Category Archives: Home Ownership

Title Insurance Discount for First Responders, Veterans, Active Military and Health Care Workers

We wanted to make you aware of a discount

that we are offering in partnership with one of our Title Insurance Underwriters. The discount is offered to First Responders, Veterans, Active Military and Health Care Workers. The discount applies to the owner’s title insurance premium incurred in relation to the purchase of a home. In order to qualify only one of the buyers needs to be in one of the groups listed and they must be purchasing a Massachusetts 1-4 family owner-occupied property.

• The Discount is equal to Ten percent (10%) off title insurance premiums for expanded or standard owner policies.

• Offer valid through December 31, 2021.

• The offer cannot be combined with any other discount

When you buy a house, you are buying more than the structure and the property it sits on. You are also buying its legal history, as identified in the title. Title insurance insures buyers against a loss resulting from matters affecting the title to the property. Title insurance companies evaluate the history of the property and insure that nothing in the history of the title will result in a loss to the insured. Unlike other forms of insurance, title insurance is paid for by a single, one-time premium at the time the property is acquired. The Owner’s Coverage is determined by the purchase price of the property, so the higher the purchase price the greater the amount of the savings, also, the premium for the expanded coverage is greater than the premium for the standard coverage.

We are proud to be able to offer this discount to so many that have served our great nation and to those that protect us every day.

Clash of the Condominium Owners

closing, Condominium, Home Ownership, Litigation/Disputes, real estate law, title, Uncategorized

    We all know it is getting harder and harder to find our little piece of this earth to call our own. Housing prices continue to rise and the demand for houses has only gotten more competitive. This have never been more true than on Cape Cod, where one condo owner believed they owned more than their deed described.

    In a recent Land Court decision in Barnstable County Massachusetts, an owner of a condominium filed suit against the Trustees of the Condominium, stating they have acquired a piece of the common area property as their own property through adverse possession. Adverse possession is law designed to promote the use of land throughout the Commonwealth. In Massachusetts to acquire land through adverse possession, one must have exclusive use and control of property for over 20 years. This use must be done openly, so that the owner would be able to see another using the property. The person using the land must also not have permission to use the land. In the case at hand, the plaintiff met all the requirements of obtaining the common area land as their own via adverse possession.

    In this case the judge ruled against the plaintiff. Even though all the requirements for obtaining land via adverse possession were met, it violated the Massachusetts condominium laws, stating each condo owner already owns a proportional, undivided interest in the common areas, which can not be modified without the consent from the other owners in the association, and a modification of the Master Deed would be required. Furthermore to award the property to one owner via adverse possession would make the laws pertaining to the governing of condominium associations meaningless.

    It’s understandable why the court came to this decision. As more and more condominiums are built, we need well defined laws to allow them to peacefully and independently run.

    Thinking of buying or selling a condominium? Do you have questions about your current condominium or its association? Contact us at Topkins and Bevans, we have decades of experience in all types of real estate law, including condominiums.

Your trust might be OK after all

Estate Planning, Home Ownership, real estate law, trusts, ,

There is a constant battle between Medicaid applicants and MassHealth that is “David-and-Goliath-Like”. The applicant wants to minimize the amount of assets included in their application so they can qualify for Medicaid Assistance and have their long-term care paid for by the government and MassHealth wants to include as many of the applicant’s assets as possible to limit the assistance provided to the applicant. Many of the debates between applicants and MassHealth involve the use by applicants of trusts. This battle over the use of a nominee trust was brought to the Massachusetts Supreme Judicial Court by Joellen Guilfoil as the personal representative of the estate of Dorothy E. Frank. (Joellen Guilfoil, personal representative vs. Secretary of the Executive Office of Health and Human Services)

As a background to the case, MassHealth governs the Medicaid program in Massachusetts. Medicaid eligibility is based upon the applicant’s countable assets. The value of the applicant’s countable assets cannot exceed $2,000.00. Countable assets are basically those assets of the applicant that are in their control and those assets given away by the applicant for less than fair market value during the 5 years preceding the date of their application. Many applicants will transfer assets to a trust in the hope of excluding them from their countable assets and therefore qualify for Medicaid benefits. In an effort to prevent this from happening, Congress has enacted the “any circumstances” rule. This rule is defined as “if there are any circumstances under which payment from the trust could be made to or for the benefit of the individual, the portion of the corpus from which, or the income on the corpus from which, payment to the individual could be made shall be considered resources available to the individual”. If any circumstances are found, the assets are considered as being in control of the applicant and therefore a countable asset.

