

 
New York State home sales fell in July by 7.4 percent on a year-over-year measurement
New York State home sales fell in July by 7.4 percent on a year-over-year measurement, according to new data from the New York State Association of Realtors (NYSAR). Last month’s sales total was 11,556, compared to 12,475 in July 2016.
 
However, the July statewide median sales price of $270,000 was an increase of 8.4 percent from the July 2016 median of $249,000. As this happened, the months’ supply of homes for sale dropped 15.8 percent at the end of July to a 6.4-months’ supply; it was at 7.6 months at the end of July 2016.
 
“July home sales were typically strong and likely would have been higher except for the ongoing decline in the number of homes for sale,” said Duncan R. MacKenzie, NYSARE’s CEO. “Newly listed homes are moving quickly and multiple purchase offers are becoming more common. These conditions have driven growth in the statewide median sales price to near record levels. With employment levels and consumer confidence steady, and mortgage rates still low, the housing market should remain active through the balance of the year. We project that sales will be near the 2016 record, but will continue to be constrained by the low number of homes listed for sale.”

 
The New York State Department of Financial Services recently re-adopted a registration procedure for mortgage loan servicers
The New York State Department of Financial Services recently re-adopted a registration procedure for mortgage loan servicers. As a part of the process, professionals need to meet bonding requirements and provide appropriate errors and omissions (E&O) insurance coverage. 
 
The Superintendent of Financial Services brought the law back into force with Emergency Adoption of Part 418 of the Superintendent’s Regulations and Supervisory Procedures MB 109 and MB 110 on July 23, 2017. The regulations become effective as of this date.
 
The registration ensures that all operating mortgage loan servicers will comply with state rules that govern their trade. The license bond, fidelity bond and E&O insurance provide additional security for the state and its citizens against servicers’ potential acts of fraud, embezzlement, misplacement, or forgery.
 
Here are the most important points of the re-adopted legislation that mortgage loan servicers in the state of New York should consider. 
 
The reinstated registration process for NY mortgage loan servicers
As of July 23, 2017, any person or entity wanting to operate as a mortgage loan servicer in the state will need to undergo a registration procedure with the Department of Financial Services. The steps are outlined in Supervisory Procedure MB 109. Supervisory Procedure MB 110 changes the procedure for change in control of a servicer.
 
Applicants have to present a completed application form, fingerprint cards, and proof of payment of a $3,000 investigation fee, a $102.25 fingerprint processing fee, and a $100 NMLS processing fee.
 
In the application form, mortgage loan servicers have to provide the following information:
 
►Personal information
►Business entity information
►Records of previous licenses
►Financial statements
►Proof of experience and qualifications
 
There is a transitional period for mortgage loan servicers who were active as of June 30, 2009 and who applied for registration before July 31, 2009. They are deemed in compliance with the registration rules as long as the Superintendent does not deny their application.
 
The re-adopted surety bond and insurance requirements
An indispensable part of the newly reinstated registration for NY mortgage loan servicers is to post a minimum  surety bond amount of $250,000. The exact amount is determined by the Department during the registration process.
 
Mortgage loan servicers also have to obtain a fidelity bond and errors and omissions (E&O) insurance coverage. Their amounts depend on the aggregate dollar volume of business conducted in New York two years before the current year, as follows:
 
►Up to $100,000,000 aggregate dollar amount: $300,000
►Of the next $500,000,000: $300,000 plus 0.15%
►Of the next $400,000,000: $300,000 plus 0.125%
►Of the amount over $1 billion: $300,000 plus 0.1%
 
The deductible amount of the fidelity bond and the E&O policy cannot exceed $100,000 or 5% of the face bond amount, whichever is greater.
 
The purpose of the surety bond and insurance requirements is to provide an extra layer of safety for the licensing authority and the general public that a registered mortgage loan servicer will comply with all applicable state laws. These security instruments can provide a compensation in case an affected party suffers losses as a result of a servicer’s illegal actions.
 
How the bonding costs are formulated
With the reinstated registration requirements, it’s important for mortgage loan servicers to know how their costs will change. Besides an insurance premium for their E&O coverage, they also need to account for the bonding premiums on their license and fidelity bonds.
 
The bond price that mortgage professionals have to pay depends on the bond amounts set by the Department. The higher the required amount, the higher the premium that needs to be covered on it. 
 
Besides this, the cost is determined on the basis of the personal and business finances of the bond applicant. The surety that provides the bonding needs to consider factors such as credit score, business financials, and assets and liquidity. The servicer’s professional experience can also play a role in the price formulation. If the candidate is deemed as financially stable, the bond premium will be lower.
 
Applicants with problematic finances often can still get bonded, but at a higher price. Servicers who are planning to apply for their bonds can work on reducing their costs. Improving the personal credit score and completing any outstanding payments can decrease the bond cost.
 
What the changes mean for NY mortgage loan servicers
The re-adopted registration, bonding and insurance requirements create a solid framework for the mortgage loan servicing field in NY.
 
In practical terms, the changes impose a new administrative process that servicers have to go through. There are also financial consequences, as professionals need to cover bond and insurance premiums in order to meet the registration requirements of the Department.
 
While introducing a heavier startup process for servicers, the emergency regulations aim to raise the standards in the loan servicing field. Their goal is to ensure a higher level of security for all parties involved. In the long run, improved industry standards are in the interest of diligent and hard-working mortgage loan servicers, as the reputation of their trade is boosted.

