Posted by Jonathan Miller -Tuesday, February 2, 2010, 1:43 AM
2 Comments
I always thought “The Appraiser” was a good name for a reality tv show. Unfortunately, the reality is real and the appraisal process is one of those accidents waiting to happen.
There is a tongue in cheek style article by Sheree Curry in the recently ramped up HousingWatch page on AOL
Are Appraisals the New Organized Crime?
that essentially takes some of the burden off of other parties in the real estate transaction such as mortgage brokers, and places it on the shoulders of appraisers. In many cases, rightfully so.
Of course this doesn’t apply to all appraisers and in fact many appraisers aren’t really…appraisers. More like form fillers.
And some are appraisers are going to have their day in court – but not enough of them.
Here’s a related article I authored for American Banker last summer called:
Then Don’t Call It An Appraisal.
Hey, you got a problem with that?
Posted by Jonathan Miller -Monday, January 4, 2010, 12:20 AM
6 Comments
A bit of year end housecleaning…
I know this story is two weeks old, but it concerns the appraiser on Long Island who was arrested for making death threats to New York State Attorney General Cuomo. Apparently he was upset about Cuomo’s May 1, agreement with Fannie Mae that was hoped to control mortgage-related fraud.
As I’ve written here on many occasions, the HVCC agreement, despite good intentions, actually made the appraisal profession worse and exposed banks to far inferior appraisal quality by enabling appraisal management companies.
Of course, I’m not condoning this sort of behavior. Whether proven guilty or not, his life is going to change substantially and not for the better.
Ok, back to work.
Posted by Jonathan Miller -Monday, December 21, 2009, 5:46 PM
Comments Off
In this podcast, I got to catch up with Jerry Feeney, a terrific real estate attorney who specializes in representing buyers and sellers in residential real estate transactions as well as institutional lenders in the New York City metro area. He brings a wide range of experience to the table, including a stint with the SEC, working for law firms specializing in litigation and real estate, before establishing his own firm.
A most importantly, he succinctly answers a legal terminology question that keeps me up at night.
Check out the podcast
The Housing Helix Podcast Interview List
You can subscribe on iTunes or simply listen to the podcast on my other blog The Housing Helix.
Posted by Jonathan Miller -Thursday, December 17, 2009, 1:29 AM
Comments Off
One of the mysteries of the recent credit boom was the way very smart people made decisions that they now regret. Hugh Kelly and I in our latest podcast agreed that “you do the math” simply wasn’t enough. Knowledge of rent regulation intentions was imperative.
Rental office site for Stuyvesant Town/Peter Cooper Village
One of the largest examples of the credit disconnect and the moment I realized the credit bubble had peaked was the moment I heard that the price paid for Stuyvesant Town/Peter Cooper Village was $5.4B a few years ago.
A recent ruling on rents may have been the last straw.
My commercial partner John Cicero in our Miller Cicero commercial valuation concern lays this out plain as day in his Commercial Grade blog extolling the virtues of an excellent white paper by Barbara Byrne Denham, Chief Economist of Eastern Consolidated Properties.
Here’s a great blog on the building complex.
Posted by Jonathan Miller -Tuesday, December 1, 2009, 12:27 AM
1 Comment
There has been a widely followed case reported last week where a Suffolk County Judge, Jeffrey Spinner, erased a $525,000 mortgage by the same California bank that bought IndyMac from FDIC after it went under.
Its also about pushing literacy to the limit so I’ll provide the definitions of two of the words in the headline I had never heard of before and had no idea what they meant:
Wow!
Apparently the judge grew tired of the bank’s tactics and wiped out the mortgage – the bank is
involved in a similar case in California, where it’s trying to foreclose on an 89-year-old woman, despite two court orders telling it to stop.
I think its a bit early to get overly excited for the homeowner if you did when reading about this case since there is an appeal process. The stakes are huge and I would think a full court press by the lender will be in order.
Plus, I assume this ruling simply disconnects the debt with from the property so it can’t be foreclosed, but the liability still exists, but without the house as collateral. Not sure about this legal point though.
Ali Rogers over at CBS MoneyWatch in her must-read “Ask The Agent” column does a nice job on this ruling and provides more background about the bank.
Posted by Jonathan Miller -Monday, November 30, 2009, 11:52 PM
5 Comments
There’s a pretty interesting story on how money laundering might be making its way to the housing market on MarketWatch: Something to hide: The warning signs a money launderer wants to buy your home.
The story caught my eye after my son tried to sell something on CraigsList this week for $500. The interested party said they would send him a check for $2,600 because she “trusted” him and he could keep an extra $100 for his trouble and send the balance back. He didn’t sell the item to her.
Apparently there is a loophole where large amounts of cash deposited in checking accounts from abroad aren’t scrutinized like a check from a parent would be. The irony here is the lender associates the large cash downpayment with lower risk. Once the cash is deposit and then used for purchase, the money is clean.
Federal Bureau of Investigation, among other agencies, suspects that money laundering is becoming more common. So much so that the Financial Crimes Enforcement Network, or FinCen, is considering a rule requiring real estate brokers, among other entities which don’t have a direct financial interest in property sales, to file the same suspicious activity reports that lenders are compelled to file when they smell something fishy.
Here’s a 3-2009 summary of Suspicious Activity Reports.
An aside, wiring money to Nigeria has its own chapter for those of you who get a lot of those emails.
Posted by Jonathan J. Miller -Tuesday, November 3, 2009, 12:42 AM
1 Comment
During the housing boom, a slew of foreign buyers came to New York City to take advantage of the falling dollar. Largely from Europe and with a high concentration from Ireland, this movement was characterized by tales of Irish carpenters buying multi-million dollar luxury condos. Booming economies and a weak dollar made investors hungry to go farther to seek out higher returns.
One of the more well-known Irish marketing firms to find Irish investors to buy luxury condos and other properties was KMS Commercial, and we usually dealt with Cathal McGinley, the Managing Director. Our residential and commercial firms dealt with his firm on several occasions as the housing boom roared on and even after it corrected at the end of 2008.
Here’s where it went sour between my commercial appraisal firm Miller Cicero and KMS Commercial.
On April 28, 2009, Cathal/KMS hired our commercial firm Miller Cicero via a signed engagement letter for a substantial appraisal assignment covering the residential component of 835 Sixth Avenue, a new large mixed-use project going up on Sixth Ave at 29th Street developed by JD Carlisle (Jules Demcheck).
The report was delivered within the agreed upon time and the appraisal fee was due in full.
Hence the reason for this post, which is basically us venting our frustration since KMS Commercial is acting like it doesn’t intend to honor its financial obligations. My partner John Cicero has been trying to collect the fee for past 5 months and has been treated less than honestly – and he’s torqued about that. His first few attempts at contact were met with his assistant saying they were on vacation, etc. until finally there was no response at all.
Appologiese for not reply before but Cathal and I are both on holidays and will not be back in the office until 14th August. I will remind Cathal re payment as soon as we are back and will send you confirmation of same.
After several months with no response, John began to think he had the wrong contact info (they moved) but it was hard to believe such a high-flying well-known firm would simply disappear. Someone we know had a contact in Dublin who went by the building and indicated that KMS Commercial does not appear on the building directory that is listed on their correspondence. Weird.
After repeated efforts by John to contact Cathal, he finally got a response on October 23 which necessitated this post due to their sarcasm:
On Oct 23, 2009, at 9:40 AM, Cathal McGinley wrote:
John
I am in receipt of your 27 various email last night and today. I can confirm that I met today at 11am my time with my partners to advise them of the urgent need to pay your bill which I agree is long overdue for payment. I personally hold a 5% interest in KMS Sixth Avenue LP with the balance of the shareholding held by two others, Liam Smyth 85% and the O’Malley family 10%. As, to date I have not been put in funds, other than my own contribution, by my partners I have been unable to pay the invoice however they have both assured me that they will put me in funds by early next week (it is a bank holiday here on Monday) so assuming this happens I will send the money out probably on Wednesday or Thursday. In the mean time if you like I can send you my $600 today or wait to send it all at once. You’re choice.
Regards
Cathal
Cathal McGinley
Managing Director
KMS COMMERCIAL
The Malting Tower
Grand Canal Quay
Dublin 2
Ireland
t: +353 1 6425220
f: +353 1 6619708
e: c.mcginley@kmscommercial.com
Of course this was October 23rd. Its now November 3rd and our follow up efforts after the above email have not been answered.
It’s a shame that there aren’t any viable options to pursue them in Ireland. It’s hard to believe they can’t afford our appraisal fee (that they agreed to in advance).
We have to pay our staff for the time it took to complete the report which was not nominal. Our conclusion has to be that KMS Commercial is either under severe financial duress or it is a business strategy – 5 months of repeated attempts to contact them is a reasonable period to draw these conclusions.
We recognize that this is one of the risks of doing business and we assume KMS Commercial will never pay us for the services they sought us out for and received. However, our treatment was so unprofessional, we felt it necessary to talk about it in a public forum. For all appraisers out there – if you are contacted by KMS Commercial for an assignment, think twice. If you are, make sure you are paid in advance and in cash. We have twelve thousand reasons to believe this is a tested assumption.
Ok, venting complete – back to work.
Posted by Jonathan J. Miller -Friday, October 16, 2009, 11:06 PM
Comments Off
In this podcast, I have a conversation with my good friend Joseph Ferrara, an attorney with over 25 years experience in real estate, intellectual property and entertainment law. He is consultant to the real estate industry on marketing, social media and branding. Joe is an endless source of new ideas and likes to shake the tree. He runs the Sellsius Real Estate Marketing Blog, which focuses on real estate marketing, social media, new technology, trends, tips and how-tos. He runs The Clozing, a real estate news aggregator and is starting up New York Real Estate Advocates, a real estate brokerage concept for attorneys.
It is always great to speak with Joe.
Check out the podcast
The Housing Helix Podcast Interview List
You can subscribe on iTunes or simply listen to the podcast on my other blog The Housing Helix.
Posted by Jonathan J. Miller -Tuesday, October 6, 2009, 6:48 AM
Comments Off
In this podcast, I have a conversation with co-op and condo attorney Bruce Cholst, a partner in the law firm Rosen Livingston & Cholst, a specialist in co-op and condo matters.
Here’s the outline we referenced, Practical Guide to Buying a Co-op or Condo, that presents some basics.
Check out the podcast
The Housing Helix Podcast Interview List
You can subscribe on iTunes or simply listen to the podcast on my other blog The Housing Helix.
Posted by Jonathan J. Miller -Tuesday, June 16, 2009, 11:47 PM
Comments Off
A phrase that’s being thrown around lately, damp squib.
The phrase “damp squib” has since come into general use to mean anything that fails to meet expectations. The word “squib” has come to take on a similar meaning even when used alone, as a synonym for dud.
Because this will take a year to enact through legislation, I wonder whether it will be relevant when the final version in place? Banks will probably be stronger. Wall Street will be in somewhat better shape. Still, I am hopeful this will be a productive effort, given the lack of effective regulation that enabled a whacked out credit environment.
On Monday, Timothy Geithner, secretary of the Treasury and Lawrence Summers, director of the National Economic Council wrote an Op-Ed piece for WaPo called A New Financial Foundation. Here’s the conclusion:
By restoring the public’s trust in our financial system, the administration’s reforms will allow the financial system to play its most important function: transforming the earnings and savings of workers into the loans that help families buy homes and cars, help parents send kids to college, and help entrepreneurs build their businesses. Now is the time to act.
The administration has been working hard to develop a plan.
The earlier vision was a super agency and the elimination of a number of existing agencies that overlap each other. Turf wars continue to be a real issue.
Tonight, the administration released the details of the plan to revamp the financial regulatory system, one of many aspects of the financial system that didn’t function.
Here’s the white paper on the plan.
The Obama administration last night detailed a series of proposals that would involve the government much more deeply in the private markets, from helping to steer consumers into affordable mortgage loans to imposing new limits on the largest financial companies, in a sweeping effort to prevent the kinds of risk-taking that sparked the economic crisis.
The plan is an attempt to overhaul an outdated system of financial regulations, according to senior administration officials.
It would vastly increase the powers of the Federal Reserve in an effort to create stronger and more consistent oversight of the largest companies and most important markets.
It also would create a new agency to protect consumers of mortgages, credit cards and other financial products.
I’m hoping something constructive comes out of this and not simply more regulation. This is being done in the name of prevention, and has limited impact on the current situation in the housing/mortgage/credit markets.
I can’t over the feeling that we will end up creating regulations for what we went through rather than where we are going.
« Previous Page — Next Page »
