Boston Estate Planning and Probate Lawyer & Attorney : Gosselin & Associates Law Firm : Serving Boston, Winchester, Hingham, Wellesley, Manchester

It occurred to me as an Elder Law lawyer that I am really a lawyer that handles the concerns of life and death generally.  My occupation is literally about life and death situations everyday.  It is how we came upon our new banner of Law for Life.  But as I reflect on what it means to hold such a responsible and important role I am struck by the spectrum that life is, from the smallest twinkle in an expectant mother's eye to an aged man gasping for his last ethereal breath.  In the spirit of being a steward of the very continuum that makes us human, I offer this powerful poem by Robert Frost that to me embodies grief, love, compassion, Men are from Mars and Women are from Venus, and Yankee reserve.  Those that know me know I am a big fan of late 19th and early 20th century literature.

Robert Frost (1874–1963). North of Boston. 1915.

Home Burial

HE saw her from the bottom of the stairs
Before she saw him. She was starting down,
Looking back over her shoulder at some fear.
She took a doubtful step and then undid it
To raise herself and look again. He spoke 5
Advancing toward her: “What is it you see
From up there always—for I want to know.”
She turned and sank upon her skirts at that,
And her face changed from terrified to dull.
He said to gain time: “What is it you see,” 10
Mounting until she cowered under him.
“I will find out now—you must tell me, dear.”
She, in her place, refused him any help
With the least stiffening of her neck and silence.
She let him look, sure that he wouldn’t see, 15
Blind creature; and a while he didn’t see.
But at last he murmured, “Oh,” and again, “Oh.”

“What is it—what?” she said.

“Just that I see.”

“You don’t,” she challenged. “Tell me what it is.” 20

“The wonder is I didn’t see at once.
I never noticed it from here before.
I must be wonted to it—that’s the reason.
The little graveyard where my people are!
So small the window frames the whole of it. 25
Not so much larger than a bedroom, is it?
There are three stones of slate and one of marble,
Broad-shouldered little slabs there in the sunlight
On the sidehill. We haven’t to mind those.
But I understand: it is not the stones, 30
But the child’s mound——”

“Don’t, don’t, don’t, don’t,” she cried.

She withdrew shrinking from beneath his arm
That rested on the banister, and slid downstairs;
And turned on him with such a daunting look, 35
He said twice over before he knew himself:
“Can’t a man speak of his own child he’s lost?”

“Not you! Oh, where’s my hat? Oh, I don’t need it!
I must get out of here. I must get air.
I don’t know rightly whether any man can.” 40

“Amy! Don’t go to someone else this time.
Listen to me. I won’t come down the stairs.”
He sat and fixed his chin between his fists.
“There’s something I should like to ask you, dear.”

“You don’t know how to ask it.” 45

“Help me, then.”
Her fingers moved the latch for all reply.

“My words are nearly always an offence.
I don’t know how to speak of anything
So as to please you. But I might be taught 50
I should suppose. I can’t say I see how.
A man must partly give up being a man
With women-folk. We could have some arrangement
By which I’d bind myself to keep hands off
Anything special you’re a-mind to name. 55
Though I don’t like such things ’twixt those that love.
Two that don’t love can’t live together without them.
But two that do can’t live together with them.”
She moved the latch a little. “Don’t—don’t go.
Don’t carry it to someone else this time. 60
Tell me about it if it’s something human.
Let me into your grief. I’m not so much
Unlike other folks as your standing there
Apart would make me out. Give me my chance.
I do think, though, you overdo it a little. 65
What was it brought you up to think it the thing
To take your mother-loss of a first child
So inconsolably—in the face of love.
You’d think his memory might be satisfied——”

“There you go sneering now!” 70

“I’m not, I’m not!
You make me angry. I’ll come down to you.
God, what a woman! And it’s come to this,
A man can’t speak of his own child that’s dead.”

“You can’t because you don’t know how. 75
If you had any feelings, you that dug
With your own hand—how could you?—his little grave;
I saw you from that very window there,
Making the gravel leap and leap in air,
Leap up, like that, like that, and land so lightly 80
And roll back down the mound beside the hole.
I thought, Who is that man? I didn’t know you.
And I crept down the stairs and up the stairs
To look again, and still your spade kept lifting.
Then you came in. I heard your rumbling voice 85
Out in the kitchen, and I don’t know why,
But I went near to see with my own eyes.
You could sit there with the stains on your shoes
Of the fresh earth from your own baby’s grave
And talk about your everyday concerns. 90
You had stood the spade up against the wall
Outside there in the entry, for I saw it.”

“I shall laugh the worst laugh I ever laughed.
I’m cursed. God, if I don’t believe I’m cursed.”

“I can repeat the very words you were saying. 95
‘Three foggy mornings and one rainy day
Will rot the best birch fence a man can build.’
Think of it, talk like that at such a time!
What had how long it takes a birch to rot
To do with what was in the darkened parlour. 100
You couldn’t care! The nearest friends can go
With anyone to death, comes so far short
They might as well not try to go at all.
No, from the time when one is sick to death,
One is alone, and he dies more alone. 105
Friends make pretence of following to the grave,
But before one is in it, their minds are turned
And making the best of their way back to life
And living people, and things they understand.
But the world’s evil. I won’t have grief so 110
If I can change it. Oh, I won’t, I won’t!”

“There, you have said it all and you feel better.
You won’t go now. You’re crying. Close the door.
The heart’s gone out of it: why keep it up.
Amy! There’s someone coming down the road!” 115

“You—oh, you think the talk is all. I must go—
Somewhere out of this house. How can I make you——”

“If—you—do!” She was opening the door wider.
Where do you mean to go? First tell me that.
I’ll follow and bring you back by force. I will!—”

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They say that cannibalism isn't so bad once you get past the idea that you are eating your fellow man.

As the participants in the real estate services industry (and there are millions, including Realtors (r), Banks, Mortgage Companies, Title Companies, Appraisers, Lawyers, Developers, Builders, et al.) slowly drift off to sleep as our collective life boat drifts aimless at sea, the opportunists among us see meals in the weak and powerless. 

Once inconsequential community lenders look like dynamos as they cruise tortoise-like by the flaming wrecks of the high flying national lenders.  The full time professional loan officers who were in the mortgage business, say, before 1995, are still making a living, a basic, fair living.  Meanwhile, their Johnny come lately stall mates at many a Massachusetts Mortgage Company are hurriedly looking for ways to unload expensive homes, boats and spouses - all the trappings of the greed-fed frenzy that has been the real estate market of the past 10+ years.  This repeats itself in the real estate brokerages, those now echo-chamber like cube farms - no longer filled with divorcees, moonlightling firemen and under-employed second cousins.

