From CNN: New Year Sees Surge in Mortgage Applications

From CNN: New Year Sees Surge in Mortgage Applications

As reported by CNN, the continued decrease in mortgage rates led to a significant rise in mortgage and refinance applications during the first week of January, hinting at a rosier outlook for homebuyers this year. Rates are expected to continue decreasing for the time being, though likely not below 6% according to analysts.

For more information, you can access the article on CNN here:

From CNN: Good News Ahead as Rate Drops Continue

As reported by CNN, mortgage rates have continued to drop through December, falling below 7% for the first time since the summer. Further drops are expected in early 2024.

To read more, please find the article here:

New York Law Takes Aim at Deed Theft

The New York legislature recently passed a bill (S6577/ A6656) which makes deed theft in the state a civil crime. The passing of this bill will provide significantly more protection to those targeted by deed thieves and equip prosecutors with the necessary tools to stop or slow a deed theft before it has been actualized.

What is Deed Theft?

Deed theft occurs when someone uses fraud or forgery to wrongfully take the title of another person’s property without the legitimate homeowner’s knowledge or consent. In essence, the scammer is able to acquire the rights or ownership to the property without the financial obligations attached to it, such as a mortgage. Taking the property through forgery occurs when a scammer fakes the real homeowner’s signature and files it with the country clerk to make it appear as though they bought the property legitimately, whereas taking the property through fraud occurs when a scammer tricks the homeowner into unknowingly signing over their home to the scammer. The scammer is then able to rent out the property or sell the home for a profit, without having to bear the financial burdens associated with homeowning such as a mortgage.

Deed theft has become an increasingly pressing concern in New York State. From 2014 to present, the NYC sheriff’s office counted nearly 3,500 complaints of deed theft in New York City alone. People of color and elderly persons are especially vulnerable to deed theft, especially those in gentrifying neighborhoods.

Prosecutors can now raise a “red flag” on suspect properties.

Previously, deed theft was not a crime in the state of New York, therefore there were no protections in place to slow down or stop a theft in progress. Once a scammer had obtained the deed through forgery or fraud, there were few legal remedies available to homeowners and prosecutors to reverse the fraud.

The new bill will enable prosecutors to file a legal action on properties where deed theft has taken place or is suspected to have taken place by putting a “red flag” on the property’s records. These flags swill serve to alert banks or title insurance companies if a scammer attempts to take out a loan against the property.

Deed theft victims now have opportunities to recover their property.

Previously, good-faith-purchaser protections stopped a victim of deed theft from recovering their property when the scammer had already sold the home to an innocent third party who was unaware of the same. Therefore, even if the scammer as found guilty of deed theft, the homeowner could not recover their property back from the innocent third-party purchaser.
The new legislation includes a provision that voids innocent purchaser protections. In cases where a third party purchased a property, and the mortgage was neither transferred to the buyer nor paid off by the original homeowner, the legislation would void the buyer’s claim on the property, even if they purchased the property in good faith from the scammer.

Victims may stay eviction proceedings.

Previously, there was no such protection when a scammer had stolen the deed and attempted to evict the rightful homeowner, because the housing court was unable to determine whether or not the evictor was actually the rightful owner of the property based on the facts presented. This resulted in many victims of deed theft being forced out of their homes illegitimately.
This legislation will make it possible for New Yorkers to remain in their homes and stay an eviction proceeding in housing court, so long as the rightful homeowner can show reasonable evidence that there is an issue with the title of the property or a potential deed theft in progress. This protection will allow homeowners to pause their evictions until the suspected deed theft case has been litigated.

Existing HETPA protections have been expanded.

The Homeowner Equity Theft Prevention Act (HETPA) allows homeowners in distress to cancel any contract to sell their property, whether they signed it knowingly or a scammer took advantage of them. Previously, these protections were only provided for homeowners whose properties were either in foreclosure or on the tax lien sale list. The new legislature will also include homeowners whose properties are on the utility lien sale list.

The passage of this legislation aims to protect New York’s most vulnerable homeowners from deed theft by equipping local officials with the tools necessary to better address this heartless crime.

