Class-Action Lawsuit Against Creig Northrop Real Estate Team Underscores Consumer Protections for Home Buyers, Home Sellers

A large class-action lawsuit recently certified against Maryland’s Creig Northrop Real Estate Team serves as an excellent reminder of the consumer protections afforded to home buyers and home sellers under the federal Real Estate Settlement Procedures Act (RESPA).

RESPA, enacted by Congress in 1974, is designed to protect consumers from unscrupulous practices in the real estate industry. Its chief purpose is to help consumers become better shoppers for real estate settlement services and to eliminate kickbacks and referral fees that unnecessarily increase the costs of closing a transaction.

Among other things, the act prohibits kickbacks between lenders and third-party settlement agents in the settlement process.

The lawsuit, filed in 2013, alleges that The Creig Northrop Team P.C. and others received more than $500,000 in illegal kickbacks from Lakeview Title Co. Inc. over a period of years. The class certified by the court in January includes all purchasers who engaged the services of The Creig Northrop Team and a defendant title insurance company from Jan. 1, 2008, until the present.

The number of home buyers and home sellers included in the class of plaintiffs is potentially huge. The Creig Northrop Team P.C. is affiliated with Long & Foster Real Estate Inc., and was ranked second in the country last year and first in 2012 in the amount of real estate transaction volume handled.

Under RESPA, service providers in a real estate transaction must provide a variety of disclosures to their clients. (See http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/rmra/res/respamor#HD) Certain disclosures must be made at the time of loan application, before settlement occurs, at settlement and after settlement.

Also important for home buyers and home sellers is the Affiliated Business Arrangement Disclosure. This disclosure is required whenever a settlement service provider involved in a RESPA-covered transaction refers the client to a provider with whom the referring party has an ownership or other beneficial interest.

The referring party must give this disclosure to the client at or prior to the time of referral. The disclosure must describe the business arrangement that exists between the two providers and give the borrower an estimate of the second provider's charges.

Except in cases where a lender refers a borrower to an attorney, credit reporting agency or real estate appraiser to represent the lender's interest in the transaction, the referring party may not require the consumer to use the particular provider being referred.

For more information on the case (Patrick Baehr et al. v. The Creig Northrop Team P.C. et al.)), see http://www.inman.com/2014/02/25/top-producing-long-foster-team-facing-class-action-respa-suit-over-alleged-kickbacks-to-title-insurance-agency/

Jerry Kline is a Realtor with the Odenton, Md., office of Keller Williams Flagship Realty (1216 Annapolis Rd., Odenton.) For more information on the local real estate market, contact him at (443) 924-7418.

Four Million Homes Return to Positive Equity

If negative equity in your home has kept you from selling it, now is the time to reassess whether selling your home makes sense. In 2013, 4 million homes returned to positive equity, bringing the total to 42.7 million, CoreLogic reports. “The plight of the underwater borrower has improved dramatically since negative equity peaked in December 2009 when more than 12 million mortgaged home owners were underwater,” says one expert.

4 Million Homes Return to Positive Equity

It's Getting Easier to Qualify for an FHA Mortgage Loan

Wondering whether you qualify to purchase a new home? A government agency reports that the average credit score on FHA-backed loans fell to 680 in 2013, and the average debt-to-income ratio of borrowers rose to 40.3 percent — both indicators that credit requirements may be easing. In comparison, the agency reported in January 2013 that the average credit score was 701 and the debt-to-income ratio was 38 percent.

If you'd like more information on whether you qualify for an FHA or other type of mortgage to buy a home, contact me today ((443) 924-7418). I'll be happy to put you in touch with an excellent group of mortgage professionals.

It's Taking Less to Get an FHA Loan

Tax Time Help for New Homeowners!

• How to Deduct Your Upfront Mortgage Insurance PremiumsRead

• Don't-Miss Home Tax BreaksFrom the mortgage interest deduction to energy tax credits, here are the tax tips you need to get a jump on your returns. Read

• Did You Sell Your Home After Making Improvements?Keeping track of the cost of capital improvements to your home can really pay off on your tax return when it comes time to sell. Read

Visit houselogic.com for more articles like this.