From those of us that were in the real estate business the last time it was this bad to those that will tell this story to the next generation - it can only get better.  I hope.

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MY LIVING WILL

Last night my wife and I were sitting in the den and I said to her,

'I never want to live in a vegetative state, dependent on some machine
and fluids from a bottle to keep me alive. That would be no quality of
life at all, If that ever happens, just pull the plug.'

So she got up, unplugged the computer, and threw out my wine.

:)

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The problems are starting to happen:

• A loan officer who gets caught pretending to be a borrower at closing.
• A borrower dead for 15 years - still on the title, so his 48 year-old son with the same name takes a reverse mortgage, and almost gets away with the money.
• An elderly woman on Medicaid benefits is talked into taking a lump sum  reverse mortgage and her otherwise protected money is taken for reimbursement by Medicaid, leaving her penniless.

Mortgage scams have been around as long as there have been mortgages (as you've learned in past blogs, reverse mortgages have been popular since the Roman Empire - literally "loans until death").

Reverse mortgages are available in Ireland, India, United Kingdom, Australia, the U.S. and other countries in various forms. "Life loan" (Irish/UK term for a reverse mortgage) programs are very similar to U.S. reverse mortgages. Here's a link to a program brochure for Bank of Ireland's life loan program: Bank of Ireland.

There are significant differences in these programs compared to a typical U.S. FHA reverse mortgage. First, the borrowing limits are tied to age and are quite low, generally around 25% of property value. Second, the interest rate is fixed for 15 years and there is a pre-payment penalty for early payment unless it is due to death, moving out of the property for more than 6 months or the sale of the property. Lastly, the program will not lend against property that appraises lower than €200,000 (about $275,000) although reverse mortgage loan limits are quite high at €400,000 (about $550,000).

One big difference between U.S. reverse mortgages and the Irish program (similar to the UK and Australian programs) is the borrower is required to have independent legal advice as part of the transaction. This would be a very positive step for the U.S. reverse mortgage industry, because so many elders do not understand the full consequence of their borrowing and the U.S. counseling certificate program is limited in its scope.

Many experienced elder law attorneys who could affordably advise elders that having each potential borrower retain an elder law lawyer would not be a large economic burden but could reduce the risk of improper loans substantially.

Not only does the Irish reverse mortgage program require legal counsel prior to and at closing, but it contains a unique requirement that would help reverse mortgage servicers recoup loan proceeds more efficiently. The Bank of Ireland reverse mortgage program requires the borrower to have a will and to notify the bank of its contents (as to executor) prior to closing.

The long list of new reverse mortgage products coming to the market reek of the influence of sub-prime lending and of Wall Street's thirst for profits.

These new reverse mortgage programs, for the most part, are not written to make reverse mortgages more affordable or understandable, but rather to make them more profitable to both mortgage lenders and Wall Street.

In the past weeks, Congress picked up the cause of elders with reverse mortgage specific components of the FHA Modernization Bill working its way to President Bush's desk. More important for the reverse mortgage industry, this bill increases FHA lending cap limits, reduces the maximum origination fee and makes the HECM (Home Equity Conversion Mortgage) product more flexible (i.e., allowing a HECM for the purchase of real estate, which can be compelling from an estate planning perspective under the right circumstances).

Watch Congress, HUD and responsible mortgage wholesalers such as Beacon Reverse and respectable mortgage brokers like Ed Barrett at Your Home For Life and Amy Day at Continental Funding to continue to be watchdogs for the reverse mortgage industry. They will help guard against it blowing up into a sub-prime-type fiasco, only hurting elders by limiting access to their home equity just when they need it most.

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On the 20th anniversary of the law, that established the reverse mortgage program, reverse mortgages are getting a closer look thanks to a Senate hearing and a new report by the AARP. The AARP's Public Policy Institute released a report on homeowners' attitudes and satisfaction with reverse mortgages. The report finds that while consumers' opinions of reverse mortgages are generally favorable, high costs are a big deterrent to purchasing a reverse mortgage. The AARP released the report at a Senate Special Committee on Aging hearing.

The AARP surveyed homeowners who had taken out loans and homeowners who had decided against loans in addition to surveying the general public on their awareness of reverse mortgages. The report found that, in general, reverse mortgage borrowers have a favorable opinion of their loans. Ninety-three percent of borrowers said their reverse mortgages had a positive effect on their lives, and 58 percent of borrowers indicated that the loan had completely met their needs. According to the report, the biggest reason for not purchasing a reverse mortgage is the high cost.

The AARP report also highlighted some reverse mortgage companies: problem of overly aggressive marketing. According to the report, lenders offered 9 percent of borrowers additional financial products, such as annuities and long-term care insurance, which may not be good investment choices given the high cost of the mortgages. In addition, the Senate panel also heard testimony from family members of those negatively impacted by reverse mortgages and advocates for the elderly who warned that unscrupulous sales agents sometimes promote reverse mortgages in order to generate funding to purchase annuity products.

The AARP report concludes with recommendations to make reverse mortgages a more mainstream option for homeowners, including recommendations for reducing costs, improving consumer counseling and information, and improving the marketing practices of lenders.

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Today, several of the new skin products being marketed tout that they can reverse the signs of aging. They make claims that they can remove wrinkles or increase energy or improve memory. I don't know if any of these products can deliver on their claims. But for seniors 62-years-old or older who own (or almost own) the home they live in, there is a way to reverse one thing in their lives, the mortgage on their homes.

How? In a typical mortgage, a home owner pays the bank a monthly amortized amount. In a reverse mortgage, a home owner pays the bank a monthly amortized amount. Does this sound too good to be true? Is this another anti-aging product gimmick? It's not. For many seniors, a reverse mortgage is a sound financial planning tool, and according to Steve Greenberg of Everbank , "A reverse mortgage might be the ideal option for seniors to maintain their financial independence."

Some Reverse Mortgage History

Reverse mortgages have been available in the United States since 1961 but with considerable variation from one region of the country to another. In 1991 the Federal government expanded its insurance of reverse mortgages, thereby increasing availability across the map. With the rising cost of healthcare, unanticipated increases in inflation, pension plans going under and the unpredictable nature of Social Security, more seniors are looking towards their houses for the cash they need.