Not yet passed is another bill (S6569), which was introduced to create new criminal provisions for deed theft in the state of New York. If passed, this bill would establish a crime of deed theft, grant the Office of Attorney General (OAG) criminal jurisdiction to prosecute criminal deed theft alongside district attorneys, and extend the statute of limitations for felony criminal prosecution of deed theft from five years to eight years.

From the NY Times: Office to Residential Conversions in the Financial District

According to the New York Times, the financial district boasts the highest office vacancy rate in Manhattan. Approximately 27 percent of office spaces are available for lease, a significant increase from the pre-pandemic rate of 11 percent.

Because of this, real estate consulting firms such as Vanbarton Group are converting some spaces into residential real estate.

To read further you can find the full article in the New York times here.

The Corporate Transparency Act – What Does it Mean for Businesses?

Starting on January 1, 2024, the Corporate Transparency Act will require mandatory beneficial ownership information (BOI) reporting requirements for statutorily created business entities, including law firms and attorneys. The purpose of this change is to aid the United States Government in policing criminals who use the corporate personal liability shield to hide their identities and launder money through the U.S. financial system, thus compromising U.S. national security and economic prosperity.


What are the reporting requirements?

“Beneficial ownership” is defined in this case as any individual who either directly or indirectly exercises substantial control over a reporting company or owns or controls at least 25% of the ownership interests. Under the act, entities must report the following information for each beneficial owner: (1) full legal name, (2) date of birth, (3) address (residential if an individual), and (4) proof of identification.

A reporting company created or registered to do business prior to January 1, 2024, will have until January 1, 2025, to file its initial beneficial ownership information report. A reporting company created or registered on or after January 1, 2024, will have 30 days to file its initial report. These reports will be accessible upon request to federal, state, local, and tribunal officials as well as approved foreign officials who formally request the information in connection with activities related to national security, intelligence, or law enforcement.


What does this mean for attorneys?

Lawyers are not exempt from the BOI reporting requirements and therefore have an independent duty under the CTA to report. Therefore, these changes raise several ethical considerations including the lawyer’s duty to conduct due diligence, how and when disclosure is necessary when a lawyer forms a business entity on behalf of a client, and balancing the duties owed to the client while still protecting themselves from regulatory action and personal liability.


Are any businesses exempt?

A “large operating entity,” defined as a business that: (1) employs more than 20 full-time employees within the U.S., (2) has an operating presence at a physical office within the U.S., and (3) filed a federal income tax or information return in the U.S. for the previous year demonstrating more than $5 million in gross receipts or sales, is exempt from the BOI reporting requirements.


What are the penalties for failing to report?

Any person who provides false information or fails to comply with the reporting requirements is liable for civil penalties of no more than $500 for each day the violation continues. Violators are also subject to criminal penalties of imprisonment of up to two years and fines of up to $10,000. Failure to comply with the CTA could have other adverse consequences – potential purchasers in a merger and acquisition will most likely consider whether the company is a reporting company and whether it follows the CTA requirements.


What does this mean more broadly?

The changes in the BOI reporting requirements will create additional filing and reporting requirements that statutorily created business entities must be cognizant of in order to avoid liability, but it will also equip the government with the tools necessary to stop and catch money laundering schemes that harm the American public. Some states are considering implementing similar transparency rules in response to the updated requirement, some of which would include a publicly accessible database.



From CNN: Mortgage Rates Drop During Early November

As reported by CNN, mortgage rates took a substantial dive during the second week of November, from 7.75% to 7.5%, after rising consistently for a period of weeks. This is the largest dip since a similar plunge during November 2022.

Sales, which had slowed during September, gained some traction thanks to the rate decrease. Despite this, the overall cost of homebuying remains high, and while rates are expected to decrease further during 2024, they are forecasted to remain above 6% for the near future.

To read further, you can find the article here.

WHFirm Celebrates the Summer

After a busy winter and spring season this year, the WHFirm staff celebrated with a couple of happy hour outings to kick off the summer – first at Malone’s Bar in June, followed by the Freehold rooftop bar in July.

Our thanks to our hardworking crew. Without such a dedicated team of professionals, our firm would not be the same!

