A federal government agency has issued new rules for home mortgages that will rewrite the way that banks decide who gets a home loan. If you’re thinking about buying a new home, you’ll want to know about these rules, so you’ll know what to expect when you apply for a mortgage and what you can do to increase your chances of getting the loan you want.
The rules officially take effect next January, but many lenders will begin following them as soon as possible.
For a long time, banks have been worried about being sued by homeowners if they make a loan that the homeowner can’t reasonably be expected to pay off. The new rules say that banks can no longer be sued in this way if they make loans that follow certain requirements. These loans are called “qualified” mortgages.
While it’s possible that some lenders will continue to issue “unqualified” mortgages, this will be the exception rather than the rule, because lenders will be facing potential legal liability if they do so. It’s expected that most lenders will try to issue only qualified mortgages.
So, what is a qualified mortgage, and how do you qualify to get one?
The most basic new rule is that a mortgage is “qualified” only if your total debt payments – including not just the mortgage, but also car loans, educational loans, etc. – are no more than 43% of your pre-tax income.
In addition, lenders are required to carefully scrutinize your employment status, income, and credit history to verify that you’ll be likely to be able to repay the loan.
That’s a pretty strict rule. To put it in perspective, of all the mortgage loans that were issued in the U.S. in 2011, only about three-quarters would have been “qualified” under these rules.
However, because today’s real estate market is still in recovery mode, the Consumer Financial Protection Bureau – the agency that issued the rules – is providing a temporary alternative.
That is, even if you don’t qualify under the 43% test, you might still qualify if you would pass an automated mortgage-granting test used by Fannie Mae, Freddie Mac, or the Federal Housing Administration. It appears that most of the mortgages issued in 2011 that didn’t pass the 43% test (but by no means all of them) would still have qualified under one of the automated tests.
This alternative won’t be around for long; it lasts only until the government’s conservatorship of Fannie and Freddie ends, or in seven years, whichever comes first.
Also, the alternative test can’t be used if you apply for a so-called “jumbo” mortgage. These are mortgages that are larger than the government’s loan ceilings, which are $417,000 in most of the country (but can be as high as $729,750 in certain high-cost markets).
Here are some other important provisions of the new rules:
Ex-wife loses alimony because of hiding assets
When marriages get unhappy and divorce is on the horizon, there can be a real temptation to hide assets to keep them from the other spouse. But tempting as this may be, it’s morally wrong, and it can also get you into legal trouble.
Take the case of a New Jersey woman who took $350,000 from the business she owned jointly with her husband and secreted it away. Clever as she was, during divorce proceedings a forensic accountant discovered the secret stash.
The woman thought she’d be okay in the end, since the divorce judge simply ordered her to repay half the amount, and proceeded to award her $600 a week in alimony.
But husband appealed, arguing that the woman’s actions were so terrible that she should be disqualified from receiving alimony payments.
An appeals court agreed with the husband. In general, it said, the right to alimony isn’t affected by who was at fault for the marital breakdown. But this was a rare case where a spouse “kicked” the couple’s economic security “in the teeth” through embezzlement, and the fault was so blatant that the woman shouldn’t be allowed to get away with it
Medicare expands its coverage for people with chronic conditions
In a major change, the federal government has agreed to provide seniors who have chronic illnesses and disabilities with Medicare coverage for many services … even if those services will simply maintain the person’s present health status and aren’t likely to improve their condition.
This is very important news for people who have diabetes, heart disease, Alzheimer’s disease, multiple sclerosis, Parkinson’s disease, Lou Gehrig’s disease, arthritis, or the effects of a stroke, among other medical conditions.
Soon, these seniors may be able to obtain Medicare coverage for care in a skilled nursing facility, as well as home health care and outpatient therapy.
For decades, Medicare had a “rule of thumb” that coverage for these services was available only if they were likely to lead to an improvement in the patient’s condition. This resulted in many people with chronic illnesses being unable to obtain coverage for treatments that were critical to maintaining their health, but that didn’t promise a cure or improvement.
According to the government, treatments that weren’t likely to lead to improvement were considered “custodial care,” which Medicare doesn’t cover.