In fact, as property values have risen, a number of seniors who took out reverse mortgage loans years ago are returning for second and even third reverse mortgages to harvest the additional equity that has built up in their homes. "Most senior homeowners just want to remain comfortable in their own home." states Ed Barrett, a reverse mortgage expert from Your Home for Life in Westwood, Mass. "With the rising costs of everything today, that is becoming harder and harder to do. Now, with the federally insured reverse mortgage, there is a new option available that really provides for financial security and peace of mind. It really can be 'Your Home For Life'." According to the Federal Housing Administration, which insures most reverse mortgages, by September of 2005, homeowners had taken out about 43,000 reverse mortgages, up from about 37,800 the year before and from 7,700 in 2001. The demand continues to rise with 56% more loans taken out in the first quarter of 2006 than in 2005.

The Ins & Outs of Reverse Mortgages

To qualify for a reverse mortgage, at least one person on the home's title must be 62 years old, the home must be the owner's primary residence (i.e., the homeowner must actually live in the home) and the home must be owned outright or the reverse mortgage loan must be used to pay off the outstanding mortgage balance.

The Federal reverse mortgage loan program has a cap on the size of the mortgage loan it provides, so for those seeking amounts in excess of the Federal limits, state programs and private lenders are a better choice. For both Federal and state programs, there may be restrictions on the types of residences that qualify. For example, under the Federal program condos are eligible, but shareholder-owned cooperatives are not. In Massachusetts, SFR, MFR (1-4 units), Condo's, and HUD-approved manufactured housing are all eligible. Loans generally are written for no more than one-half to two-thirds the value of a home and even if the value of the home changes while the loan is outstanding, the borrower only owes the amount of the loan. The repayment amount can never exceed the value of the home. In fact, under the Federal program, the government makes up the deficiency, if any, to the lending institution, and while Private Placement programs are not insured, all are "non-recourse".

The borrower decides how to receive the loan money. There are four payment options: (1) an up-front lump sum payment; (2) a line of credit; (3) fixed monthly payments; and (4) a combination of a line of credit and fixed monthly payments. With any of these options there are fees and costs, but many of these are the same fees and costs that would be incurred with any loan. For example, there is an origination fee, an up-front mortgage insurance fee, an appraisal fee, and standard closing costs. As far as Uncle Sam is concerned, the money received from a reverse mortgage is not taxable as income, regardless of the way the money is paid. Likewise, many states do not consider reverse mortgages as income. They are not count ed as disqualifying resources for most Federal and state public assistance programs.

A reverse mortgage must be carefully evaluated as it is more complex than other secured loans (like home equity loans, for example). It is suggested that seniors considering one seek the advice of a legal, tax or financial advisor. In fact, the law requires that seniors receive counseling before they obtain a loan. Typically, such counseling covers budgeting and general financial planning, as well as the tax implications and Medicaid/public assistance ramifications. The AARP, Fannie Mae and HUD are three agencies that provide counselor referrals. As previously mentioned, reverse mortgage loans contain fees and costs. However, the fees and costs are low and are not paid out of pocket or up front. They are added to the total loan amount along with the interest, and are paid when the loan's term expires. If a borrower's reverse mortgage is structured as monthly payments "for life", his or her estate may end up paying off the loan.

The Federal reverse mortgage program assumes a life expectancy of 100 years, thus, monthly payments may be lower for seniors closer to age 62 than for those nearer to 100. The life expectancy assumed by Massachusetts, as well as for all other programs is 100 years. One thing about reverse mortgages that seems to worry most seniors is that having a reverse mortgage loan will prevent their children and grandchildren from inheriting their home.

Seniors who want to ensure that their heirs are provided for could take advantage of the new transfer rules under the Deficit Reduction Act of 2005 (passed in 2006) which allows, among other things, transfers made five years before their application for Medicaid to be outside the "look-back period". Being outside the "look-back period" means that the seniors will not be penalized for the transfer. For example, if a senior gives some of her savings and investments to her grandchildren five years before she needs Medicaid, she qualify immediately, provided of course, that she is careful not to make it seem like the transfer was made for the sole purpose of qualifying. Even if seniors do not take advantage of the new transfer rules, the rising costs of real estate should protect the home for their heirs, who can sell the house and use the proceeds to pay off the reverse mortgage note and keep the profit. In fact under the Deficit Reduction Act, seniors with more mortgage on their home may fair better (in some circumstances) that those who have higher equity.

The new law's limit of $500,000 on home equity (which can be increased up to $750,000 at state option) may well mean that seniors owning homes with greater equity could risk not qualifying for Medicaid coverage. If the equity is tapped using a reverse mortgage loan,  seniors may be sheltered from disqualification.

Because You Were Curious: Other Home Equity Conversion Mechanisms The desire of seniors to utilize the value of their homes' equity, while continuing to live in their homes has led to banks offering various other home equity conversion mechanisms in addition to reverse mortgages. Home equity loans, sale-leasebacks and financial arrangements in which seniors retain a life interest in the home while selling the remainder interest are other options for seniors to harness the equity in their homes. However, none of these are as beneficial to seniors or are as easy to obtain as a reverse mortgage.

For example, most home equity loans require that the borrower demonstrate a dependable source of income that can support monthly re-payment obligations. As a result, most seniors in retirement are not likely to have the income that is necessary to obtain a home equity loan. In a sale-leaseback (where the home is sold and then simultaneously leased back to the person for life) or a sale of a remainder interest transaction (where the homeowner retains a life estate in the home while selling the remainder interest) a major concern, in each of these transactions, is that it may be difficult to find a suitable buyer who is willing to buy the home subject to the sort of leasehold restrictions that an older homeowner requires. In sale-leaseback and remainder interest transactions, there are also tax and public assistance issues that may not make these viable options for seniors.

Reverse Mortgage in Summary

A reverse mortgage is a financial planning tool that is increasingly being used by senior homeowners from all walks of life. They are an attractive option that allows seniors across the economic spectrum to have more cash by increasing the liquidity of an asset that most do not think of as liquid, a home. According to Ed Barrett of Your Home For Life, "Reverses offer a better quality of life for those who need more cash flow than offered by a pension or social security benefits and enable much needed repairs to your home to be made, all without making a single monthly payment," and while reverse mortgages can't remove wrinkles, increase energy or improve memory, they do help seniors lead a richer and more rewarding life.

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I had the good fortune recently to meet Sir Richard Branson in Boston at the launch of his great new company, Virgin Money. Well, not an entirely new company, it's really Circle Lending re-branded as a unit of the Virgin Empire. You should check out their site at www.virginmoneyus.com.