Copyright 2014 NATIONAL ASSOCIATION OF REALTORS®

Six Reasons Why You Should List Your Home for Sale During the Holidays

There are concrete reasons for – and advantages to -- selling your home during the holidays.

As a realtor, I get this question a lot this time of year: Is it better to list my home for sale now, or to wait until after the holidays? Similarly, should sellers who currently have their homes on the market temporarily withdraw them from the MLS and wait for the holidays to pass?

There are six good reasons for listing your home for sale now or leaving it on the market if you already have it for sale. Just think like that buyer you’re hoping to court.

1. People who look for homes during the holidays are more serious buyers. Think about it – with all the things you need to do during the holiday season, would you be out there looking through other peoples’ houses if you didn’t really need to? While it’s true there are fewer buyers as the year ends and winter sets in, the fewer buyers who are out there are out there for a reason. Most have to find a new place to live – and soon.

2. As a seller, you’ll have less competition. Fewer homes are on the market during the holiday season, and buyers have fewer houses to choose from. This helps you capture motivated buyers more easily, and less competition may very well help you garner you a higher price.

3. Buyers have more time to look for new homes. Yes, the holiday season is busy for everyone, with all the travelling, shopping, wrapping presents and sending greeting cards. But remember, more homebuyers are off work during the holidays, and buyers have more time to search for homes online and see homes between trips to the mall. Don’t be surprised if showing activity at your home spikes a bit during the holidays – if your home is in good condition and it’s competitively priced.

4. Some people want to buy a home before the end of the year for tax reasons. Every buyer’s financial situation is different. But there are tremendous tax advantages to buying a home, and these savings help offset taxable income earned in a particular year. These tax savings often give buyers extra motivation to get a deal done by Dec. 31.

5. January is traditionally a month for employees to start new jobs. Employees who are relocating this time of year to accommodate new jobs need a new place to live, and they usually cannot delay such moves. Sellers who keep their homes on the market through the holiday season are in prime position to appeal to these buyers.

6. Homes generally look more appealing during the holidays. The festive nature of the season helps homes show better, particularly on the inside. With all the decorating, entertaining and pleasing aromas, your home may never be more attractive to buyers. Take advantage of it.

It’s natural for sellers to have reservations about putting or keeping their home on the market through the holidays. Maintaining your home in showing condition and allowing buyers to walk through your home during this more private, family period is a bit off-putting.

But there are concrete reasons – and advantages – to selling your home during the holidays. Motivated buyers need houses to buy. Those buyers can’t choose your home if they don’t know it’s for sale.

Jerry Kline is a Realtor with the Odenton, Md., office of Keller Williams Flagship Realty (1216 Annapolis Rd., Odenton.) For more information on the local real estate market, contact him at (443) 924-7418.

Study: Professional Photos of Listings Boosts Sales

The study found that homes priced between $200,000 and $1 million sold for an average of $3,400 to $11,200 more than their list prices when professionally photographed than homes with amateur photos. For homes priced between $400,000 and $499,999, the study found that homes professionally photographed sold for $11,200 more. Study: Professional Photos of Listings Boosts Sales

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A typical home inspection may uncover many problems, some severe, some not. Here are five home condition issues that definitely should not be ignored. Five Inspection Problems Buyers Shouldn’t Ignore

Survey: Rising Rates Getting Sellers Nervous

" . . . [B]road economic gains could erode sellers' advantages in the housing market as mortgage rates rise," said Ellen Haberle, a real estate economist. It's a good time to sell your home NOW!

Survey: Rising Rates Getting Sellers Nervous

Survey: Buyers Will Pay More for Good Schools

More than 44 percent of home buyers who plan to buy a home within the next two years said they would be willing to go over their budget by up to 10 percent in order to buy in their preferred school boundaries. And remember - even if schools aren't important to you when you buy a home, they'll likely be important to buyers who eventually buy your home from you! Survey: Buyers Will Pay More for Good Schools

Want a Swimming Pool in Your Backyard?

Here's everything you ever wanted to know about adding a pool to your yard or buying a new home that has a pool. Clarifying Home Pool Choices