Sunday, April 28, 2013

When smart people die like idiots.

“He was a very smart man but he died like an idiot."

So eulogized by a close friend, Roman Blum died at age 97 with no wife, no children, and no heirs. Mr. Blum also died without a Will. To this point, Mr. Blum followed a trajectory similar to many of our clients, here in Maryland.  But unlike most of us, Mr. Blum left $40 Million behind. It will now be left to the state courts in New York to divvy up the money, according to laws governing folks who fail to leave instructions for their probate estate. The government stands to make a windfall!

Your estate, the collection of assets you worked hard to accumulate during your life, can benefit others when you pass.  And you have a lot to say about who benefits.  It simply must be written down. Otherwise, you may well benefit persons and governments that you consider unworthy of your help.

Most folks simply have not considered what may happen to their bank accounts, house, cars, collections and other things upon death.  Most of us just don't like to consider our own death.

The State of Maryland has considererd your death, and it has made plans for all your stuff, and your kids.  It is called "intestacy." When you die without a Will, you are deemed "intestate." And at the moment of your death, your estate (that pile of money and things you have accumulated) becomes subject to Maryland statutes that cover folks like you...folks that never considered drafting a Will.

In a manner of speaking, the State of Maryland has drafted your Will, already.  If the rules of intestate succession (who gets your stuff, your money, and who raises your kids) work for you, then you certainly should not write a Will.  But if you are not satisfied having the State of Maryland interfering in your family affairs, then you need to write a Will.

For instance, if you die before your spouse (wife or husband, or same sex), there is no guarantee that your spouse will inherit your entire estate.  If you leave a minor child or a parent, your spouse will be entitled to $15,000, off the top, and then only 1/2 of the remainder.  And it gets worse.

If you have left a minor child to inherit 1/2 of your estate, it will be left to the Circuit Court to appoint a trustee for the child's money, and it may not be your spouse!  That trustee will make annual, and public, reports on how the money is spent. And the Circuit Court may well need to approve any expense to be paid for your child. As you read this, I can sense your revulsion, as if you just ate a spoiled fruit.

At the most extreme, if there are absolutely no parents, spouse, kids, step-children or others entitled to take your stuff under the laws of intestacy, guess who gets it all? Read on and be appalled:

the net estate shall be converted to cash and paid to the board of education in the county in which the letters were granted, and shall be applied for the use of the public schools in the county.
And so, imagine if Roman Blum, recently of New York, had died in Baltimore City. Without any children, spouse or heirs, it is entirely likely that Mr. Blum's $40 Million would fall to the City of Baltimore for use by the Public Schools.  And just imagine how that money would be wasted away.

Take control of your estate. Create peace of mind for yourself and your family. Don't let the State of Maryland make such important decisions for you. Don't let it be said that you "died like an idiot."--Write a Will.


Thursday, April 25, 2013

Baltimore traffic tickets stuck at a red-light!

On April 23, 2013, Baltimore City announced that it will throw out more than 6,000 speed and red-light tickets.  Yes, you read that correctly. 
As reported by The Baltimore Sun, the city is relinquishing the opportunity to collect more than $300,000 in fines because its former contractor has stopped coming to court to defend the tickets.  And yes, you read that correctly, too.

Baltimore City transportation officials claim that Xerox State and Local Solutions has failed to provide the evidence necessary to mount a defense in court.  Without this proof, the city says it cannot fight the ticket appeals.  Xerox, however, is just as quick to point the finger, insisting it has supplied officials with all essential data.
Xerox’s contract with the city ended on December 31, but the company continued to assist Baltimore for more than 90 days to facilitate the transition to another vendor.  Xerox insists it informed Baltimore City that its court representation would end on April 8.  Of course, transportation officials argue differently, citing non-responsive company representatives as the root of the problem.
This is just the latest issue to plague Baltimore City’s dysfunctional speed camera program, coming only days after the city shut down the program after acknowledging a glitch with cameras provided by the new vendor.  Officials voided more than 500 tickets due to this programming error.  In addition, over the past two weeks, judges have dismissed 600 speed camera tickets due to a lack of evidence.
Now over 4,000 speed and 2,000 red light citation holders await a letter in the mail, voiding the charges.  As Baltimore City and Xerox continue to squabble in the “blame game,” the ticketed rejoice in the mass dismissal.
They are enjoying every accused speeder’s dream come true.


Friday, April 12, 2013

Maryland's highest court makes foreclosure easier.

Your mortgage note is often passed around like an endorsed check. Welcome to the wild and wonderful world of "endorsements in blank."  On March 22, 2013, the Maryland Court of Appeals made it just a bit easier for mortgage lenders to foreclose in the case called (take a deep breath ) Deutsche Bank National Trust Company as Trustee for the Certificate Holders of ISAC 2006-5 MTG Pass-Through Certificates and Bank of America, N.A., as Successor by Merger toBAC Home Loans Servicing, LP v. Angela Brock

This case allowed the appellate court to settle a common dispute involving a lender or loan servicing company's right to enforce a note, or to foreclose the deed of trust securing that note. Mrs. Brock argued that the foreclosing loan servicer lacked authority to take her home because the mortgage note was endorsed "in blank," and did not specifically name the loan servicer.  And if you are not in the law biz, you may just be mumbling "what's 'in blank' mean?"  Glad you asked. Pour yourself some strong coffee and read on.