I have been working with Circle Lending for quite a while. For most of the time that I have known them they have been a sleepy little company with a great idea that was hard to communicate to the always cluttered marketplace. In simple terms, Virgin Money documents loans between family and friends. When I first heard of their business model I thought that it was an act against nature. Seriously, how many people borrow money from their mother with the intention of actually paying her back? Let alone with interest.

Virgin Money US is counting on lots of people to start making their intrafamily loans legit. So Sir Richard and I got to hang out and discuss the status of AIDS in Africa, the British banking system's need for increased consumer confidence in an unsettled world economic setting and the use of biofuel in his Virgin Atlantic 747's to reduce emissions.

Ok, we didn't reach all the topics that I had hoped to, but he was a charming conversationalist and a genuinely nice human being. Virgin Money is looking to help ordinary Americans get access to sophisticated loan products, including the classic Circle Lending family loans, but also complex loan products that should dramatically change the borrowing landscape and particularly hit the traditional banking business square between the eyes. A wake-up call is just what the American banking industry needs. Loans should be made to people who can pay them back. Real terms for real people. Virgin Money gets it. Richard Branson gets ordinary people. He knows that his brand only has value if it delivers unique and true value to consumers. Richard Branson and Virgin do not fake it.

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Gosselin Law's short sale group can be reached at 781-782-6000 or toll free at 877-325-6746. Gosselin Law has convenient office locations in Boston and throughout Massachusetts.

What is a Short Sale:

• When a lender accepts a discount on a mortgage to avoid a foreclosure or bankruptcy.

Why a Lender Would Take a Discount:

• They do not like excess inventory or bad loans on their books;
• Loss mitigators have incentive to clear up defaulted loans - short sales help do that; and
• Lenders know they can lose more money if a home goes to auction.

Lender "Short Sale" Factors:

• Whether the seller deserves a break due to: financial hardship caused by unforeseen circumstances (layoffs, divorce, illness, etc.);
• Whether it would be cheaper to repossess the home, fix and sell;
• How many other properties the lender has in default; and
• If co-signers are on the loan and can help pay the mortgage balance.

The Short Sale Process:

• Acquire a professional (such as a real estate attorney) with short sale experience.
• Contact the lenders 'loss mitigation department' to discuss the possibility of a short sale and determine the lenders process for completing the sale. This sometimes involves acquiring a 'Short Sale' or 'workout' packet.
• Seller must issue a signed 'Release' or 'Authorization to Release Information' to authorize the release of personal information about the loan and the property for the buyer or escrow agency.
• Lender will review the settlement statement indicating: sale price, loan balance, expenses, commissions and fees associated with closing the sale.
• Seller must complete a 'hardship letter' explaining the reason for wanting a short sale. The letter should include all information regarding the financial circumstances of the seller along with bank statements, investment account information, pay stubs and other necessary financial information.
• The lender will connect with the broker to provide a price opinion based on the condition of the home, market value, maintenance costs, etc.
• The lender reviews the purchase agreement and real estate commissions and weighs them against the cost of repossessing the home to sell or auction.
• If the lender finds the situation works in their favor, the short sale will proceed with the terms negotiated in the purchase and sale agreement.

Short Sale Mistakes to Avoid:

• Don't low-ball your offer. Lenders are trying to minimize loss and have a good sense of property values so make your offer as tempting as you can while staying inside your profit guidelines.
• Have a knowledgeable short sales professional on your side. Lenders are busy and do not have time to explain the process so make sure you know what you are doing, or find someone (like a real estate attorney or a broker with short sale experience) who does.
• Don't assume each lenders short sale process is the same. Each lender has different documents, requirements and regulations so don't foul up by making assumptions.
• The fewer loans on the property - the smoother the short sale process. Avoid complicating an already complex process by having a good handle on what's owed on the home.

Why Short Sale Knowledge is Important for Brokers and Real Estate Agents

• You can recognize  the opportunity to sell a home and receive commission on a home that would otherwise be repossessed by the lender or auctioned.
• To develop a favorable reputation among potential buyers (who stand to purchase a discounted home with a short sale) and among sellers (who will no longer go into foreclosure or declare bankruptcy) let the experienced short sale lawyers at Gosselin Law guide you through the MA short sale procedure. Very often the legal fees are negotiated with your lender as part of the short sale procedure. Gosselin Law's short sale group can be reached at 781-782-6000 or toll free at 877-325-6746. Gosselin Law has convenient office locations in Boston and throughout Massachusetts.
Tags: Boston law firm, Century 21, Gosselin Law, Massachusetts Real Estate Attorney, Real Estate, Real Estate Broker, Short Sale, bankruptcy, boston, boston lawyer, boston short sale, boston short sale lawyer, foreclosure, foreclosure relief, gosselin and associates, lawyer, lender, loss mitigation, ma short sale, massachusetts lawyer, massachusetts short sale lawyer, mortgage, refinance, short sale lawyer, short sale procedure, short sales and massachusetts
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For better or worse we have a growing short sale specialty practice group, helping homeowners solve the problems associated with being 'upside down' on their home mortgages through short sales, deed in lieu transactions and arranging private sales.  Call us for a free consultation at 781-729-0313 to discuss.  There is no fee for the call and often our legal fees can be paid by your lender in the short sale.  Best wishes in the new year.

What is a Short Sale

• When a lender accepts a discount on a mortgage to avoid a foreclosure or bankruptcy

Why a Lender Would Take a Discount

• They do not like excess inventory or bad loans on their books
• Loss mitigators have incentive to clear up defaulted loans - short sales help do that
• Lenders know they can lose more money if a home goes to auction

Lender "Short Sale" Factors

• Whether the seller deserves a break due to: financial hardship caused by unforeseen circumstances (layoffs, divorce, illness, etc.)
• Whether it would be cheaper to repossess the home, fix and sell
• How many other properties the lender has in default
• If co-signers are on the loan and can help pay the mortgage balance

The Short Sale Process

• Acquire a professional (such as a real estate attorney) with short sale experience
• Contact the lenders 'loss mitigation department' to discuss the possibility of a short sale and determine the lenders process for completing the sale. This sometimes involves acquiring a 'Short Sale' or 'workout' packet
• Seller must issue a signed 'Release' or 'Authorization to Release Information' to authorize the release of personal information about the loan and the property for the buyer or escrow agency
• Lender will review the settlement statement indicating: sale price, loan balance, expenses, commissions and fees associated with closing the sale
• Seller must complete a 'hardship letter' explaining the reason for wanting a short sale. The letter should include all information regarding the financial circumstances of the seller along with bank statements, investment account information, pay stubs and other necessary financial information
• The lender will connect with the broker to provide a price opinion based on the condition of the home, market value, maintenance costs, etc.
• The lender reviews the purchase agreement and real estate commissions and weighs them against the cost of repossessing the home to sell or auction
• If the lender finds the situation works in their favor, the short sale will proceed with the terms negotiated in the purchase and sale agreement.

