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Home Equity Line of Credit loans

Home Equity Line of Credit loans

An important thing to consider if you are paying off a home equity line of credit, also referred to as a HELOC. These are usually open ended loans that allow you to borrow on them for a designated period of time. Therefore, if you pay off the balance, the mortgage that is the security interest for repayment may not get discharged. When paying the loan in full, you must request in writing to have the loan marked paid in full and discharged.

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Your Rights as a Condominium Owner in New Hampshire

Your Rights as a Condominium Owner in New Hampshire

For those that may not know, there is a specific law that covers Condominiums and how they are set up. That law is RSA 356-B and is known as the Condominium Act. Much of this Act covers the establishment of a Condominium, but in 2010, RSA 356-B:70 was added which established a Committee to Study the Laws relating to Condominium and Homeowners’ Associations. The governance of associations has frequently been a problem area.

As a result of that Committee, the Condominium Act was amended and a number of new laws took effect on August 1, 2016. The changes target governance of the Association. Associations often operate informally and consult an attorney only when problems arise. The new laws are aimed at providing more structured governance and greater protection to unit owners once the condominium has been established.

As recently as August, 2017, a woman was accused of embezzling $100,000 from a NH condo association. She was arrested and charged with two counts of theft by unauthorized taking. This charge is a Class A felony and is punishable by a maximum sentence of 7 ½ to 15 years in prison. This is not a random thing, theft of a condominiums funds happens more often than you would think.

One of the major ways these thefts occur is by one of the board members receiving a kickback for work performed or by having personal work done for themselves and rolling it into the associations bill. With that in mind and in an effort to control this type of theft, one of the new laws requires any contractor licensed by the State of New Hampshire who performs work to disclose on the bill any referral fee paid by the contractor.

Some other key changes are:

• Boards may not use social meetings to evade the open meeting requirements
• Roberts Rules of Order Newly Revised are the default procedural rules
• The board must send proxy voting forms with control numbers assigned for each owner
• Electronic noticing and meetings are allowed

If you are a condominium owner don’t be afraid to ask questions of the board. Make sure that you regularly see the bank statements rather than to just rely on being shown a copy of the financials once a year at the annual meeting. If you do find that a board member has been embezzling, consider taking legal action, don’t just let it slide. Often, once they think they got away with something they will continue taking advantage of you in the future.

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What is a Form PA-34

What is a Form PA-34

In New Hampshire, the Department of Revenue Administration is responsible for equalizing the value of property in each municipality. Equalization is used to accurately apportion county and school district taxes among the cities and towns and to distribute state revenues to the cities and towns.

To equalize property values, the Department of Revenue Administration annually conducts a sales/assessment ratio study for each municipality. The information provided on the PA-34 form is needed to assist the Department in determining whether a particular sale involved is an “arms-length transaction” and should be included in our equalization sales/assessment study.

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Homestead Rights in New Hampshire

Homestead Rights in New Hampshire

Under Homestead Exemption laws any property designated as a homestead is exempt from execution and sale by creditors for the payment of debts. The protected amount differs in each state, but in New Hampshire every person is entitled to $120,000 of his or her homestead to be exempt from the rights of creditors.

There are exceptions to the above and the following debts have precedence over the rights of homestead:

• The collection of taxes;
• The enforcement of liens of persons having done work for the construction, repair or improvement of the homestead;
• In the enforcement of mortgages on the property;
• In the enforcement of liens filed by homeowner or condominium associations for unpaid assessments.

No deed can convey or encumber the homestead right, except for a mortgage made at the time of purchase to secure payment of the money used to purchase the home, unless it is executed by the owner and spouse, if any. This is why, when a new mortgage is taken out or the property is conveyed, the husband and wife must both sign to release rights of homestead.

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Why is a new Lender’s Policy needed every time?

Why is a new Lender’s Policy needed every time?

Since the time that the original loan was made, you may have taken out a second trust deed on the house or had mechanic’s liens, child support liens or legal judgments recorded against you. These are all events that could result in serious financial losses to an unprotected lender. Regardless if it has only been 6 months or less since you purchased or refinanced your home, a myriad of title defects could have occurred. While you may not have any title defects, many homeowners do. The only way for a lender to adequately protect itself is to get a new lender’s policy each time you purchase or refinance your home.

Remember, title companies offer a refinance transaction discount if your last policy was written within 3 years. Be sure to ask us how it can save you money.

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One of the latest wiring scams involving title companies

One of the latest wiring scams involving title companies

Just as soon as one type of wire scam is uncovered it seems like a new one pops up. One of the latest versions involves the perpetrator sending the funding lender wiring instructions to a legitimate account belonging to an innocent, unknowing title company. In verifying the account number, the lender will see that the funds are being wired to a legitimate title entity.

Once the wire has gone through, the scammer contacts the unknowing title company and states that the funds were sent in error. The scammer gives the title company instructions for sending the funds back, but those instructions are fraudulent and the funds will be sent to the scammer. The title company then confirms that it was not entitled to the funds and sends them back using the account information that it has received from the scammer.

The lesson to be learned here is that if you receive wired funds in error, the wire should be rejected. In doing so, the funds will automatically go back to the original sender.

