2016 Winter Newsletter

Posted by admin on Dec 27, 2016 11:48:00 PM
“Making You Look Good is Our #1 Priority ”

What’s New:

We at CSS want to thank you for your continued support and wish you a Happy New Year!

Abolishment of Dower in Michigan—one step closer. As you know, in Michigan, the dower rights of a wife attach to real property in which the husband owns a fee simple estate (with some caveats) during the marriage. There is a package of bills which would abolish dower that have been waiting for passage. On December 13, 2016, the House passed Senate Bills 558 and 560 both on a vote of 66-42. They returned those bills back to the Senate and the Senate concurred in the House’s changes. The Senate also passed House Bill 5520 on a vote of 32-5. They are now returning that bill back to the House. Once the House receives it they will order it enrolled. After the House and Senate have had an opportunity to enroll the bills, they will then prepare them for the Governor’s signature to enact them into law. Below are links to the bills:

SB 558 – http://www.legislature.mi.gov/documents/2015-2016/billconcurred/Senate/pdf/2015-SCB-0558.pdf

SB 560 – http://www.legislature.mi.gov/documents/2015-2016/billconcurred/Senate/pdf/2015-SCB-0560.pdf

HB 5520 – http://www.legislature.mi.gov/documents/2015-2016/billengrossed/House/pdf/2016-HEBS-5520.pdf

1031 Exchanges.

Approval of reverse 1031 outside of safe harbor. The Tax Court issued a long-awaited ruling on the case of Estate of Bartell, which involved a reverse (improvement) 1031 exchange. The Tax Court held that the replacement property to be acquired as a part of a like-kind exchange can be parked with an Exchange Accommodation Titleholder (EAT) for longer than the 180-day limit permitted under the established reverse exchange safe harbor. In September of 2000, the IRS issued Rev. Proc. 2000-37, which allowed taxpayers to park replacement property with an EAT. To qualify for tax deferral treatment, among other requirements, the EAT had to hold qualified indicia of ownership (legal title or other beneficial ownership) and not be the taxpayer or a disqualified person; within 45 days of the EAT acquiring the replacement property, the relinquished property had to be identified; and not later than 180 days after the EAT acquired ownership of the replacement property, the property had to be transferred to the taxpayer as replacement property. Thus, the time period for the relinquished and replacement properties to be held pursuant to the reverse exchange Qualified Exchange Accommodation Agreement could not exceed 180 days. This still did not prevent a taxpayer from effectuating a reverse exchange outside of the safe harbor, but that essentially meant that it may be challenged and tax deferment denied by the IRS.

In the Estate of Bartell case, the EAT acquired the replacement property on 8/1/00 and closed on the relinquished property on 12/28/01, with Bartell’s acquisition of the replacement property from the EAT on 1/3/02, well outside of the safe harbor deadline. The IRS in denying tax deferral treatment argued that it was Bartell who had the burdens and benefits of ownership, and not the EAT. The Tax Court, however, did not seem extremely concerned with who held the benefits and burdens of ownership and agreed with a 9th Circuit ruling (Alderson) that proper title can be acquired by an EAT solely for the purpose of the exchange.

The Tax Court also found “no specific limit on the period in which a third-party exchange facilitator may hold title to the replacement property before the titles to the relinquished property and replacement properties are transferred in a reverse exchange.”

Note that this case is appealable to the 9th Circuit, and the Tax Court’s decision cited the Alderson9th Circuit precedent in its decision. Tax Courts in other circuits do not necessarily need to apply the precedent relied upon in this case. Also, this exchange began prior to the safe harbor rules for reverse exchanges becoming effective.

Taxpayers are still highly encouraged to consult their tax advisors when contemplating a 1031 exchange, particularly if the transaction will fall outside of the safe harbor.

Market News:

2017 Real Estate predictions. Only time will tell if any of the real estate predictions for the coming year will come to fruition, but some of the more popular predictions for 2017 include the following:

  • Drones. With FAA reigns lessening, the use of the drone to show unique aspects of properties by realtors and owners alike should increase.
  • “Surban” properties. A move from suburban-style sprawl to more dense communities of different housing such as townhouses, apartments and single-family homes in the same neighborhoods. Urban amenities are being added to existing subdivisions.
  • Millennials. More millennials buying their first home, but it will be more than your typical starter home or condo unit, according to the National Association of Realtors (NAR).
  • Relative strong 2017. For the majority of this year, the housing market could not get past low inventory levels. Next year should be better, according to the newly released forecast from NAR, but will not necessarily happen quickly. In addition, new single-family home sales are likely to total 570,000 this year and rise to around 620,000 in 2017, with existing home sales projected to grow roughly 2% to around 5.46 million. The national median existing-home price is expected to rise to around 4% both this year and in 2017.