Short Sale Mistakes to Avoid

• Don't low-ball your offer. Lenders are trying to minimize loss and have a good sense of property values so make your offer as tempting as you can while staying inside your profit guidelines
• Have a knowledgeable short sales professional on your side. Lenders are busy and do not have time to explain the process so make sure you know what you are doing, or find someone (like a real estate attorney or a broker with short sale experience) who does
• Don't assume each lenders short sale process is the same. Each lender has different documents, requirements and regulations so don't foul up by making assumptions
• The fewer loans on the property - the smoother the short sale process. Avoid complicating an already complex process by  having a good handle on what's owed on the home.

Why Short Sale Knowledge is Important for Brokers and Real Estate Agents

• You can recognize  the opportunity to sell a home and receive commission on a home that would otherwise be repossessed by the lender or auctioned
• To develop a favorable reputation among potential buyers (who stand to purchase a discounted home with a short sale) and among sellers (who will no longer go into foreclosure or declare bankruptcy)

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October is my favorite month of the year for estate planning. It is the essence of fall. It is the gateway to winter and analogously, to the Winter of our lives.

October as a time of reflection on life is not lost on Major League Baseball. MLB's slogan for October is "I Life for This". Well, I don't. I mean, I do love baseball. I love the Red Sox. I especially love October baseball. But I don't live for 18 men playing ball for millions of dollars. Baseball is a pastime.

What do we live for? Elders, facing the scourge of aging and the loss of those dear to them, lose clear reasons to live. It is not uncommon for me, when visiting an elderly client at a nursing home, to hear weak voices telling anyone who will listen they want to die.

We live for hope. We live for tomorrow. Without that, death is a comfortable option. What's bothering me is the power of the media, America, Inc., and the organized establishment's role in shaping what they thing retirement and aging should look like for millions of Americans. They employ a cadre of image and word specialists to create viewers, customers and members of organizations.

Take AARP, which after an odd name change, no longer stands for anything - It's just AARP (rhymes with carp, except in Boston where it rhymes with no work in our vocabulary). It is an organization solely committed to delivering the most efficient database of Americans old enough to obtain personal credit (OK, they have some standards - you need to be of "retirement" age, which is defined as age 50).

AARP is essentially a big insurance agency, a vast department store and pharmacy with a direct mail business for every pill pusher, gadget and ointment and older American needs to make life complete. Their mission is to sell and to promote the sale of all manner of tschochkes they think older Americans need to live a good and active life.

The media likewise are entwined with pharmaceutical giants in an effort to maintain fear in the minds of the aged so they can sell them salves and potions.

My generation rarely watches the evening news. How do I know? Well, frankly, how many of us need Lipitor, Viagra, Zoloff or any other little pill? The media machine's news function is largely sponsored by Merck, Pfizer, Novartis and others pandering their trademarked brand for all that ails you.

Many older people watch the news out of fear the world is coming to an end. And it is. Just not today, or in your hometown of Suburbia, USA. I think all of this careful and manipulative branding of what it means to age in America is going to be lost wholesale to the baby boomer generation's unique perspective on things. For one, improved health and increased personal debt will keep them in the workforce for many more years. Retirement, what's that?

Technological connections and improved access to information should help boomers comparison shop for services and test the vapid claims of unscrupulous salesmen.

Last, boomers are tired of being boomers. Seriously, how many times do you need to hear you were the product of your parents' pent-up sexual energy, after years of war in foreign lands? These people were rock'n rollers, hippies, yippies, yuppies, dinks and now boomers. They have had enough of labels. I'm looking forward to watching boomers break the media-imposed aging model AARP and the pharmaceutical machine has so carefully created for them.

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Gosselin Law assists homeowners in Massachusetts and New Hampshire negotiate effective short sale, deed in lieu and other foreclosure alternatives. Call us toll free at 877-325-6746 for a no fee consultation. No fee is due unless homeowners complete a short sale. Here are some tips to help homeowners facing foreclosures. Note that we only provide our services in Massachusetts and New Hampshire.

What is a Short Sale

• When a lender accepts a discount on a mortgage to avoid a foreclosure or bankruptcy

Why a Lender Would Take a Discount

• They do not like excess inventory or bad loans on their books
• Loss mitigators have incentive to clear up defaulted loans - short sales help do that
• Lenders know they can lose more money if a home goes to auction

Lender "Short Sale" Factors

• Whether the seller deserves a break due to: financial hardship caused by unforeseen circumstances (layoffs, divorce, illness, etc.)
• Whether it would be cheaper to repossess the home, fix and sell
• How many other properties the lender has in default
• If co-signers are on the loan and can help pay the mortgage balance

The Short Sale Process

• Acquire a professional (such as a real estate attorney) with short sale experience
• Contact the lenders 'loss mitigation department' to discuss the possibility of a short sale and determine the lenders process for completing the sale. This sometimes involves acquiring a 'Short Sale' or 'workout' packet
• Seller must issue a signed 'Release' or 'Authorization to Release Information' to authorize the release of personal information about the loan and the property for the buyer or escrow agency
• Lender will review the settlement statement indicating: sale price, loan balance, expenses, commissions and fees associated with closing the sale
• Seller must complete a 'hardship letter' explaining the reason for wanting a short sale. The letter should include all information regarding the financial circumstances of the seller along with bank statements, investment account information, pay stubs and other necessary financial information
• The lender will connect with the broker to provide a price opinion based on the condition of the home, market value, maintenance costs, etc.
• The lender reviews the purchase agreement and real estate commissions and weighs them against the cost of repossessing the home to sell or auction
• If the lender finds the situation works in their favor, the short sale will proceed with the terms negotiated in the purchase and sale agreement.

Short Sale Mistakes to Avoid

• Don't low-ball your offer. Lenders are trying to minimize loss and have a good sense of property values so make your offer as tempting as you can while staying inside your profit guidelines
• Have a knowledgeable short sales professional on your side. Lenders are busy and do not have time to explain the process so make sure you know what you are doing, or find someone (like a real estate attorney or a broker with short sale experience) who does
• Don't assume each lenders short sale process is the same. Each lender has different documents, requirements and regulations so don't foul up by making assumptions
• The fewer loans on the property - the smoother the short sale process. Avoid complicating an already complex process by  having a good handle on what's owed on the home.