Dorothy Frank, the David of the case, created a nominee trust entitled “the Frank Family Realty Trust” on December 16, 1999. She was the trustee of the trust. She also named the beneficiaries of the trust. The beneficiaries were her five children as joint tenants with rights of survivorship and herself with a retained life estate. She then conveyed her Fitchburg home to the trust at the same time she created the Trust. Dorothy applied for long-term benefits from MassHealth, the Goliath, in 2017. The only potential countable assets she had were the Fitchburg home worth $109,000.00 and a credit union account worth less than $2,000.00. MassHealth denied her application ruling that the trust property was in her control and therefore a countable asset. Based upon the value of the credit union account, if the home was not a countable asset Frank would have qualified for Medicaid. A hearing was held next and the MassHealth denial was upheld. The Superior Court later upheld the decision of the hearing officer denying the application. Frank appealed the Superior Court decision and the SJC decided to take the case.

The SJC framed the issue presented to them fairly simply as, “whether the entire interest in a property transferred to a nominee trust is a countable asset in a MassHealth eligibility determination where the trustee retains a life estate in the real property”. The Court, in its discussion, focused on what a nominee trust is and what it is not. A nominee trust is usually created for the sole purpose of holding title to the property. The trustee has a minor role in the application of the trust and its assets. The Court stated that a Nominee Trust is not a “True Trusts”. True Trusts are either revocable or irrevocable trusts. A True Trust creates a fiduciary relationship requiring that the trustee act for the benefit of the beneficiary of the trust, a much greater role than the trustee of the nominee trust.

The Court stated that there are qualitative differences between nominee trusts and True Trusts. The initial difference it discussed was the limitation of the trustee powers.  Trustees iof a Nominee Trust are unable to act with respect to trust property without the direction of the beneficiaries. This limitation was included in the Frank Family Revocable Trust. This limitation creates a principal and agent relationship and not a fiduciary relationship. The central concept of the True Trust is the fiduciary relationship. The trustee of a True Trust may have broad powers it can undertake for the benefit of the beneficiaries without their input. There is a true delegation of power to the trustee.

The next level of review by the Court was whether the grantor of the nominee trust has the power to revoke the trust. If the grantor’s power to revoke does not exist then the beneficiaries become the vested owners of the property, if there is a power to revoke then beneficiary’s interest does not vest until after the grantor’s death. The beneficiaries of the Frank Family Revocable Trust and not the grantor of the Trust had the right to terminate the trust and therefore the property ownership was vested in the beneficiaries. Based upon these factors the SJC ruled that the Frank Family Realty Trust was a nominee trust and not a revocable or irrevocable trust. Therefore, once the property was conveyed by Dorothy Frank to the Trust the property was vested in the beneficiaries.

The Frank Family Revocable Trust does give the power to revoke the trust to any beneficiary. Dorothy was a beneficiary and the grantor, so why is she not able to revoke the trust and get the property back? If the Frank Family Revocable Trust was terminated all assets of the Trust must be distributed to the beneficiaries pursuant to the terms of the Trust. So even if Dorothy as one of the beneficiaries was to terminate the Trust each beneficiary would get their interest in the property subject to Dorothy’s life estate. So, the initial transfer of the property to the trust created an irrevocable gift to the beneficiaries subject to Dorothy’s life estate. MassHealth has long held that if an irrevocable gift was made by an applicant and the five-year look-back period has expired the property given is a non-countable asset, here the look back period had long since expired.

