REALTORS & BROKERS
Join Our Strategic Alliance Partnership Program Today!
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Nagle Law Group is proud to continue with its
Realtor/ Broker - "Strategic Alliance Partnership Program." Nagle Law Group is excited to work with realtors and brokers - together providing outstanding service to their clients. Those realtors and brokers who become members of this program will enjoy the benefits of working with experienced Real Estate attorneys in helping their clients understand the legal and financial risks and liabilities involved in selling or purchasing a home in today's real estate market, while providing them with first-class legal counsel at competitive rates. The benefits of this program are highlighted on our website: www.naglelawgroup.com Sign up today - you and your clients deserve an extra layer of protection!
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Did You Attempt Loan Modification With Bank of America, Countrywide or BAC Home Loans? | |
To our friends and clients: if you or someone you know have, or had a home loan in which Bank of America, Countrywide, or BAC Home Loans Servicing LLP was the lender or servicer, and you tried unsuccessfully to modify the loan with the bank, you may be entitled to compensation. Please contact Christopher Stuart of Stuart & Jabbar, PLC for more information at (602) 341-3453. |
| Nagle Law Group Welcomes Charlene Gates |
We are pleased to announce the addition of Charlene Gates to our staff at Nagle Law Group. Charlene is an experienced paralegal who will be supporting our bankruptcy attorneys as more Arizonans turn to NLG for assistance with overwhelming debt.
Charlene brings nearly 15 years bankruptcy case experience to NLG, with excellent experience working for bankruptcy courts and trustees as a case administrator, and then as a paralegal focused on personal bankruptcy cases for law firms.
"Charlene's extensive bankruptcy case experience is invaluable and she shares our focus on insatiable client service," said Nagle Law Group founder and managing partner Robert Nagle. "At Nagle Law Group every bankruptcy client meets directly with an experienced attorney. To assist them, we look for top-notch paralegals that provide important support for our team of attorneys and we welcome the addition of Charlene." |
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Eviction After Foreclosure: AZ Laws Explained |
Homeowners facing foreclosure should be aware of the eviction process after their home has been sold at a foreclosure sale.
Many homeowners are under the mistaken belief that immediately after the foreclosure sale, a sheriff's deputy will immediately be at their door to evict them. This simply isn't true and an understanding of Arizona's eviction laws is necessary so that homeowners will be aware of their rights and obligations after their home has been foreclosed upon.
Arizona law generally prohibits the landlord or owner of residential property from exercising so-called "self-help" remedies to evict their tenants or other occupants of the property. Thus, the owner cannot change the locks or shut off utilities without first bringing an eviction lawsuit.
Residential eviction lawsuits in Arizona are called forcible entry and detainer actions. Arizona's forcible entry and detainer actions laws specifically cover evictions by the new owner of a home (often the former mortgage lender) following a trustee's sale or foreclosure.
The first step which the new owner must take to evict the former owner is to make a written demand for possession. Assuming the former owner doesn't leave after receiving the written demand (Arizona law is unclear as to the time period the former owner has to vacate after receiving the notice), the new owner must file a complaint in court and serve a summons upon the former owner in order to evict him.
Trial is generally supposed to be five business days after the complaint is filed, although the trial date may be extended for a few more days. If the former owner doesn't appear for trial or is found guilty, an eviction order (called a "writ of restitution") will be issued directing the sheriff to evict the former owner. The writ cannot be issued until five calendar days after the judgment is entered. The sheriff can then can go to the property and forcibly remove the former owner, although in reality because of the backlog of foreclosures in Arizona today, that time period is likely to be longer.
A major exception to the rule that residential owners of property cannot exercise self help is if the property has been abandoned by its former occupant. A relatively common occurrence after foreclosure is for the new owner (or more likely an agent for the new owner) to inspect the home and upon inspection find that most or all of the personal belongings of the former occupant have been removed. Under the belief that the property has been abandoned, the new owner in order to avoid a costly and time consuming eviction action and to possibly prevent the vacant home from being vandalized, exercises self help and changes the locks. Frequently, however, the reason the personal property has been removed is because the former owner is in the process of moving out but has not yet done so and is actually still living at the home!
Although the law in Arizona is not crystal clear on the issue of abandonment claims in cases of evictions after a foreclosure, in order to avoid a claim of abandonment by the new owner, the former owner should notify the new owner, in writing by certified mail, return receipt requested, that he is not surrendering the home and is, in fact, still living there.
Homeowners should be aware that if they continue to occupy the property following a foreclosure sale, the new owner may try to characterize this post-sale occupancy as a criminal trespass and/or bring a lawsuit against the former homeowner to recover damages which may be in the form of a reasonable rent for the number of days that the new owner did not have possession of the home.
Because Arizona's laws are relatively complex and sometimes unclear, it is of course recommended that legal counsel be consulted by homeowners potentially facing eviction after foreclosure. |
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Realtors & Brokers: We Respect the Fees YOU Earn | |
Here in Arizona, attorney involvement in residential real estate transactions was practically unheard of - until the mortgage crisis hit our state. As you already know, more and more underwater homeowners are looking to short sale as a way out of their toxic mortgage and it has become imperative for agents and brokers to seek assistance from an experienced real estate attorney when managing these transactions. Unfortunately, some of these attorneys are costing YOU money.