An endorsement is the act of signing over a negotiable instrument (imagine the check from your own checking account). You might write a check to your friend, "Jane."  Well, Jane usually will sign the back of the check and deposit that check in her account.  She has "endorsed" the check.  And the bank normally will require that she sign the check before it is accepted for negotiation.

But Jane can also choose to pass your check to someone else.  Imagine that she owes the exact same amount of money to her friend "Dick." She would sign her name to the back and add "pay to the order of Dick."  She'd hand him the check and Dick can now drop the check into his own bank account.

But Jane can also endorse your check "in blank."  That is, to anyone who possesses the check.  She would simply sign her name, or she might add "pay to bearer."  This converts our check to something that can be passed around from Jane to Dick, and from Dick to any number of others.  And each person in that chain of possession may deposit the check to their account.  It doesn't matter that their individual names do not appear on the back of your check because it has been endorsed "in blank."

So, back to our case.

Mrs. Buck argued that the loan servicing company should be required to prove that it had received her mortgage note from the last entity identified in the chain of endorsements. This is the standard of proof when a loan servicer has possession of a note that is missing endorsements.  And it would have made foreclosure of Mrs. Buck's home more difficult.  Her note was endorsed "in blank," and had been physically delivered to the foreclosing lender without any additional endorsement stamps.

Remember your check that was passed from Jane, and then to Dick and his friends? Well, the Court of Appeals made the same analysis.  It held that the servicing company does not have to make additional proof as long as it is in physical possession of the original note, where that note is endoresed "in blank."

What's this mean for you? Very simply, another avenue of attack on mortgage lenders and mortgage servicers has been closed to the homeowner. The court recognized the long standing practice of negotiating notes endorsed "in blank" as legitimate, and not falling into the category of cases where a note is missing endorsements, or a servicer has lost the original.

In a March 14, 2013 posting, the website Mortgage News Daily reported over 158,000 new foreclosure actions were docketed across the Country in February.  This is reported to be a slight increase from the prior month. (, last checked 4/13/2013). In the following chart, Maryland is reportedly experiencing a 319% increase in new foreclosure activity.


As a practical matter, there are hundreds of cases clogging Maryland's courts where homeowners have sought to forestall foreclosure by arguing the lack of standing by a lender or servicer. These fights take years to resolve (Mrs. Buck's foreclosure started in 2009, four years before this final decision), and thousands of dollars in legal fees, and the delinquent homeowner often remains in the house without paying a dime in mortgage payments. 

Is that a good thing? For Mrs. Buck, perhaps, but what about you and others who struggle to make your monthly payments? But that's a different discussion, for another day.

Monday, April 8, 2013

Tale of the Tape

            Did the ball cross the plane?  Did the shooter have his foot on the 3 point arc?  Was it a homerun or a double?  Let’s go to the video.  At least, that’s how it works in the arena of professional sports.  And we justify the effort it takes to catalogue every minute detail because there’s so much at stake!  A touchdown, a point, a run—in the end, affect the outcome of the match, and the fate of our team.

            So why not devote the same effort to cataloging your encounters with the police?  Are your civil liberties less valuable than a three-pointer?

            In Rialto, California (a city about 1/6 the size of Baltimore), the police department has begun experimenting with cameras attached to the glasses, cap, or collar of individual police officers.  The cameras are “activated” during any interaction with citizens.  After a year, the experiment showed that the incident of citizen complaints of police misconduct decreased by 88%, and the incident of police using “force” on citizens decreased by 60%.   The conclusion—police and citizens alike act differently when they know their actions are being recorded.

            Many police officers are uncomfortable being recorded.  Many will bully onlookers into shutting off cameras to prevent accounts of police misconduct from being memorialized.  Just look on YouTube.

            The reality is that many criminal cases come down to a “he said, she said” between the arresting officer and the accused citizen.  Sadly, the credibility of a sworn police officer often trumps the credibility of someone accused of a crime by default.  (“He told me I could search the car.” “No, I didn’t.”)  But when there’s a recording of the interaction—the game changes.

            In Maryland, it is perfectly legal to take audio or video recordings of police interactions with citizens.  You may not interfere with the police (“can you move over here to get in the light?”), but you may (and should) document your interactions with them as often and as thoroughly as possible.   So next time you’re pulled over, just flick your phone over to “voice record” and leave it on the dashboard.  Or if your friend is being accosted by the police, record it.  Worst case scenario, you delete the file.  Best case, you have solid evidence of constitutional violations that prevent you or your friend from being wrongly convicted.