Everyone needs to be vigilant in dealing with wire transfers, verifying information by directly contacting the other parties through secure channels and being skeptical when instructions are changed at the last minute or appear out of the ordinary.

 

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How do money wiring scams work?

How do money wiring scams work?

In a money wiring scam, a dishonest person lies and tricks you into wiring money to them.

The scammer might say:you won a prize, or inherited money, but you have to pay fees first;

  • you won the lottery, but you have to pay some taxes first;
  • a friend or family member is in trouble and needs you to send money;
  • you need to pay for something you just bought online before they send it;
  • you got a check for too much money and you need to send back the extra.

These are all tricks.  If you wire money, the scammer will keep it and you will not get your money back.

Wiring money is like sending cash.  If someone you do not know asks you to wire money it is probably a scam. Scammers are clever and they try to make things look real. They are good at fooling people and they also want to rush you. They want your money before you have time to think, but before you do anything, stop and check.

If you have already wired money to someone who contacted you…that money is probably gone. Remember, if you gave money to a scammer once, you will probably be targeted again . The best thing you can do to help yourself and others is to report the incident to the Federal Trade Commission.

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Owner’s and Lender’s Title Insurance

Owner’s and Lender’s Title Insurance

Lender’s Policy – If you have ever taken out a mortgage on your home it is likely that the lender required you to purchase a title insurance policy. Then lender’s policy is also known as a loan policy and most lending institutions require it as a way to insure their security interest in the property. The policy protects the lender for as long as the loan is outstanding.

Owner’s Policy – As a buyer, you also want to protect your investment and your ownership rights in your property. That is why you should purchase an owner’s policy of title insurance.  This will protect your rights as the homeowner for as long as you or your heirs have an interest in the property.

Both of these title insurance policies pay valid claims along with the legal fees to defend against hidden title issues. They also help to decrease ownership risks by providing a thorough title search prior to the issuance of either policy.

Refinance Transactions – If you are refinancing your property you may be surprised to see that you are required to purchase a new lender’s policy of title insurance. This is because a lender’s policy only provides coverage for the life of a loan. When a home is refinanced that previous loan is paid off and the policy ends. Therefore, a new lender’s policy will be required. Because your owner’s policy provides coverage for as long as you own your home and additionally to your heirs, there is no need to purchase a new owner’s policy when refinancing

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Tenancy in New Hampshire

Tenancy in New Hampshire

New Hampshire has two types of tenancy, Tenants in Common and Joint Tenants with Rights of Survivorship (JTWROS). This has been the law in New Hampshire since November 13, 1959.

Every conveyance of real estate to two or more persons creates a tenancy in common pursuant to New Hampshire RSA 477:18. That means, that if the person preparing your deed fails to state the type of tenancy, you will automatically become tenants in common. When one person dies their half of the property will pass to their estate according to the probate process.

If you want to have your property pass to the surviving person that must be specifically stated. Your deed must state after your names “as joint tenants with rights of survivorship”. The property automatically passes to the surviving joint tenant without the need of filing probate. You simply record the death certificate and in future deeds reference the death and state that you are the surviving joint tenant.

The failure to state tenancy, or stating it incorrectly, happens quite often, especially when the deed has been prepared by an out of state attorney who may not be familiar with our laws. Different states have different types of tenancy laws. We sometimes see a husband and wife owning property and thinking they owned it as joint tenants with rights of survivorship. One spouse dies and it is not until the other gets ready to sell the property that this is discovered. It can create quite a mess, take a while to clear up and ultimately delay the closing.

So use this information to take a look at your deed and be sure that you own your property the way you wanted. If you don’t, you can have a Quitclaim Deed prepared and record it to establish the proper tenancy that you want. Please give us a call at 603-836-5309 if we can assist you in this process.

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Assessment Versus Market Value

Assessment Versus Market Value

In an update year, assessments as of April 1st should be fairly representative of market value. Because sales are based on emotional likes and dislikes of buyers, there is no one right number, but rather a range of numbers depending on the negations and motivations of the buyers and seller involved in a transaction. The industry standard indicates that plus or minus 10% is reasonable because an opinion of value is subjective and will vary by this amount.

When there is a decline in the real estate market, taxpayers may see that their assessment is higher than what they could expect to sell their property for (market value). That does not invalidate the towns assessment of your property when they account for the local assessment to sales ratio because every year the New Hampshire Department of Revenue Administration (DRA) calculates an equalization ratio. This ratio represents the difference between the assessment and the market transactions (sales). Here is an example:

In the town where you live in New Hampshire, the DRA published the an equalization ratio of 1.15% as of 4/1/2017. The assessment on your home is currently $300,000. Homes similar to yours are currently selling for $250,000. You may think that you are being over assessed, but this is where the equalization ratio comes into play.

To determine the market value of your home you would take the assessment of $300,000 and divide it by the ratio of 1.15% which gives you an indicated market value of $260,870. Although this number may be higher than the $250,000 sale price, it is considered fair and equitable so long as it falls within the 10% allowance.

 So long as all properties are being assesses similarly, the assessments, even if they are higher than current market value are fair and equitable because everyone is being treated the same. The real estate market is constantly fluctuating which makes comparisons of assessment and sales very difficult. The Form PA-34 that you complete at closing is one of the tools that the DRA uses in determining the equalization ratio.

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