At Nagle Law Group, I personally manage our residential real estate practice - we have been serving Arizona real estate clients for more than 12 years. There has been a noticeable increase in the number of short sale consultations at our firm over the past year and expert predictions estimate some 300,000 Arizona foreclosures coming over the next several years; certainly many of those homeowners will be turning to real estate professionals like you for short sale assistance.
It recently came to my attention that, on top of consultation fees, some law firms charge a percentage of the transaction amount at the time of closing a short sale. I'm writing to remind you about a big difference between Nagle Law Group and other real estate law practices: none of our fees are ever paid by real estate agents or the title companies.
What truly upsets me is the lack of respect these other law firms have for the hard work you put into every transaction. They view your commission as disproportionate to the work performed, failing to appreciate that, for every deal that closes, there is a fair share of deals that do not. I understand this critical detail and don't look to take advantage of your efforts. After all, a short sale would not be likely without you.
We offer residential real estate services to homeowners at modest fixed fees. Our team of professional, experienced attorneys is extremely knowledgeable in short sale transactions and you can be assured that your clients will receive the superb personal service and responsiveness that our firm has become known for.
Please contact me directly if you have any questions about our real estate practice via email (info@naglelaw.com) or phone directly 602-595-6951 x100. You can also visit us online at www.NagleLawGroup.com. I know you have a variety of options for legal partners in short sale transactions; we hope you'll keep us in mind.
Robert Nagle is the managing partner of Nagle Law Group, P.C., focusing on residential transactional and debt management matters, and can be reached at 602-595-3156 or via email at robert.nagle@naglelaw.com. |
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Nagle Law Group Teams Up With Brent White
for New Book Focused on Arizona | |
Nagle Law Group is thrilled to share some exciting news; managing partner Robert Nagle is working with renowned law professor Brent White to release a new book. Brent White is an Associate Professor of Law at the University of Arizona and leading expert on the mortgage crisis. His book Underwater Home: What Should You Do if You Owe More on Your Home than It's Worth? has been widely-covered in the national media, including 60 Minutes, the Wall Street Journal, National Public Radio, CNN, Fox Business News, Good Morning America, and the New York Times.
Together, Prof. White and Robert Nagle will be creating a new version of the book specific to Arizona. Underwater Home, Arizona is both an emotional and practical guide for the underwater homeowner in our state. They will explain when it makes financial sense to stay in your underwater home and when it makes sense to get out. And they'll offer no-nonsense insight into how to negotiate with your lender. The book should be released by mid-March; subscribe to the Nagle Law Group blog to stay informed at http://naglelawgroup.com/blog.
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| Nagle Law Group in the News! | |
Robert Nagle was interviewed for this story in the Phoenix Business Journal about some law firms charging fees for short sale transactions (click on image to view story).
 Nagle Law Group teamed up with 3TV reporter Carey Pena for a special "3 On Your Side" to give advice regarding underwater mortgages, foreclosures, loan modification and short sales. (click on the image to view the video).
In this "Money Matters" segment on 3TV, Robert Nagle speaks with reporter Carina Sonn about real estate and mortgage issues, and the record number of foreclosures in Arizona during 2010.
In this segment on 12 News, Robert Nagle discusses foreclosure and loan modification issues that an Arizona man encountered with Fannie Mae when he fell behind on his mortgage.
Robert Nagle was interviewed for this "3 On Your Side" segment on 3TV, about an Arizona woman who fought foreclosure while trying to get a loan modification through the HAFA program because her home is underwater.
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Pitfalls of Handling Short Sales | |
By Shannon B. Jones, Partner, Shannon B. Jones Law Group and and Lisa Riggins, Regional Director, Pearl Insurance
Short sales have become a "necessary evil" for real estate agents in today's market. Because short sales are so prevalent, in order for agents to earn a living, most have no alternative, but to represent clients in them. Although short sales are becoming a majority part of the market in some locations, short sales can be fraught with legal pitfalls. The most common problems are identified in this article with recommendations for handling those issues to avoid claims.
Handling an initial call from the seller. It is common for a seller/borrower to contact an agent and advise the agent that their property is "under water" and seek advice. Many agents, without considering the many alternatives a seller/borrower may consider, immediately suggest a short sale. However, in many circumstances, there are other alternatives, which may be more appropriate for the seller. For example, sellers can consider the following: foreclosure; deed in lieu of foreclosure; bankruptcy; loan modification; or renting out their property and moving to another less expensive property. There may also be tax consequences associated with short sales that agents do not consider. In order to properly advise a client on their many alternatives, a client should be referred to an accountant and an attorney to analyze the seller's situation before the seller makes a decision. This makes legal and practical sense. Remember that if a client is better off with a foreclosure sale, the client may cancel the short sale at any given time and proceed with a foreclosure sale. If that occurs, the agent wastes their time, effort and money in marketing the property without the benefit of receiving a commission. Therefore, it is important that a client make a decision as to how to proceed with their property before an agent lists it.
