Arrested Development: Richard Vetstein Talks About Foreclosure Rulings

Richard D. Vetstein, Esq. was recently quoted in a Banker & Tradesman article on recent federal appeals foreclosure rulings.  Mr. Vetstein was quoted as saying:

The rulings are “a wakeup call” for attorneys to make sure assignments in proper order, said Rich Vetstein, an attorney in private practice in Framingham and author of the Massachusetts Real Estate Law Blog. Title companies are giving close scrutiny to such matters, and anybody looking to buy or sell a property with a foreclosure in its past will have to be prepared to deal with the assignment issues.

“If a title company were to see [a potentially back-dated assignment], they’d make you’d file an affidavit confirming that you had reviewed their files,” and there was evidence that the mortgage had been assigned before the foreclosure proceeded said Vetstein. “That might be tough to do, but that’s why you’ve got to do. It’s got to be thorough.”

Richard Vetstein Writes About Important Foreclosure Case, Juarez v. Select Portfolio

This week, in the Massachusetts Real Estate Law Blog, Richard D. Vetstein, Esq. writes about the noteworthy First Circuit case, Juarez v. Select Portfolio which held that a back-dated mortgage assignment could support a borrower’s wrongful foreclosure claim.  The article is embedded below.

Juarez v. Select Portfolio: First Circuit Court of Appeals Holds That Backdated Mortgage Assignment Support… by

Richard Vetstein’s Mass. Real Estate Law Blog Selected In ABA Journal Top 100 List

PRLog (Press Release) – Dec. 12, 2012 – FRAMINGHAM, MA. — Editors of the ABA Journal announced they have 
selected The Massachusetts Real Estate Law Blog, authored by Framingham, Massachusetts Attorney Richard D. Vetstein as one of the top 100 best blogs for a legal audience.

The Massachusetts Real Estate Law Blog was the only real estate publication selected out of thousands of entries for this prestigious nomination.

“Each year, our choices become tougher. Blogging has become such a staple of
 professional communication that keeping up with our own directory of more than 3,500 
blogs by lawyers, judges, law professors or even law students is more formidable than
it’s ever been,” said ABA Journal Editor and Publisher Allen Pusey. “Some of them
have become such permanent, even required, fixtures in our everyday reading that we’re
introducing the ABA Journal Blawg 100 Hall of Fame to recognize those blogs and
bloggers that have set the standards for this vast, vibrant network for legal news and
commentary.”

“I am very honored and humbled to be selected for this recognition,” said Richard D. Vetstein.  “My blog is a great platform to keep my clients and the public educated on recent changes in Massachusetts real estate law.  I’ve been fortunate that Massachusetts courts and lawmakers have been extremely busy with real estate issues these last several years.”

Now that the editors have made their picks, the ABA Journal is asking readers to weigh
in and vote on their favorites in each of the 6th Annual Blawg 100’s 15 categories. Go
to http://www.abajournal.com/blawg100 to register and vote. Voting ends at close of 
business on Dec. 21, 2012.

About Richard D. Vetstein and the Vetstein Law Group, P.C.

The Vetstein Law Group, P.C. is a law firm based in Framingham, MA, servicing clients in real estate, real estate and business litigation, construction, condominium, and zoning law. Richard D. Vetstein, Esq., the Firm’s Founding Partner, is a nationally recognized real estate attorney, having contributed to the Wall Street Journal, Boston Globe and Financial Times. Mr. Vetstein can be followed on Twitter(@richardvetstein) and Facebook.

Richard Vetstein Quoted In Metrowest Daily News About Changes In Massachusetts Snow Removal Law

From the Metrowest Daily News

A recent state Supreme Court ruling makes it clear: Home and business owners are potentially liable if someone slips and falls on their icy or snowy property.

Driveways, walks and sidewalks – “any place on the property where a guest or a visitor or a FedEx man or a mailman could trip” – must now be cleared and treated, says Framingham real estate attorney Richard Vetstein.

So as businesses reopen and snowed-in residents dig themselves out from this week’s nor’easter, lawyers are advising they heed the ruling and take “reasonable care” to keep visitors on their two feet.

“What I’m telling everyone is when the blizzard ends, get out there and clear it off and put ice melt out there and make it safe,” Vetstein said yesterday. “You just can’t leave it alone anymore.”