Legal News and Case Law:

In the case of In re Surplus Proceeds from Sheriff Sale, the Michigan Court of Appeals affirmed the trial court’s decision against the Petitioner/bidder at the foreclosure sale, Trademark Properties of Michigan, LLC (“Trademark”). Trademark attempted to claim that there was a surplus owed to it, where in fact, there was a deficiency. The original mortgagor (borrower) defaulted on her mortgage leaving a balance of $55,030.58. During the sheriff’s sale, the mortgagee bid $20,572.80 (“initial credit bid”) as an initial partial credit bid. Trademark was the highest bidder at $31,572.80 (“final bid”). Following the foreclosure sale, the mortgagor assigned her rights to any surplus proceeds to Trademark, who filed a petition for the return of surplus proceeds in the amount of $11,000 (which was the difference between the initial credit bid and the final bid). The trial court granted summary disposition in favor of the County of Macomb (Respondent), noting it did not “‘recognize the total satisfaction under the statute by bid from the mortgagor’” of less than the mortgage amount. On appeal, the court noted that “a surplus constitutes the difference between the amount the mortgagor owes the mortgagee, plus the costs and expenses of the foreclosure and sale, and the amount for which the property is sold during the foreclosure sale.” Here, “the amount owing on the mortgage, including fees, interest, and costs,” was $55,030.58, and the “successful bid was $31,572.80.” Thus, “there was a deficiency of $23,457.78.” Affirmed.

Corporate Settlement Solutions has many Michigan branch offices to serve you—Traverse City, Suttons Bay, Elk Rapids, Charlevoix, Bellaire, and Mt. Pleasant in addition to providing services throughout the eastern United States.

Maura A. Snabes, Esq., CES®, CLTP – Sr. Underwriting & Compliance Counsel

Phone: (231) 547-5220×102/802 Bridge St., Charlevoix, MI 49720

e-mail: msnabes@visitcss.com.

This Newsletter may be construed as an advertisement as defined in Public Law 108-187. A recipient of this Newsletter may decline to receive future messages by making such a request to the above email address.

Oct
10

2018 Fall Newsletter

CSS News - Posted by Maura A. Snabes, Esq., CES®, CLTP - Sr. Underwriting & Compliance Counsel
What’s New: I have just returned from my annual Federation of Exchange Accommodators 1031 conference. The conference had a lot of daily transactional...
Continue Reading
Jul
7

Summer Newsletter

CSS News - Posted by Maura A. Snabes, Esq., CES®, CLTP - Sr. Underwriting & Compliance Counsel
What's New! We are in the middle of the “dog days” of summer, which is our busiest time in Northern Michigan. Real estate is moving, and that is good...
Continue Reading
Mar
3

Spring Newsletter

CSS News - Posted by Maura A. Snabes, Esq., CES®, CLTP - Sr. Underwriting & Compliance Counsel
What's New! CSS was recently awarded its 4th consecutive Circle of Excellence Award from Fidelity National Title Group, one of the agency’s...
Continue Reading
Dec
12

Winter News

CSS News - Posted by Maura A. Snabes, Esq., CES®, CLTP - Sr. Underwriting & Compliance Counsel
We at CSS want to wish you Happy Holidays to you and a safe, healthy and prosperous 2018! TAX REFORM. I think the item that is first and foremost on...
Continue Reading
Oct
10

2017 Fall Newsletter

CSS News - Posted by admin
What’s New: 1031 Exchange update: While likely that there will be extensions for both Texas and Florida exchangors relative to the recent hurricanes,...
Continue Reading
Jul
7

Attorney Mike Rossman joins CSS as Corporate Counsel

CSS News - Posted by admin
TRAVERSE CITY, Michigan, July 20, 2017—Corporate Settlement Solutions (CSS) is pleased to announce attorney Mike Rossman has joined their...
Continue Reading
Mar
3

2017 Spring Newsletter

CSS News - Posted by admin
“Making You Look Good is Our #1 Priority ” What’s New: Abolishment of Dower in Michigan
Continue Reading
Jan
1

Governor Signs Legislation that Eliminates Dower in the State of Michigan

Real Estate Trends - Posted by admin
As a follow up to the information in our recent newsletter, today the Governor filed signed versions of SB’s 558 and 560 to complete enactment of a...
Continue Reading
Dec
12

2017 Real Estate Industry Predictions

Real Estate Trends - Posted by admin
With the new year just days away, I thought this would be a great time to reach out to our leadership team to get their real estate industry...
Continue Reading
Dec
12

2016 Winter Newsletter

CSS News - Posted by admin
“Making You Look Good is Our #1 Priority ” What’s New: We at CSS want to thank you for your continued support and wish you a Happy New Year!
Continue Reading
Oct
10

Understanding The Benefits of Going Digital

Real Estate Trends - Posted by admin
Whether you have started the transition to a full electronic mortgage (eMortgage) process or not, it is important to understand the process and the...
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Oct
10

2016 Fall Newsletter

CSS News - Posted by admin
“Making You Look Good is Our #1 Priority ” What’s New: CSS Implements DocMagic’s Total eClose Solution
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RECENT NEWS & INSIGHTS

