Black & LoBello on AM720 KDWN

Tune in as Black & LoBello offers free legal advice on a wide range of topics

Click here to listen to the January 2nd, 2013 radio show. 

Topics include tips to avoid probate involving real estate (1:32), what happens to debt and property after death (3:15), how to manage health care decisions (8:05), updating wills (9:00), marital disclaimer (11:05), children NOT included in a trust (13:45), including assets in a trust (15:45), naming a beneficiary for a house (21:15), how to add/remove beneficiaries (24:55), possible changes to the estate taxes after 2012 (26:10), what happens to a mortgage debt after death (31:35) and the difference between a deed upon death or joint tenancy (36:30). 

Black & LoBello on AM720 KDWN

Tune in as Black & LoBello offers free legal advice on a wide range of topics

Click here to listen to the Legal Hour on KDWN AM720 from May 30th, 2012 in which Managing Partner, Tisha Black Chernine, Esq., hosts special guest, Randy M. Creighton, Esq., a bankruptcy attorney practicing at Black & LoBello.  Mrs. Black Chernine and Mr. Creighton discuss misconceptions about bankruptcy (3:40), how to improve credit (8:15), the differences between chapter 7, 11 and 13 bankruptcies (10:15), how and when bankruptcy can protect real estate assets (12:40), student loans in a bankruptcy (14:44), which debts can be discharged (18:40), short sale vs. bankruptcy (21:00), 1099-C tax  forms and promissory notes (25:45), how to use TILA letters (30:37) and how a lawyer can help in a loan modification (35:50).

Please tune in to AM720 KDWN’s “Legal Hour,” every Wednesday, from 9 AM to 10 AM.  Listen live on the radio or online.   Feel free to call in with your comments or questions at 702-257-5396.

To listen to past shows, visit our Media page.

Black & LoBello on the Radio

Click here to listen to a clip from the Legal Hour on KDWN AM720 in which Tisha Black-Chernine  explains the trends in the Las Vegas real estate market of the past and present and what affects it today.

The Obama administration released its “white paper” outlining the winding down and replacement of Fannie Mae and Freddie Mac.  The goal of the proposals is to decrease the government’s involvement in the mortgage industry.  The first proposal presented by the administration would create a government backstop under a federal reinsurance model.  In the second proposal the government backstop would only be triggered in event of a crisis.  The last option presented has no government backstop beyond existing federal agencies such as the Federal Housing Administration (FHA).

The paper also proposes reforming the current industry standards. The paper recommends raising the fees that Fannie and Freddie charge to lenders in order to make mortgages that are not government-backed more competitive.  Another proposal includes a gradual increase in minimum down payments so that Fannie and Freddie can buy loans with a minimum 10% down payment.  Lastly, the paper recommends slowly reducing the maximum loan limits Fannie and Freddie can purchase but does not specify to exact loan limits.

As part of the recommended reforms to the current mortgage industry, the paper also recommends reducing the role and financial exposure of the FHA. The administration says it will increase the annual insurance premiums borrowers of FHA backed loans pay later this year.  The administration is concerned with phasing in any reform gradually to prevent increased chaos in the fragile mortgage and housing market.

Joshua D. Carlson, Esq.

Bankruptcy and Divorce Seminar

Black & LoBello will host a seminar discussing Bankruptcy and Divorce on February 25th, 2011 at 10 AM.  This seminar is open to anyone seeking answers to the following questions:

• Can I file for bankruptcy during my divorce?
• Is it better to file before or after my divorce?
• What if my spouse files and I don’t, or vice versa?
• If my ex-spouse filed bankruptcy, am I liable for debts he/she agreed to be responsible for in the divorce agreement?

Seating is limited.  Please RSVP to [email protected]

Nevada requires that a deed of trust be used to secure a real estate loan.  Although commonly referred to as a mortgage, a deed of trust has significant differences from a mortgage.  In addition, states using deeds of trust differ among themselves in their requirements.

All mortgages are two-party instruments between the lender and the borrower.  Foreclosure of a mortgage requires the lender to file a complaint with the appropriate court and proceed through the judicial process. Anecdotal reports from mortgage states such as Ohio indicate that borrowers can delay these cases for years. The process is slow and expensive.

Deeds of trust are three-party instruments.  There is a beneficiary who is the lender, a trustee who is a third party responsible for the foreclosure process including filing the Notice of Default and related documents, and the trustor who is the borrower.  A foreclosure of a deed of trust does not require that a court case be filed.  It is fast and inexpensive compared to a mortgage foreclosure.

