Tag Archives: Reiss

Reverse Mortgage Lowdown

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Athene quoted me in Is a Reverse Mortgage Right for You? It opens,

Experts weigh the pros and cons of this loan—to help you make a smart choice.

For homeowners age 62 and older who have a significant amount of equity (appraised value minus mortgage balance) in their homes, a reverse mortgage can seem like an attractive option. Simply put, a reverse mortgage allows you to convert a portion of the equity in your home into cash, without having to sell your home. But this type of loan isn’t right for everyone. Here’s help determining if a reverse mortgage is the smart choice for you.

Pros: A reverse mortgage is a loan against your home equity, which you can take as a lump sum payment, a monthly payment, or a line of credit. The loan is paid off when you no longer live in the home. “It allows a homeowner to access home equity in the present in order to supplement current income,” says David Reiss, a professor of law at Brooklyn Law School who teaches residential real estate courses.

Consider this loan if you would like to stay in your current home and

  • Have lived in your home for a long time and plan to use the equity to supplement Social Security and other investment income streams
  • Have other assets and are not using this as a loan of last resort
  • Might not be able to access the cash you need in emergencies

Cons: These loans aren’t cheap, says Scott Withiam, housing counseling supervisor at American Consumer Credit Counseling, Inc. Plus, the industry that sells them has been under scrutiny from the Consumer Financial Protection Bureau for deceptive practices. “The reverse mortgage industry has had more than its share of shady operators who are drawn to all that equity that seniors have amassed,” says Reiss. “Homeowners considering a reverse mortgage should make sure to review the terms of the transaction with someone whose financial judgment he or she trusts.”

Making the Switch to Dirt Law

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Lawyer & Statesman quoted me in Real Estate Lawyers in Demand about how lawyers can make the transition to a dirt law practice. It reads, in part,

Real estate is one of the most fickle industries around — hot when the economy is growing and cold when it is not. The good news is that real estate is growing again and that means more jobs for attorneys.

Robert Half Legal, a legal staffing agency, reports that the real estate lawyer is the third most in-demand legal position in the South Atlantic region. Real estate is the second-fastest-growing legal industry in the South Atlantic region and the fourth fastest in the Mountain and Pacific regions.

At Brooklyn Law School, real estate law has become the most popular specialization. Graduates are finding more jobs in the specialization’s niche areas such as cooperative and condominium representation, said Professor David Reiss, who also serves as the academic program director of the Center for Urban Business Entrepreneurship.

If you have the time and money, Reiss thinks additional training in real estate can certainly help attorneys specialize their experience in the law. Course and certificates seem to be the best option in regards to both time and money.

“Taking a few relevant courses might make sense for most people instead of devoting the time and money that an LL.M. in real estate would entail,” he said. “Certain kinds of certificates can also help you stand out from other candidates, like the Leadership in Energy and Environmental Design (LEED) certificate. It does not involve nearly as much time or money as an LL.M. degree would, but it does signal a level of knowledge and commitment to a particular practice area.”

Don’t worry about getting your real estate license (unless you already have one). Spreading yourself too thin will be more harmful than productive, Reiss said. Attorneys also need to consider the requirements and restrictions of their individual jurisdiction.

“In some jurisdictions, such as New York, members of the bar are exempt from the various requirements necessary to become a licensed real estate broker,” he said. “But in my experience, lawyers are better off doing one thing well — being good lawyers — rather than being a jack of all trades.”

As with a lot of specialized areas of the law, real estate law has plenty of niche areas in which lawyers can further delve into. This can make you more attractive to clients and employers.

“Specializing in areas of the law relating to real estate can make a lot of sense — co-ops, condos and HOAs; construction law; land use; finance; affordable housing; and foreign investment programs, to name a few,” Reiss said.

*     *     *

While real estate can be up and down, Reiss said real estate law could be a good field even during slower economic times.

“No matter what the economy as a whole is doing, clients are still buying and selling properties, financing and refinancing them, and entering into property leases,” he said.