The New York State Department of Financial Services recently re-adopted a registration procedure for mortgage loan servicersVic Lance is the founder and president of Lance Surety Bond Associates. He is a surety bond expert who helps mortgage professionals get licensed and bonded. Vic’s phone number is (877) 514-5146 and his e-mail is info@suretybonds.org.

 

The farmhouse and adjacent barn that inspired one of the most beloved books of the 20th century is now listed for sale
The farmhouse and adjacent barn that inspired one of the most beloved books of the 20th century is now listed for sale.
 
Realtor.com is reporting that the former Brooklin, Maine, residence of E.B. White, the author of the children’s book “Charlotte’s Web,” is now listed for $3.7 million. Built in the 1790s, the property covers 44 acres and includes 2,000 feet of shore frontage, and the residence has five bedrooms, three bathrooms, two offices and six working fireplaces.
 
White purchased the property in 1933 and lived there until his death in 1985; he cited the property’s barn and its animal occupants as the inspiration for what became his award-winning book. Besides the barn where Charlotte the spider and Wilbur the pig maintained their friendship, the property also includes the rope swing that White incorporated into the book.
 
“The barn is beautiful—it’s original [and] it has the swing,” said Martha Dischinger, real estate broker with Downeast Properties in Blue Hill, Maine.
 
However, none of the spiders currently on the residence are believed to be writing messages in their webs.

 
Is Manhattan real estate seeing price spikes due to presence of celebrity residents
Is Manhattan real estate seeing price spikes due to presence of celebrity residents? A New York Post report cited an analysis by the real estate firm Leslie J. Garfield and the property research group DataLoft in concluding the stars are driving up Big Apple prices.
 
“It’s a herd mentality,” claimed broker Dolly Lenz. “Everybody wants to be where they are. It’s like, ‘I’ll have what she’s having.’”
 
Lenz cited a $34.5 million listing she is representing at 271 W. 11th St. and insisted its expensive price tag is due, in large part, to having the likes of Liv Tyler, Julianne Moore, and the married celebrities Sarah Jessica Parker and Matthew Broderick in the neighborhood. The Post’s coverage included a study determined the presence of A-list stars helped boost prices by approximately 127 percent in recent years, while less stellar B-listers contributed a 67 percent spike and the famous but not particularly respected C-listers contributed a 43 percent price bump.
 
And the star power is not restricted to Hollywood homeowners in Manhattan’s trendy neighborhoods. Taylor Swift, who maintains a residence in the West Village, is a renter rather than an owner. Nonetheless, the neighborhood’s average sales price is now $14.3 million, up 127 percent from $6.3 million about a decade ago. Of course, whether having Taylor Swift as an occasional neighbor is really worth $14.3 million is still up for debate.

 
ESMBA's 2017 Holiday Party will be held Wednesday, Nov. 29 at the Milleridge Cottage in Jericho, N.Y. from 6:00 p.m.-10:00 p.m.
 
For more information, visit ESMBA.org.

 
New York State home sales fell in July by 7.4 percent on a year-over-year measurement
New York State’s housing market hit a new peak in its second quarter home sales, with 32,444 residential properties sold, according to the New York State Association of Realtors (NYSAR).
 
For the first six months of the year, there were 58,490 closed sales, up 2.9-percent increase from the same period in 2016. However, closed sales during June decreased to 12,610, a 2.7-percent reduction compared to June 2016.
The second quarter statewide median sales price of $245,000 was 6.5 percent higher on a year-over-year measurement, while median sales price for the first half of the year was $244,000, a 6.1-percent increase from the same period in 2016. In June, the statewide median sales price of $264,000 represented an increase of 9.3 percent compared to the June 2016 median of $241,500.
 
Second quarter pending sales increased two percent year-over-year to reach 41,478, while June’s pending sales (14,388) were up 4.5 percent compared to June 2016. However, the months’ supply of inventory dropped 17.1 percent at the end of the second quarter to 6.3 months’ supply.
 
“Homebuyers, buoyed by a healthy economy and still low mortgage rates, have set sales records for two consecutive quarters in 2017,” said Duncan R. MacKenzie, CEO of NYSAR. “Exceptionally strong buyer demand throughout the first half of 2017 has driven a nearly three percent growth in home sales compared to the first six months of 2016. As we look ahead to the second half of the year, we continue to closely monitor the ongoing decline in the number of homes listed for sale. If the trend continues, we expect an impact on home sales and selling prices.”

 
A real estate brokerage’s effort to rebrand an area of the Harlem section of New York City is facing charges of disrespect to the celebrated neighborhood
A real estate brokerage’s effort to rebrand an area of the Harlem section of New York City is facing charges of disrespect to the celebrated neighborhood.
 
According to a NY1 News report, the local Keller Willams brokerage has used the term “SoHa” to describe between 110th and 125th Streets; the term is clearly inspired by “SoHo,” which has been used for years to define the neighborhood south of Houston Street in the city.
 
However, State Sen. Brian Benjamin took umbrage with “SoHa.” "The real issue comes when you want to abbreviate the name Harlem,” he said. “Because once you take the name Harlem out of the definition you are now coming up with a whole new classification of this location. And Harlem is an historic name, representing an historic village. And we want to make sure that anytime anyone represents Harlem, Harlem is in the word, Harlem is in the vocabulary,"
 
However, the brokerage did not respond to Benjamin’s statement and is still using the “SoHa” label to mark out the neighborhood.