For most people in Philadelphia and its suburbs, buying a home will be the largest financial transaction of their lives. Even couples who are purchasing their second or third house may be unaware of changes in the complex state and federal laws that regulate land sales. The summary that follows does not pretend to provide complete and authoritative legal advice -it merely explains the basics that are common to most if not all residential real estate purchases.
Anyone in the Philadelphia area who has used a bank loan secured by a first mortgage to purchase residential real estate in the last thirty years has dealt with several forms intended to disclose the terms of the loan. According to federal rules, lenders were required to give these forms to borrowers before the closing, but the forms often lacked correct information or were not provided until the day of closing, effectively depriving the borrowers of the intended protections. Under a new set of rules promulgated by the United States Consumer Financial Protection Bureau ("CFPB") that became effective on October 1, 2015, lenders, borrowers, loan brokers and real estate agents are learning to work with a new set of disclosure requirements and a new set of disclosure forms that apply to all residential real estate transactions.
One of the most innovative and appealing developments in the law of residential real estate in the last thirty years is the so-called "reverse mortgage." Instead of providing money to purchase a home, a reverse mortgage allows home owners to convert a portion of their accumulated equity into cash. The amount of the mortgage amount then becomes a lien on the residence. Three recent cases in the Philadelphia area have revealed a hidden trap for couples where only one spouses is named as mortgagor. When that spouse dies, the bank that provided the cash can foreclose on the reverse mortgage and take back the house.
A recent letter to a financial columnist for a Philadelphia-area paper highlights one of the risks of a residential home closing. What happens if the buyer shows up without enough money to complete the transaction?
Houses can be complex structures, with many systems that are susceptible to defects that are not readily apparent to a prospective buyer. For example, a basement that leaks after a heavy rain may not appear to be wet in August or after a period of no rainfall. Similarly, a buyer who inspects a house in the summer may not notice that the furnace does not work properly. In order to assist persons buying a home and prevent sellers from hiding known defects in a house, Pennsylvania has enacted the Real Estate Seller Disclosure Law.
For many people, the idea of owning their own home may be an important dream. If you have made owning your own home a goal, you may wonder about the process and sometimes feel overwhelmed by all it entails. Because of the importance purchasing a dream home often holds in many people's lives, it is worth it to be knowledgeable concerning the process of purchasing residential real estate when pursuing the dream of buying your own home.
Though the Pennsylvania economy is seemingly showing signs of recovery, residential real estate foreclosures are still disturbingly common, with record numbers of home foreclosures throughout the United States and Pennsylvania. Besides being emotionally problematic, as losing one's home is definitely difficult, foreclosure can negatively affect your credit score. You may even end up owing the bank more money, called a deficiency judgment, if your home is worth less than the amount you owe on your mortgage.
Buying a new home is always a thrilling event, but it may also be stressful at times. Residential real estate sales were on the decline for quite some time, but it seems as if things are starting to look up in the area of property transactions.
For those buying or selling residential real estate properties in the Philadelphia area, having an attorney can be incredibly helpful while navigating the often complicated process. There are various intricate aspects involved in property transactions, such as negotiations, inspections, disclosures and closings.
Some states across the country are seeing signs of a reversal of the economic downturn. This would mean many things, including the possibility that there would be a turn for the better in residential real estate, and that foreclosures would be of a decreasing occurrence. Unfortunately, according to a report recently released by Wells Fargo, this may not be the case in Pennsylvania.