To prepare for careers in real estate law, Brooklyn Law School encourages job applicants to have very focused resumes, which increases their marketability.

“We find that students with focused resumes can make a compelling case to a range of real estate employers, even if their overall GPA is not high,” Reiss said.

Participating in bar association committees is also highly recommended for networking and learning purposes. Reiss says it is important to notify your network that you are transitioning into a new specialization.

“A good word about your work ethic and ability to learn can help compensate for a lack of direct experience,” Reiss said.

All that said, Reiss recommends attorneys be sure of their specialization interests before getting too far into the field.

“You should keep in mind that once you specialize, many people will pigeonhole you in that area,” he said. “So you want to make sure that you like the practice area and that there is a sufficient flow of work to keep you busy.”

Movin’ on up with TJ’s and Whole Foods?

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TheStreet.com quoted me in Houses Near Trader Joe’s or Whole Foods Reap Better Property Value Returns. It opens,

The internal debate for people who are shopping for a home is never an easy one, as the location and potential for the property value to rise might outrank the appearance of the brick and mortar edifice. But new research from Zillow has reiterated beliefs that resale value should remain the higher priority.

Even first-time home buyers are aware of the importance and value of determining the resale value of a condo or house.

After examining 17 years of housing data from 1997 to 2014, Zillow, the Seattle-based real estate website, determined that homeowners realized greater gains when they were in close proximity to Trader Joe’s and Whole Foods, the national grocery store chains. The analysis included examining the values of condos, co-ops and houses within a mile of 451 Trader Joe and 375 Whole Foods locations, totaling nearly 3 million homes. The median value of these homes was compared to the median values of all homes during the same time period.

“These grocery stores are doing a great job of identifying places ready for quick home value appreciation,” said Svenja Gudell, chief economist of Zillow. “A Whole Foods or Trader Joe’s opening is a signal for home shoppers or homeowners that this is likely to be an up-and-coming location.”

One emerging trend is the desire of homebuyers to live in neighborhoods where walking to local stores and restaurants remain a feasible option.

“As more people are priced out of city centers and head to the suburbs, homebuyers still want amenity-rich neighborhoods and a more urban feel,” she said. “These stores are definitely among those amenities that are attractive to buyers.”

Other Amenities Sought

These two grocery stores resonate highly with consumers, and their preference has increased to the point where they have asked specifically if either one is within walking distance at showings of homes, said Samantha DeBianchi, CEO of DeBianchi Real Estate, a Fort Lauderdale, Fla. real estate firm.

“The old adage ‘location, location, location’ is really true,” she said.

The research conducted by Zillow revealed that through 2014, the homes located a mile of either Whole Foods or Trader Joe’s were valued at more than twice as much as the median home throughout the U.S.

Since these two grocery stores are always constructed in neighborhoods where the gross income is higher than the average salary, whether this phenomenon is simply a self-fulling prophecy is anybody’s guess.

Zillow contends that the stores provide the inertia to push up home prices, even in neighborhoods where the prices were falling behind those in the city itself. They also examined the effect of the construction of the stores on the property value three years before and after the opening of 40 Trader Joe’s locations and 40 Whole Foods stores. After a store opens, the prices of homes start to exceed those in the city overall.

“I am still skeptical of the claim when it comes to those two stores, but I would say that when you buy near a major amenity when it is under construction, you often see a bump when it is complete,” said David Reiss, a law professor at Brooklyn Law School.

Dirt Law Jobs Up

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The National Jurist quoted me in Hot Practice Areas For J.D.s. It opens,

Real Estate is hot again

Real estate is one of the most fickle industries around — hot when the economy is growing and cold when it is not. The good news is that real estate is growing again and that means more jobs for entry-level attorneys.

Robert Half Legal, a legal staffing agency, reports that real estate lawyer is the third most in-demand legal position in the South Atlantic region. Real estate is the second-fastest-growing legal industry in the South Atlantic region and the fourth fastest in the Mountain and Pacific regions.

