SunTrust Settles U.S. Mortgage Claims

SunTrust Banks Inc. is paying more than $1 billion to settle federal allegations of mortgage violations, in the latest move by a bank to put behind it costly legal issues stemming from the financial crisis. A portion of the money - $160 million - will be paid to resolve claims that SunTrust mishandled borrowers' loans. SunTrust is the first bank to join the national mortgage settlement since the deal was announced in February 2012 with Bank of AmericaCorp., Citigroup Inc., J.P. Morgan Chase & Co. and Ally Financial Inc. The settlement introduced more than 300 new servicing standards that required the banks to improve their communication with borrowers who are seeking loan modifications.

 

For more information please visit our website at www.carthewlaw.com or call one of our Attorneys at 248-656-6800.

New Property Transfer Law Effective December 31, 2013

When there is a "transfer of ownership" to a new owner (including a family member), the taxable value of the property generally is "uncapped" to the state equalized value, which is supposed to represent 50 percent of the property's current fair market value.  Uncapping the taxable value after a sale or transfer can result in the new owners paying significantly more in property taxes than longtime previous owners of the same property.

A new law now extends tax protection to transfers between close relatives. Under Public Act 497 of 2012, signed into law in December 2012 but made effective December 31, 2013, a tax exemption will apply to a transfer of real property to a person related by blood or affinity to the first degree.  This includes a person's parents and children (including legally adopted children). Persons related to the first degree by affinity also include a person's spouse, mother-in-law, father-in-law, son-in-law, daughter-in-law, stepson, stepdaughter, stepmother or stepfather. The exemption applies only to property that is classified as residential real property, and only as long as the use of the property does not change following the transfer. MCL 211.27a(7)(s).

The new law is not limited to primary homesteads. Therefore, it allows a tax exemption on secondary residences such as second homes, cottages and vacation homes.  In essence, the new law will allow parents to transfer long time cottages and vacation homes to close relatives without an increase in tax.

For more information please visit our website at www.carthewlaw.com or call one of our Attorneys at 248-656-6800.