But in January 2011, a group of seniors and some elder advocacy groups brought a nationwide class action lawsuit against the government. They argued that this policy violated their rights, because the “rule of thumb” against covering such services never actually appeared anywhere in the Medicare laws.
The government tried to have the case thrown out, but a federal judge rejected that request and allowed it to proceed. Shortly afterward, the government agreed to settle the case by expanding Medicare coverage.
The settlement is being reviewed by the court, and it’s still unclear exactly when the policy change will go into effect. It’s also unclear whether the change will apply just to future claims or to claims going all the way back to January 2011.
Under the terms of the settlement, seniors who are enrolled in Medicare Part A, which covers hospitalizations, may be eligible for up to 100 days in a skilled nursing facility (as long as it follows a three-day hospitalization), as well as up to 100 home visits following a hospitalization. Seniors who are enrolled in Part B, which covers doctor visits and other outpatient services, may be eligible for potentially unlimited home visits.
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In Massachusetts, along with most other states, there are two types of child custody: 1) legal custody; 2) physical custody. Not all parents understand the difference between the two types of custody, and it can sometimes be confusing.
When a parent has legal custody of a child, then the parent has the right to make important and major decisions in the child’s life. This includes where the child will go to school, decisions about the child’s health and welfare, what religion(s) the child will be raised in, as well as other significant decisions affecting the child. Typically, but not always, both parents share legal custody, which then is known as joint legal custody. However, in certain instances, only one parent has legal custody, which is known as sole legal custody.
The other type of custody is physical custody. This type of custody relates to who the child physically resides with. If a child resides with one parent more than the other parent, then the parent who has the child more of the time has primary physical custody. If parents equally share time with the child, then there is no primary physical custodian, but rather joint or shared physical custody.
A custody arrangement is typically created either by agreement of the parents or by order of the court. The legal standard for developing a custody arrangement is the best interests of the child. Through the legal standard, the courts analyze how a child’s living arrangements and upbringing affect their physical, mental, and emotional well-being, and based upon that, what is best for the child. Oftentimes, the determination is very case and fact-specific, and there is not one “clear cut” answer to any case.
Divorces can be a lengthy, complicated and emotionally charged process. With all of the procedural nuances of a divorce proceeding and procedural rules of the court, even after several court appearances, it is entirely possible that a spouse will not have had the opportunity to testify and tell his or her side of the story. Oftentimes, the first few court appearances just involve the parties’ attorneys arguing on their respective behalves and a judge making a ruling. It is not until much further into the process that a spouse has an opportunity to speak on own their behalf and tell their side of the story.
A recent study showed that brides and grooms-to-be who have cold feet before their wedding could very well foreshadow an unhappy marriage that could even end in divorce.
Brides and grooms-to-be who have cold feet should really consider entering into a prenuptial agreement with their future spouse. This agreement can protect both spouses-to-be in the event that the marriage does not work out and end in a divorce.
Contrary to popular belief, a prenuptial agreement does not protect just one spouse; it protects both spouses. It must be fair and reasonable for both parties. It can be a very specific agreement dealing with all aspects that may be covered in a potential divorce, including distribution of property and assets, alimony, child support, and child custody. Or, the agreement can be narrow, and just address one or two issues, like protecting a specific property owned by one spouse-to-be.
A prenuptial agreement also requires both spouses-to-be to make a full and accurate disclosure of their assets and liabilities. This way neither spouse enters the marriage with any financial secrets.
A prenuptial agreement can be a good idea to protect spouses who are concerned about any potential risk of divorce in the future.
Source: www.theglobeandmail.com , "Wedding day cold fee? Divorce may be in the cards"Wency Leungr, Nov. 8, 2012.
Holidays can be an exciting time for families. They can include family gatherings, big meals, and other fun events. But they can also be a stressful time for parents and children when negotiating a visitation schedule or co-parenting plan resulting from a divorce. This can mean maintaining different schedules and children splitting their time between their mother’s family and their father’s family. This can lead to stress and aggravation for not only the parents, but for the children as well.