The next issue reviewed by the Court, was whether the life estate retained by Dorothy Frank would make her ineligible for Medicaid? The SJC ruled that it did not. The life estate gave her the right to use and occupy the property but not the right to sell it and distribute the proceeds of the sale. Therefore, this property was not a countable asset for Medicaid eligibility purposes and Dorothy’s application should be treated as such. Based upon this the SJC reversed the Judgment of the Superior Court. Confirming that yes David can occasionally take down Goliath.

New First-Time Homebuyer Loan Program from Freddie Mac. It requires a down-payment of 3%

closing, Condominium, Home Ownership, Mortgages, real estate law, Uncategorized

First-Time Homebuyers have another arrow in their quiver in their attempt to slay the great monster, purchasing their first home. On April 26, 2018, Freddie Mac announced a new loan program targeted at first-Time homebuyers. It is called HomeOne. The Program requires a down payment of 3% and it is provided to otherwise qualified borrowers who are first-time homebuyers. This is not a FHA insured loan but a conventional loan. According to Freddie Mac, HomeOne will be available to borrowers commencing on July 29, 2018, so it misses this spring’s market but it will be positioned for the late summer and early fall seasons.

Freddie Mac’s release stated that “HomeOne mortgage is part of the company’s ongoing efforts to support responsible lending, provide sustainable homeownership and improve access to credit,…The HomeOne mortgage will provide our customers the flexibility they need to help borrowers anywhere in the country achieve the milestone of homeownership and overcome the common down payment resource hurdle. HomeOne is a great solution for aspiring homebuyers to grab that first rung of the property ladder and enjoy the financial and social benefits of participating in homeownership.”

The underwriting of the loans will attempt to make a complete risk assessment based on several factors. It will review credit as it applies to the capacity to repay and the value of the collateral as well as other factors. It was stated that HomeOne mortgage will be offered only for conforming fixed-rate mortgages. The loan must be secured by a single unit primary residence. Not all of the borrowers have to be a first-time homebuyer, but at least one does have to be a first-time homebuyer. According to Freddie Mac it is also adjusting the area-median-income (AMI) limits in an effort to sharpen its focus on low- and-moderate income homebuyers.

So, if you are a first-time homebuyer looking for a property, you may want to consider this loan program. It is also important to note that this is not the only program available to first-time homebuyers nor is it our firm’s endorsement of the program. You should always seek the advice of a well-informed lending professional when you are purchasing a home. Our Firm is prepared to assist first-time homebuyers in their purchase of their home in the Commonwealth of Massachusetts. We want to earn your trust and have you as a client for life.

Should I Put My Child On My Deed?

Estate Planning, Home Ownership, real estate law, title, trusts

There are many options when it comes to estate planning. These options can often seem overwhelming and unnecessary. This can feel especially true when dealing with relatively small estates.

In an attempt to avoid the estate planning process, many consider placing their children on the deed of their home. The thought is this: The home is the only asset they have of great value and this will allow the property to go to their children upon their death without dealing with the courts. It is also seen as a relatively cheap alternative to estate planning; making it even more appealing. However, under most circumstances, this is ill advised and can have disastrous consequences.

The main problems with adding a child to your deed are:

  1. Creditors
  2. Control; and
  3. Spouses

Creditors:

As the largest asset that most people own, a home is very valuable. It is often more than just a place to live but is used as collateral to pay for college, weddings, and/or retirement. The home is also one of the first assets creditors go after when a debt is owed. Once a child is placed on a deed, that property becomes open to that child’s creditors. Even if the child has little to no interaction with the property (i.e. does not live there or contribute to mortgage payments) creditors will still have rights over the property.

Though many believe their children to be financially stable, the future can be unpredictable. Unforeseen events, including sickness, can lead to financial instability. This instability can jeopardize your property and leave you with little choice or control. Your children’s creditors may then end up with rights to the equity you have developed, putting you into financial situations you are ill equipped to handle or recover from.

Control:

Once placed on the deed, a child will have an interest in the property. This means that they will need to sign off on any decision made by their parents; whether that is refinancing, selling or otherwise. Though for most this will only be a slight inconvenience, for some it can become more.

