J. Russell Jackson

Are you a non-resident landlord in Rhode Island? You must file with the RI Secretary of State!

§ 34-18-22.3 Nonresident landlord to designate agent for service of process. - A landlord who is not a resident of this state shall designate and continuously maintain an agent upon whom service may be made of any process, notice, or demand required or permitted by law to be served, including but not limited to notices of minimum housing code violations. The agent shall be a resident of this state or a corporation authorized to do business in this state. The landlord's designation shall be in writing, shall include the name and address of the agent, shall include the street address of each property designated to said agent, and shall be filed with the secretary of state and with the clerk of the city or town wherein the dwelling unit is located. If a landlord fails to comply with the requirements of this section, rent for the dwelling unit abates until designation of an agent is made and the landlord shall be subject to a fine of up to five hundred ($500) dollars per violation, payable to the municipality.

Contact my office today if have questions or need assistance with this filing.

Banks are eager to negotiate with those who are experiencing difficulty in this economy. Now is the time to start the process. Legal representation is vital to help homeowners on the road to recovery.

Sign of the times..

National economic experts have only recently acknowledged a simple truth that Rhode Islanders have known for many months....we are in a recession! Statewide, our unemployment rate has climbed above 9% and the challenges facing our local economy are deep and broad. Accordingly it should be no surprise that many Rhode Islanders simply cannot keep their heads above water and are turning to bankruptcy as a means to eliminate debt and financially rebuild their lives.

The Bankruptcy Reform Act of 2005 was intended to curb alleged abuses of the Bankruptcy Code and make it more difficult for debtors to secure relief under Chapter 7, which allows you to discharge or get rid of all of your unsecured debts and keep most, if not all of your possessions including your car and your home. Although the perception was that the new law would preclude most people from filing for bankruptcy, the reality is that the vast majority of debtors that would have qualified prior to the change in the law, would still have qualified after.

The practical result of the Reform Act was to cause a rush of filings nationally, and in Rhode Island, prior to October of 2005 when the law changed. In 2006 there was a substantial drop off, and by 2007 filings began to trend upwards again. To no one's surprise, 2008 has seen a rapid increase in local filings. Here in Rhode Island we are projected to have approximately 4100 bankruptcy filings by the end of this year. That is an increase of almost 55% above the total for our state in 2007. Not only is it a clear reflection of the impact that our struggling local economy has had on individuals, but I would venture that it is also an indicator of a growing awareness among debtors that bankruptcy is still an available option, despite the changes of 2005. The Bankruptcy Code in large part was intended to provide individuals the opportunity to get out from under stifling debt, and get a fresh start. Thousands of Rhode Islanders are now taking advantage of the opportunity provided under the Bankruptcy Code to survive these tough times.

BENEFIT RAISES FUNDS FOR FUEL ASSISTANCE

Jackson Law, Ltd. hosts a gathering of realtors and mortgage lenders at Sardella's Restaurant in Newport, RI to help raise money for the Community Housing Resource Board, providing housing aid and fuel assistance to those in need.

Newport, Rhode Island - November 6, 2008

Local Realtors and mortgage lenders gathered for cocktails at Sardella's Restaurant in Newport, RI to raise money for the Community Housing Resource Board, an outreach organization which assists low and moderate income residents of Newport County who are seeking fuel assistance, as well as affordable or emergency housing.

Attorney J. Russell Jackson of Jackson Law, Ltd., organized the event, which helped raise over $700.00 for the non-profit organization. "With our difficult economy, and the unpredictability of fuel costs in the coming months, I know that the Community Housing Resource Board will be facing unprecedented demands this winter. It is imperative that we support these type of organizations which help those in our own community get through troubling times", said Jackson.

Founded in 1978 by Newport Police Officer Jimmy Winters, the "Housing Hotline" also assists tenants with landlord issues, fair housing complaints, evictions and emergency funds to prevent utility shut offs. The Board also plays an integral part in working with local municipalities to realize their long-term neighborhood revitalization efforts and upgrade their affordable housing plans.

For more information, contact:

Elizabeth Brantingham

Director of Marketing

Jackson Law, Ltd.

26 Valley Road - Suite 203

Middletown, RI 02842

Tel: 401-848-7979

beth@jacksonlawltd.com

A number of factors have come together during the course of the last year which have resulted in a "perfect storm" in the real estate market. The sub-prime mortgage crises has produced a large population of homeowners who borrowed against their properties when the market was hot, values were high, credit was easy, and adjustable rate mortgages provided low initial payments. Many of these same folks are now facing the sobering reality of dealing with mortgage rates that are starting to go variable, resulting in substantially higher monthly payments. These difficulties are compounded by tightening credit, depreciated home values, and an overall economic slow down, resulting in an inability for these troubled homeowners to refinance or sell their properties for an amount sufficient to payoff the entire principal due and outstanding on their mortgages. The unfortunate results have been rising loan defaults and a record number of foreclosures nationwide. Although the outlook may look bleak, homeowners getting squeezed to the edge of foreclosure still may have a few options.

