Changes To The New York State Star Program

Changes To The New York State Star Program

My good friend and leading Real Estate Broker Marcia Clarke, the Owner and Principal at M C Realty Consulting and Management, Inc., in Brooklyn, NY does a wonderful job of keeping real estate professionals and those in related professions up to date with important information.

Marcia is a member of the Long Island Board of Realtors, which is where she found this information about changes to the New York State Star Program.

Due to changes in the law, the STAR (School Tax Relief) Program has been modified. Here are some highlights of the Star Program:

Effective July, 1 2019:

 

– If you own your own home, it’s your primary residence, and your income is $500,000 or less, you are eligible for the Basic STAR Program.

– If your income is greater than $250,000 and less than or equal to $500.000, you will receive a check for the STAR credit instead of a reduction on your school tax bill.

– If your income is $250,000 or less, and you are currently receiving the STAR exemption (a direct reduction on your school tax bill in the form of a property tax exemption), you can choose to register for the STAR credit to receive a check instead.

– The STAR exemption program is now closed to new applicants. New applicants can only register for the STAR credit.

– Homeowners with income greater than $250,000 and less than or equal to $500,000 who currently receive the STAR exemption, need not take any additional action to start receiving the STAR credit in the form of a check.

– If your income is $250,000 or less and currently receive the STAR exemption but want to receive the STAR credit instead, you have to register with the NY State Department of Taxation and Finance to make the switch.

– The taxing authority is giving homeowners an incentive to switch to the STAR credit. STAR credits may increase as much as 2% each year, but the value of the STAR exemption savings cannot increase.

– Enhanced STAR is provided to homeowners age 65 and older for their primary residence if their income is $86,300 or less for the 2019-2020 school year.

– Enhanced STAR recipients are now required to enroll in the Income Verification Program (IVP).

– Homeowners need not register every year for the STAR Program. Once registered, they are automatically reviewed for eligibility each year.

Want To Know More?

For more information, please go to: https://www1.nyc.gov/site/finance/benefits/landlords-star.page

Courtesy of the Long Island Board of Realtors, August 2019

If you would like to reach Marcia Clarke to buy, sell or manage real estate, here’s how to reach her:

Marcia Clarke, Broker – 917 841 2121
MEMBER: National Association of REALTORS-Brooklyn Board of Realtors. ABR CIPS CRS ePRO SRES; AREAA: ICSC: NAREB: projectREAPNY 2016: ULI: WCR-PMN
M C Realty Consulting & Management Inc.
1431 Nostrand Ave Brooklyn NY 11226 O: 718 484 8582 F: 718 345 0102

Eustace L. Greaves, Jr., LUTCF wants to help his clients “Live Life Full Covered.” He accomplishes this by combining homeowners, renters, flood, life, disability, long term care, co-op, condo, umbrella liability and auto insurance  policies with income tax strategies designed to meet and exceed client goals and needs.
If you want to ensure you and your family are living life fully covered, call Eustace today at 718-489-2218, or email him at eustace@insuremeeg.com to make an appointment.

 

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Illegal Apartments in NYC: How Many More Must Die?

“What’s even worse is that this building was had complaints about illegally converted apartments way back in 2006. Unfortunately, according to records, the New York City Department of Buildings representatives couldn’t gain access to the building to verify the illegal renovations, and properly cite the owner (s).”

Illegal Apartments In NYC

On page 28 of  today’s New York Daily News, the article, “Blaze In Illegal Apartment Kills Woman, 82.” The article details how the body of Ho Yukkuen was found inside a bedroom, in an illegal apartment in a Sunset Park residence.
What’s tragic is firemen couldn’t reach her in time because of window bars.

What’s even worse is that this building had complaints about illegally converted apartments way back in 2006. Unfortunately, according to records, the New York City Department of Buildings representatives couldn’t gain access to the building to verify the illegal renovations, and properly cite the owner (s).

So an 82-year-old woman loses her life, maybe screaming for help in vain while trying to escape her prison.

Why Was An 82-Year-Old Woman Living In An Illegal Basement Apartment?

Let’s talk truth. The lack of truly affordable housing is literally killing members of our citizenry. I find it hard to believe an 82-year-old woman couldn’t be placed in some form of affordable senior housing facility. At worse, why couldn’t she find placement in a regular, legal apartment?