In Nevada, the foreclosure process begins with the filing of a notice of default by the trustee.  The borrower has 35 days from that date to bring the delinquent payments current together with the lender’s costs and fees.  Starting on the 36th day, to prevent foreclosure the borrower must pay the entire principal balance owing together with interest and any additional amounts owing for fees and costs. 21 days prior to the trustee’s foreclosure sale the trustee must publish a notice of the sale once each week and also post the notice.   At the end of 111 days the property may be sold at the trustee’s sale.  The borrower has no right of redemption after the sale.

Nevada was a full recourse state until October 1, 2009.  This meant that the foreclosing lender had six months to file a complaint against the borrower seeking the recovery of the deficiency after the sale.  After the six month period lapses the lender was barred from filing suit to recover the deficiency.  Full recourse means that the borrower is liable for the deficiency regardless of the purpose of the loan.  There is no exemption for loans used to purchase an owner occupied residence.

Effective October 1, 2009, Nevada became a limited recourse state similar to California.  Loans made after October 1, 2009 by a financial institution to a borrower who continuously occupied the property as a primary residence were nonrecourse.  This means that the lender may not pursue a foreclosed borrower to recover a deficiency.

Nevada recently joined the small number of states that entitle the borrower receiving a notice of default to request mandatory mediation with the lender.  This applies to all primary residences receiving a notice of default starting July 1, 2009.

Tisha Black Chernine, Esq.

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There are approximately 850,000 Americans with top secret security clearance and hundreds of thousands of others who have varying degrees of clearance as the result of government, quasi-government or contract employment.  In order to obtain security clearance, one’s credit score and financial stability are considered by an administrative board.  These clearances are renewed several times, if not dozens of times, during the course of employment.  The foreclosure crisis in this country is having an unforeseen, adverse effect on the security clearances of thousands of security clearance holders.  Considering that there were 332,172 default notices, scheduled auctions, and bank repossessions nationwide in October 2010, it is no wonder that the ability to maintain security clearance is on the forefront of many citizens minds.  Without clearance, these individuals may lose their livelihood and be forced to seek out new employment in an already incredibly weakened job market.

A recent study by Sheldon Cohen[1], a Virginia based attorney specializing in security cases, has evidenced how security clearance due to foreclosure has been evaluated by the Department of Defense Office of Hearings and Appeals (DOHA).  In fact, the study shows that between 2000 and 2002, there was only one reported case before the DOHA dealing with foreclosure.  In contrast, there were twenty-four foreclosure based cases before the DOHA in 2009 alone.  As the DOHA is only one of twelve such administrative bodies that make rulings on security clearance, it is clear that foreclosures are impacting a number of citizens and it is safe to assume that number will continue to grow over the next several years.

The government has the right to question your financial stability for security reasons.  A person in a difficult financial situation is seen to be more vulnerable to offers of money in exchange for secrets.  Additionally, those who are overextended are considered more susceptible to performing other illegal acts to generate funds necessary to pay their debts.  That being said, the administrative bodies evaluating how financial hardship and foreclosure affect a person’s security clearance take into consideration conditions that were beyond a person’s control.  A downtrodden economy, orders to relocate, and lenders that refuse to work with the borrower, could all be identified as factors by an adjudicator to mitigate the presumption of financial irresponsibility.  However, it should be noted that whether or not mitigating circumstances exist, a person’s security clearance may still be affected.

Persons facing foreclosure and trying to maintain active security clearance should seek the advice of counsel in order to assist them in navigating this complex terrain.  It is difficult enough for a person to lose their home; it is even more harrowing to compound that injury by losing your livelihood as well.

[1] “Report: :Loss of Security Clearances Matches Rise in Home Foreclosures,”

Carlos L. McDade, Esq.
Kelle L. Kuebler, Attorney*
*Licensed only in New York and Connecticut

Carlos L. McDade, Esq. will teach a class entitled, “Stay on Top of Environmental Considerations” at the National Business Institute One-Day Seminar located at the Gold Coast Casino on October 13th.   Attendees can qualify for up to 6 hours of CLE and 7 hours of Real Estate CE.    For more  information about the seminar, click here for a brochure.

Government Arrests Mortgage Lenders

As part of Operation Stolen Dreams, the government’s push against mortgage fraud, federal authorities investigated 1,215 criminal defendants allegedly responsible for more than $2.3 billion in losses and made 485 arrests.  Unlike previous mortgage fraud sweeps, Operation Stolen Dreams focused on federal criminal cases as well as civil enforcement, recovering money for victims and increasing cooperation with state and local partners. The operation involved the FBI, U.S. attorneys’ offices, U.S. Trustee Program, HUD, Treasury, Federal Trade Commission, IRS, and many others.

