Richard Vetstein

Richard D. Vetstein, Esq. was recently quoted in Bloomberg News about the recent Massachusetts case of Eaton v. Federal National Mortgage Association (Fannie Mae) which has the potential to significantly impact the foreclosures of the millions of securitized mortgages in Massachusetts and the U.S.

Seizures Threatened In Massachusetts With Naked Loans Challenge: Mortgages, Bloomberg News (Feb. 21, 2012).

“The banks will have to find ways to reunify them and establish the same party holds both the note and mortgage,” said Richard Vetstein, a real-estate lawyer in Framingham, Massachusetts. “It’s going to open up foreclosures to challenges all over the place.”

The Massachusetts Supreme Judicial Court justices signaled last month they may rule in favor of Eaton when they asked parties in the case to submit briefs arguing whether such a decision should be applied retroactively or only to future lending. If retroactive, it would cloud the titles of the 40,000 Massachusetts properties seized in the last five years and while the ruling only applies to the state, it could serve as a model for homeowners trying to overturn foreclosures in other states.

 

Richard D. Vetstein, Esq. is now the new legal contributor to Banker and Tradesman’s Law of the Land column. His first article, New Trends Emerging In Short Sale Legal Transactions, was published on Feb. 6, 2012.

New Trends Emerging In Mass. Short Sale Transactions, Richard D. Vetstein Feature Article in Banker & Trade…

Founding Partner of The Vetstein Law Group, P.C., Vice President + Director of Marketing for TitleHub Closing Services, LLC

Tel: 508.620.5352 | Email: rvetstein@vetsteinlawgroup.com


View Richard Vetstein's profile on LinkedIn

Richard D. Vetstein, Esq. is the creator and principal author of the Massachusetts Real Estate Law Blog. Rich is a nationally recognized real estate attorney, having written extensively on real estate legal issues and been featured or quoted by the Boston Globe, Bloomberg News, Financial Times, Associated Press, Wall Street Journal, and Banker & Tradesman. Rich was recently selected as one of Inman News’ Top 100 Most Influential in Real Estate.

 

As a former outside title claims counsel for a national title company and sitting zoning board member, Rich has extensive experience with real estate litigation, title claims, condominiums, construction, lending, and residential transactional work. Rich has worked on several groundbreaking real estate cases in his career.

 

Rich is also a trailblazer for the successful use of the Internet and social media for his companies’ marketing efforts. Rich thinks so highly of social media that he helped found HubConnected LLC, which provides Social Media Solutions for the real estate industry. The ABA Journal and Lawyers Weekly USA have featured Mr. Vetstein for his successful use of blogs and social media. Mr. Vetstein is also a contributing blogger on Boston.com’s Real Estate Now Blog.

 

Education

Suffolk University Law School, J.D.

  • Top 10% class rank
  • Law Review
  • Clerk, Federal District Court Judge William G. Young.

Miami (Ohio) University in Oxford, OH, B.S. in Mass Communication/Media Management with a minor in Marketing.

  • Account Executive, Laws, Hall & Associates, Molson Breweries in Toronto, Canada.
  • Sigma Alpha Mu. Fraternity
  • Men’s Volleyball Team

Community

Rich is active in his community, local philanthropies and bar associations, which provides him with the opportunity to give back, volunteer and connect with his colleagues and peers.

Publications/Speaking Engagements

 

Reported Cases

 

I’m thrilled to be writing the guest post for the Inman Future of Real Estate Marketing Blog highlighting the Agent Reboot Conference in Boston held yesterday on October 13, 2010. From the buzz surrounding the conference here at the Hynes Convention Center, it’s clear that Boston area agents are embracing the power of social media, and that Boston is well on its way to becoming the next “Hub” for social media savvy agents!

Click here for a full recap of the Inman Agent Reboot Social Media Conference.



 

Local Agents Raise Questions Over New Fannie Rules

‘Loan Quality Initiative’ May Prove Burdensome, Not Bountiful

By Colleen M. Sullivan

Banker & Tradesman Staff Writer

06/07/10


Richard VetsteinLocal brokers and bankers have some unanswered questions about new Fannie Mae rules for auditing loans, and the lack of clarity could create havoc for borrowers at the closing table.