Some communities already had bylaws requiring citizens and commercial property owners to be responsible neighbors.

A general bylaw in Milford, which Town Counsel Gerald Moody said is “probably of quite ancient vintage,” requires property owners to get rid of snow and ice on sidewalks within 24 hours.

The penalty is a $10 fine.

“It does create a legal responsibility,” Moody said.

But in general, Bay State property owners weren’t required to shovel and salt after a storm until state Supreme Judicial Court Justice Ralph Gants in July overruled 125 years of legal precedent.

In his ruling on Papadopoulos v. Target Corp., Gants sided with a man who sued the retailer after sliding on a patch of ice in a Danvers store parking lot.

“You own a house in Framingham on Carter Drive, you need to get out there and shovel your sidewalk as soon as reasonably practical. Otherwise, someone slips and you can be held liable,” Vetstein said. “That’s the new rule.”

Moody said the ruling is “a very important one.”

“It’s actually good for everybody because now there’s one standard that everybody’s going to be held to,” he said.

In Framingham, the Department of Public Works plows 78 miles of sidewalk with tractors, compared to 250 miles of roadway.

Between the cost and logistics of pulling together manpower and equipment, the town isn’t able to clear more sidewalks, said Highway Director Jim Murphy.

“Of course time, as they always say, is money,” he said.

Murphy said the focus is on making downtown safe, and digging out crosswalks and creating pathways for children to get to and from schools.

“If people choose to walk in the road itself, it’s always dangerous, plus now you’ve got a bank that’s three or four feet tall,” Murphy said.

The town of Natick takes responsibility for clearing more than 40 miles of sidewalks along main roads and near schools.

As snow piled up from this season’s first big storm, crews were out at least once since Sunday opening the walks, said Highway Superintendent Thomas Hladick said. They were headed back out yesterday afternoon with snowblowers.

Some communities, such as Newton, Worcester and Boston, have passed ordinances forcing residents and businesses to make sidewalks that border their property safe.

With the requirement now on everyone, Vetstein said it will be up to personal injury lawyers and civil courts to enforce.

Vetsein wrote about the ruling on his blog, massrealestatelawblog.com. He encourages property owners to review their insurance policies and consider upping their liability coverage.

The most frequently asked questions Moody receives on Milford’s sidewalk policy, he says, are from attorneys representing people who slip or insurance companies trying to defend subscribers.

“Juries will typically look at these kinds of things reasonably,” he said.

(Danielle Ameden can be reached at 508-626-4416 or dameden@cnc.com.)

Richard Vetstein Featured Guest Blogger For Inman News Agent Reboot

I’m thrilled to be writing the guest post for the Inman Future of Real Estate Marketing Blog highlighting the Agent Reboot Conference in Boston held yesterday on October 13, 2010. From the buzz surrounding the conference here at the Hynes Convention Center, it’s clear that Boston area agents are embracing the power of social media, and that Boston is well on its way to becoming the next “Hub” for social media savvy agents!

Click here for a full recap of the Inman Agent Reboot Social Media Conference.

Richard D. Vetstein Quoted About Effect Of Massachusetts Ibanez Foreclosure Land Court Ruling

Massachusetts Bar Association Lawyers Journal

Real estate attorneys, title insurers await Ibanez verdict

April  2010

by Steven Altieri

Framingham real estate attorney Richard Vetstein recently represented a family who had bought a house out of foreclosure about a year ago, then invested in excess of $100,000 in improvements to the property with the intention of selling it to their daughter. Before they could complete the sale, a title issue came up and put the transaction on hold.

The glitch was the downstream result of a controversial land court decision in the US Bank v. Ibanez foreclosure case, which will soon be heard by the Massachusetts Supreme Judicial Court.  The land court ruled that the foreclosure of the Ibanez property was invalid because US Bank did not have an assignment at the time of the foreclosure.

Framingham real estate attorney Richard Vetstein recently represented a family who had bought a house out of foreclosure about a year ago, then invested in excess of $100,000 in improvements to the property with the intention Many hundreds, if not thousands, of foreclosed property titles could be similarly invalid all across Massachusetts. Attorneys are concerned that a retroactive application of the case’s decision could further depress sales of foreclosed properties.

