Q & A

By: Joe Catalano
Newsday
July 13, 2001

Q.

I had the misfortune of falling on the sidewalk in front of a house. One slab of concrete was 4 inches above the rest and I needed 30 stitches to close the cut on my forehead.

My lawyer said he could not obtain the name of the owner's insurance company. Presently, he has a lien on the property and the bank holding the mortgage has started foreclosure proceedings. Is it possible for a homeowner with a mortgage not to have insurance? Is there a way to obtain the insurance company's name?

A.

If a homeowner has no mortgage, he or she is under no legal obligation to carry insurance, said Sheldon M. Goldstein, a partner who heads the real estate group in the Mineola law firm Meltzer, Lippe, Goldstein & Schlissel. However, before someone can close on a home with a mortgage, lenders do require proof that insurance has been purchased. Both the homeowner and lender are named on the policy. The lender has a substantial financial stake in the home and wants to be sure it is safe should disaster, like a fire, strike, he said.

One indirect way you might get the insurance company's name is through a title search, said David Drucker, chief executive officer of the Realty Data Corp. in Mineola, which offers online real estate data to title companies and others. This lists the lender, but the company may not give out the name for privacy reasons, he said.

If the lender started foreclosure proceedings, as you mentioned, the company's name could be in the filing papers.

But one thing you need to be sure of is that the homeowner owns the sidewalk, not the local municipality. If the municipality is the owner, it may be liable, Goldstein said. A title search can answer that question.

Q.

I am a first-time home buyer purchasing a $66,000 co-op with a $40,000 mortgage. I shopped around and was quoted a rate of 6.75 percent with two points by the mortgage broker I chose. On April 18, I got a good faith estimate of 6.75 percent. But later, the commitment letter that I received said the rate could vary. I called the broker, who said she could lock in the 6.75 percent rate, but it could be dangerous. If the co-op board turned me down, I could face a large penalty if I didn't take the mortgage.

I waited and was approved by the board. When I locked in on June 5, it was now 7.125 percent. The broker swears rates went up since April 18. Is this true, given that Alan Greenspan has been cutting rates since then?

A.

Mortgage rates have gone up, said Zahra Jafri, president of Lynx Equities, a Great Neck mortgage broker. Greenspan and the Federal Reserve have been lowering short-term rates. Mortgages, however, follow long-term bond rates, which have risen. One reason is the high demand for mortgage money, she said.

Some lenders charge a lock-in rate that you lose if the co-op board turns you down and you don't purchase the unit, Jafri said. There are lenders who don't levy this fee, however.

Q.

Suppose a seller accepts an offer, subject to a sales contract. His real estate agent had advised lowering his price due to a structural problem stated in the buyer's engineer's report. But when the seller gets a copy of the report, after agreeing to the lower price, he finds no real structural problem, just cosmetic things the seller could repair at a nominal cost. Has the agent acted improperly? Should he reimburse some of the commission? Can he be reported to the New York State Department of State which licenses agents?

A.

The answer isn't a simple yes or no, said Howard Goldson, a partner in the Rockville Centre law firm Goldson & Nolon Associates and counsel for the Long Island Board of Realtors.

Presumably, you didn't see the report until after you made the price concession.

However, did the agent have a copy of the report when he advised you? Did you ask to see it if he did? Did you ask him to obtain a copy if he didn't? If you asked to see a copy, did he refuse to show it or to obtain one? If you didn't ask to see a copy before you made the price concession, the agent probably didn't have an obligation to get one, Goldson said. But whether the agent acted improperly in suggesting that you come down in price and is obligated to reduce his commission is hard to say without knowing all that happened, he said.

If you feel wronged, file a complaint with the New York State Department of State and/or The Long Island Board of Realtors, Goldson said. Both will investigate to see whether disciplinary action is required, he said.