There are, however, ways to prevent this. When negotiating a parenting plan or visitation scheduling in the midst of a divorce, parents should consider not just the regular weekly visitation schedule or parenting plan, but holidays as well. When drafting a visitation schedule or parenting plan, the parents should consider what traditions, events, and functions, both the mother’s family and the father’s family have, and try to develop a visitation schedule or parenting plan that accommodates all of these factors, and allows the children to see both sides of their family and celebrate each holiday.
It’s important to plan for all holidays. So in addition to planning for the major holidays, such as Thanksgiving, Hanukkah, Christmas, New Years, and Easter, parents should think about the smaller, or shorter holidays, such as Memorial Day, Fourth of July, Columbus Day, Veterans Day, and other “one day” holidays. Parents should also remember to plan for extended school breaks, such as winter vacation and summer vacation.
By placing a parenting plan or visitation schedule in your Separation Agreement that includes holidays, it provides some structure and predictability for everyone involved. That way parents can plan special functions or outings for each holiday. This also makes each holiday less stressful for the children, because the children will know in advance with whom they will spend their holiday. When a holiday involves extended family, it also helps the extended family plan any special functions and know whether to include the children in the planning.
Each family is different and plans for these holidays in different ways. What is most important when drafting a parenting plan or visitation schedule is to make sure it works for your family, including you, your former spouse, your children, and also your extended family. Think about what your family usually does for each holiday. Consider any traditions or special functions you and your family may attend for each holiday. That way you will have a parenting plan or visitation schedule that suits your family’s needs.
Under the Massachusetts Alimony Reform Act, which became effective in March 2012, there are new standards and guidelines upon which a spouse may file for a modification of alimony. There are four types of alimony under the Massachusetts Alimony Reform Act: 1) General Term ; 2) Rehabilitative ; 3) Reimbursement ; and 4) Transitional . Based upon the new law, only General Term and Rehabilitative are modifiable.
General Term Alimony
General Term may be modified upon a showing of a material change in circumstances. Modification on these grounds may be indefinite, permanent, or finite in duration. General Term may be modified or terminated upon a showing that the recipient spouse is and has been cohabitating with another person for at least 3 months.
Additionally, any payor spouse who will reach full retirement age on or before March 1, 2015, may file for a modification of alimony on or after March 1, 2013.
The Alimony Reform Act also allows a General Term Alimony award to be modified based upon certain durational limits. These limits are as follows:
Rehabilitative Alimony may be modified by a recipient spouse who has not remarried to extend the alimony obligation past the termination date upon the showing of compelling circumstances of the following factors:
Under the new Massachusetts Alimony Reform Act, which became effective in March 2012, if a spouse who receives alimony begins to cohabitate with another person, then alimony may be modified or terminated under the new law. This is a departure from the previous Massachusetts alimony law, which did not allow for termination or modification based upon cohabitation.
In cases involving General term alimony, a payor spouse shall modify or terminate his or her alimony obligation if the recipient spouse has been cohabitating with another person for a continuous period of at least 3 months. Cohabitation is defined as persons who maintain a common household when they share a primary residence together with or without others.
It must be noted, however, that the payor spouse has the burden of proving that the recipient spouse is cohabitating with another person. To prove this, the payor spouse may show any of the following:
When considering friendlier alternatives to divorce litigation, you should understand the differences and similarities of the options available to you. Specifically, mediation and collaboration are two popular forms of alternative dispute resolution that might sound similar in theory but have different practical implications. You should choose according to a style that most caters to your relationship with your spouse and/or your lawyers.
A divorce mediator might be a lawyer, finance professional, or social worker. They are trained in all aspects of divorce mediation: economical, legal, and psychological. Mediators who are certified have gone through minimum hourly requirements for training in dispute resolution, as well as divorce proceedings and issues. Mediators are trained to be neutral third parties to a mediation session. They do not represent either party, and cannot offer legal advice to any party; although the parties may retain counsel on their own to assist them in the process, if they wish. At the end of mediation, the mediator will draft the terms of settlement for both parties to review and ultimately sign. If the mediation process breaks down at any point, then the parties are not bound by the mediation terms prior to signing the agreement, and may choose to litigate with their attorneys.
