What to Know Before You Close
You've done your shopping, found a beautiful, functional home close to everything you need, and your offer has just been accepted. Before you close the deal, here are a few things to consider.
Unlike renting in which you pay in advance for the upcoming month, a mortgage is paid "in arrears". This means you are paying back the past month's worth of your loan after the month has passed and the interest accrued during that month is included in the payment. Say, for example, you close a sale on June 29th. Your first mortgage payment will be due on August 1st. If, however, your close occurred in the middle of June, that half a month's worth of loan interest will be due at the time of close. Because of this, it can be advantageous to close a sale at the end of a month rather than the beginning. By closing later, you save yourself needing to have that extra money on hand right at closing. You don't really save money in the long run, but considering all the expenses involved in buying a home and moving, not having to pay half months worth of interest right then and there can really help.
There's another reason why closing later is a good idea. Let's take our example again, and the closing date has been set for June 15th. Knowing the sale is imminent, and that a payment isn't technically late until after the 15th of the month, the current owners of the home you are purchasing may decide not to make their June 1st mortgage payment. If this happens, you will have to pay not only for that half of June, but also May's mortgage payment as well, all at the time of close. While we hope that a seller wouldn't do this, it has been known to happen, and setting close date at the end of the month is a good way to prevent this.
Another thing to make sure of is that you don't take out another loan right before closing. Most lending institutions will do a second credit check right before finishing the closing paperwork, and another loan may jeopordize your mortgage loan. So as much as it might seem like a good idea to get a new car or TV to go along with that new house, resist the temptation, even if you think you can afford it. Waiting until after your real estate purchase is complete assures that the process will go smoothly and reduce the stress of the buying process.
Speaking of stress, it is common for buyers to get second thoughts or feel worried about the purchase they are about to make. To prevent this, a final walk through of the home is recommended. Check everything you may have overlooked in your initial excitment, such as electrical outlets and any appliances that will be included in the sale. Examine the foundation and the roof, turn on faucets and flush toilets. In short, make sure that everything is in complete working order, that no changes have been made to the home since your initial decision to buy it, and that any promised renovations or clean-up has in fact occured. Also, make sure you know what to expect in regard to any maintenance fees that may be included in the home, such as water, garbage collection or landscaping. If the home you are buying is being constructed, make sure the builder signs a contract that includes exactly what you expect to be built and when it will be completed by. In this way, you will know exactly what you're getting, and save yourself from any surprises at the time of moving in.
Another way to reduce the stress of the overall move is to assure that all your personal service providers have been notified of your move. Don't forget that all your mail will need to be redirected, and the utilities put into your name. If a house has been empty for a time, electricity, water and cable may need to be hooked up. And don't forget to hire movers and get an estimate on the cost so you know what your total moving expenses will be in advance. Arranging these things early on makes everything easier when you move.
Finally, make sure the money you will need for the closing process is deposited before coming to close. Your payment should be in the form of a direct transfer, money order or a certified check, not a personal check.
Hopefully, with careful planning, the process of buying will be fun!
John Mejia is a real estate agent specializing in Birmingham real estate. If you are looking for a new home in Alabama, contact John today or visit the Mejia Group online at http://www.themejiagroup.com.
Article Source: http://EzineArticles.com/?expert=John_Mejia
Saturday, July 7, 2007
Indiana Supreme Court Discusses Proceedings Supplemental
Do you know what “proceedings supplemental” are? If you are in the business of collecting judgments in Indiana, and from time to time virtually all secured lenders are, then the June 27, 2007 opinion by the Indiana Supreme Court in Rose v. Mercantile National Bank, 2007 Ind. LEXIS 471 provides a great primer on the subject.
Facts of Rose. Plaintiffs sued an S-Corp, and the trial court entered judgment against S-Corp for $159,581. During the litigation, the owners of S-Corp sold the company in an asset sale to Corporation I for $475,000. Corporation I then transferred its rights and obligations under the asset-purchase agreement to Corporation II, a wholly-owned subsidiary of Corporation I. After the sale, the owners of S-Corp deposited the sale proceeds into S-Corp’s bank account and, within three days, issued checks to themselves for the entire sale price. The closing occurred approximately one month after the trial court entered judgment for Plaintiffs.
About a year later, presumably because the judgment had not been paid, Plaintiffs moved for proceedings supplemental and brought fraudulent transfer claims against S-Corp, Corporation I, Corporation II, and S-Corp’s owners. Plaintiffs asserted that assets had been transferred out of S-Corp to avoid paying the judgment. During the proceedings supplemental, Plaintiffs sought to amend the complaint to add additional claims and to recover new damages. The result was a new judgment for Plaintiffs for $542,435.49 plus attorney’s fees of $162,730. The Indiana Supreme Court affirmed the trial court’s finding that the two owners of S-Corp fraudulently transferred assets, but the Court set aside the new claims for new damages.
Proceedings supplemental generally. Proceedings supplemental are designed to help judgment creditors enforce judgments – for discovering assets and to set aside fraudulent conveyances. Proceedings supplemental are merely the continuation of an original action. Ind. Trial Rule 69(E) generally governs proceedings supplemental, and the motion is made in the court where judgment was rendered. Discovery is permitted, and a hearing must be conducted, after which certain property is to be applied toward the judgment. Id. at 4-5.
Fraudulent transfer. Judgment creditors often use proceedings supplemental to bring fraudulent transfer actions, the purpose of which is to remove “obstacles which prevent the enforcement of the judgment . . . through the levy of execution.” The essence of a fraudulent transfer action is not to attack the transfer or to recover damages. Instead, the action “is to subject property to execution as though it were still in the name of the grantor.” Id at 6-7.