In Vetstein’s client’s case, when the original owner was foreclosed upon, the mortgage company did not have a properly recorded assignment. To clear the title, Vetstein had to track down the original owner in Alabama, and persuade him to sign over the deed to the property. “They can close now that the title issue is solved, but in a lot of cases, [they are] not going to be able to be solved,” said Vetstein “We were lucky, that’s what it came down to.”

Vetstein, who has blogged on the Ibanez case at length, thinks that the court might uphold the Ibanez decision. Previously, many lenders had not recorded mortgage assignments in a timely manner, only recording them after a foreclosure, to clean up the title. During the  overheated mortgage market, mortgages were routinely passed from lender to lender and many buyers were foreclosed upon for unpaid mortgages by lenders that didn’t have assignment at the time of foreclosure.

“On foreclosures that have already been completed, if this decision is or has already been taken at face value, this is a huge problem,” says Laurel H. Siegel, a Boston real estate attorney and co-chair of the Massachusetts Bar Association’s Property Law Section. “It’s the retroactive part that’s so troubling. Are we going to bankrupt the title companies?”

Many attorneys share Siegel’s fears. If Ibanez is applied retroactively, then sales of properties that were foreclosed upon and sold and perhaps even sold again could be ruled invalid. Owners would then try and clear the title in land courts. In some cases, the foreclosure process may even have to start all over again — and title insurers would be stuck with the legal bill for settling title.

According to Elizabeth J. Barton, Siegel’s co-chair and counsel for title insurer CATIC, no title insurers will currently write a policy on properties with a potential title issue. Sales of foreclosed properties have therefore stopped. In cases where sales of foreclosed or formerly foreclosed properties are taking place, Barton says that insurers have had to provide letters of indemnification so that the closing can take place. Barton hopes that the SJC will rule to have Ibanez applied prospectively. She reasons that mortgage companies are likely to more closely follow the letter of the law. Clearer titles will make things easier on the title company and remove its liability on older policies where there may be a hitherto unknown Ibanez style title issue.

Siegel also thinks that a prospective judgment would be best. “Lenders are now on notice that they need to record their assignments promptly and should be able to comply with this requirement.”

Frank Reynolds, a Lexington-based real estate attorney with more than 40 years’ experience, thinks that it’s too early to predict the SJC’s rule. “I can’t tell you how it’s going to be decided, but there is an awful lot of equity and public policy involved. The appeal itself is like a little phone book. You could have a short career just becoming an expert on this case,” he said.

It’s expected that those representing the lenders will argue for dismissal of the Ibanez verdict or at least for its prospective application, and challenge the land court’s factual or legal conclusions.

“What they are trying to do is get the courts to recognize that these were [foreclosure] procedures that weren’t challenged prior [to this case],” said Ward P. Graham, a longtime title attorney. The Ibanez decision, he added, “is a radical shift in the application of GL 244 14.” For that reason, Graham also thinks that it would make sense for the SJC to apply the decision prospectively.

“Given the current constitution of the court and their tendencies of recent years to be kind of moving towards some pro-consumer decisions, I wouldn’t be surprised if they upheld the land court, probably by a slim margin, and so for people who are stuck with an Ibanez issue, that is in essence the worst-case scenario,” he said.

Indeed, it’s unlikely that a pro-consumer verdict upholding the Ibanez decision would actually help consumers. Homebuyers or investors who thought they had gotten a good deal and a clean title on a foreclosed property will instead be saddled with hefty legal bills on a property they can’t sell.

The title issues that Ibanez raises can be solved through a quiet title action, getting an original owner to sign over the deed to the property as Vetstein did, and re-doing the foreclosure. All of these procedures are time-consuming and hit or miss.

Graham thinks that  if  Ibanez is upheld and all foreclosures with an improper assignment are invalidated, there may be one other recourse for perfecting title. “Most, if not all, 244 14 Ibanez-issued cases may have the benefit of foreclosure by entry,” said Graham.

It seems that few attorneys would welcome a flood of new business related to the Ibanez decision. “I don’t know of any real estate attorney using Ibanez as a business development opportunity, mainly because solving these title defects, if at all, is incredibly difficult and in some cases impossible.  It’s a ‘lose-lose’ in many situations” said Vetstein.

However, should the SJC uphold Ibanez, Vetstein foresees many claims against the foreclosing lenders and the foreclosure attorney for failing to convey good title. “There will also be claims for rescission of these transactions. There is a class action against lenders and foreclosing attorneys which could encompass many millions in potential damages.” he says.