In Las Vegas, 123 defendants were charged, convicted, or sentenced as a result of the operation.  Most of the defendants worked in the local real estate industry including 30 loan officers, 24 real estate agents, 6 loan processors, 5 settlement agents, 4 mortgage brokers, 2 appraisers, and 1 builder.  Those defendants are accused of engaging in hundreds of fraudulent transactions with “straw” buyers or people who use someone else’s name to buy a house.  These transactions caused a gross total loss of more than $246 million. 

Joshua D. Carlson, Esq.

Just as it has for the past 13 quarters, Nevada continues to lead the nation in foreclosures during the first quarter of 2010.  One in every 33 Nevada housing units received a foreclosure filing which is more than four times the national average and an increase of nearly 15 percent from the previous quarter.

However, the number of Nevada houses to receive a foreclosure filing in the first quarter of 2010 was down 16 percent from the first quarter of 2009.  This decrease may be related to the success of the Nevada Foreclosure Mediation Program (NFMP) and the Making Home Affordable Program (HAMP).

The NFMP program is designed to help borrowers and lenders mediate a resolution dealing with distressed properties.  Homeowners must submit their Election of Mediation form along with a $200 fee within 30 days of receiving the Notice of Default.  Within 10 days after submission, the case is assigned to a mediator and mediations are scheduled within 80 days of the date the foreclosure notice was recorded.

The HAMP program is designed to help as many as 3 to 4 million financially struggling homeowners nationwide avoid foreclosure by modifying loans to a level that is affordable and sustainable for borrowers.  A borrower can check to see if their loan servicer is participating in HAMP by going to the Making Home Affordable website.  Borrowers are eligible for the program if they meet the following criteria:

  • The borrower is delinquent on mortgage payments or faces imminent risk of default;
  • The property is the borrower’s primary residence;
  • The mortgage originated on or before January 1, 2009; and
  • Unpaid principal balances must be no greater than $729,750 for one-unit properties.

Through March 2010, roughly 210,000 people nationwide and over 6,400 Nevadans have received permanent modifications under HAMP.

Randy M. Creighton, Esq.

A Las Vegas Business Press article discusses the growing trend of lenders coming after developers for their personal holdings

Read the full story here

Dennis G. Sartain of Hilliard, Ohio; and Bonnie Helt, of Columbus, Ohio, pleaded guilty on January 21, 2010, to conspiring to commit mortgage fraud, money laundering and obstruction of justice.  In a press release, the Justice Department and Internal Revenue Service (IRS) announced that Sartain, the accountant for co-defendant Thomas Parenteau, pleaded guilty to one count of conspiring to defraud the United States by impeding and impairing the IRS, one count of conspiring to commit money laundering, and one count of conspiring to obstruct justice.  Helt, a real estate agent for co-defendant Parenteau, pleaded guilty to one count of conspiring to commit bank and wire fraud and one count of conspiring to obstruct justice. 

According to the indictment and statements made at the plea hearing, Sartain conspired with Parenteau and others to prepare a $4.5 million fictitious loan application to refinance to improve a 30,000 square foot home.   As a result of the fraudulent loan documents, McCarty obtained nearly $4.5 million from one bank and an additional $1.5 million from a second bank, and she transferred the money to Parenteau.  From March 2004 through September 2006, Parenteau and Sartain dispersed in excess of $1 million of the loan proceeds back to McCarty by disguising the payments as payroll checks from Your Home Source (YHS) and JSS Investments, rental payments and consulting payments from YHS and other miscellaneous payments.   On Jan. 31, 2007, Parenteau and his wife refinanced the 30,000 square foot property and received a $12 million loan, which was used in part to pay off McCarty’s existing obligations at the two banks.

Helt admitted that from 2005 through 2007, she, Parenteau, and others negotiated and participated in real estate deals in which they sold luxury homes for a falsely inflated purchase price from the builder in exchange for undisclosed or disguised kickback.  In many of the transactions, the buyers misrepresented their income and assets in order to obtain financing of the inflated purchase price.  The buyers and sellers in the transactions attempted to justify the inflated purchase prices by creating false work change orders and addendums which created the appearance that the inflated price represented additional substantial work to be completed on the homes.  No such agreement was actually intended by any party.  Further, those documents were not disclosed to the lenders.  The object of each transaction was to use the loan proceeds in excess of the actual purchase price in order to fund hundreds of thousands of dollars in kickback payments to the buyers.  The loans associated with several of the real estate purchases have gone into default.

