Thursday, November 24, 2011

Tenancy by the entirety

There seems to be a misconception that holding title to real estate as tenants by the entirety is a magic bullet that makes judgments go away. Not the case. All it accomplishes is to protect you from creditors foreclosing judgments against your real estate, while you live there, and while you are still married.

The example that comes up frequently is this. Married couple own their residence as tenants by the entirety. A judgment is entered against the husband only, and a memorandum of judgment is recorded. If they, for example, owned the property as tenants in common, that judgment creditor would be able to foreclose the judgment lien. But since they own the property as tenants by the entirety, this cannot happen. When the couple decides to sell the house, they will need to take care of the lien. Many people are under the mistaken impression that tenancy by the entirety makes the lien disappear. The lien is still there, it just cannot be enforced against the real estate. So when they sell the house, it will no longer be their residence, and the tenancy by the entirety protection will cease to exist. And boom, as soon as the deed to the buyers is recorded, the lien is now enforceable, and it is ahead of any mortgage lien the buyers might have.

More information on tenancy by the entirety is here.

Tuesday, November 22, 2011

Senator Jacobs CAN write!

I have sent our esteemed Senator Mike Jacobs two letters over the past couple of years regarding matters that I consider important to the People of the State of Illinois. Senator Jacobs apparently disagrees, since he has not even given me the courtesy of a political "thanks but you bore me." You know, the typical, "Thank you for expressing your concerns, and I will give your suggestions all of the consideration warranted under the circumstances." Or, "Your letter brings up some important matters of which I was not fully cognizant. I will immediately create a commission and make recommendations accordingly." Anything would have been nice, including actually doing something.

My first contact was when I was unable to get anyone interested in the rampant mortgage fraud occurring in our area. I was under the mistaken impression that maybe our legislators could light a fire under the appropriate enforcement agencies.

No response from Senator Jacobs.

Next, I was frustrated with the one-sided and possibly unlawful contracts being required by banks selling foreclosed properties. In many of these contracts, the bank requires the buyer to use the closing agent and sometimes title agency selected by the bank. These closing agents and title agencies are sometimes charging as much as five times what a local provider would charge (i.e., local providers which are small businesses in Senator Jacobs' district). No disclosure of these exorbitant fees is provided to the buyer prior to when they show up at closing. I had this crazy idea that Illinois could follow several other states in allowing buyers to select their own settlement service providers. After all, there is no good reason that the seller should tell the buyers who they have to hire and pay.

No response from Senator Jacobs.

Did I take this personally? Not at all. Maybe he is too busy getting these things taken care of for us. Maybe his typewriter is in the shop. Was I bitter that I made an effort to make a difference and make things better for the people of the State of Illinois and was summarily ignored. Of course not! Perhaps Illinois Senators do not send letters as a cost-saving measure.

But then I hear that he CAN write AND send letters! Well, sort of write, anyway. An acquaintance sent me correspondence from Senator Jacobs. Apparently, someone was annoyed that Senator Jacobs cast the only vote in favor of using taxpayer money to pay for a portrait of Rod Blagojevich. (Actually, in the interest of accuracy and specificity, he voted no to a bill which would prohibit the use of taxpayer money to pay for the portrait, so it is a double negative kind of thing.) And she sent a letter to Senator Jacobs telling him so.

Rather than take the high road and ignore her, which, I assure you, he is fully capable of doing, he sent a letter to her demonstrating his intellectual prowess. He responded that "in the words of Harry Truman, if you want a friend in government, get a dog."

Well, first of all, what President Truman is actually credited with saying is, "If you want a friend in Washington, get a dog" [emphasis added], so he did not even quote correctly. See the difference? The big difference is, President Truman's statement actually makes sense. He was simply saying that Washington is full of folks with ulterior motives desiring political gain. If you want a real friend in a town like this, a dog is your best bet. Senator Jacobs' quip seems to imply that the government is full of dogs. I guess. Maybe

Now for Senator Jacobs quote: How would getting a dog help me have a friend in government? Ok, Senator, I went and got a dog at the shelter and he is my friend, now what? How does this help me get a friend in government? Should I get my dog elected to office? Can I get my dog to replace Senator Jacobs? What if my dog was a relative of Senator Jacobs, would that help? Perhaps Senator Jacobs should stick with ignoring letters sent to him. Less embarrassing perhaps.

It is great for Senator Jacobs that the job was handed to him by his father, but I am not so sure it is great for residents of western Illinois. This is why nepotism is generally frowned upon in most circumstances. It is also why tigers often eat their young.

Friday, November 18, 2011

Marc Engelmann update

Marc Engelmann, a Davenport, Iowa real estate attorney was found guilty of nine counts of wire fraud, bank fraud, and conspiracy on September 13, 2011. Engelmann filed a motion for a new trial based on his assertions that 1) the jury was confused regarding whether he acted in good faith, and 2) the investigating FBI agents were discussing the case during the trial.

The jury sent a question to the judge asking for more information on "good faith." The Judge responded that the instructions provided a clear definition of good faith, and the jury should refer to those instructions. Part of Engelmann's defense was that he acted in good faith that the lender was aware of the fraud scheme. He claimed that the closing agent was aware of the fraud, and therefore, he claims, the lender was aware. All of the employees of the closing agent testified that they were unaware of the kickback scheme. His own (former) real estate assistant testified that Engelmann told her not to discuss the kickback with the closing agent. He also prepared two closing statements--one which was marked "Numbers for HUD" and one which was marked "courtesy copy." The "Numbers for HUD" version was faxed to the closing agent, but it did not appear the "courtesy copy" was provided to the closing agent. The "Numbers for HUD" version did not show the kickback, while the "courtesy copy" did. As an experienced real estate attorney, he was certainly aware that the scheme was illegal, and if he believed the lender knew of the scheme and assented to it, he certainly should have had ample documentation in his file from the lender. No such documentation was presented at trial.

There was a clear and concise jury instruction defining good faith, which was taken from a set of model jury instructions. Engelmann wanted a more verbose version, though everything which was included in the verbose version was included throughout the rest of the jury instructions.

A long-time client of Engelmann's was apparently a spectator at the trial. This individual called the Judge after the trial. During a break, this individual claims he witnessed the two investigating FBI agents discussing the case. Normally, witnesses are not allowed to discuss the case prior to testifying. Obviously, it would not be appropriate for the closing agent employees and Engelmann's former assistant to get together to get their stories straight before testifying. These gentlemen, however, were the investigators. They talked to all of the witnesses. And they obviously talked with each other. Can you imagine Sgt. Friday not talking with Officer Gannon about the facts, ma'am? Pete Malloy and Jim Reed ignoring each other in Adam 12? Ponch and Jon with their fingers in their ears saying "la la la la I can't hear you?" In fact, one of the agents was present through the entire trial, and he also testified. The only reason the other agent was called to testify is that Engelmann denied telling the agents that he told them he knew the scheme was illegal when they first came to talk to him. To argue that two investigating agents cannot discuss a case on which they are working together is a bit of a stretch.

The motion was denied. His sentencing has been delayed until January 2012.