At Brooklyn Law School, real estate law has become the most popular specialization. Graduates are finding more jobs in the specialization’s niche areas such as cooperative and condominium representation, said professor David Reiss.

“This is, in part because of our externship program that provides students with experience in the applicable government agencies and law firms, but also because of our Real Estate Certificate program, our wide array of real estate courses and the availability of courses at nearby urban planning schools,” Reiss said. “We also offer a Real Estate Law Certificate, and we find that most or all those receiving certificates are employed pretty quickly in any given year.”

Richard Hermann, a professor of Concord Law School who has written extensively about legal careers, recommends earning certificates in niche areas of the law, as they are inexpensive ways to increase your qualifications.

“Many such programs are available, and quite a few are online and inexpensive,” he said.

While real estate can be up and down, Reiss said real estate law could be a good field even during slower economic times.

“No matter what the economy as a whole is doing, clients are still buying and selling properties, financing and refinancing them, entering into property leases”, he said.

To prepare for careers in real estate law, Brooklyn Law School encourages its students to have very focused resumes, which increases their marketability. “We find that students with focused with focused resumes, can make a compelling case to a range of real estate employers, even if their overall GPA is not high,” Reiss said.

Luxury Real Estate and Transparency

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Law360 quoted me in Atty-Client Privilege At Stake In Real Estate Bill (behind a paywall). It opens,

The push to reveal the individuals involved in anonymous real estate deals has moved from title insurers to attorneys and real estate agents, but lawyers say requiring them to reveal the names of clients they help set up limited liability companies and other vehicles could weaken attorney-client privilege.

Reps. Carolyn Maloney, D-N.Y., and Peter King, R-N.Y., plan to reintroduce legislation this week that would require states to collect the beneficial ownership information for limited liability companies and other vehicles used in real estate transactions, or to have the U.S. Department of the Treasury step in if states are unable to meet the requirement, in order to prevent criminals, corrupt government officials and terrorists from using real estate purchases to launder funds.

Doing so would close a loophole that allows attorneys to advise clients without meeting the same reporting requirements as banks and would help prevent potentially illicit funds from making their way into real estate markets, Maloney said. But it also has the potential for putting attorneys in the uncomfortable position of reporting clients to the government in cases where there may not be a criminal violation, said Marc Landis, the managing partner of Phillips Nizer LLP.

“This will certainly be an area where client confidentiality and attorney-client privilege will be weakened in ways that they have not been previously,” he said.

Lawyers in real estate transactions came under renewed attention after the transparency advocacy group Global Witness and the CBS News program “60 Minutes” released a blockbuster report Sunday night that showed several New York law firms providing information to an individual posing as an adviser to a minister from an African government who was looking to buy a Gulfstream jet, a yacht and a New York brownstone without the money being detected.

According to the report, which used hidden cameras, 12 of 13 lawyers provided assistance when asked how to set up shell companies and other vehicles to avoid attaching a name to the purchases. One of those 12 later said he wouldn’t participate in the transactions.

The Global Witness report found that the attorneys — none of whom signed the group’s investigator as a client — broke no laws in providing the advice they did. And that’s a problem that Maloney wants to address.

“This is unacceptable, criminal, scandalous, and it has to stop,” she said on a conference call with reporters.

The New York Democrat’s solution to the problem is to require states to force attorneys, real estate agents and other advisers on a transaction to include the name of the beneficial owner of an LLC or trust on forms submitted to the state. If the state will not or cannot implement such a system, the Treasury Department, through the Financial Crimes Enforcement Network, would require that disclosure.

In a similar move, FinCEN last month announced that title insurers would temporarily be required to provide the names of beneficial owners of LLCs that high-net-worth individuals use to purchase luxury real estate in Miami and Manhattan without mortgages.

Maloney’s bill, which she is introducing for a third time, will expand such reporting and make it permanent.

“We’re going after the loophole. We’re going after the real estate transactions. We’re going after the realtors and some lawyers that are setting these things up,” she said.