Greed. That’s right. Greed.

We are erecting condominiums which many hard-working New Yorkers cannot afford to buy, and not requiring at least 40% of the apartments be affordable for people with annual incomes between $35,000 to $60,000.

Homeowners in communities like Bedford-Stuyvesant, who purchased their homes for $10,000, $50,000, and $300,000, who fought for years for better schools, libraries, and sanitation and police services, only to cut and run when investors, both foreign and domestic, show up at their door, promising them one million dollars and up for their now-beautifully restored brownstones. And many of these former owners rue the day they sold.

But what happens to the elderly tenants in these buildings, many of whom lived with the former owners like family for decades, and don’t have leases, or protections through rent control and rent stabilization laws? Where do they wind up? Do they sleep outdoors in the winter when the bitter cold is a constant danger? Or, are they fortunate enough to have family who’ll take them in, or blessed to be accepted into a senior living facility?

I only know this: The overwhelming majority of those elected to the New York City Council, and other government positions ran on platforms promoting the creation of affordable housing. Let’s hope they remember their promises to the people of this city, and not any corporate masters who helped them get elected. I know that I and others won’t forget the promises they made to address the real housing needs of all New Yorkers.

Finally, I hope this new crop of politicians/public servants finally pass legislative giving the Department of Buildings the real power it needs to gain access to any building in New York City to discover and address illegal apartment conversions and other matters of safety for its tenants and the surrounding community.

With this type of power, perhaps Ho Yukkuen would be alive today.

Eustace L. Greaves Jr., LUTCF is a business owner who since 1995 has provided his clients with integrated insurance and income tax strategies and solutions. He is also a firm believer in a New York City building inspection program which will root out the bad players, thus keeping all of us safe. You can reach him by telephone at 718-783-2722 and by email at Eustace@insuremeeg.com .

 

Heightened Awareness | Brooklyn Covered

“Increased inflation during their working years left their hard-earned pensions inadequate for the new financial reality of increased rents, and having to purchase Medicare Supplement coverage to fill the gaps in their health insurance. And, even if they own their own home, increased real estate taxes and utility bills will become an increasing burden at a time in their lives when, for the most part, their income will not increase each year.

“Many of these good folk are facing retirement and still have mortgages. Why? They fell prey to the siren song of refinancing during the years of mortgage madness. They used their hard-earned equity for new cars, vacations, window treatments and college educations for their children. They thought the gravy train would still be rolling down the tracks.

Recently, I had the pleasure of sharing ideas about money, savings, mortgages and the like with Mr. John Dallas, Program Coordinator for the East Flatbush office of Neighborhood Housing Services of New York City.

During the conversation, John asked me a question I’d never been asked in all my years of self-employment. “Eustace, as a self-employed person, are you ever afraid?”

Wow. Talk about being leaning into a Joe Frazier left hook.

I told John in all my years, no one had ever asked me such a question. After some thought, the best answer I could give him was, “While I don’t give in to fear, I do enjoy a ‘heightened awareness’ in all aspects of my life.”

“John, several years ago, I sat in my office with some friends, just shooting the breeze, you know, talking about the economy, business, what we were doing to increase the amount of business we had while keeping our current clients happy.  Everyone in the group was an entrepreneur, responsible for their own financial success.

“As I think back on our conversation that day, one thing stands out: Not one of us was boo-hooing about the economy. Instead, we focused on giving each other good business-growing ideas. In some cases, we exchanged leads, and promised to make introductions to other professionals who could be a source of help.”

“At one point several of us jokingly questioned our lack of intelligence for not having gotten one of those “safe” jobs decades ago, especially those of us who would be near the once-normal retirement age.” As we laughed about that, I stated that for many current and soon-to-be-retirees, the future was actually quite bleak.

Retirement Realities

“Increased inflation during their working years left their hard-earned pensions inadequate for the new financial reality of increased rents, and having to purchase Medicare Supplement coverage to fill the gaps in their health insurance. And, even if they own their own home, increased real estate taxes and utility bills will become an increasing burden at a time in their lives when, for the most part, their income will not increase each year.

