Protection From Foreclosure Fraud

Foreclosure, Residential , , , , , , ,

California’s Homeowner Bill of Rights and Foreclosure Fraud

Foreclosure fraud in California has increased due to the number of homeowners who were talked into buying more property than they could afford. Predatory lending practices became commonplace as brokers used any means possible to qualify marginal borrowers. Mortgages with affordable initial rates that quickly adjusted to much higher rates put many in an untenable financial position. Extreme types of adjustable rate mortgages reset periodically throughout the life of the mortgage, continuously going higher. Mortgages with inconspicuous balloon payments that required borrowers to produce enormous sums of money were included in many contracts.

The increasing number of unaffordable mortgages led to an endemic number of foreclosures and with them followed foreclosure fraud. Foreclosure fraud utilized faulty documents and/or procedures, which resulted in homeowners wrongfully losing their homes. State and local government agencies are now investigating allegations of improper foreclosures by banks and other lending institutions. Meanwhile, homeowners have also filed foreclosure lawsuits, alleging banks used an unethical foreclosure process to force them out of their homes.

Between 2008 and 2011, more than one million homes in California were foreclosed. In many cases, lenders did not provide homeowners with a significant opportunity to obtain loss mitigation options to avoid foreclosure and also engaged in extensive mortgage servicing misconduct

A law, California’s Homeowner Bill of Rights, that reformed some aspects California’s foreclosure process went into effect on January 1, 2013. It was formulated in order to better protect homeowners in foreclosure. The Homeowner Bill of Rights makes the nonjudicial foreclosure process in California more fair and transparent. The law’s protections for homeowners and now the Homeowner Bill of Rights can aid homeowners facing foreclosure in California.

The Service members’ Civil Relief Act and Foreclosure Fraud

A federal law that provides foreclosure benefits to those on active military is called the Service members’ Civil Relief Act (SCRA). If you took out a mortgage before you went on active duty, you are entitled to a variety of protections against foreclosure.

Under the Service members’ Civil Relief Act (SCRA), all states are required to have judicial review of foreclosures and a judge is required to authorize foreclosures on homes of military members. Foreclosure authorization can only be given after a hearing at which military members are properly represented. The SCRA was enacted to protect active military members, some of them on duty overseas and with no ability to make mortgage payments. It has been reported that some service members have returned from active duty to discover that their home was in active foreclosure.

DiJulio Law Group
https://www.dijuliolawgroup.com

The Limited Liability Company or LLC

Business Law , , , , , , ,

A Limited Liability Company (LLC) is Flexible and Also Provides Tax Benefits

Unlike a corporation, a limited liability company (LLC) is a flexible, hybrid type of legal enterprise. They provide the limited liability features of a corporation and the tax benefits and operational characteristics of a partnership. The LLC’s main advantage over a partnership is that the liability of the LLC’s owners (members) for debts and obligations of the LLC is limited to their financial investment. This limited liability for its owners applies in the vast majority of United States jurisdictions. Businesses that engage in professional services requiring a state professional license, such as legal or medical services, may not form an LLC but may find that a Professional Limited Liability Company (PLLC) suits their requirements.

LLC’s Offer Tax Benefits and Liability Advantages

For U.S. federal income tax purposes, an LLC isn’t considered a separate entity from its owners. An LLC is treated by default as a “pass-through entity.” All profits and losses are “passed through” the business to each member of the LLC. This means that an LLC will not pay taxes by itself; rather, the members pay the taxes on their personal tax returns. If there is only one member in the company, the LLC is treated as a “disregarded entity” for tax purposes. The individual owner would report the LLC’s income or loss on Schedule C of his or her individual tax return. Thus, income from the LLC is taxed at the individual tax rates.

LLCs shield members from personal liability if the business goes bankrupt or injures someone or otherwise incurs legal liabilities. This means that, although your business might fold, courts and creditors will generally not be able to take the member’s personal assets. Separation between business and personal responsibility and assets is maintained.

There Are Some Disadvantages

LLCs generally do not have specific roles like directors, managers, and employees. Unlike corporations, they are not required to have a board of directors or officers. Lack of a traditional management structure can make it difficult for the company and especially investors to determine authority for various company functions. This management structure of an LLC may be unfamiliar to those used to corporations and could be used by some to gain unfair advantage. Creation of an LLC operating agreement may define roles and eliminate confusion.

LLCs are usually subject to self-employment taxes unless members choose to be taxed like a corporation. Choosing to be taxed like a corporation may lead to increased tax liabilities. For this reason, when choosing to start an LLC, it’s wise to speak to a knowledgeable lawyer who can explain this fully. Since laws and taxes vary from state to state, the best choice for a LLC may be some state other than the one under current consideration.

DiJulio Law Group
https://www.dijuliolawgroup.com

Evictions from Two Perspectives

Adverse Possesion, Easements, Foreclosure, Residential , , , , , ,

Unlawful detainer actions and evictions

Evictions are also referred to as unlawful detainer actions. These actions are the process through which a tenant can be removed from either residential or commercial property for non-payment of rent or other specific reasons defined under California landlord/tenant laws. Whether you are a property owner or a renter, the law provides procedures that guide resolution of eviction cases and protect both tenant’s and client’s rights.

Following Landlord Procedures in Evictions

A landlord can’t begin an eviction lawsuit without first legally terminating the tenancy. This means giving the tenant written notice, as specified in the state’s termination statute. If the tenant doesn’t move (or “reform” in some manner, such as paying the rent or removing the pet from the premises), landlords can then file a lawsuit to evict. Legally, these termination notices are called an unlawful detainer, or UD, lawsuit. Although terminology varies somewhat from state to state, there are typically three types of termination notices used by landlords to terminate a tenancy due to some type of tenant misbehavior. They are: pay rent or quit notices, cure or quit notices, unconditional quit notices.