Why Short Sale Knowledge is Important for Brokers and Real Estate Agents

• You can recognize  the opportunity to sell a home and receive commission on a home that would otherwise be repossessed by the lender or auctioned
• To develop a favorable reputation among potential buyers (who stand to purchase a discounted home with a short sale) and among sellers (who will no longer go into foreclosure or declare bankruptcy)

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I make my Easter turkey a couple of different ways, sometimes, I'll even make two or three smaller birds in different styles. My favorite method for preparing turkey is really the most simple. First, choose a fresh 10-12lb whole turkey, clean it thoroughly. Preheat a three burner gas grill to maximum temperature with a handful of hickory chips wrapped in aluminum foil, (I use a Vermont Castings that I got at Home Depot for this part ).

Mix chopped carrots, celery, onion, fresh sage, fresh ground pepper, a crushed and chopped lemon, a couple cloves of garlic and five tablespoons of sea salt (seriously) together and stuff it into the turkey cavity. Generously slather sea salt, ground pepper, fresh sage and lemon juice all over the skin. Here's the trick. Now, turn the middle burner to the off position and the front and back burners to the lowest possible setting. Place the turkey breast up, close the grill and wait. Whatever you do, don't check on the turkey. Just come back in 2.5 hours. Do not open the lid. Do not open the lid. Do not open the lid. I know you will, so close it quickly - the secret is uninterrupted convection. Don't eat the vegetables inside, just discard them prior to serving.

 

There are two holidays in my estate planning world - Easter and Leap Year Day. Huh? Easter is a holiday based around families coming together to share a meal and in the "Leave it to Beaver" world to think about the good things in life that come from being a family and the re-birth that the season inspires. Since we had Leap Year Day, there is no Easter on my perpetual calendar this year.

Of course, Easter today is as much about Easter baskets, and after Easter sales at the Burlington Mall. Leap Year Day is a big holiday on my perpetual calendar.

LYD (what us insiders call it) is a day every four years that you should take your estate plan and read it. And as you get older, I'd celebrate the last day of February more often. For older clients, I suggest reviewing your estate plan each year at Easter time. So, every four years until you stop buying green bananas!

Death. Money. Who gets the china? I think these are wonderful topics for your Easter Feast. What better time than when you have the whole family together to discuss your estate plan? If you want to review your intended resurrection, I'm all for it - tell your family that you will haunt them. I am a great proponent of talking to your family about your financial affairs and your intent - albeit homogenized for the audience. You may not want your in-laws to be in the room, no problem, give them a Monopoly box and put them in the den. Easter is a good day for board games. Did you ever think that Milton Bradley has a Monopoly on Monopoly?

Be direct with your children. In my experience as an elder law lawyer in Massachusetts, I have learned that frankness wins the day. You can reduce your child's anxiety by giving them straight answers and your clear intent. If you intend to create trusts for your children - tell them so. And don't let your spendthrift child talk you out of protecting him from himself. If need be, call your estate planning lawyer (my cell phone will be on on Easter for just such emergencies) to take the heat. As for health care issues there is nothing better than expressing your wishes to your family. After all, they will be the ones to make decisions about your care when you are no longer able.

It's a time to give thanks for the good things in our lives and to discuss what will happen after our deaths. It's what Jesus would do.

Happy Easter and God Bless.

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The housing market and mortgage industry, like the economy, rise and fall. This is normal and consistent with U.S. economics principles. No offense to major media outlets, but these are normal times. As I write this article, interest rates continue to hold steady at historic lows and housing inventories are at their highest levels in years. This is good news for buyers, not such good news for sellers.

Homeowners purchasing property in recent years may have bought properties priced higher than their current value, and financed those properties at high interest rates or via adjustable rate mortgages. This might explain why there's been a sharp rise in potential short sales listed in Massachusetts this year. Between January and August this year, 287 homes were listed by their owners through MLS (a real-estate listing service) as potential short sales, up from 51 last year. And many experts expect this number to increase in the coming months.

The Long and Short of Short Sales & Foreclosure

Short sales, like foreclosures, fall into the real estate category of arrangements called 'distressed sales,' but short sales differ from foreclosures and other kinds of distressed sales in many respects. For one thing, homeowners do not have to be behind in mortgage payments to venture into the short sales market. They merely have to demonstrate their homes can't be sold for what is owed on them. A short sale is an "arrangement" between the current owner of a home and the lender, where the lender accepts an offer less than the total amount owed on the mortgage. The "deficiency" is the difference between the amount owed, and what is collected at a short sale closing. It is important to note if a bank sells a house (most likely at auction) it is not a short sale. A seller deciding to lower the price and take less profit is not a short sale. Someone who owns a home free and clear, who sells a $150,000 for $75,000 - is not a short sale. For it to be a short sale, there must be an outstanding mortgage on the home and either the seller or the lender must be getting "shorted."

Foreclosure occurs when a lender files a notice of intent to foreclose in the Massachusetts Land Court because of non-payment. This filing notifies the homeowner that unless payments are brought up to date, the home will be sold to the highest bidder. Not all homes that fall into foreclosure go to public sale. Owners have the right to cure, i.e., make up "back payments" up to a point. Pending legislation in Massachusetts, House No. 4085, proposed by the Governor in July of this year, gives homeowners up to 90 days to cure. The 90-day clock starts ticking from the date that the lender mails the notice.

Why Have a Short Sale Instead of Foreclosure?

Even though it is not necessary for homeowners to be in arrears on the mortgages to qualify for a short sale, a homeowner can't just wake up one morning and decide to sell the home in a short sale transaction. Short sales require the approval of the lender, and typically, lenders won't consider a short sale if payments are current. Lenders aren't in the business of buying or selling property and are certainly not interested in losing interest money from interest rates on financed homes. In approving short sales arrangements, lenders usually do diligence on the homeowner/seller, the buyer, and the party financing the buyer. While the kinds of evidence lenders require varies, in doing diligence, all lenders usually require sellers to submit a hardship letter which specifically details the seller's financial difficulties. The lender may also require pay stubs, copies of medical bills, credit reports, checking account statements and other proof of financial hardship. From the buyer or buyer's representative (attorney, broker or the like) the lender will require some kind of release, signed by the seller, authorizing the lender to talk to the buyer about the seller's mortgage. In general, a buyer's first interaction with the lender is through the lender's loss mitigation department. At or near the closing of the short sale, the mortgage lender will review the settlement statement, a contract between the buyer and the seller, containing a description of the source of the buyer's financing.