“Many of these good folk are facing retirement and still have mortgages. Why? They fell prey to the siren song of refinancing during the years of mortgage madness. They used their hard-earned equity for new cars, vacations, window treatments and college educations for their children. They thought the gravy train would still be rolling down the tracks.

“They never thought it would dry up. And just imagine the financial calamity should the IRS send everyone who refinanced their mortgage a letter asking them to provide, in detail, how they actually used the money they got from refinancing. If they can’t prove they used these funds for the purchase of a property or the improvement of an existing property, and deducted the interest on Schedule A, Schedule E, or a combination of both, they violated income tax law.

“And John, everyone deducted the interest. In many cases, it was the only way the new mortgage was affordable.

“They forgot the story of the three-legged stool we all sit on in retirement. One leg is  income from Social Security, the second is pension income, and the forgotten third leg is personal savings. Just try to balance on a two-legged stool and chances are you’ll fall on your rear end every time.

“You see John, everyone forgot about the third leg. We were too busy cruising, travelling, eating out instead of in, purchasing big-screen tv’s to watch cable and dish programs which added no value to our lives, the newest ‘smartphones’, cellphone packages costing megabucks, and buying clothes which were too expensive and in many cases, never saw the light of day.  And shoes, don’t talk about the shoes.

“John, too many people purchased things to make themselves happy. Instead of cash-value life insurance, annuities, mutual funds, or even a simple bank account, they instead put their money in the street in the form of new cars they really couldn’t afford to insure or maintain, and on their backs for all to see.

“As a result, we don’t own the amount of savings we should. And the stool is real shaky.

John, a really good listener, was taking this all in. ” So what,” John asked, “do people like you do differently than others who work for someone?”

I told John that, while in the meeting, one of my friends used a term so profound, it’s stuck with me to this day. “Heightened awareness”, John, “heightened awareness.”

“My friend deemed those who worked for someone “The Normals.” Most of the time, they don’t even know how much is in their checking accounts because they know in a week or two, more money will magically appear to help them pay the bills. They don’t worry about health or dental care costs because they have benefit plans. Their employer provides them with a pension which may or may not keep up with inflationary pressures.

“What many of them lack is the entrepreneur’s sense of heightened awareness. We know how much a toner or ink cartridge costs. How many miles a gallon our car gets. We turn off lights when we’re not in the room, and are loath to use the air-conditioning until a pool of sweat forms at our feet.

“Most importantly, we spend for fun only after we meet our monthly obligations, not before.”

Now John is one of those folk who while employed by someone else, really has the soul of the entrepreneur. And, as many of my clients deal with the realities of debt, before and after retirement, they too are developing the heightened awareness so necessary to financial success.

So I looked at John and said, “My friend, I’ve yet to give you an answer. While I am never afraid, let’s just say I know when to waste time watching a football game, and when to sit down at the desk and send out an email, or prepare for a presentation. I love coupons in the supermarket, and DSW for the shoes my Little Princess needs.

“I know where just about every dollar goes.

“About a year after my fiancée died, our daughter and I were buying the office supplies I needed for the upcoming income tax preparation season. The total came to just shy of $800.00. When the cashier announced the total, my daughter held up her hand and said “Hold up there Daddy. Are you telling me we just spent almost $800.00 and we didn’t have any fun?”

“I looked at her and said, “No, I’m about to spend almost $800.00. And, should the plan reach fruition, this expenditure will enable me to generate the money necessary for the fun we’ll have in the spring and the fall.”

“That day, my daughter received her first lesson in “heightened awareness”, a lesson I’m proud to say she’s never forgotten.”

As our meeting came to an end, John and I agreed we should all work on heightening our financial awareness.

Otherwise, we may crack a hip falling off a two-legged stool.

Birth Of Force-Placed Insurance | Brooklyn Covered

Of course, the jackals were waiting in the bush. As soon the distressed fell into default, they pounced. Now the letters and calls offerd relief in the form of a quick sale. In many of theses cases, what the house sold for was barely enough to cover the outstanding mortgage. So, you had a home you’ve lived in for 30 or 40 years. No mortgage. Now you have nothing and nowhere to live.

The Birthplace of Force-Placed Insurance

While those who participated in the scam known as sub-prime lending deserve whatever punishment they receive, let’s not forget where they learned their lessons. And how force-placed insurance grew to become the serious issue it is today.