Oct 1, 2018 by Maura
What’s New: I have just returned from my annual Federation of Exchange Accommodators 1031 conference. The conference had a lot of daily transactional...
Continue Reading
Jul 23, 2018 by Maura
What's New! We are in the middle of the “dog days” of summer, which is our busiest time in Northern Michigan. Real estate is moving, and that is good...
Continue Reading
Spring Newsletter
Mar 28, 2018 by Maura
What's New! CSS was recently awarded its 4th consecutive Circle of Excellence Award from Fidelity National Title Group, one of the agency’s...
Continue Reading
Dec 15, 2017 by Maura
We at CSS want to wish you Happy Holidays to you and a safe, healthy and prosperous 2018! TAX REFORM. I think the item that is first and foremost on...
Continue Reading
Oct 9, 2017 by admin
What’s New: 1031 Exchange update: While likely that there will be extensions for both Texas and Florida exchangors relative to the recent hurricanes,...
Continue Reading
Jul 20, 2017 by admin
TRAVERSE CITY, Michigan, July 20, 2017—Corporate Settlement Solutions (CSS) is pleased to announce attorney Mike Rossman has joined their...
Continue Reading
Mar 31, 2017 by admin
“Making You Look Good is Our #1 Priority ” What’s New: Abolishment of Dower in Michigan
Continue Reading
Jan 6, 2017 by admin
As a follow up to the information in our recent newsletter, today the Governor filed signed versions of SB’s 558 and 560 to complete enactment of a...
Continue Reading
Dec 28, 2016 by admin
With the new year just days away, I thought this would be a great time to reach out to our leadership team to get their real estate industry...
Continue Reading
Dec 27, 2016 by admin
“Making You Look Good is Our #1 Priority ” What’s New: We at CSS want to thank you for your continued support and wish you a Happy New Year!
Continue Reading
Oct 25, 2016 by admin
Whether you have started the transition to a full electronic mortgage (eMortgage) process or not, it is important to understand the process and the...
Continue Reading
Oct 11, 2016 by admin
“Making You Look Good is Our #1 Priority ” What’s New: CSS Implements DocMagic’s Total eClose Solution
Continue Reading
Sep 29, 2016 by admin
Fully TRID-compliant solution delivers superior service and a competitive advantage
Continue Reading
Sep 21, 2016 by admin
We were recently advised by our title insurance underwriter that the State of Michigan had revamped its procedures relative to the processing of...
Continue Reading
Aug 22, 2016 by admin
Despite the existing hurdles to digital or “eMortgages” highlighted in this article (Industry throws wet blanket on the digital mortgage revolution),...
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Jun 30, 2016 by admin
“Making You Look Good is Our #1 Priority ” What’s New: National Homeownership Month! According to the American Land Title Association (ALTA), June is...
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Jun 27, 2016 by admin
The Governor signed the flat recording fee package (SB 599-604, SB 737 and HB 5164-5165) and the condominium act amendment legislation (SB 610) into...
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May 18, 2016 by admin
Corporate Settlement Solutions, a provider of real estate settlement services to regional lenders throughout the eastern half of the US, announced...
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Mar 14, 2016 by admin
“Making You Look Good is Our #1 Priority ” What’s New: The year 2016 marks the 95th anniversary of like-kind exchanges and the 25th anniversary of...
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Feb 25, 2016 by admin
For the week ending February 19th, the Mortgage Bankers Association reported in its Weekly Mortgage Applications Survey that mortgage applications...
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Feb 2, 2016 by admin
For 2016, the Mortgage Bankers Association (MBA) is projecting a $511 billion growth for originations of commercial and multifamily mortgages. This...
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Jan 21, 2016 by admin
If you have ever gone through the home closing process, you know that it doesn’t always run as smooth as expected. In an ideal world, the homebuyer...
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Dec 22, 2015 by admin
As some of us pack our bags and prepare to travel, others may be plotting a break-in. Don’t let your busy plans get in the way of burglary...
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Dec 22, 2015 by admin
With 2015 coming to an end, it’s time to look forward to 2016. The question is, what will 2016 look like? Will we see more Millennials taking a leap...
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Sep 22, 2015 by admin
October 3rd is just around the corner and we are happy to share that our title quote app is ready for the change.
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Jul 22, 2015 by admin
The Consumer Financial Protection Bureau (CFPB) today issued a final rule moving the effective date of the Know Before You Owe mortgage disclosure...
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Jul 7, 2015 by admin
For some families, buying a home has been delayed due to the recent recession. As the economy turns around there are more opportunities for people to...
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Jun 16, 2015 by admin
I was fortunate enough to have be an attendee at the 2015 National Settlement Services Summit in Atlanta Georgia last week. It was an awesome...
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Jun 8, 2015 by admin
With new low down payment loan programs being introduced, you are seeing more and more first time homebuyers making a purchase. Because of this, the...
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Mar 26, 2015 by admin
The article below outlines the importance of educating the buyer and seller on the closing process and the costs involved. The survey shows that...
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