The rules, part of an ongoing so-called “Loan Quality Initiative” on behalf of the government lending agency, are intended to filter out poorly-underwritten loans before they reach Fannie’s books. A big sticking point is a new regulation requiring a second credit check within days of a planned closing. If a borrower’s debt-to-income ratio has worsened during that time, Fannie could refuse to accept the loan.

The requirement would help catch fraudsters trying to take out more than one mortgage without informing a lender, or reckless borrowers who’ve made other large purchases at the same time that they’re trying to purchase a home.

But having to re-check credit for borrowers who’ve already been qualified could disrupt the chain of contracts and commitments that occur before a closing, which incur obligations on all parties to the transaction.

“You’re moving the point of conception to after the birth,” said Brian Koss, managing partner of The Mortgage Network, an independent mortgage company based in Danvers.

While lenders have always had certain checks in place to verify the quality of a loan before it’s made, “The difference now with this new piece that really throws off [the closing process] is that they want to make sure there’s no changes to the credit profile prior to closing,” said Koss.

Crossing The Threshold

Exactly what the thresholds are at which Fannie will refuse a loan are unclear, and even minor possible alterations to an individual’s credit report–like a new credit card offer–would have to be investigated.

“Between commitment and closing, the average person has three inquiries that would have to be addressed,” said Koss.

But it’s not merely borrowers making big purchases who might have reason to be concerned. Smaller changes in credit status might mean that a borrower no longer meets the criteria for a previously quoted mortgage rate.

“If there’s even a minor fluctuation in the credit score – one point – that can impact the pricing on a loan,” said Amy Tierce, president of Needham’s Fairway Independent Mortgage.

If a borrower’s score drops, “Are we going to raise the rates? Those are still questions that are out there,” said Geof McLaughlin of Mortgage Master in Walpole. “I haven’t gotten guidance from the lenders.”

No More Outs

Also unclear is what will happen to borrowers’ deposits if they are unable to close because of the second credit check.

“In lots of other parts of the country, people buy real estate with nothing more than $1,000 to $5,000 at risk. Often, you put $1,000 down, and that is all the money that you’re going to lose if you end up not being able to close the transaction,” said Tierce. “But in our state with the [purchase and sale piece], you could have 10 percent, you could have $50,000 on the table. So I think some of the legalities around this could be very complicated.”

Under standard purchase and sale agreements, if financing falls through because of a fault on the buyer’s part, the seller can keep the deposit.

“Once you’re past the loan commitment deadline, you don’t really have any more outs, as a buyer – if your loan gets pulled, you’re up a creek without a paddle,” said Richard Vetstein, founding partner of Framingham’s Vetstein Law Group, which specializes in real estate law.

An alert attorney can draft a modified agreement that gives a buyer a little more leeway, but Vetstein said he worries that that many in the industry aren’t cognizant of the possible effect of the law.

“It’s amazing how many loan officers I’ve talked to who aren’t aware this is on the horizon,” he said.

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Reporter Steven Altieri of the real estate trade journal Banker & Tradesman recently published an article on the Ibanez foreclosure case, Impending SJC Ibanez, Title Ruling May Invalidate Thousands Of Foreclosures, Why Real Estate Attorneys Expect The Worst, And What It Means To The Industry.Foreclosure

Since we’ve written about the case extensively here, Steve asked for my views about the impact of the case and recent matters I’ve handled with Ibanez title defects:

Framingham real estate attorney Richard Vetstein recently represented a family who had bought a house out of foreclosure about a year ago, then invested in excess of $100,000 in improvements to the property with the intention of selling it to their daughter. But before they could complete the sale, a title issue came up and put the transaction on hold.

In Vetstein’s client’s case, when the original owner was foreclosed upon, the mortgage company did not have a properly recorded assignment. To clear the title, Vetstein had to track down the original owner in Alabama, and persuade him to sign over the deed to the property.

“They can close now that the title issue is solved, but in a lot of cases that [is] not going to be able to be solved,” said Vetstein. “We were lucky, that’s what it came down to.”

Steve asked me how I would handicap the appeal of the case:

Vetstein, who has blogged on the Ibanez case at length, thinks the court might uphold the Ibanez decision.

“Given the current constitution of the court and their tendencies of recent years to be kind of moving towards some pro-consumer decisions, I wouldn’t be surprised if they upheld the land court probably by a slim margin,” Vetstein said. “And so for people who are stuck with an Ibanez issue, that is in essence the worst-case scenario.”