The U.S. District Court Judge Michael H. Watson has not scheduled a sentencing date.  Sartain faces a maximum sentence of 30 years in prison and a maximum fine of $1 million or twice the monetary loss or gain from the offense.  Helt faces a maximum sentence of 35 years in prison and a maximum fine of $1.25 million or twice the monetary loss or gain from the offense.

Carlos L. McDade, Esq.

Lawyer vs. FHA

New Orleans residents are challenged often with the task of tracing home titles back potentially hundreds of years. With a community rich with history stretching back over two centuries, houses have been passed along through generations of family, making it quite difficult to establish ownership.

Here’s a great letter an attorney wrote to the FHA on behalf of a client that I thought was absolutely priceless. This is one lawyer you gotta love, and it’s too good not to share!

A New Orleans lawyer sought an FHA loan for a client. He was told the loan would be granted, if he could prove satisfactory title to a parcel of property being offered as collateral. The title to the property dated back to 1803, which took the lawyer three months to track down.  After sending the information to the FHA, he received the following reply:

(Actual letter):

‘Upon review of your letter adjoining your client’s loan application, we note that the request is supported by an Abstract of Title. While we compliment the able manner in which you have prepared and presented the application, we must point out that you have only cleared title to the proposed collateral property back to 1803. Before final approval can be accorded, it will be necessary to clear the title back to its origin.’

Annoyed, the lawyer responded as follows:

(Actual letter): 

‘Your letter regarding title in Case No. 189156 has been received. I note that you wish to have title extended further than the 194 years covered by the present application.  I was unaware that any educated person in this country, particularly those working in the property area, would not know that Louisiana was purchased, by the U.S. from France in 1803, the year of origin identified in our application.

For the edification of uninformed FHA bureaucrats, the title to the land prior to U.S. ownership was obtained from France, which had acquired it by Right of Conquest from Spain. The land came into the possession of Spain by Right of Discovery made in the year 1492 by a sea captain named Christopher Columbus, who had been granted the privilege of seeking a new route to India by the Spanish monarch, Isabella.

The good queen, Isabella, being a pious woman and almost as careful about titles as the FHA, took the precaution of securing the blessing of the Pope before she sold her jewels to finance Columbus ‘ expedition.

Now the Pope, as I’m sure you may know, is the emissary of Jesus Christ, the Son of God, and God, it is commonly accepted, created this world. Therefore, I believe it is safe to presume that God also made that part of the world called Louisiana. 

God, therefore, would be the owner of origin and His origins date back, to before the beginning of time, the world as we know it AND the FHA.

I hope you find God’s original claim to be satisfactory. Now, may we have our damn loan?’

The Pending Home Sales Index (PHSI) is an index created by the National Association of Realtors (“NAR”) to measure housing contract activity, which is released the first week of each month.  PHSI analyzes the relationship between existing home sale contracts and transaction closings over the last four years.  As of September 2009, contract activity for pending home sales had risen for the sixth straight month, a pattern not seen since the Index began in 2001.  Sold House

Why are we seeing so many contracts signed in recent months?  Certainly, the lower home prices and falling cost of mortgages have played a role.  However, real estate pundits are attributing a material part of the increase to the one-time $8,000 tax credit, which is set to expire at the end of November.  The NAR estimates that at least 350,000 of the 1.8 million first-time   purchased a home solely because of this tax credit.  Though Washington is expected to extend this credit, many first-time home buyers are not gambling on the extension.  Rather, they have chosen to play it safe and take the credit now, thus scrambling to close home purchases before the November 30, 2009 cut-off date.

The incentive to purchase homes spurred by the tax credit may be partially responsible for the positive news in the real estate residential front.  Spending on private home construction jumped 2.3% in July to an annual rate of $245.6 billion — the highest level since April.  Public spending on residential homes also rose 3.6% to an annual rate of $8.6 billion — a record number!  While commercial construction is still weak, and expected to remain sluggish as it is a 12-month trailing indicator behind residential building and consumption, the focus ought to be on both private and public spending in the residential market.

Hopefully, an extension of the one-time tax credit will continue to drive, even if in small measure, new home buyers to purchase homes.  If and when residential construction reaches a critical mass, commercial building will, eventually, increase as well.  We can only hope that Washington sees the connection.  We will keep you posted.

Tisha Black-Chernine, Esq.

Nevadan at Work - Featuring Tish…

Nevadan at Work - Featuring Tisha Black-Chernine: