The Fed publishes meeting minutes 8 times annually – three weeks after each scheduled Federal Open Market Committee get-together. The Fed Minutes summarizes the FOMC meeting.

The Federal Reserve released the minutes from its August 9, 2011 Federal Open Market Committee meeting Tuesday.

The Fed Minutes contained no surprises and, as a result, mortgage rates across Massachusetts and nationwide have idled.

Although it gets less press attention, the Fed Minutes is every bit as important as the more highly-publicized, post-meeting statement from the FOMC. With its detailed record of conversation, the Fed Minutes highlights the discussions and debates that shape our nation’s monetary policy.

For example, here is some of what was said at the Fed’s August 2011 meeting :

• On growth : Economic growth had been slower than the committee expected
• On housing : The market “remains depressed”. Underwriting standards are “tight”.
• On rates : The Fed Funds Rate will remain low until mid-2013

In addition, the Fed talked about whether a third round of asset purchases should be announced. Ultimately, that plan was rejected by consensus.

The FOMC’s next meeting is a 2-day meeting, scheduled for September 20-21. The meeting was originally scheduled for just one day, but Fed Chairman Ben Bernanke chose to extend it to two. Wall Street believes that the extension was made so Fed members could discuss new forms of economic stimulus.

Depending on the form of said stimulus — if it should even occur — mortgage rates may rise or fall. We can’t know for certain unti the size and scope of the Fed’s plan is known.

For now, mortgage rates remain rock-bottom. There’s more room for rates to rise than to fall. If you’re shopping for a loan and the rate looks right, therefore, consider locking on it.

As the housing market begins to dig itself out of the trough caused by the bubble, new tough down payment requirements are hamstringing recovery momentum, especially among first time home buyers. Under the newly proposed Qualified Residential Mortgage (QRM) rule (meant to prevent another credit bubble in housing markets) only borrowers putting down 20 percent can get the best deals. To buy a median nationally priced home of $170,000, the borrower would have to come up with $34,000 in cash, which takes the average middle class family 14 years to save. Even repeat buyers will be restricted from getting the best deals as equity has eroded from their home which is normally used to purchase a new home.

The Federal Reserve Board’s regulations governing loan originator compensation went into effect April 6 after a federal appeals court dissolved a stay suspending implementation of the rule.

The U.S. Court of Appeals for the District of Columbia Circuit issued an order March 30 to stay the implementation of the Board’s loan originator compensation regulations. However, on April 5, the appeals court on Tuesday ruled National Association of Mortgage Brokers and (NAMB) the National Association of Independent Housing Professionals (NAIHP) had not “satisfied the stringent standards required for a stay pending appeal,” and dissolved its administrative stay of the rule.

The Associations filed a lawsuit March 9 against The Federal Reserve System seeking to restrain implementation of a section of the Fed’s loan originator compensation rule. On March 30, Judge Beryl Howell denied NAMB’s request although she found the rule could cause irreparable harm. NAMB then appealed to the U.S. Court of Appeals, which then issued the stay on March 31, preventing the rules from going into effect April 1. The Federal Court then dissolved the stay after both NAMB and the Federal Reserve filed replies.

The three-judge appeals court panel also denied an emergency motion to stay implementation of the rule pending appeal, and denied a motion for expedited relief that sought to fast-track the appeal process.

Read more about this on HousingWire.

In Massachusetts an estate of homestead protects a homeowner’s primary residence from the claims of certain creditors. Prior to the change in the law the declaration of homestead protected the equity in the home for up to $500,000 of its equity in the event the home owner is sued. That is, if a homeowner is successfully sued in court, $500,000 of the home’s equity could not be touched by an attachment and or execution of sale by the judgment creditor. To acquire the homestead a homeowner would need to file a written declaration and record it with the county Registry of Deeds.

The Massachusetts Legislature has recently passed long awaited revisions to the Massachusetts Homestead Act. The revised law now provides automatic protection up to $125,000 on a homeowner’s primary residence, and a written homestead can also be filed to increase the protection up to $500.000.  The act also provides homeowners additional protection:

• An automatic homestead exemption of $125,000 is now provided for all Massachusetts homeowners for protection against certain creditor claims on their primary residence.
• Homeowners are eligible for a $500,000 homestead exemption by filing a written declaration of homestead at the county registry of deeds.
• A written homestead declaration can now be signed by both husband and wife.
• Homeowners who already have a written homestead are still covered up to $500.000.
• Homes held in trust can be declared as a homestead by the trustee.
• If a single person who has a homestead gets married, the homestead automatically protects the new spouse!
• A homestead can now pass on to the surviving spouse and children who live in the home.
• You do not have to re-file a homestead after a refinance.
• In all mortgage transactions the closing attorneys must now provide the mortgagor with a written notice of availability of a homestead.

As a matter of practice our office had always provided new homeowner’s with a professionally prepared declaration of homestead for a nominal fee.  Now homeowners will automatically benefit from the automatic coverage.  We can assist any homeowner who would like to declare a written homestead to receive the full $500,000 of protection. Contact our office for more information.

A Declaration of Homestead is a type of protection for a person’s primary residence. The Declaration of Homestead is a form that is filed at the Registry of Deeds in the county where the property is located, referencing the title/deed to the property. It allows homeowners in Massachusetts to protect their property up to five hundred thousand dollars ($500,000) of the value from civil attachment.

A Declaration of Homestead will not provide protection against:

• federal, state and local taxes, assessments, claims, and liens;
• mortgages used to purchase the residence, and in the case of the elderly homestead, first and second mortgages held b y financial institutions or others;
• an execution issued from the Probate Court to enforce its judgment that a spouse pay for the support of a spouse or minor children;
• where buildings on land not owned by the declarant of a Homestead estate are attached, levied upon or sold for the ground rent of the lot whereon they stand;
• upon an execution issued from a court of competent jurisdiction to enforce its judgment based upon fraud, mistake, duress, undue influence or lack of capacity;
• debts contracted prior to the acquisition of the homestead.

A Homestead Declaration protects a homeowner only from unsecured creditors. It does not offer protection from first or second mortgage lenders or equity lenders who possess a security interest in a home. If payments are not current on these types of secured credit, a homeowner may lose their home to foreclosure.

A Homestead Declaration is not a subistute for home hazaed or liability insurance.

The House bill extends the closing deadline to September 30, 2010.

Now the Senate must approve the new, stand-alone House bill. But the Senate has already shown support and approval of the measure by having passed their own version of the bill last week.

The House bill doesn’t help anyone currently shopping for a home. Buyers must have signed a purchase contact by April 30 to qualify for the tax break. The issues currently is that many who now qualify for the credit may not be able to close their transaction in time. That is by July 1, 2010.

Read more on Inman News.

A 2009 ruling in favor of National Real Estate Information Services Inc. (NREIS) in an unauthorized practice of law case brought by the Real Estate Bar Association for Massachusetts Inc. (REBA) has been vacated by the First Circuit Court of Appeals.

According to the June 21 order to vacate, the appeals court said it would let the Massachusetts Supreme Judicial Court decide what constitutes the practice of law in the state encompassing all the interconnected activities of a real estate conveyance and the issuance of title insurance, and whether or not non-attorneys can conduct “witness” or “notary” closings. The appeals court said the district court construed the sparse state case law and declared the practices at issue did not constitute the unauthorized practice of law.

This decision will impact who can capture title insurance premiums in Massachusetts. Last year, $198 million in title premiums were generated in the state.

In 2009, United States District Judge Joseph L. Tauro entered an order of summary judgment in favor of NREIS, enjoining REBA from enforcing its interpretation of the practice of law.

In the court’s decision, Tauro agreed with NREIS’ position that the definition of the practice of law as set forth by REBA was a violation of the Dormant Commerce Clause of the United States Constitution. The order to vacate also reverses the district court’s decision on NREIS’s dormant Commerce Clause counterclaim. NREIS claimed that requiring attorneys to conduct closings was an unconstitutional restraint on trade that would result in higher closing costs.

REBA had filed the original lawsuit in 2006 in an attempt to restrict the provision of title, settlement and closing services by Massachusetts attorneys only. The decision marked the first time a Federal District Court has ruled on the issue of unauthorized practice of law as it relates to settlement services.

Background

According to court documents, REBA has a history of attempting to curtail what it calls “witness” or “notary” real estate closings, in which all of the documents required to complete a real estate transaction are compiled by nonlawyer third parties and an attorney only witnesses the closing of the transaction.

REBA believes that the essential tasks involved in a real estate transaction are an “interconnected series of activities that must be performed in order to convey the various legal interests in … real estate,” and each of the activities must be overseen, if not personally conducted, by an attorney. REBA’s position is that some mechanical tasks, such as creating title abstracts, may be delegated to nonattorneys, so long as “the lawyer maintains a direct relationship with the client, supervises the delegated work, and has responsibility for the work product.” REBA also alleges that the issuing of title insurance policies is the practice of law because title insurance policies are issued based on the examination and legal analysis of the seller’s legal title in the property, which REBA asserts must be conducted by an attorney.

Consistent with its views, REBA has opposed bills in the legislature that would formally recognize witness closings in Massachusetts and has tried to persuade affiliated bar associations to petition the SJC to adopt, through rulemaking, REBA’s own definition of the practice of law into the Massachusetts Rules of Professional Conduct. REBA also filed and won two lawsuits in 1993 and 2001 in Massachusetts Superior Court to enjoin local companies, not run by lawyers, from providing real estate settlement services.

NREIS, a Pittsburg-based vendor management company, provides real estate closing services and acts as a title insurance agent in Massachusetts. In helping to coordinate a real estate closing, NREIS, at the lender’s request, may provide any of the following services in Massachusetts: (1) obtaining valuations of a property and third-party reports such as tax certifications and flood reports; (2) obtaining title searches from a third-party vendor; (3) drafting the settlement statement; (4) scheduling the closing with a Massachusetts attorney who will attend and transmitting the lender’s documents to that attorney for the closing; (5) disbursing settlement funds, held by NREIS in its own bank account until the mortgage has been executed by a borrower; and (6) ensuring that the transaction documents were completed properly and properly recorded. NREIS describes these activities as administrative and not legal.

According to court documents, the title search is conducted by a third-party vendor under contract to NREIS. One of those companies, Connelly Title, itself does not employ any lawyers and purports only to provide title abstracting services and no legal analysis. NREIS does not conduct its own review of the title abstract provided by Connelly Title.

When a lender-customer requests that NREIS provide a deed for a transaction, NREIS contracts with another third-party vendor, a Las Vegas-based company. That company is not a law firm.

As to the closings themselves, NREIS schedules the closing to be attended by a Massachusetts attorney, selected from a list it maintains of around seventy-four lawyers. Before the closing, NREIS sends the relevant documents to the attorney. NREIS does not provide any instructions as to how the attorney should conduct the closing.

NREIS also acts as a title insurance agent on its transactions when requested. When acting as an agent, NREIS does not review the status of the real estate title. It prepares the title insurance policy based on a title abstract provided by a third-party vendor, simply copying the contents of the abstract into the policy documents. NREIS issues polices for several companies that write title insurance in Massachusetts, including Stewart Title, First American, Ticor Title and Old Republic.

From ALTA http://www.alta.org/news

The Home Affordable Foreclosure Alternatives (HAFA) program is a part of the Home Affordable Modification Program (HAMP), and offers a streamlined process for short sales and deeds-in-lieu of foreclosure. HAFA will allow homeowners to discharge their first mortgage debt without the credit-destroying step of foreclosure. The program also offers a $1,000 incentive to banks to permit short sales and a $1,500 bonus to homeowners for the purpose of relocation.

• The property must be the owner’s principal residence

• The first mortgage must have originated before 2009

• The unpaid principal must be less than $729,750 for a single-family dwelling

• The borrower’s monthly payment must exceed 31% of their gross income

• The mortgage must either be delinquent or a default be reasonably foreseeable.

If borrowers meet the program requirements they will receive pre-approved short sale terms from their lender, which will include a minimum acceptable proceeds figure for the sale. The homeowner will be required to list the property for sale with a Realtor® and close within 120 day, extensions may be permitted up to a total of 12 months.

Based on the short sale agreement with the lender, HAFA requires property owners to be fully released from any future liability on their first mortgage debt, and in some cases, subordinate debts, so that when the home is sold, the borrower is free and clear of their mortgage.

The program ends on December 31, 2012. HAFA does not apply to FHA or VA loans. There is an extensive amount of paperwork to be completed to participate in the program, Homeowners wishing to take advantage of the relief offered are encouraged to work with a experienced Realtor®.

.

Massachusetts privacy law requires businesses to implement security controls to protect systems containing Massachusetts resident’s personal information from data loss.

What is Mass 201 CMR 17?

In an effort to protect Massachusetts residents from the rising incidence of fraud and identity theft from data loss, the State of Massachusetts has implemented aggressive regulatory requirements to protect personal information. The state now requires mandatory compliance with 201 CMR 17.00 – Standards for the Protection of Personal Information of Residents of the Commonwealth (also known as just 201 CMR 17, or the Massachusetts Privacy Law). Building on California’s landmark security regulation SB-1386, Massachusetts Privacy Law establishes a minimum standard to be met for the protection of Massachusetts resident’s personal information (PI) contained in both paper and electronic records. For the purpose of being compliant with the new Massachusetts data privacy law, PI is defined as a resident’s first name and last name or first initial and last name in combination with any one or more of the following data elements that relate to the resident:

• Social Security number;
• Driver’s license number or Massachusetts identification card number;
• Financial account number, or credit or debit card number, with or without any required security code, access code, personal identification number or password that would permit access to a resident’s financial account; or
• A biometric indicator (finger prints, DNA, voice prints, etc.).

The Massachusetts data privacy law has set a new level in state security laws by regulating both private and public sector entities that handle Massachusetts resident’s sensitive data, regardless of where that entity is located. The law is intended to bring entities into alignment with both federal and industry security laws, including the Safeguards Rule under the Gramm-Leach-Bliley Act (GLBA) enforced by the Federal Trade Commission (FTC) and Payment Card Industry Data Security Standards (PCI-DSS) security standards overseen by the PCI Security Standards Council. Its process and technical controls are aimed at preventing criminal activity from causing data breaches of either paper or electronic records containing PI. The requirement of securing electronic records includes PI on databases, laptops, applications, portable devices, and just about any other system in which electronic PI data can be either in transit or at rest.

Who needs Mass 201 CMR 17?

All persons, corporations, associations, partnerships or other legal entities with systems containing Massachusetts resident’s personal information in transit or at rest are responsible for complying with the 201 CMR 17 regulations by March 1, 2010. However, the regulations alsor equire businesses to complete internal and external security risk assessments prior to the effective date. The regulation applies regardless of whether the entities or the data is either inside or outside state borders, and applies equally to private and public sector organizations.

Penalties for non-compliance

The penalties for non-compliance with 201 CMR 17 are enforced through Massachusetts General Law Title XV: Regulation of Trade, chapter 93A, section 4. Violators may be faced with a civil penalty of $5,000 for each violation, are required to pay the reasonable costs of investigation and litigation of such violation (including reasonable attorney’s fees), and are subject to additional civil action since 201 CMR 17 creates a baseline standard that allows plaintiffs in civil suits to argue that a business that lost data was negligent. Title XV also requires any data breach be reported to both the Office of Consumer Affairs and Business Regulation (OCABR) and the Attorney General.

What you need to be Mass 201 CMR 17 compliant

The new Massachusetts Privacy Law requires the following criteria be met:

• An internal and external risk assessment of the human, physical, technical environment based on the criteria outlined in 201 CMR 17.
• the computer security provisions in the regulation use a risk-based approach that comply to the extent that it is technically feasible, meaning that reasonable means must be used to accomplish a required result if there is a reasonable technology is available.
• the results of the internal and external risk assessments must be documented in a Written Comprehensive Information Security Program (WISP).
• the scope of the WISP must be reviewed at least on an annual basis or whenever there is a change in business practices that may impact security controls.

The OCABR published the 201 CMR 17 Compliance Checklist as an aid to be used by either organizations themselves or their auditors when conducting their risk assessment. However, additional guidance on how and where to submit risk assessment results is expected from the state prior to the March 2010 deadline.

Reference:  http://www.mass.gov/Eoca/docs/idtheft/compliance_checklist.pdf

.

Law Requires 2 Types of Smoke Detector Technology

The two most common methods of fire/smoke detection technology currently used is either ionization or photoelectric based.

Ionization sensors feature a constant current flowing between two electrodes. When smoke strikes the device, it impedes the current between the electrodes and causes the alarm to set off.  Ionization sensors are usually quicker to go off than photoelectric detectors. The problem with ionization detectors is that they are not able to distinguish between smoke and steam.  This makes them prone to false alarms when steam from a shower or other source interrupts the current. This is particularly true when the ionization detector is located near a kitchen or bathroom.