Indeed, it’s unlikely that a “pro-consumer” verdict upholding the Ibanez decision would actually help consumers on the whole. Home buyers or investors who thought they had gotten a good deal and a clean title on a foreclosed property will instead be saddled with hefty legal bills and an inability to sell their property.

Lastly, Steve asked if the Ibanez ruling has created an business development opportunties for real estate attorneys:

“I don’t know of any real estate attorney using Ibanez as a business development opportunity, mainly because solving these title defects, if at all, is incredibly difficult and in some cases impossible,” Vetstein said. “It’s a ‘lose-lose’ in many situations.”

One aspect of the case could potentially provide plenty of work for attorneys. Should the SJC uphold the Ibanez decision, Vetstein reasons that there will be many claims against the foreclosing lenders and the foreclosure attorney, for failing to convey good title.

“There will also be claims for rescission of these transactions,” he added. “There is a class action against lenders and foreclosing attorneys which could encompass many millions in potential damages.”

Banker & Tradesman is a great publication. If you don’t want a paid subscription, you can follow them on Twitter and Facebook.

Post image for Richard Vetstein Quoted In Boston Globe Article  About Recent Developers’ Rights Case

Boston Globe reporter Jenifer McKim read my blog post, Four Toed Salamanders And SLAPP Suits, and decided that it would be a great topic to write about. Her superb article, How A Salamander Raised A Rights Issue, was published today, and I was fortunate enough to be quoted:

Richard Vetstein, a Framingham real estate lawyer, said the decision was a victory for developers in a state that has an especially tough permitting process.

“Whether it is zoning, whether it is wetlands, you name it, vernal pools, you can invoke some pretty serious regulation and have a property get bogged down pretty quickly,’’ said Vetstein, who wrote about the salamander case on his Massachusetts Real Estate Law blog.

The case is very interesting, pitting free speech rights against developers’ rights to build.

House Call: To Buy or Not to Buy8000-tax-credit1-294x300

There are fewer than 40 days remaining until the federal home buyer tax credit expires. And home builders and realtors aren’t letting consumers forget it.

Home builder Lennar (LEN: 16.11, -0.43, -2.59%) is touting its move-in ready homes in South Florida. Beazer Homes’ (BZH: 4.67, -0.28, -5.65%) web site encourages house hunters to “cash in on the tax credit,” while KB Home’s (KBH: 17.33, -0.31, -1.75%) site declares “Time is running out,” along with countdown — to the second — until the credit expires.

Time is, indeed, running out: Buyers must have a binding contract on a house in place by April 30, and the sale must close by June 30. But should you heed the call?

It is true that the tax credits, combined with low mortgage rates and overall affordability make buying a house tempting today. But there are other considerations that should factor into your decision.

Here are a few reasons why taking advantage of the credit may not be a savvy move:

1. Say there was no credit

Taxes are important, but they shouldn’t drive the decision-making process. “If absent the tax credit, you wouldn’t make that purchase, don’t do it just to save a few thousand dollars,” says John Scherer, a certified financial planner and president of Trinity Financial Planning in Middleton, Wis.

The bottom line is, if you’re in a position where it makes sense to buy a house, and you’ve found a house you really want at the right price, then you should pursue the credit, he says. But don’t settle for a house you may not be happy with just to get the money – you might regret it.

For existing homeowners after the $6,500 credit, think about what’s involved in selling your current house. Buyers are still bidding low and homes continue to come on the market, says Neil Sullivan, president of Westfield Mortgage in Westfield, N.J., who adds that many homes that didn’t sell last year were taken off the market.

2. The bigger picture

From a psychological perspective, $8,000 is a lot of money to many people. But as a percentage of the purchase price for, say, a $200,000 home, it represents just 4%.

“How many of us would rush off to a car dealer who was offering a 4% discount off the car price?” says John Vogel, a professor of real estate at the Tuck School of Business at Dartmouth. And buying a home is more complicated and involves more time and effort than buying a new car.

Also, if you’re in a rush to land the credit, a seller might more inclined to use that as leverage and be less willing to negotiate on price, says Erin Baehr, a certified financial planner and owner of Baehr Family Financial in Shawnee-on-Delaware, Pa.

3. Last-minute snags

The deadline to be in contract is April 30 and June 30 to close on the house. For buyers who haven’t started doing research and seeing houses, it’s cutting it close. Even if you’re preapproved for a mortgage, things might still hold up the transaction that could mean missing the deadline.