Training requirements for a collaborative divorce lawyer are similar to that of a mediator. They will be trained for a minimum number of hours in collaboration law, client-centered facilitative conflict resolution, and collaboration communication skills. However, the structure of a collaborative divorce significantly differs from that of mediation. Collaborative divorce involves the parties and their respectively retained collaboration lawyers, along with the professionals who form part of the collaboration team (such as appraisers, accountants, and mental health professionals). The lawyers are not neutral parties; they represent their clients’ interests during the collaboration process. Even though the lawyers will have different objectives for their clients, they will collaborate as a team to reach an agreement which satisfies both their clients. Another structural difference is that parties to a collaborative divorce will sign “Participation Agreements” which lay down the ground rules of the process. Typically, these will include confidentiality agreements, agreements not to litigate, and general enforcement clauses. On the one hand, these agreements provide financial incentives for the parties to work towards a collaborative divorce and discourage litigation. On the other hand, it does create a binding obligation for the parties to retain new legal counsel from new firms in the event that they forgo collaboration for litigation and in general, the collaborative divorce process can be more expensive than by way of divorce mediators.
Both collaborative divorce and mediation require honest, voluntary, free exchange of information and negotiation. Although the collaborative lawyers and the mediator play different roles in the proceedings, they both strive to achieve a quick, cost-efficient, and amicable divorce. Going through either of the alternatives to divorce litigation is preferable for divorcing couples who are willing to cooperate and to achieve a fair result.
For additional information contact us today at 1(800)290-1012 or at firstname.lastname@example.org a free consultation.
Child Custody & Visitation Mediation FAQ’s
Do you wish there was a way to make getting a separation from your significant other or divorce from your spouse easier on your children?
Mediation helps preserve and maintain whatever is left of the good part of your relationship by significantly reducing the tension of getting a divorce. Parties who mediate their family law matters are typically able to reach an agreement that first serves the “best interests” of their children and then themselves.
Who is best suited to make decisions about your children?
Typically the parties are more satisfied by having arrived at their own "solutions" to the problems as opposed to having a judge ram a decision against you both that neither party may like.
How do you know if mediation is right for you?
Mediation may be an option if each party wants to save money for their children’s interest instead of paying excessive fees to their lawyers and if both parties wish to reach and create a thorough agreement in a short period of time usually a month or so as opposed to waiting close to 14 months for the traditional and contested divorce to play out.
Would you like to reduce the fees involved in child custody for the same results?
If you are able to Mediate your child custody matter it reduces costs significantly. Eliminating costs means that money can be spent on the children and their education. Instead of spending upwards of $ 10,000 each and usually more on attorney fees, you can spend less than $ 1,000 each through Amaral’s Online Divorce Mediation (ODM) program found at www.OnlineDivorceMediation.Com.
Child Custody & Visitation FAQ'S
What is child custody?
Child custody is a term that refers to the rights and responsibilities that a parent carries with respect to his/her child.
What is child visitation and a "Parenting Plan"?
The term "child visitation" refers to the time when the non-custodial parent has the right to be with the child. The custodial parent's right to be with the child is often subject to the non-custodial parent's right to visit with the child.
What factors determine custody and visitation?
The term "parenting plan" refers to the agreement between the parents or the court order which defines provisions for custody and visitation. The parenting plan also defines when the child is to be with the non-custodial parent.
The primary consideration is, "What is in the best interest of the child?"
Child Support FAQ'S
What is child support?
Child support is a payment by one parent (often the "non-custodial parent") to the other parent for the support of their common child. It is in the best interest of a child for both parents to be obligated to pay for the support of their child.
What is a child support order?
A Child Support Order is a document from a court that states (a) when, (b) how often, and (c) how much a parent is to pay for child support. A Child Support Order is typically part of a divorce decree or paternity judgment.
Who can be ordered to pay it?
A court can order either parent of a child to pay support to other parent. The court order for support is usually payable on a monthly basis. Many states now require that child support be paid by wage assignment (automatic deductions from the paycheck) whenever available, thus reducing the need for subsequent enforcement actions.
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