In making a decision whether to foreclose on a property or to accept a proposal from a homeowner/seller and buyer to enter into a short sale, lenders may consider the following factors, among others:

• whether the seller is deserving of a break
• whether it would be cheaper to simply repossess and sell
• how many other properties the lender currently has in default
• whether there are co-signers on the mortgage who can be held responsible for the balance owed on the mortgage

Loss mitigators are also part of the decision-making process. They work for lenders and sometimes receive bonuses based on how many defaulted loans they clear up efficiently and inexpensively. Loss mitigators might be more likely, especially during certain real estate markets, to accept a detailed, well-done short sale plan versus foreclosing on a property. Foreclosures in New England typically cost an average of $50,000 and are time consuming to the lender.

In conducting diligence, homeowners can expect lenders to order what's called a broker's price opinion, which will give the lender some idea of what the property is worth in the current market. Sellers can get their own opinion from an independent appraiser.

What Are the Credit or Other Related Consequences of Short Sales Transactions?

Sellers at short sales will take a hit on their credit score, but a short sale typically turns out better compared to foreclosure, especially if that seller wants to qualify for another mortgage. For example, if a seller's FICO score was 680 before a foreclosure, after foreclosure, the seller's score could dip as low as 400 and the seller may have to wait about 36 months before a lender will offer a reasonable interest rate.

On the other hand, if a seller with the same number of points entered into a short sale transaction, the FICO score will only fall about 80 to 100 points, i.e. to about 580 to 600, and in about 18 months, the seller can buy another home with financing at a good interest rate. As part of the negotiation, sellers (or representatives) might ask the lender not to make an adverse report to credit reporting agencies. Lenders are under no obligation to accommodate this request. In fact, some companies require them to report as part of their policy.

Lenders are likewise under no obligation to "write off" the loan. Sellers may still be legally obligated to pay the difference between the loan amount and the amount that the buyer paid for the property if at least one of the following is true:

(1) the terms of the loan agreement make the homeowner personally liable; and/or

(2) state law requires lenders collect loan deficiencies from homeowners/sellers.

In Massachusetts the current law in this area permits with little restriction, the loan agreement to govern. Thus, it is important sellers review loan documents with an attorney to make an informed decision. Attorneys can advise sellers on legal options or obligations and whether they will be subject to the possibility of a deficiency judgment for the "loss" to the lender who permits them to "sell short."

What About Income Tax?

Sellers might think that they are fine when it comes to taxes from selling a home less than its value. The IRS sees it differently. The deficiency the sellers paid in a short sale transaction is taxed as ordinary income. Short sale sellers can expect to receive a 1099 for debt cancellation from the IRS. In the case where a seller is found to be liable for and has paid a deficiency judgment, that amount can be counted as a loss for tax purposes. For sellers with capital gains, short sale losses can be subtracted from capital gains. For those without capital gains, the law presently allows them to deduct up to $3,000 for the year. Additional losses have to be carried forward to later years at the rate of $3,000 per year. Each seller should be certain to get individual tax advice for specific transactions from an attorney, CPA or other similar professional as part of the process of considering a short sale.

Pending Federal Law and New Massachusetts Regulations

Representatives advising sellers should, in addition to advising on existing tax law, be aware of pending federal law that could potentially affect taxation on short sales (if enacted) as well as new Massachusetts regulations currently in effect. On October 4 of this year, the House passed the Mortgage Forgiveness Debt Relief Act of 2007. In sum, should this piece of legislation pass in the Senate, it will amend the Internal Revenue Code to exclude amounts attributable to a discharge of indebtedness incurred on a principal residence. There are limits on the amount that can be discharged, among other provisions of the bill. Attorneys or others representing sellers in a short sale transaction should keep an eye on this bill and, for now, make their clients aware of it as a future possibility.

Currently Massachusetts has promulgated regulations to protect and help sellers in a different way from the pending federal legislation. New regulations apply to what they call "foreclosure rescue transactions" and "foreclosure-related services." The regulations took effect this September and are intended primarily to protect sellers from charlatans in the foreclosure world who prey on sellers in danger of losing their homes. Here's how scam foreclosure rescue schemes typically work. Businesses or professionals claim to assist consumers who are facing foreclosure by convincing them to convey their property to straw purchasers. The straw purchasers then obtain mortgage loans, permitting the individuals facing foreclosure to continue living in their property for a limited time, and promising the individuals they will be able to later reacquire their homes. The promises of maintaining home ownership are illusory and homeowners lose their home to the so-called "rescuer." These new regulations underscore the need for attorneys zealously representing their clients in Massachusetts and thoroughly investigate the buyers in a transaction.

Selling Short in Short

In the world of investment, securities stocks are often sold short; meaning that an investor sells borrowed securities in anticipation that the price will plummet and the stock can be paid back at a lower price. This is called "covering" a sale of shorted stock.

A short sale in the real estate world is fairly similar. A homeowner who does not yet own the home (i.e., the home is mortgaged) can sell it to a third party to "cover" the mortgage. Short sales in the mortgage world therefore, amount to an accommodation by a lender who hopes to avoid or at least mitigate an impending loss by permitting a homeowner/seller to "short" the property - selling it below the value of the mortgage to a buyer who is not the lender.

As previously mentioned, it is not necessary for homeowners to be behind on their mortgage in order to enter into a short sale transaction. If that is the case for a particular homeowner, it might be important for the homeowner to know a short sale or foreclosure are not the only options. Even though this article is limited to discussion of options to short sales and foreclosures, these are not always the best solutions for every homeowner with an "upside down mortgage." Attorneys or other representatives would be well-advised to have homeowners consider workouts or restructuring of loans, voluntarily offering the lender the deed in lieu of foreclosure or inquiring if mortgage insurance will cover the deficiency. Short sales can be risky, somewhat intrusive and involve a long, frustrating process, but could be worthwhile, provided homeowners and their representatives work together to choose and negotiate the right solution for the right client.

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There has been a lot of hype lately about E-Closings, E-Recording, Landata, Simplifile, ACS, E-Sign, e-tc.  I couldn't be prouder to see my pet project take off.  You see, I have been on the cutting (bleeding?) edge of electronic process in the title and mortgage industries since the mid-90's.  The industry used to think I was nuts, now apparently I'm a visionary.  I was looking through my archives and found this gem of a press release (note the date).  If you're a mortgage lender and are looking for the true original e-recording and e-closing title company, then you have found it here.  Give a me a call at 877-E-Closing to discuss.