According to Brooklyn Law School professor David Reiss, Maloney’s bill, the Incorporation Transparency and Law Enforcement Assistance Act, has struck a good balance between giving law enforcement the power to root out illicit funds in high-end real estate and not infringing too much on attorney-client privilege.

“The attorney-client privilege is one of the oldest of the privileges recognized by courts, and in the aggregate it provides great benefits to society because it promotes open communications between clients and their lawyers. The privilege is not a shield for illegal behavior, though,” he said.

Hidden Home Costs

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Faulty Wiring

TeleMundo quoted me in 15 Hidden Home Costs When Buying a Home (the original is in Spanish: 15 gastos escondidos al comprar una casa). It reads, in part,

There are many other things to consider when buying a house, besides the fact that it looks nice. Pay attention to these details and avoid unpleasant surprises.

*     *     *

Taxes for the following year — Although you were notified about your current taxes, they could go up from one year to the next says David Reiss, Research Director of the Center for Urban Business Entrepreneurship (Brooklyn).

Bad electrical wiring –when purchasing a house many expenses may be hidden behind the walls and you will not realize it until the light switch stops working, adds Professor Reiss.

Thanks to Ana Puello for the translation.

Tough Edge for Financial Services

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Law360 quoted me in Cuomo’s DFS Nominee Likely To Keep Tough Edge (behind a paywall). It reads, in part,

Although New York Gov. Andrew Cuomo turned to a longtime BigLaw attorney to lead the New York State Department of Financial Services, observers say the agency is likely to continue taking the aggressive regulatory and enforcement stance that has become its calling card.

The governor tapped Paul Weiss Rifkind Wharton & Garrison LLP’s Maria T. Vullo to lead the DFS, completing a monthslong search to replace former New York Superintendent of Financial Services Benjamin M. Lawsky. In turning to Vullo, Cuomo brings on a litigator and former prosecutor with 25 years of experience in the law, including two decades of representing banks.

But given the reputation that the DFS has built up since it burst onto the scene with its $340 million sanctions violation settlement with the U.K.’s Standard Chartered PLC in 2012, advocates and observers believe that if confirmed, Vullo will continue to push for tough enforcement and big penalties against the banks, insurers and other financial firms that the DFS oversees.

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However, because Vullo comes from a BigLaw background with extensive experience representing financial firms, some have raised concerns that the agency will become less aggressive in enforcing New York state’s financial regulations.But observers who spoke to Law360 said her noncorporate experience gives a clearer picture of how she might run the DFS.

Vullo has been an advocate for women in the legal profession and represented women who sued for damages after being raped during the war in Bosnia between 1992 and 1995, helping secure a $745 million verdict in that case.

And in her work for Cuomo during his tenure as New York’s attorney general, Vullo oversaw a staff of around 200 that worked in the office’s investor protection, antitrust, real estate finance, consumer fraud and Internet bureaus.

In that position, she took action against Ezra Merkin and Ivy Asset Management for their roles in defrauding investors in Bernard L. Madoff’s $65 billion Ponzi scheme, as well as launching an investigation and action against Ernst & Young for investor losses in Lehman Brothers Holdings Inc.’s 2008 bankruptcy.

Those past experiences should allay any fears that Wall Street’s critics might have, said David Reiss, a professor at Brooklyn Law School.

“I thought that Governor Cuomo would seek an aggressive replacement for Lawsky,” Reiss said. “Vullo fits the bill.”

To that point, financial reform and other advocates said in interviews that they knew little about her, but were encouraged by what they did know.

“What we’re hoping is that the reputation that the department has established will continue through the new leadership,” said Andy Morrison of the New Economy Project, a New York-based advocacy group.

Indeed, Cuomo has an interest in maintaining an aggressive DFS.

The billions of dollars in fines it collected from banks have gone to fund state infrastructure projects, including the construction of a new Tappan Zee Bridge across the Hudson River north of New York City.

And that get-tough approach has also been a way to attract voters.

“My sense is he benefits from the halo effects of an aggressive DFS,” Reiss said.