Barton thinks that the lenders are seeing the worst of it. “Some of the law firms that represent lenders have had quite a bad season,” she says.

For more information about the Ibanez decision, please read our blog, The Massachusetts Real Estate Law Blog.

Richard Vetstein Featured In Article On Ibanez Foreclosure Mess

Reporter Steven Altieri of the real estate trade journal Banker & Tradesman recently published an article on the Ibanez foreclosure case, Impending SJC Ibanez, Title Ruling May Invalidate Thousands Of Foreclosures, Why Real Estate Attorneys Expect The Worst, And What It Means To The Industry.

Since we’ve written about the case extensively here, Steve asked for my views about the impact of the case and recent matters I’ve handled with Ibanez title defects:

Framingham real estate attorney Richard Vetstein recently represented a family who had bought a house out of foreclosure about a year ago, then invested in excess of $100,000 in improvements to the property with the intention of selling it to their daughter. But before they could complete the sale, a title issue came up and put the transaction on hold.

In Vetstein’s client’s case, when the original owner was foreclosed upon, the mortgage company did not have a properly recorded assignment. To clear the title, Vetstein had to track down the original owner in Alabama, and persuade him to sign over the deed to the property.

“They can close now that the title issue is solved, but in a lot of cases that [is] not going to be able to be solved,” said Vetstein. “We were lucky, that’s what it came down to.”

Steve asked me how I would handicap the appeal of the case:

Vetstein, who has blogged on the Ibanez case at length, thinks the court might uphold the Ibanez decision.

“Given the current constitution of the court and their tendencies of recent years to be kind of moving towards some pro-consumer decisions, I wouldn’t be surprised if they upheld the land court probably by a slim margin,” Vetstein said. “And so for people who are stuck with an Ibanez issue, that is in essence the worst-case scenario.”

Indeed, it’s unlikely that a “pro-consumer” verdict upholding the Ibanez decision would actually help consumers on the whole. Home buyers or investors who thought they had gotten a good deal and a clean title on a foreclosed property will instead be saddled with hefty legal bills and an inability to sell their property.

Lastly, Steve asked if the Ibanez ruling has created an business development opportunties for real estate attorneys:

“I don’t know of any real estate attorney using Ibanez as a business development opportunity, mainly because solving these title defects, if at all, is incredibly difficult and in some cases impossible,” Vetstein said. “It’s a ‘lose-lose’ in many situations.”

One aspect of the case could potentially provide plenty of work for attorneys. Should the SJC uphold the Ibanez decision, Vetstein reasons that there will be many claims against the foreclosing lenders and the foreclosure attorney, for failing to convey good title.

“There will also be claims for rescission of these transactions,” he added. “There is a class action against lenders and foreclosing attorneys which could encompass many millions in potential damages.”

Banker & Tradesman is a great publication. If you don’t want a paid subscription, you can follow them on Twitter and Facebook.

Richard Vetstein Quoted In Boston Globe Article About Recent Developers’ Rights Case

Post image for Richard Vetstein Quoted In Boston Globe Article  About Recent Developers’ Rights Case

Boston Globe reporter Jenifer McKim read my blog post, Four Toed Salamanders And SLAPP Suits, and decided that it would be a great topic to write about. Her superb article, How A Salamander Raised A Rights Issue, was published today, and I was fortunate enough to be quoted:

Richard Vetstein, a Framingham real estate lawyer, said the decision was a victory for developers in a state that has an especially tough permitting process.

“Whether it is zoning, whether it is wetlands, you name it, vernal pools, you can invoke some pretty serious regulation and have a property get bogged down pretty quickly,’’ said Vetstein, who wrote about the salamander case on his Massachusetts Real Estate Law blog.

The case is very interesting, pitting free speech rights against developers’ rights to build.

Richard Vetstein Quoted In Wall Street Journal Online/Smart Money On Expiring $8000 Home Buyer Tax Credit

House Call: To Buy or Not to Buy8000-tax-credit1-294x300

There are fewer than 40 days remaining until the federal home buyer tax credit expires. And home builders and realtors aren’t letting consumers forget it.

Home builder Lennar (LEN: 16.11, -0.43, -2.59%) is touting its move-in ready homes in South Florida. Beazer Homes’ (BZH: 4.67, -0.28, -5.65%) web site encourages house hunters to “cash in on the tax credit,” while KB Home’s (KBH: 17.33, -0.31, -1.75%) site declares “Time is running out,” along with countdown — to the second — until the credit expires.

