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Worcester Real Estate Law Blog

Ways to approach a zoning or building permit denial

There’s no denying that Boston and many of its surrounding suburbs have a great deal of history. According to the city of Boston’s website, there are nine local Historic District Commissions that review property owners’ requests to make exterior design changes to real estate located within designated districts. 

Yet even if an individual doesn’t live in a historic district, there may be other municipal regulations that impact an individual’s plans to buy or sell a house. One prospective homeowner’s nightmare experience with a building permit revocation illustrates that a conversation with a real estate attorney might be a wise safeguard in many instances.

Settlement payments for wrongful foreclosures total $3.1 billion

Although a real estate attorney is usually called upon in the front-end of a deal, a recent story suggests that a legal professional could also provide counsel to residential or commercial owners facing foreclosure. 

Specifically, the Federal Reserve recently issued a report indicating that around 83 percent of borrowers across the country have been compensated for some form of financial injury, most commonly in the form of improper or premature foreclosure proceedings. As of April 2014, borrowers had cashed payment checks totaling around $3.1 billion.

Commercial real estate companies adjust to foreclosure market

Although many aspects of the housing industry were affected after the subprime mortgage crisis of 2008, some commercial real estate companies responded by buying foreclosed properties in bulk. That institutional buying is credited with helping home prices to rise in many distressed markets.

Yet the market for such purchases and sales of investment properties may be changing, according to a recent report. Specifically, as cash flow issues normalize and collateral values once again start to rise, the supply of foreclosure properties is diminishing. Some commercial buyers and lenders are responding to this change by investigating the feasibility of flipping those distressed properties. Institutional buyers that have benefited in the past few years from rental income from purchased foreclosure properties may now be looking to sell those homes to lock in their profits. 

Worcester city leaders propose new zoning for open spaces

Zoning laws in Massachusetts are not set in stone, as a recent article reminds us. According to a recent vote of a Worcester City Council subcommittee, local developers may have to pay heed to new open space considerations.

Specifically, the council members approved a 131-page plan to create more city parks, rectangular fields, dog parks, other open spaces and playgrounds over a seven-year timeframe. If approved by the full City Council, the proposal will be submitted to the state’s Executive Office of Energy and Environmental Affairs.

First-time Massachusetts homebuyers may face added challenges

For many Massachusetts workers, buying a house is the quintessential American dream. Such a goal often involves years of saving and planning. For example, in order to qualify for the most favorable mortgage rates, a homebuyer may need to make a sizable down payment, perhaps as much as 20 percent.

Yet in a housing market that is still recovering, a recent announcement from Bank of America is not good news. The bank used to offer a first-time homebuyer program. In a change to its lending strategy, however, Bank of America will now direct borrowers to other sources, such as programs offered by the Federal Housing Administration. 

Restrictions on jumbo mortgages may be loosening

As readers may know, Fannie Mae and Freddie Mac are stockholder-owned corporations that, according to their websites, purchase mortgage loans complying with certain guidelines. Those mortgages are then packaged into securities that investors can purchase.

In the wake of the housing crash, the underwriting guidelines of Fannie Mae and Freddie Mac remain strict. For conforming loans -- those that adhere to the guidelines set forth by Fannie Mae and Freddie Mac -- there is typically a maximum loan amount, certain borrower credit and income requirements, and other requirements such as a minimum down payment.

Boston mayor creates new zoning chief position

If readers needed a sign that local zoning disputes can be big business, Boston Mayor Martin J. Walsh recently created a new senior-level zoning chief for Boston’s City Hall. The position’s duties include making regulatory and operational recommendations that impact the Boston area.

An attorney who focuses on land use and zoning might draw another inference from the new appointment. Since zoning regulations can vary even between neighboring Massachusetts cities, it’s a smart move for Boston city planners to designate an official as the municipal authority in this area of law.

Are government-guaranteed mortgages unfair?

Some commentators may question the federal government’s level of involvement in the mortgage market. At least two entities that guarantee mortgages, Fannie Mae and Freddie Mac, are government sponsored. That involvement may raise certain expectations and policy questions.

Under the current system, a government-guaranteed mortgage might have additional requirements that a borrower must meet to qualify for the mortgage. The guarantee helps banks sell mortgages to investors, but it may also exclude certain types of borrowers from qualifying for a mortgage.

Landlords segregate their amenities for high-paying tenants

In either a residential or commercial real estate context, an attorney might caution against unwritten easements or rights. Although current neighbors might permit certain rights of shared access or use, a new owner might bristle at any such unofficial arrangements. 

However, a recent story suggests that rental property owners in downtown areas might be taking their approach to access rights to the extreme. Specifically, the story profiled several luxury rentals in New York’s Upper West Side where rent-regulated tenants are excluded from certain common areas, even if they’ve lived in the building for years. Such areas might include new gyms, playrooms, rooftop gardens or other amenities. Co-op and condo buildings might also be implementing the new approach. 

Condos are smaller than homes, but not their purchase agreements

Although readers might assume that condo prices would move in tandem with the local residential real estate market, a recent report from the Massachusetts Association of Realtors indicates otherwise.

Whereas the market for single-family homes in Massachusetts appears to be slowing, condo prices continue to rise. In April, median condo prices rose to $319,000, almost equaling the $320,000 median price for single-family homes in the same period. In addition, the annual appreciation rate for condos is also outpacing that for single-family homes. April’s rate was 11.7 percent, compared to a 2.3 percent appreciation rate for homes.

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