Supcoffconstructionlaw’s Weblog

The Federal Government has taken important steps to increase mortgage activity, including increasing loan limits for Fannie Mae, Fredie Mac and the FHA and agreeing to buy $600 billion of mortgage debt from Fannie and Freddie.  The latter announcement resulted in mortgage rates on government backed loans dropping by a third of a percentage point.  However, self-employed borrowers and nonconforming or “jumbo” loan borrowers (loans in excess of $417,000 to $729,000, depending on the market) are finding it difficult to obtain a bank loan, even with good credit and savings, because lenders are relying heavily on loans gauranteed by Fannie Mae and Freddie Mac and the FHA.    The Personal Journal of today’s Wall Street Journal has an informative article on this situation including some tips from mortgage brokers on how borrowers can improve their chances of obtaining mortgage financing.

Here is a positive effect of the current economic slowdown:  many home improvement contractors have more time to take on new projects and can be expected to be very competitive in pricing new jobs.  In addition, with oil prices plummeting in recent weeks, prices for material supplies that depend on oil for fabrication and delivery are expected to drop.   So now may be a good time to schedule a new roof project or build a new deck that you have been thinking about for a while.  Of course, the financial crisis has made it more difficult (but not impossible) to obtain a new loan such as a home equity line of credit to finance the renovation project.  If you are ready to take on a construction project, you still need to do due diligence and I recommend you obtain multiple contractor bids before proceeding.  My firm can review your contract before you proceed and make sure your legal rights are adequately protected before construction begins!

http://www.nytimes.com/2008/09/24/business/24noma.html?ex=1379995200&en=d3d9dd71cb9ced7f&ei=5124&partner=permalink&exprod=permalink

A 3rd quarter survey of 1299 CFOs from global public and private companies reports that CFOs say they will reduce domestic jobs and make few capital expenditures, they expect inflation to climb and the credit crisis to continue to spread, with more firms directly affected this quarter than last quarter.    However, many CFOs believe the economy is beginning to bottom out and will rebound next summer.  Full results of the 2008 Duke University/CFO Magazine Global Business Outlook Survey are at http://www.cfosurvey.org/

On this anniversary of the terrorist attacks in New York, Pennsylvania, and Washington, D.C., a nation remembers the individuals who innocently lost their lives.  In downtown New York starting at sunset this evening and lasting until dawn Friday two beams of light will be turned on toward the sky at the location where the Twin Towers stood.  The beams of light can be seen from all over the City, much the way the Twin Towers were a visible part of the Manhattan skyline.  See the changing sklyine of Lower Manhattan on the Wall Street Jounal’s website at http://s.wsj.net/public/resources/documents/info-launch08.html?project=WTC_ANNIV08

The House Talk Section at wsj.com has an interesting Q&A column of advice for potential buyers of new residential construction.  The article discuses builder buy backs, interest rates and points, discounts on upgrades, and lease back deals.

I represented Borrowers in successfully obtaining commercial construction loan financing to build a new self-storage facility in New York City.

I represented Buyers seeking to enforce their NJ New Home Warranty and contractual rights to have punch list items completed and radon remediated. (5/27/08)

Spring and Summer are two popular seasons for home buying.  Here are some pointers when you are ready to start searching to buy your first home:

1.   Figure out how much you can afford – speak to your financial advisor/accountant and/or use an online mortgage calculator program to determine how much house you can afford.

2.  Get preapproved – once you know how much house you can afford, you should contact a mortgage lender or a mortgage broker and get pre-approved for mortgage financing up to the amount that you can afford.  The pre-approval letter from the lender will give you more leverage in the offer and negotiation process and should speed up the mortgage commitment process.

3. House hunting – Decide how you will you go about searching for your new home.  The Seller pays the real estate commission on the sale, so unless the Seller is selling the home itself (without a broker), there is no financial benefit to searching for a home without the assistance of a real estate broker.  A real estate broker has access to available listings as well as experience and knowledge of the local market.

4.  Contact Your Real Estate Attorney – Once you find a home and have agreed with Seller on a purchase price, the real estate agent or seller will ask for your attorney’s contact information.  It is helpful to line up your real estate attorney in advance so that you are not scrambling to retain one at the last moment.  The Seller’s attorney typically prepares the Contract of Sale (in NJ, the broker will fill out a form contract and circulate to both side’s attorneys to review).

5.   Pre Closing Items – Your broker and real estate attorney should guide you through the numerous preclosing items required from house inspection, co-op/condo board approval to title insurance to bank financing commitment requirements.

6.  Closing – At closing, the Seller will transfer title to the Buyer in exchange for the Buyer paying the balance of the purchase price and all closing items/adjustments.  If bank financing is required, the Buyer will sign all the bank loan note and mortgage documents at the closing.  The settlement agent at the closing will make sure that any exsiting mortgages, taxes and any liens on the property are paid off at the time of closing.

Contact The Law Offices of Marc Supcoff at (649) 278-9975 with any questions concerning buying a home in New York or New Jersey.

Construction is underway on a new six-story building on East 58th Street in Manhattan’s design district.  The Owner of the Project is Lanson Properties, a long-time client of the Law Office of Marc H. Supcoff.  The  new six-story structure will house a gallery on the first two floors with the remaining four floors consisting of three  separate residences, including a duplex.  The general contractor is Citistructure.  Progress photos of excavation and a future view of the new building are posted at: http://citistructure.com/east-58th-street/47/.

Now is a good time for young renters to consider buying their first house, according to a column article on Reuters.com today.   Factors making the market more attractive for first-time home buyers:  a housing glut leading to motivated sellers and falling prices, a Federal stimulus bill raising limits on affordable  government-backed mortgages, and low mortgage rates.  The article also offers common sense tips on how to get started.  http://features.us.reuters.com/personalfinance/news/N19600119.html