First Electronic Signature Closing in Massachusetts Conducted by Old Republic Title

FOR IMMEDIATE RELEASE

SEPTEMBER 29, 2000

Boston-Stephen Wilson, President-Old Republic Eastern Title Company, Inc. and Lawrence F. Scofield, Sr. Vice President, New England States Manager, Old Republic National Title Insurance Company are pleased to announce that on September 29, 2000 Old Republic National Title Insurance Company insured the first electronic signature closing in the history of Massachusetts. The closing took place in Old Republic National Title Insurance Company's Boston office and was conducted by Old Republic Title's Agent, John Gosselin.

 Parties to this transaction were:

 

     *  Lender: Bank of America

     *  Settlement Agent: Gosselin & Associates, P.C., Winchester, MA

     *   Software Developer: iLumin Corporation, Orem, Utah

     *   Integrator: Deloitte & Touche, IT Group E-Government Initiative

     *   Title Insurer: Old Republic National Title Insurance Company

 
This electronic signature closing demonstrates the effectiveness of the new legal rights under the Federal Electronic Signature Statute (E-SIGN) passed recently by Congress. Our title insurance policy insured the validity and effectiveness of the electronic signatures.

Old Republic Title's conference room was set-up with the appropriate data lines to facilitate the closing. iLumin Corporation provided Digital Handshake T Server, its software program to facilitate the closure of automated legally binding transactions over the Internet from start to finish, Deloitte & Touche provided technology support, and Mr. Gosselin orchestrated the overall closing. All parties to the transaction entered an iLumin Online Signing Room T placed their electronic signatures on the electronic documents where appropriate, and according to that individuals roles and responsibilities. Through use of the iLumin's Digital Handshake Server, the borrowers also entered the iLumin Online Signing Room, put in their passwords and executed the promissory note electronically. In addition, they executed the lender's copy of the mortgage electronically. The Borrowers also executed original paper documents for registration with the Essex South Registry District of the Land Court.

The Southern Essex District Registry of Deeds was involved in the first TEST of E-Filing in Massachusetts. The documents from the TEST were recorded in the traditional fashion by Attorney John Gosselin representing the Bank.

The Southern Essex District Registry of Deeds is looking forward to continuing testing and developing a prototype for electronic recording within the bounds of all applicable Massachusetts statutes. The Registry's interest and cooperation was appreciated by all participants.

This is an exciting development in the world of real estate closings. 

Old Republic Title is proud to be associated with each of the parties who enabled this first electronic signature closing in Massachusetts. 

Old Republic Title has crossed a new frontier with this development.

For the seventh consecutive year the Old Republic Title Insurance Group (ORTIG) has received the highest financial strength ratings in the title insurance industry, providing assurance to our customers that we have the financial strength to stand behind our title policies. No title underwriter has matched our AA- rating from Standard & Poor's and our A1 rating from Moody's Investors Service.

We have received a financial strength rating of 'AA-' (Double-A-Minus) from Fitch Ratings, the international rating agency formed by the merger of Duff & Phelps Credit Rating Company (DCR) and Fitch Ratings IBCA.

We are one of the nation's largest title insurance insurers, operating in 48 states, the District of Columbia and Puerto Rico, through a national network of Company-owned offices, subsidiaries, authorized agents, and approved attorneys. We are a wholly owned subsidiary of Old Republic International Corporation, a Chicago-based multi-line insurance company.

 

               

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"Could you pay us $200?" I remember clearly the words that welcomed me to my legal career. After going toe-to-heel and heel-to-toe in the little windowed office, James Dwinell, then Chairman of the Board of Winchester Savings Bank in Winchester, Massachusetts, asked if I could afford the rent as calculated on his sophisticated commercial leasing software platform - 2 size 13 Allen Edmonds wingtips.

James Dwinell passed away this past week at the ripe old age of 98. He was the prototypical small town banker. He was always well dressed. He knew everyone's name. He looked you in the eye. He was on time for appointments and expected others to be on time too. He could tell with just a handshake who would be paying a mortgage back to the Winchester Savings Bank in full and who would be trouble.

As my first landlord he was fair and willing to give me a shot at starting a law practice when no one else in town would rent to a 24 year old looking to hang his shingle. I had one telephone at that time - I would bring it home at night as it was my home phone too. The simple table and single chair made me feel like Atticus Finch, Abraham Lincoln and Oliver Wendell Holmes all at once. Mr. Dwinell was NEVER "Jim" to anyone at the bank, always "Mr. Dwinell", but I was politely honored as "Attorney Gosselin" to him - a novelty for a newly minted lawyer.

Like so many other people in Winchester and Woburn that owed Mr. Dwinell for giving them chances at owning homes or starting businesses, I owe Mr. Dwinell for giving me my start - a start that led to nine happy years in that office on the third floor of the Winchester Savings Bank before moving on to bigger things.

Winchester will miss Mr. Dwinell's leadership and values, but those that he touched will pass on his special way of doing business.

 

 

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I had the good fortune last night to meet Sir Richard Branson (photo to follow) in Boston at the launch of his great new company, Virgin Money. Well, not an entirely new company, it's really Circle Lending re-branded as a unit of the Virgin Empire. You should check out their site at www.virginmoneyus.com or enter their contest at www.changingthefaceofmoney.com.

I have been working with Circle Lending for quite a while. For most of the time that I have known them they have been a sleepy little company with a great idea that was hard to communicate to the always cluttered marketplace. In simple terms, Virgin Money documents loans between family and friends. When I first heard of their business model I thought that it was an act against nature. Seriously, how many people borrow money from their mother with the intention of actually paying her back? Let alone with interest.

Virgin Money US is counting on lots of people to start making their intrafamily loans legit. So Sir Richard and I got to hang out and discuss the status of AIDS in Africa, the British banking system's need for increased consumer confidence in an unsettled world economic setting and the use of biofuel in his Virgin Atlantic 747's to reduce emissions.

Ok, we didn't reach all the topics that I had hoped to, but he was a charming conversationalist and a genuinely nice human being. Virgin Money is looking to help ordinary Americans get access to sophisticated loan products, including the classic Circle Lending family loans, but also complex loan products that should dramatically change the borrowing landscape and particularly hit the traditional banking business square between the eyes. A wake-up call is just what the American banking industry needs. Loans should be made to people who can pay them back. Real terms for real people. Virgin Money gets it. Richard Branson gets ordinary people. He knows that his brand only has value if it delivers unique and true value to consumers. Richard Branson and Virgin do not fake it.

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October is my favorite month of the year for estate planning. It is the essence of fall. It is the gateway to