If a child decides they do not wish to cooperate, wish to have more control in what happens to the property or wish to gain something financially from the property, a child may have rights to do so. Though the problems may be fixable, it could cost an incredible amount of time and money in court.

Spouses

We all hope that we love, or at least like, our child’s spouse and that their love lasts forever. Unfortunately, for many that is not the case. And, as a child has a degree of control over the property once they are on the deed, so will their spouse.

This control can come in the form of influence over the child or through divorce. If it does turn out that the parents do not care for the spouse, this could lead to animosity that is taken out on the property. Also, in the event of divorce, the property may be up for debate when assets are split.

Conclusion

It is only natural to want to find the quickest and cheapest way to accomplish your goals. However, it is important to understand the risks involved in those decisions. For most, their home is the most valuable asset they own and decisions regarding title should not be taken lightly. Always consult an Attorney prior to making decisions regarding title, to fully understand your options and the consequences of any action.

Homestead Protection for Trusts

Home Ownership, real estate law, Reverse Mortgages, trusts, Uncategorized

Revocable Trusts can be a good way to protect your assets from the probate process. Properly drafted and executed, assets will automatically transfer to your loved ones upon your passing. It also allows you to retain control over your assets while you are alive and gives you the ability to alter the trust as you see fit.

A common misconception regarding a Revocable Trust, however, is that they have some ability to protect your assets from creditors. It is important to know that this is not the case. Because you retain primary control of your assets, with the ability to alter the trust at any time, creditors are still able to access the assets to satisfy debts.

Fortunately for Massachusetts Residence, there is a way to protect your home from most creditors while having it in a Revocable Trust. This protection is known as the Homestead Protection Act.

The Homestead Protection Act, protects your primary residency from unsecured creditors. These creditors are, for example:

  • Someone that slips and falls on your property
  • Medical Bills
  • Credit Card Bills
  • Someone that sues you for something that happens while you are on the job
  • Someone you get into a car accident with; and
  • Many more

The Homestead automatically protects the equity in your home for up to $125,000.00. But, many Massachusetts residence own homes that are worth more than $125,000.00. For these individuals, a Homestead can be filed with the Registry of Deeds and the protection will be increased to $500,000.00. For many this is the difference between a completely protected home and a home that is vulnerable to creditors.

Before March of 2011, this protection was only available to individuals that owned their homes in their own name. Once the property was placed into trust, the protection was lost. However, in March of 2011 the Homestead Act was extended to properties held in revocable trusts if proper requirements were met. A homestead must be filed with the registry of deeds and it must state that the property is owned in trust and that the primary beneficiaries currently or intend to live in the property as their primary residency. Once this is done, your home will have the best of both worlds; the future protections of a trust and the present protections of the Homestead Protection Act.

By putting your property in trust, you are saying that you are concerned about the loved ones that you will leave behind. You are allowing your loved ones the ability to avoid the probate process and the time and money that goes along with it. It only makes sense that you would want to take this simple step to protect one of your most valuable assets while you are alive. By putting your property into a trust with a Homestead Protection, you are protecting it from both the probate process and most creditors.

Click here to read the homestead law.

Please contact Topkins & Bevans to learn more about this important protection and how to obtain it today. firm@topbev.com or bmartin@topbev.com

March 2015 Newsletter Trending Now

closing, Estate Planning, Health Care Proxy/HIPPA, Home Ownership, Marketing / Communication, real estate law, title, trusts, Uncategorized
T&B Trending March 2015 Vol 2-2015
 

Housing Market Continues Slow Climb Toward Stable Levels

 

Source: Dsnews.com

 

The latest Multi-Indicator Market Index (MiMi) from Freddie Mac, released Wednesday, showed that the U.S. housing market showed continued stabilization for the fourth straight month in December.
Read more >>

 

 

Q4 2014 Commercial Real Estate Cycles from Dividend Capital

Source: Ted C. Jones

There is one blog topic that I write about quarterly that is preceded by several calls and emails as to when it is scheduled to be available – The Cycle Monitor – Real Estate Market Cycles from Dividend Capital, prepared by Dr. Glenn Mueller from the University of Denver. Read more >>