If the tenant has not done anything wrong, landlords may usually use a 30-Day or 60-Day Notice to Vacate to end a month-to-month tenancy. Cities with rent control may not allow this. They require the landlord to prove a legally recognized reason for eviction (“just cause”) of tenants.

Tenants Rights in Evictions

If the tenant doesn’t voluntarily move out after the landlord has properly given the required notice to the tenant, the landlord can evict the tenant. In order to evict the tenant, the landlord must file an unlawful detainer lawsuit in superior court.

The court-administered eviction process assures the tenant of the right to a court hearing if the tenant believes that the landlord has no right to evict the tenant. The landlord must use this court process to evict the tenant; the landlord cannot use physical measures to force the tenant to move. For example, the landlord cannot remove or change door locks, cut off utilities such as water or electricity, block access to the property, remove the tenant’s property in order to carry out the eviction. The landlord must use the court procedures.

If the landlord uses unlawful methods to evict a tenant, the landlord may be subject to liability for the tenant’s damages, as well as penalties of up to $100 per day for the time that the landlord used the unlawful methods.

DiJulio Law Group
https://www.dijuliolawgroup.com

Reverse Mortgages: The Potential For Elder Financial Abuse

Adverse Possesion, Foreclosure, Residential , , , , ,

…the worst possible product for an elder

Reverse mortgages are becoming a high profile example of the many ways in which financial elder abuse can occur. Older spokesmen picked for their trustworthy demeanor appear in endless television commercials that attempt to sell a trusting senior a product that would benefit the mortgage broker greatly, but amounts to the worst possible product for the senior in the later stages in of life.

These reverse mortgage marketers are very adept and skilled in the methods of successful selling to seniors. For example, one well organized group of marketing advisors is telling the sellers of reverse mortgages , “These [senior] consumers understand that simply having a reverse mortgage offer mentioned on the AARP website and through most senior web links is an excellent way to gain trust from your [mortgage] candidates as most of the seniors that would respond to this ad have had some contact or consideration with the AARP”

By associating trustworthy sources with their products, these marketers are pushing their products with a pervasive intensity that is designed to create a need for a reverse mortgage and to break down whatever resistances the seniors may have.

…an elder without a place to live

Incurring the debt of a reverse mortgage may be acceptable as long as the senior can live in that home. If the senior finds that they have to move out of the home into assisted living or a nursing home, the mortgage becomes due. Now, there is the expense of paying the reverse mortgage off, as well incurring the high cost of the assisted living or nursing home care. A situation like this can leave an elder without a place to live.

In 2006, the California state legislature passed SB 1609 which protects seniors from elder financial abuse associated with reverse mortgages. First, it requires that seniors receive financial counseling from a HUD approved counselor before applying for a reverse mortgage. Second, it requires lenders to prepare loan documents in the language in which the reverse mortgage was negotiated. Finally, it prohibits lenders from requiring a borrower to purchase an annuity as a condition of the loan.

DiJulio Law Group
https://www.dijuliolawgroup.com

Residential Issues with Toxic Mold Contamination

Adverse Possesion, Residential , , , ,

Contamination Concerns for Health and Property Alike

Toxic mold exposure may be responsible for any number of health problems faced by tenants and homeowners alike. Mold may occur in older structures and well as new construction that utilized substandard materials such as imported drywall. As public awareness of the problem grows, more legislation is passed to address the problem.

Toxic mold exposure has many aspects, and a variety of lawsuits may result from a single mold contamination incident. Continued efforts on the part of the public and the government are needed to ensure that the mold problem is controlled and that responsible parties are held accountable for their liability in the problem.

Discovery of mold is of concern to tenants and property owners alike. For tenants, health considerations come first, but financial impact can also be great. For the property owner, resulting litigation and repair costs may lead to the biggest financial liability of mold contamination. Mold contamination is usually preventable, as are the health issues to which tenants become vulnerable.

Mold contamination are caused by microscopic fungi

Molds are microscopic fungi that need plant and animal matter in order to grow. Molds are found in outdoor environments as well as in homes, offices and residential structures. Molds can be observed in colors such as red, green, blue-green, brown and black. Most molds pose little or no health risks to people. Exposure to certain molds can cause severe health complications and even death for the young and persons with compromised immunity.

Residential structures are seemingly the source of most mold complaints from tenants and property owners alike.

Tenants suffer the highest percentage of health problems related to toxic mold. This may be due, in part, to older structures that are be poorly maintained or were built with substandard materials. Tenants can bring suits against landlords, building management, or ownership companies for any related health issues caused by the presence of toxic mold in their residences.

Property owners also file a substantial number of toxic mold suits. Their problems frequently stem from poor construction, water damage, and low quality building materials. Mold may go undetected for long periods of time and result in large and hard-to-fix problems. Property owners can bring suits against contractors, inspectors, material suppliers or any other party who may have contributed to toxic mold problems.

Legal Recourse in Toxic Mold Cases

Toxic mold cases require diligent and thorough legal counsel and finding a competent lawyer who will take on a toxic mold case is not always easy. Toxic mold legislation is still relatively new and some lawyers may not be familiar with pertinent laws. As both construction and health laws may be involved, lawyers versed in both areas would be desirable.

DiJulio Law Group
https://www.dijuliolawgroup.com

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