Time is, indeed, running out: Buyers must have a binding contract on a house in place by April 30, and the sale must close by June 30. But should you heed the call?

It is true that the tax credits, combined with low mortgage rates and overall affordability make buying a house tempting today. But there are other considerations that should factor into your decision.

Here are a few reasons why taking advantage of the credit may not be a savvy move:

1. Say there was no credit

Taxes are important, but they shouldn’t drive the decision-making process. “If absent the tax credit, you wouldn’t make that purchase, don’t do it just to save a few thousand dollars,” says John Scherer, a certified financial planner and president of Trinity Financial Planning in Middleton, Wis.

The bottom line is, if you’re in a position where it makes sense to buy a house, and you’ve found a house you really want at the right price, then you should pursue the credit, he says. But don’t settle for a house you may not be happy with just to get the money – you might regret it.

For existing homeowners after the $6,500 credit, think about what’s involved in selling your current house. Buyers are still bidding low and homes continue to come on the market, says Neil Sullivan, president of Westfield Mortgage in Westfield, N.J., who adds that many homes that didn’t sell last year were taken off the market.

2. The bigger picture

From a psychological perspective, $8,000 is a lot of money to many people. But as a percentage of the purchase price for, say, a $200,000 home, it represents just 4%.

“How many of us would rush off to a car dealer who was offering a 4% discount off the car price?” says John Vogel, a professor of real estate at the Tuck School of Business at Dartmouth. And buying a home is more complicated and involves more time and effort than buying a new car.

Also, if you’re in a rush to land the credit, a seller might more inclined to use that as leverage and be less willing to negotiate on price, says Erin Baehr, a certified financial planner and owner of Baehr Family Financial in Shawnee-on-Delaware, Pa.

3. Last-minute snags

The deadline to be in contract is April 30 and June 30 to close on the house. For buyers who haven’t started doing research and seeing houses, it’s cutting it close. Even if you’re preapproved for a mortgage, things might still hold up the transaction that could mean missing the deadline.

For one, the appraisal process can be a wild card in many transactions, says Sullivan. For deals with little margin for error, an appraisal below the agreed sales price can make the deal hard to complete.

“Deals have been canceled because of low appraisals – it has to match up with the purchase price,” says Richard Vetstein, a real estate attorney in Framingham, Mass.

One way around this is making sure you include a provision (called a mortgage contingency clause) in the purchase contract to protect the buyer. So if the appraisal comes in less than anticipated or if there’s a title issue that pushes the closing date back, the buyer can terminate the deal, says Vetstein.

4. How long do you plan on staying in the home?

If you don’t plan to live in the new house for at least three years — and preferably five years — the brokerage and other transaction costs are likely to swallow up all the profit, including the $8,000 or $6,500 tax credit, says Vogel.

What’s more, if the home ceases to be your primary residence after less than three years after purchase, the IRS will ask you to pay back the $8,000 tax credit. If you’re self-employed and you know where you’ll be living five years from now, buying a house isn’t that big of a risk, says Jake Engle, CFP and founder of Wealth Planning & Management in Portland, Ore. Get transferred to another region for work and you may be forced to sell into a bad market – and you “could get a bill from the government for the credit you just took,” says Engle.

5. Prices might still be declining

All the variables that a housing rebound depends on makes it difficult to forecast where home values will be in a few months, let alone a few years from now.

The credit, which was has been around for about a year (and was extended and expanded last fall), to a large extent artificially stabilized home prices. That also means there’s a lot of uncertainty about what will happen once the credit expires and all the demand still trickling into the market will have evaporated, says Jonathan Miller, president and CEO of Miller Samuel, a real estate appraisal firm in New York.

Without another extension – which most in the industry don’t expect – you may see weaker prices in the second half of 2010. (Moody’s Economy.com predicts house prices to fall 2% this year.) And if you buy into a slumping market, that tax credit may not be as compelling as you thought.

Read more: House Call: To Buy or Not to Buy (Page all of 2) at SmartMoney.com http://www.smartmoney.com/Personal-Finance/Real-Estate/House-Call-To-Buy-or-Not-to-Buy/?page=all#ixzz0iuTkTXyj