House Search Warrant Powers Clarified by U.S. Supreme Court

A warrant allowing police to search a house does not give them the authority to detain someone who is away from home at the time the search is being conducted, the U.S Supreme Court ruled.

Police investigating a drug case got a search warrant for an apartment on Long Island, New York, in 2005, after an informant claimed to have seen guns when he went there to buy drugs from a man known as "Polo."  While detectives watched the apartment, waiting for the time of the search, they saw a man matching Polo's description drive away.

They followed the car for almost a mile, then pulled it over. In the man's pocket, they found a set of keys.  They drove him back to the apartment, where officers found a gun and drugs in plain view.  It was later discovered that one of the keys opened the door of the apartment.

In a 6-3 ruling, the U.S Supreme Court said that the general power police have to detain someone at home during a search doesn't apply beyond the immediate area.  Police can, the court has ruled, detain someone at the place being searched for the sake of officer safety and to prevent a person from interfering with the effectiveness of the search.

But, said Justice Anthony Kennedy for the court, "Once an occupant is beyond the immediate vicinity of the premises to be searched, the search-related law enforcement interests are diminished."

Mortgage Pact Relief: $19 Billion

Five of the largest U.S. banks have provided $19 billion in mortgage debt write-downs to some 240,000 borrowers under the terms of a federal and state settlement of foreclosure-processing violations reached one year ago. The banks included Bank of America, Ally, Citigroup, Inc. JP Morgan Chase & Co and Wells Fargo Co.  Bank of America Corp., which was required to provide the majority of relief under the foreclosure pact, with about $13.5 billion in homeowner debts written off. Another $2.2 billion in loan forgiveness modifications were in a trial stage as of December 31^st.  For more information please see our website at www.carthewlaw.com or call one of our Attorneys at 248-656-6800.

Home Sales on the Rise

 Sales of new homes are surging in the U.S., far outpacing results for less expensive existing homes and creating an unusual disparity in the housing recovery. The trend partly reflects the small inventory of previously owned homes, now at a 13-year low after investors picked over the long-depressed market. New-home sales jumped 28.9% in January from a year earlier to the highest annual sales pace in four years, according to data released Tuesday by the Commerce Department.   Sales of previously owned homes rose 9.1%.   For more information please see our website at www.carthewlaw.com or call one of our Attorneys at 248-656-6800.

FANNIE MAE seeks to reduce Foreclosure costs by changing “Forced Insurance” policies.

Homeowners with mortgages are required to carry insurance policies to protect their property, which serves as collateral for the loans.  Homeowners who are struggling to make their payments sometimes allow their insurance to lapse due to non-payment.  However, lenders can place “forced” insurance policies on these customers which can greatly increase the cost of the monthly payment and escrow.  Force-place policies, as they are known, are issued primarily through just two insurance companies. They are expensive, and some banks are paid hefty commissions for arranging them.  Current force-placed insurance rates are at least twice that of standard homeowners’ policies, regulators say.

This is an additional source of revenue to the lenders and can cause homeowners to dig deeper into default or debt.  Because of the potential loss of revenue these policies provide, Lenders are fighting an effort by Fannie Mae to cut costs on backup insurance policies often imposed on cash-strapped homeowners, a step that would crimp the lucrative fees the lenders collect on the coverage. For months, Fannie has been seeking approval from its regulator, the Federal Housing Finance Agency, to use a consortium of insurers led by Zurich Insurance Group AG that it lined up last year, according to people familiar with the company. Under the new proposed system, Fannie would require banks handling its mortgages to use the Zurich-led consortium, which would charge 30% to 40% less than current premiums, according to the people.