Borrowers behind on their mortgage payments can work with their lender to modify the terms of the loan or negotiate a forbearance agreement to get back on track with their lender and recover from a temporary financial setback. A forbearance agreement will allow a borrower to pay an accrued deficiency over an extended period of time, provided they can resume and continue to make regular mortgage payments, and demonstrate that the financial issues which led to the arrearage have been resolved. A loan modification is a renegotiation of the terms of the original note and mortgage, often resulting in a reduced monthly payment. For a homeowner looking to keep their property, pursuing either of these options may make sense, especially if the borrower's financial situation has stabilized. For those homeowners, however, who are in properties they can no longer afford, are dealing with an ongoing financial hardship, and are slipping into default on their loans, a short sale may be the answer.

A short sale is a process by which the lender agrees to accept a payoff amount less than what is due and owing on the loan. In exchange for the payment, the lender will release the mortgage on the property, and in many circumstances, agree to accept the lesser amount as payment in full, waiving any deficiency remaining on the note. In order to make this happen, the borrower must be prepared to run through a gauntlet of requirements and disclosures prior to getting any consideration from the bank. At a minimum, the homeowner must be prepared to provide a financial statement, proof of income and assets, copies of bank statements, a comparative market analysis indicating the market value of the property, and a detailed hardship letter which gives an explanation as to the circumstances which have led to the borrower's default. Additionally, an estimate regarding the costs of sale, and the net amount to be received by the bank will need to be prepared. If the numbers work, it can be a win-win for both lender and borrower, allowing the homeowner to move on and sparing a bank the time, trouble and expense of foreclosing and adding another property to their inventory.

Despite the benefits, the process can be long and tedious. Banks are so overwhelmed with modification requests, foreclosures, and short sales, that loss mitigation departments will often not evaluate the borrower's proposal until there is a signed purchase and sale agreement in hand. Sellers will need to proceed with caution, and should have a clear understanding of their legal rights and obligations, as well as their contractual duties, prior to signing a purchase and sale agreement. At the very least, sellers need to make sure they can back out of an agreement and void a contract and sale agreement if the bank rejects the short sale proposal. A prudent seller should engage legal counsel and the assistance of a realtor to work through this process. If all goes well, the realtor's commission, many costs and most of the legal fees will be disbursed from closing at the time of sale, and in essence be paid by the bank.

Ultimately for the homeowner in trouble, the goal of a short sale is to get the property sold, get out from under the mortgage, and move forward without having to pay any deficiency to the bank. Make no mistake, however, this process will affect a borrower's credit score, but the alternatives of a foreclosure or bankruptcy may have much greater and long lasting impacts. Local mortgage broker Jonathan Estrella of Star Financial, Inc. states that "A credit report containing the terms Foreclosure, Deed in Lieu of Foreclosure or Short Sale, may prohibit prospective borrowers from qualifying for a mortgage for a minimum of 2 years. As part of the short sale process, it is imperative that borrowers attempt to negotiate with lenders regarding the manner in which the transaction will be reported. The responsiveness of lenders on this issue will vary, but if a lender accepts the short sale as payment in full, and lists it as such on the borrower's credit report, it will enable a borrower to rehabilitate their credit score and gain underwriting approval for a future mortgage much sooner."

The good news is that there are greater tax incentives for most homeowners to complete a short sale. Up until recently, the amount of the deficiency forgiven by the lender was treated by the IRS as taxable income to the borrower; however the Mortgage Forgiveness Debt Relief Act of 2007 changes this practice. Under most circumstances, taxpayers may now exclude debt forgiven on their principal residences. Homeowners should seek the advice of a tax professional to fully appreciate the limitations and filing requirements of the new law, however for many, this represents a significant savings opportunity. "The new law contains important provisions for struggling homeowners," said Acting IRS Commissioner Linda Stiff. "We urge people with mortgage problems to take full advantage of the valuable tax relief available."

Engaging in a short sale can be a long and intense process for people already faced with difficult decisions. For the right cases, the benefits of completing a short sale will far outweigh the costs of taking no action, and leaving your future to be determined by others. Getting informed and drawing on the recourses of legal, tax and real estate professionals will ensure your rights and interests are protected and provide you with the greatest opportunity for success.

J.Russell Jackson may be reached at

counsel@jacksonlawltd.com or 401.848.7979