Photoelectric sensors send a beam of light between two sensors. This beam passes in front of the sensors in a direct line. When smoke cuts across the path of the light beam, some light is dispersed by the smoke particles causing it to activate the alarm. Photoelectric detectors are less sensitive to false alarms from steam or cooking exhaust fumes but may take longer than ionization detectors to operate. Another major concern is that ionization detectors do not offer the best protection in fires that smolder. Fires that smolder are some of the deadliest fires nationally. Photoelectric smoke alarms are more sensitive to smoldering, smoke producing fires. Most of the residential dwellings in the country have ionization detectors which are more sensitive to flames.

Tests of both types of alarms show that in smoke producing fires photoelectric detectors sound first and it takes nearly 17 minutes longer before an ionization alarm sounds.

New Fire Detector Regulations

Since there are strengths and weaknesses between photoelectric and ionization smoke detectors, the Board of Fire Prevention Regulation has passed a new regulation (527 CMR 32.00). According to the new regulation, owners of certain residential buildings will be required to install and maintain both the ionization and photoelectric smoke detectors. While the new regulation does not change the locations where smoke detectors are required, it does call for the installation of both technologies in certain locations.

Under the new regulation, an ionization detector can not be placed within 20 feet of a kitchen or a bathroom containing a shower or a tub. In these locations only a photoelectric detector is allowed.  In order to comply with the law you can either install two separate detectors that have both technologies or by installing one that utilizes both.

What Properties Are Affected By The New Regulation?

In order to determine if a property is affected by this change you may consider checking with the local fire department. According to the new amendment the following types of properties are impacted by the new regulation:

• Residential buildings under 70 feet tall and containing less than six dwelling units.
• Residential buildings not substantially altered since January 1, 1975, and containing less than 6 residential units.
• All residential buildings sold or transferred after April 5, 2010, which are less then 70 feet tall, have less than six units, or have not been substantially altered since January 1, 1975.

For all properties in these categories, compliance is mandated by April 5, 2010. It should be noted that the law does not apply to these larger buildings or those which were substantially altered since January, 1975, as these properties already were required to upgrade their fire safety systems under other existing laws.

One other important note regarding smoke detectors: Many towns require hard wired smoke detectors and NOT battery operated. You should make certain you know what the requirement is for the town where the property is located in.  As a general rule according to the State fire Marshall’s office, the law is as follows:

• Homes built after 1975 are required upon sale or transfer to comply with the State Building Code in effect at the time of construction.
• Homes built before 1975 are required upon sale or transfer to comply with the requirements of MGL c. 148, §26E(A); and
• Homes built between 1975 and 1998 are required to have hard wired interconnected smoke detectors outside the bedrooms and one detector on each floor at the top of the stairs. The smoke detector at the top of the stairs can be the same detector that is required outside the bedroom.
• Homes built after 1998, smoke detectors are required to be interconnected and have a battery backup. Smoke detectors are required in each bedroom, outside the bedroom and at the top of each flight of stairs. A single detector can satisfy multiple location requirements, if sited properly. There must also be one smoke detector on each level and one smoke detector for each 1,200 square feet of living space.
• The requirements for newer construction also apply to additions and/or renovations where a bedroom is either added or substantially altered. If an addition or renovation involves adding or substantially changing a bedroom, the entire house, including existing bedrooms must be brought up to the present standard according to the Massachusetts State Building Code (780 CMR), regardless of when the original home was built.Carbon Monoxide detectors are required in any residence that has fossil-fuel burning equipment including, but not limited to, a furnace, boiler, water heater, fireplace or any other apparatus, appliance or device; or has enclosed parking within its structure.

According to the carbon monoxide regulations, you need to have a detector on each finished level of the home. Further there must be a detector placed within ten feet of all the bedroom doors. The detectors do not need to be hard wired. A plug-in or battery operated detector meets the requirements and usually the most viable choice. Here are all the types are carbon monoxide detectors that are allowed:

• Battery powered with battery monitoring;
• Plug-in (AC powered) units with battery backup;
• Hardwired AC primary power with battery backup;
• Low-voltage or wireless alarms with secondary power; and
• Certain combination smoke detectors and CO alarms

.