 

FHA launches historic homebuyer ‘care package’ for 2015

 

Source: Inman.com

 

After several years of lackluster participation in the housing market, first-time homebuyers are getting a boost from the Federal Housing Administration (FHA) this year.
Read more >>

 

March 2015 Newsletter Trending Now

 

Source: Topkins & Bevans Blog

 

This is the time of the year when all of us have no choice but to pour through our bank statements, credit card statements, checks and acknowledgments from charities regarding contributions….. While you are going through this data-producing exercise, you might want to consider your Will, and other elements of your Estate Plan, at the same time.
Read more >>

 

Topkins & Bevans

Offices in

Boston, Braintree and Waltham

rbevans@topbev.com

www.topkinsandbevans.com

T&B Trending January 2015

CFPB, closing, Home Ownership, Mortgages, title, Uncategorized
 T&B Logo
T&B Trending January 2015 Vol 1-2015
Top StoryNovember 2014 Job Growth – 7th Best Month in 10 Years Source: Dr. Ted C. Jones

Job growth continues to accelerate into the fall and winter as November 2014 saw 321,000 net new jobs (preliminary) added on a seasonally-adjusted annualized rate. That was the seventh best month of job growth in the past 10-years. Read more >>

In The News

Forecast: Full Steam Ahead for Housing

Source: Themreport.com

The housing market will continue its gradual recovery and gain momentum in 2015 after a disappointing 2014.

Read more >>

What’s Happening

Home Sales, Housing Starts Expected to See Significant Growth in 2015

Source: Themreport.com

Improvements in economic fundamentals, notably employment growth among millennials, will fuel significant increases in home sales and housing starts and a modest rise in home prices in 2015. Read more >>

In Our Neighborhood

First-time homebuyers given more options to buy a home by FannieMae and FreddieMac:

Source: Topkins & Bevans Blog

Earlier this week new lending guidelines for first-time homebuyers were released in a statement by the FHFA Director Melvin L. Watt . Watt wrote “The new lending guidelines released today by Fannie Mae and Freddie Mac will enable creditworthy borrowers who can afford a mortgage, but lack the resources to pay a substantial down payment plus closing costs, to get a mortgage with 3 percent down. Read more >>

Topkins & Bevans
Offices in Boston, Braintree and Waltham Name
rbevans@topbev.com
www.topkinsandbevans.com

First-time homebuyers given more options to buy a home by FannieMae and FreddieMac:

closing, Home Ownership, NFLPA, real estate law, Uncategorized,

Earlier this week new lending guidelines for first-time homebuyers were released in a statement by the FHFA Director Melvin L. Watt . Watt wrote “The new lending guidelines released today by Fannie Mae and Freddie Mac will enable creditworthy borrowers who can afford a mortgage, but lack the resources to pay a substantial down payment plus closing costs, to get a mortgage with 3 percent down.

The lower down-payment requirement will allow more first-time homebuyers the opportunity to buy a home. Often the greatest hurdle for the first-time homebuyer is saving enough for a down payment. Many first-timers would try to save 20% of the purchase price that many lenders required. It can take a significant period of time to save that large amount of a down-payment forcing first-timers to wait to buy a home. Right now with rates as low as they are it very well may be cheaper to buy than rent.

FannieMae in its statement regarding its My Community Mortgage® “announced an option for qualified first-time homebuyers that will allow for a down payment as low as three percent. …the 97 percent loan-to-value ratio (LTV) option will expand access to credit for qualified first-time homebuyers that may not have the resources for a larger down payment.” Other requirements will still have to be met by the first-timer. These include “the usual underwriting, income documentation and risk management standards. These loans will require private mortgage insurance or other risk sharing, as is required on purchase loans acquired by the company with greater than 80 percent LTV.”

FannieMae expressed its hope that “Our new 97 percent LTV offering is simply one way we are working to remove barriers for creditworthy borrowers to get a mortgage. We are confident that these loans can be good business for lenders, safe and sound for Fannie Mae and an affordable, responsible option for qualified borrowers.”