New claims. Unlike Plaintiffs’ fraudulent transfer claims, Plaintiffs also sought new damages from the S-Corp owners by adding a new cause of action under Indiana’s Crime Victims’ Compensation Act, which allows for treble damages and attorney’s fees. The Court said this was a no-no:
Allowing a new claim to be tacked on at this stage would be just as
unfitting as opening up any other litigation to add new claims after
judgment. Such an approach to collections would lay the
groundwork for perpetual motion-a far cry from the timely and
efficient system of conflict resolution the nation’s judiciary strives
to provide. Proceedings supplemental are appropriate only for
actions to enforce and collect existing judgments, not to establish
new ones.
Id. at 7. So, a new claim for new damages, and thus the imposition of a new judgment, should be filed in a new lawsuit. On the other hand, “any action to assist in collection of an original judgment [like a proceeding supplement] must be filed under the same cause number as the original action.” Id.
In addition to addressing the generalities of proceedings supplemental, the Indiana Supreme Court provides clarity for lenders concerning fraudulent transfer actions, which can be appropriately prosecuted in proceedings supplemental or, in other words, in a continuation of the same case and in the same trial court that rendered the judgment. Any new claims or, in other words, actions for separate and distinct damages, however, must be the subject of another lawsuit.
John D. Waller is a partner at the Indianapolis law firm of Wooden & McLaughlin LLP. He publishes the blog Indiana Commercial Foreclosure Law at http://commercialforeclosureblog.typepad.com John’s phone number is 317-639-6151, and his
e-mail address is jwaller@woodmclaw.com.
Article Source: http://EzineArticles.com/?expert=John_Waller
Do you know what “proceedings supplemental” are? If you are in the business of collecting judgments in Indiana, and from time to time virtually all secured lenders are, then the June 27, 2007 opinion by the Indiana Supreme Court in Rose v. Mercantile National Bank, 2007 Ind. LEXIS 471 provides a great primer on the subject.
Facts of Rose. Plaintiffs sued an S-Corp, and the trial court entered judgment against S-Corp for $159,581. During the litigation, the owners of S-Corp sold the company in an asset sale to Corporation I for $475,000. Corporation I then transferred its rights and obligations under the asset-purchase agreement to Corporation II, a wholly-owned subsidiary of Corporation I. After the sale, the owners of S-Corp deposited the sale proceeds into S-Corp’s bank account and, within three days, issued checks to themselves for the entire sale price. The closing occurred approximately one month after the trial court entered judgment for Plaintiffs.
About a year later, presumably because the judgment had not been paid, Plaintiffs moved for proceedings supplemental and brought fraudulent transfer claims against S-Corp, Corporation I, Corporation II, and S-Corp’s owners. Plaintiffs asserted that assets had been transferred out of S-Corp to avoid paying the judgment. During the proceedings supplemental, Plaintiffs sought to amend the complaint to add additional claims and to recover new damages. The result was a new judgment for Plaintiffs for $542,435.49 plus attorney’s fees of $162,730. The Indiana Supreme Court affirmed the trial court’s finding that the two owners of S-Corp fraudulently transferred assets, but the Court set aside the new claims for new damages.
Proceedings supplemental generally. Proceedings supplemental are designed to help judgment creditors enforce judgments – for discovering assets and to set aside fraudulent conveyances. Proceedings supplemental are merely the continuation of an original action. Ind. Trial Rule 69(E) generally governs proceedings supplemental, and the motion is made in the court where judgment was rendered. Discovery is permitted, and a hearing must be conducted, after which certain property is to be applied toward the judgment. Id. at 4-5.
Fraudulent transfer. Judgment creditors often use proceedings supplemental to bring fraudulent transfer actions, the purpose of which is to remove “obstacles which prevent the enforcement of the judgment . . . through the levy of execution.” The essence of a fraudulent transfer action is not to attack the transfer or to recover damages. Instead, the action “is to subject property to execution as though it were still in the name of the grantor.” Id at 6-7.
New claims. Unlike Plaintiffs’ fraudulent transfer claims, Plaintiffs also sought new damages from the S-Corp owners by adding a new cause of action under Indiana’s Crime Victims’ Compensation Act, which allows for treble damages and attorney’s fees. The Court said this was a no-no:
Allowing a new claim to be tacked on at this stage would be just as
unfitting as opening up any other litigation to add new claims after
judgment. Such an approach to collections would lay the
groundwork for perpetual motion-a far cry from the timely and
efficient system of conflict resolution the nation’s judiciary strives
to provide. Proceedings supplemental are appropriate only for
actions to enforce and collect existing judgments, not to establish
new ones.
Id. at 7. So, a new claim for new damages, and thus the imposition of a new judgment, should be filed in a new lawsuit. On the other hand, “any action to assist in collection of an original judgment [like a proceeding supplement] must be filed under the same cause number as the original action.” Id.
In addition to addressing the generalities of proceedings supplemental, the Indiana Supreme Court provides clarity for lenders concerning fraudulent transfer actions, which can be appropriately prosecuted in proceedings supplemental or, in other words, in a continuation of the same case and in the same trial court that rendered the judgment. Any new claims or, in other words, actions for separate and distinct damages, however, must be the subject of another lawsuit.
John D. Waller is a partner at the Indianapolis law firm of Wooden & McLaughlin LLP. He publishes the blog Indiana Commercial Foreclosure Law at http://commercialforeclosureblog.typepad.com John’s phone number is 317-639-6151, and his
e-mail address is jwaller@woodmclaw.com.
Article Source: http://EzineArticles.com/?expert=John_Waller
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