Preparing the buyer for the short sale process. Many buyers are interested in short sale puchases because they believe they are "getting a deal" or they simply like the property. However, it is important to manage buyer's expectations before writing an offer on a short sale. The buyer should understand that the sale is more likely a "long sale" and not a "short sale." In order words, it could take a long time to close or may not ever close. Agents should advise buyers that to close, all of the lenders must approve of the short sale. It is entirely voluntarily on the part of the lenders. If one lender does not approve of the sale, then it will not close. It can take a significant amount of time to obtain approvals from the lenders, particularly, if there are multiple lenders or lien holders. In addition, while the short sale is pending, the seller's agent may be required to present additional purchase offers to the seller for consideration and that at the seller's option the additional offer(s) can be forwarded to the lien-holder(s) usurping the original offer. The buyer also needs to be made aware of their own rights to rescind the purchase offer and walk away from the transaction as well as any financial consequences to this option if any earnest monies have been deposited.
Understanding a short sale. It is important for agents to understand the parties' roles in a short sale and how the transaction works. The purchase and sale agreement is by and between the buyer and the seller. They are the parties to the contract. The lenders are not parties to the contract. The contract should be prepared so that the seller's acceptance is subject to approval by the lender and that any conditions of approval set by the lender are subject to approval by the seller. Therefore, these are two (2) additional contingencies in a short sale that are not in a traditional transaction. Once the offer is accepted by the seller, the seller submits the offer to the lender for the lender's approval. If the lender does not approve the sale, the transaction will not close. If the lender approves the offer, the lender's terms are subject to approval by the seller. Once the seller approves the lender's terms, the escrow can close in accordance with the remaining terms of the contract.
Disclosure obligations. To avoid any risk of liability to the listing agent liable for failing to disclose that a seller was short and that escrow may not close, and to protect the seller should the lender(s) not provide an acceptable Approval Letter (see Section 5, below), it is recommended that agents utilize an addendum to the purchase and sale agreement, which provides that the sale will be short and is contingent upon a lender's approval. In Arizona, agents are advised to use the Arizona Association of Realtors' Short Sale Addendum.
Lender's approval letters. When a lender approves of a short sale, the lender generally issues a letter setting forth the terms of that approval. The terms generally include without limitation the following: close of escrow date; minimum amount that the lender is willing to accept; confirmation that the sale is an arms length transaction; confirmation that the seller is not accepting any sales proceeds; if there a junior lien holder, the senior lien holder will dictate how much money the junior is receiving; how much commission the agents receive; and whether the lender is willing to extend a release to the borrower for the amount owed or reserve their right to proceed against the borrower for any deficiencies. The release is an extremely important part of the approval letter. Agents are advised to refer their clients to attorneys and accountants when these approval letters are received to negotiate the release language. If agents advise their clients to accept the release terms, the agent could be subject to liability if the release terms are not beneficial to the client or if the client is unaware of the risks. In most approval letters, lenders reserve the right to proceed against the borrower for any deficiencies even if the lender does not otherwise have that right. Agents should be cautious about recommending that clients sign those approval letters without referring them to an attorney.
Payments outside of escrow. In short sales, agents are sometimes asked to allow payments outside of escrow. For example, if the senior lender permits the junior lender to accept only $2,000 of the sales proceeds, the junior lender occasionally will ask for a larger payment outside of escrow. This is not only a breach of the senior lender's terms, but constitutes lender fraud. Senior lien holders are now asserting claims against title companies who allow payments outside of escrow, which are not listed on the HUD-1 closing statement or are contrary to the lender's approval letter. It is likely that in the future, lenders will consider pursuing claims against agents. All payments should be on the HUD-1. If any payments deviate from the senior lender's approval letter, permission from the senior lender should be obtained.
Short sale negotiators. There are a number of agents and individuals performing services as short sale negotiators or consultants. Unfortunately, some of these agents are not complying with the law, which can lead to significant liability for agents who utilize them. It is imperative that a short sale negotiator be a licensed real estate agent or attorney. Any fees paid to short sale negotiators must be disclosed to the lenders and approved. Short sale negotiators who are paid by buyers are also likely acting as an agent for a buyer, which must be disclosed and provide a consent for dual agency. Moreover, agents need to be cautious that they are not being paid unearned fees, which is a RESPA violation. Additionally, if an agent negotiates with banks other than the current lender(s), this may be considered mortgage brokering which creates additional issues which can include issues with licensing and coverage by any applicable E&O policy. For these reasons it is important to be sure the negotiations do not stray outside the expertise of the agent(s) involved and obtain the advice and assistance from professionals qualified to handle these exposures.
Many agents are earning a tremendous income in this challenging market by undertaking short sales. However, it is important that agents address short sales with care to ensure that they do not subject themselves to unnecessary liability.
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