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Worcester Real Estate Law Blog

Is a higher mortgage rate worth the extra liquidity?

When purchasing real estate, there are several financing approaches a buyer might take. 

For someone interested in a long-term commitment, it may make sense to make a sizable down payment in order to qualify for the lowest interest rates on a 20-year or even 30-year mortgage. 

Buy a house based on due diligence, not emotion

Although making an “as-is” purchase may be a calculated risk in certain situations, an attorney that focuses on real estate law might caution against applying this approach when buying real estate. In the parlance of real estate law, such “as-is” language might be termed inspection and mortgage contingencies.

Of course, this advice might be easier said than followed, especially in a seller’s market and/or when a buyer has fallen in love with a prospective new property. Fortunately, an attorney can help a buyer avoid making such emotion-based decisions in the heat of the moment. An inspection can reveal serious flaws, such as areas requiring plumbing or electrical work, a roof in need of repairs, or termite damage.

Is real estate permitting easier with a renewable project?

When a real estate developer is applying for real estate permits, getting approval from a federal agency is certainly a positive sign. However, it’s not necessarily a guarantee of smooth sailing in the realm of real estate law.

For example, two Massachusetts electric utility companies had expressed interest in a proposed wind turbine project on Cape Cod. The project, if completed, would have been the first offshore wind farm in the United States. However, the companies backed out of the project before construction of the 130-turbine wind project ever began.

Is obtaining a real estate permit approval ever easy?

Information about the various permits and approvals needed to move forward with a commercial development project is provided on the websites maintained by many municipal governments in Massachusetts. For example, the Boston Redevelopment authority maintains a website where information about zoning and planning can be found.

However, a real estate attorney would caution that ease of accessibility should not lull prospective real estate investors or developers into a false sense of security. The process of obtaining permits and zoning approvals is often not as easy as the municipal websites would suggest. In addition, zoning disputes might arise even after a project has started, forcing construction to a halt until the applicable zoning authority has once again granted approval. Such delays can be costly.

Municipal program offers mortgage assistance to Boston buyers

Readers may not have known about an incentive home buying program offered by the city of Boston.

Specifically, prospective buyers who have completed two classes offered by the Boston Department of Neighborhood Development may qualify for financial assistance toward the purchase of a family home or condo. In fact, buyers may receive up to $20,000 toward their down payment and closing costs. Assistance may also be available for the purchase and repair of a foreclosed property, with up to $10,000 applied in each category. 

Do foreclosures present an investment opportunity?

In recent years, lenders may have allowed a grace period for homeowners struggling with delinquent mortgage payments. However, that safety net has apparently been removed, considering that foreclosure filings in Massachusetts have increased by 91 percent from October 2013. In fact, foreclosures have been on the rise for eight consecutive months in the state.

A real estate attorney knows that foreclosure filings can also present a potential purchase opportunity for home hunters. In fact, some investors specialize in buying distressed properties, fixing them up and then selling them at a profit. However, the disclosure rules in a foreclosure proceeding are different than the ordinary real estate transaction. That can lead to a nasty surprise when hidden defects come to light. 

An important distinction: initiated versus completed foreclosures

According to data from a local real estate tracking firm, foreclosures against Massachusetts homeowners rose for the eighth consecutive month in October. Since October 2013, initiated foreclosures have nearly doubled, according to data from the Warren Group. 

Of course, a real estate attorney knows that a distinction must be made between initiated and completed foreclosures.  In fact, the data bears this out: Although initiated foreclosures in Massachusetts rose in the first ten months of 2014, the number of completed foreclosures actually fell by 6.7 percent during the same period. 

What are some issues that can arise in a condominium conversion?

As greater Boston communities continue to grow and develop, urban planners may have an eye toward converting older warehouses or buildings. 

In a recent example, a three-level East Boston firehouse constructed in 1860 was converted into two luxury condos. Given the building’s original purpose, the dimensions of the first floor are vast and include industrial touches like metal air vents. Even the third floor ceilings are about 15 feet high. As might be expected, the developer had to take a keen eye toward refurbishing, such as installing adequate heating and floorings.

Tips for responding to a foreclosure notice

Although a lender may have a legal right to collect on its secured interest, many equitable considerations also come into play what the property at issue is a principal residence. For that reason, state lawmakers have codified the procedures for foreclosure and redemption of mortgages in Massachusetts. For both buyers and sellers, it is important to consult with a real estate attorney to plan for this contingency. 

For starters, it is important to note that a foreclosure proceeding does not always involve the court’s involvement. If the mortgage document contains a power-of-sale clause, a lender generally has the right to foreclose on property in the event of the borrower’s default. 

Supreme Court scheduled to hear dispute over second mortgage debt

If a homeowner’s primary mortgage is underwater, does he or she have a chance at refinancing or taking out a second mortgage? 

A real estate attorney’s answer might be qualified, and perhaps dependent on the outcome of two pending appeals before the U.S. Supreme Court. The appeals, brought by Bank of America, originate in the 11thCircuit. However, their ramifications could be far-reaching.

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