Above: at Malone’s Bar

Above: at Freehold rooftop bar


WHFirm Makes The Real Deal’s Top 40

Congrats to the firm for making this year’s list of NYC’s top 40 law firms on The Real Deal! We entered the year with a bang, jumping immediately to number 25, and have held strong throughout the year.

The Real Deal bases their ranking on the dollar volume of closed sales recorded in ACRIS between August 1, 2022 and July 31, 2023. They factor deeded purchases and cooperative sales in Manhattan, Brooklyn, and Queens. We are especially pleased to have made the ranking, considering our firm’s focus has never been on the numbers, but rather on the client experience. The placement is particularly satisfying when we consider that it does not even include our firm’s largest volume transaction type, cooperative purchases!

For more, and to check out more NYC real estate news, you can find the article on The Real Deal here.


Upcoming Changes to the Property Condition Disclosure Statement

The law in New York surrounding the Property Condition Disclosure Statement (PCDS) changed significantly with Governor Hochul’s recent signing of A.1967/S.5400, which eliminates the option for sellers to offer a $500 credit to buyers at closing in lieu of completing the PCDS and adds questions disclosing the property’s flood history and risk to the PCDS itself.

What is a Property Condition Disclosure Statement?

The Property Condition Disclosure Act, established in Article 14 of the New York Real Property Law, requires sellers of real, residential property to provide a Property Condition Disclosure Statement to a prospective buyer. Real residential property refers to stand-alone homes used as, or intended to be used as, a residence by one or more individuals, and does not include vacant lots, condominiums, coops, or property in a homeowner’s association that is not owned in fee simple by the seller.

A PCDS is a document that provides important information about the condition of a property for sale. It is completed by the seller, then given to the buyer as part of the sales process; both parties must sign the document to acknowledge its completion and accuracy prior to the buyer’s signing of the final contract. A PCDS is a valuable disclosure tool that protects the buyer from unexpected and costly repairs or renovations after purchasing a property.

Who must complete a PCDS?

Until recently, there was a loophole in New York law that allowed sellers to avoid completing a PCDS provided they paid a $500 credit toward the purchase price of the property. This essentially allowed sellers to treat the PCDS as optional, with the $500 credit as the cost of doing business. On September 22, 2023, however, Governor Hochul signed bill A.1967/S.5400, which eliminates the $500 credit option and adds several questions to the disclosure form in order to protect New Yorkers from increasingly frequent and extreme flooding in the state. Therefore, beginning on March 10, 2024, all sellers of residential property must complete a PCDS or be held liable for a failure to do so.

The Property Condition Disclosure Act requires a listing’s real estate broker to timely inform the seller of their obligation to complete and deliver the PCDS to the potential buyer. Furthermore, the buyer’s broker (or the seller’s broker if the buyer is not represented by a broker) is required to inform the buyer of their right to receive the form. Both parties must sign the PCDS prior to the buyer’s signing of the contract.

What does a PCDS include?

A typical PCDS includes information about a property’s age, ownership, drainage, mold history, termite history, shared features of the property, and more. With the passing of A.1967, the New York PCDS will have several new questions relating to the property’s flood history and flood insurance requirements: specifically, whether the property is located in a 100-year or 500-year flood plain according to FEMA’s flood insurance rate maps, whether the property is subject to requirements under federal law to obtain and maintain flood insurance, and the flood insurance history of the property. With the new flood risk disclosure, New York state will empower home buyers with information about the flood risk of their potential property and allow them to have all the information they need to make informed decisions. Sellers must answer the questions themselves and based on their actual knowledge at the time of signing the PCDS.  A seller is not obligated to conduct any type of inspection of the property in order to complete the PCDS.

What happens if a seller fails to complete a PCDS?

With the elimination of the $500 dollar credit option, a seller who willfully fails to provide a PCDS to the buyer is liable for actual damages suffered by the buyer, in addition to any other existing equitable or statutory remedy.

The new changes to the PCDS will become effective on March 20, 2024 and will heighten the responsibilities of sellers in the New York marketplace while affording prospective buyers a more comprehensive picture of their potential future home.