For one, the appraisal process can be a wild card in many transactions, says Sullivan. For deals with little margin for error, an appraisal below the agreed sales price can make the deal hard to complete.

“Deals have been canceled because of low appraisals – it has to match up with the purchase price,” says Richard Vetstein, a real estate attorney in Framingham, Mass.

One way around this is making sure you include a provision (called a mortgage contingency clause) in the purchase contract to protect the buyer. So if the appraisal comes in less than anticipated or if there’s a title issue that pushes the closing date back, the buyer can terminate the deal, says Vetstein.

4. How long do you plan on staying in the home?

If you don’t plan to live in the new house for at least three years — and preferably five years — the brokerage and other transaction costs are likely to swallow up all the profit, including the $8,000 or $6,500 tax credit, says Vogel.

What’s more, if the home ceases to be your primary residence after less than three years after purchase, the IRS will ask you to pay back the $8,000 tax credit. If you’re self-employed and you know where you’ll be living five years from now, buying a house isn’t that big of a risk, says Jake Engle, CFP and founder of Wealth Planning & Management in Portland, Ore. Get transferred to another region for work and you may be forced to sell into a bad market – and you “could get a bill from the government for the credit you just took,” says Engle.

5. Prices might still be declining

All the variables that a housing rebound depends on makes it difficult to forecast where home values will be in a few months, let alone a few years from now.

The credit, which was has been around for about a year (and was extended and expanded last fall), to a large extent artificially stabilized home prices. That also means there’s a lot of uncertainty about what will happen once the credit expires and all the demand still trickling into the market will have evaporated, says Jonathan Miller, president and CEO of Miller Samuel, a real estate appraisal firm in New York.

Without another extension – which most in the industry don’t expect – you may see weaker prices in the second half of 2010. (Moody’s Economy.com predicts house prices to fall 2% this year.) And if you buy into a slumping market, that tax credit may not be as compelling as you thought.

As reported through PR NewsWire, the Massachusetts Real Estate Law Blog is now ranked #9Richard Vetstein5 of all legal blogs according to Avvo.com and Alexa rankings! As far as I can tell, this puts us Numero Uno in Massachusetts for all substantive legal blogs focusing on Mass. law.

Much thanks to all of you — our readers — who have made this blog so much more than I could have ever imagined. In the next few months, this blog will see more contributors, more guest bloggers, and will even get a bit of a design face-lift. So stay tuned…

FRAMINGHAM, MA, March 9, 2009/PR Newswire/– The nationally acclaimed the Massachusetts Real Estate Law Blog created by real estate attorney Richard D. Vetstein was recently ranked #97 in a ranking of all North American law blogs by Avvo.com. The Massachusetts Real Estate Law Blog, averaging 15,000 monthly page views, has proven very popular to home buyers, sellers, consumers, realtors and lenders due to its easy to read articles on timely topics affecting Massachusetts and national real estate law.

Attorney Richard D. Vetstein, Founding Partner of the Vetstein Law Group, P.C, set out to launch the first ever legal blog dedicated solely to Massachusetts real estate law. Through the blog, Attorney Vetstein offers timely legal commentary, updates and checklists to help consumers, realtors and lenders navigate the intricacies of Massachusetts real estate law. Recent popular posts include:

Attorney Richard Vetstein’s blogging follows a greater trend of attorneys using blogs as a key component to their business development and marketing efforts. “I truly enjoy blogging. It helps me become a thought leader and expert on the latest trends in real estate law. Plus, as the founder partner of a small law firm, blogging is an incredibly cost-efficient tool for business development and marketing,” said Vetstein. “In the legal services industry, blogging is a win-win for the attorney and the consumer. People get access to basic legal information without charge, and good lawyers further enhance their reputations and hone their writing and analytical skills,” Vetstein adds.

About Richard D. Vetstein and the Vetstein Law Group, P.C.

The Vetstein Law Group, P.C. is a law firm based in Framingham, MA, servicing clients in real estate, real estate and business litigation, construction, condominium, and zoning law. Richard D. Vetstein, Esq., the Firm’s Founding Partner, is an avid blogger and proponent of Web 2.0 technology for business development and marketing. Richard Vetstein is also a contributing blogger on the Real Estate Now Blog of Boston.com. Mr. Vetstein can be followed on Twitter and Facebook.

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