Another layer of administrative hassle has been added to the real estate world. On July 1, 2008, all of Cook County will be subject to the Predatory Lending Database Program. The purpose of this mess of a program is to stop lenders from forcing bad loans on people. (After many years of doing closings, my view is that most people know what they are getting in a bad loan, but sign up for it anyway!)
It works like this: A mortgage document cannot be recorded in Cook County unless a “certificate of compliance” or a “certificate of exemption” is attached to the mortgage. It only applies to owner-occupied, 1-4 unit homes.
This applies to all refinances and all purchases by first-time buyers where any of the following loans are being used: Interest only, negative amortization, more than 5 points being charged, a prepayment penalty or an adjustable of 3 years or less.
If the buyer/refinancer fits this profile, he has to go to counseling (scream therapy may be needed by those sitting through the session) and if it’s determined he really, really still wants the mortgage, the certificate of compliance is issued and then the closing will occur.
The problem is that it’s too much hassle, an extra expense ($100-$200 just for the certificate) and it’s about 2 years too late. Most of the mortgage programs that are targeted here are gone, wiped out by the sub-prime cleansing.
Many Cook County homeowners received a long term occupant exemption application in the mail from the Cook County Assessor. If you have lived in your house for more than 10 years, and your income is under a certain level, the increase in the assessment level of your real estate taxes will be limited to either 7 % or 10% by signing the form.
The assessor has no mention of this on his site which is weird.
This is a strange “exemption” and I, for one, really don’t see the need or reason for it.
A client called to say he got a direct mail invite to a living trust dinner seminar.
At the seminar, act 2 would be some awesome chicken vesuvio. But, in act 1, the presenter promised to reveal several important provisions that should be in every trust, so the trust didn’t “fail.”
My client wanted to know if the trust I did for him a few weeks ago had “the 11esssential things” that the mailer said were needed in all living trusts. I reassured my client that it had these provisions. My client said he could go to a living trust dinner once every week, if he had the fortitude to suffer through the presentation.
The worst living trust seminars are put on by annuity sales guys. They will try to get you to invest every spare cent you have, including all IRA money, in annuities. You never meet with an attorney. These are called “trust mills” and you want to avoid them. Some trust mills get sued.
Attorneys put on living trust seminars too. Most seminars like to use the words “nursing home,” “medicaid” and “probate” a lot. Most attorney seminars are average at best. The seminar attorneys tend to charge quite a bit for their trusts. That’s because they have to factor the cost of feeding dinner to 40 people into it.