FannieMae will require for this program that at least one of the borrowers be a first-time homebuyer.

FreddieMac also provided its guidelines for the low down-payment program. The program is entitled “Home Possible Advantage”

FreddieMac also set forth its Key Facts:

  • Home Possible Advantage offers qualified low- and moderate-income borrowers a conforming conventional mortgage with a maximum loan-to-value ratio of 97 percent.
  • Home Possible Advantage mortgages can be used to buy a single unit property or for a “no cash out” refinance of an existing mortgage.
  • First time homebuyers must participate in an acceptable borrower education program, like Freddie Mac’s CreditSmart®, to qualify for Home Possible Advantage.
  • Home Possible Advantage mortgages are available as 15-, 20-, and 30-year fixed rate mortgages.

These programs are seeking to allow the first-time homebuyer the ability to buy a home with less of a down payment but also limit the risk that the loan will go bad or default. They are focusing on the borrowers’ credit worthiness as opposed to the size of their down-payment. There is always an element of risk with requiring a lower down-payment; the homeowner has less of their own money at risk. But when you balance this against the economic drag of so many potential buyers sitting on the sidelines the benefit of pulling pull them into the real estate market may outweigh that risk.

We offer reduced rates for first-time homebuyers. Contact if you are thinking about buying a home. We will provide you with over a century of experience in dealing with real estate.

Massachusetts Court of Appeals rules that a deed notarized improperly is unenforceable?

Estate Planning, Home Ownership, Litigation/Disputes, real estate law, trusts, Uncategorized

The Massachusetts Appeals Court in Allen V. Allen ruled that a deed signed by a grantor but not acknowledged by the grantor before a notary was not enforceable. This was family transaction involving the family home in Lexington. The matriarch of the family Ethel began the process of moving from her Lexington home to live with one of her daughters, Nancy in 2001. Ethel’s son Harold claims that a deed from Ethel executed on July 23, 2001, conveyed the house to him and Ethel as joint tenants. This deed is the subject of the litigation. An Attorney prepared the deed and notarized it. The acknowledgement (notary) was dated July 23, 2001, and it read: “Then personally appeared the above named Ethel M. Allen and acknowledged the foregoing instrument to be her free act and deed, before me”. The attorney then recorded the deed on August 10, 2001.

Later that year, on November 30, 2001, Ethel established the Allen Realty Trust and executed a deed conveying the Lexington property to herself and to her daughter Deborah as co-trustees of the Trust, reserving a life estate for herself. Ethel specified in the trust that the property would be sold upon her death and the proceeds divided among several of her descendants, including Deborah. This deed was recorded on February 8, 2002. Ethel died on December 20, 2009. It was at this time that Harold revealed the July 23, 2001, deed. Neither Deborah nor her sister Nancy nor the attorney who prepared the November deed had discovered Harold’s deed. When the second deed was recorded no title examination was done. Deborah commenced a litigation in January of 2010. Her suit disputed Harold’s claim to the property and sought to declare the deed to him was unenforceable.

The judge at the trial found that Ethel’s signature on the July deed was authentic. But he determined that Ethel never appeared before the attorney/notary to acknowledge the deed. The judge found that Ethel had signed the deed in front of Harold; he then brought it to attorney/notary for his signature, and then the attorney had notarized the deed without Ethel in his presence.

The Land Court ruled that the deed was unenforceable because it was improperly notarized. It was not sufficient that Ethel had signed the deed. She had not confirmed before the notary that the deed had been her free act and deed. The deed because of the invalid acknowledgement was not entitled to be recorded as the Registry of Deeds. The Court stated “We therefore conclude that the latent defect in the certificate of acknowledgment of the July deed prevented it from giving constructive notice to Deborah of the prior conveyance.” The Appeals Court affirmed the Land Court’s findings in its decision.

There were other arguments made by Harold which all also failed. Always remember that a document cannot be notarized unless you are in the presence of the notary when you execute it or when you acknowledge that your signature was your free act and deed. Also whenever you have a document conveying an interest in real estate recorded, have the title checked for any other matters first and then record your document.