An Indication of Force-Placed Insurance

PropertyShark.com provides information about housing around the region. PropertyShark .com just  published a map showing all the distressed properties in New York City during 2011. You can see the map here: http://www.propertyshark.com/mason/ny/New-York-City/Maps?map=nyc2&x=0.5632&y=0.6809333333333333&zoom=2&basemap=lispendens&star=1&tab=themes&ll=40.6289391996291,-73.9243806440218

Now, as you look at the areas in Brooklyn and Queens, a disturbing trend becomes evident. In communities of color there are more of those nasty little dots than anywhere else on the map. How did this happen?

Well, blame the first phase of the problem on those dirt bags who engaged in the worse form of predatory lending known to man: The predation of elderly and unsophisticated homeowners.

They mailed thousand of letters each week, and employed telemarketers whose only mission was calling these unsuspecting homeowners and convincing them to meet with a consultant. They told these vulnerable folk about how their homes had money (equity) just sitting there doing nothing. They could use this money or repairs, a trip home, and many other reasons. They never told them about reverse mortgages. No, you see there was little profit in legitimate financial instruments like reverse mortgages. Heck, sometimes, they didn’t even say a mortgage was involved.

Then, when they met with their unsuspecting victims, they’d tell them how they didn’t have to take a dime out of their pockets for anything. Little did the public know everything was coming out of their home equity. Many didn’t know  how their loan applications were falsified to reflect fraudulent rental, pension and employment incomes.  Corrupt appraisers  valued homes for much more than they were worth, so lenders could meet the necessary “loan-to-value” numbers.

So, the homeowners applied for $25, 000 and more. They’d go to the closing table thinking about what they’d do with the money, only to walk away with $5,000 or $7,000. What happened to the rest of the money, you ask? Well, that went for attorney fees, application fees, and any other fees you can think of. Fees which, were the mortgage not predatory in nature, would average about 6% of the total cost of the loan. Money which shouldn’t come out of their equity, but from liquid cash.

Once the deception was discovered, some would revolt and demand, via the right of the three-day rescission rule, the cancellation of the loan and return of all of their funds.

Too few people did this.

Most, convinced this was the way business was done, struggled to pay loans with high interest rates, at a time of life when they should enjoy living in a home without outstanding debt. And yes, force-placed homeowners insurance helped many of these same people fall deeper into the pit. Many of these people wound up losing their homes, because their Social Security and pension checks couldn’t handle the weight of their new monthly obligation.

Of course, the jackals were waiting in the bush. As soon the distressed house fell into default, they pounced. Now the letters and calls offered relief in the form of a quick sale. In many of theses cases, what the house sold for was barely enough to cover the outstanding mortgage. So, you had a home you’ve lived in for 30 or 40 years. No mortgage. Now you have nothing and nowhere to live.

I’ll be returning to the subject of force-placed homeowners insurance next week. I just wanted to let everyone know this resource was available.

If you, a family member, or a close friend are either in, or facing default on your mortgage obligations, please call me at 718-783-2722. There are organizations like Bridge Street Development Corp. ,  (bsdcorp.org), and Neighborhood Housing Services (nhsnyc.org), ready to provide counsel and guidance to homeowners in need. If you’re paying for force-placed insurance, call me. Let’s work together to save you thousands of dollars you can use to bring and keep your mortgage obligations current.

Force-Placed Home Insurance | Brooklyn Covered

When you signed your mortgage commitment, one of the requirements you agreed to do was maintain home insurance on your home. This homeowners insurance policy would contain a certain amount of Coverage A – Dwelling Coverage, as well as a mortgagee clause, naming the bank and your loan number.

What Is Force-Placed Home Insurance?

Force-placed home insurance is insurance your mortgage bank places on your home when you fail to maintain contractually required home insurance coverage.

Why Do I Need Home Insurance?

When you signed your mortgage commitment, one of the requirements you agreed to do was maintain home insurance on your home. This homeowners insurance policy would contain a certain amount of Coverage A – Dwelling Coverage, as well as a mortgagee clause, naming the bank and your loan number.

When you think about it, home insurance protects the homeowner against the loss of what is once again, the single largest purchase many families will ever make. Imagine a fire reducing your home to cinders and burned bricks. Without home insurance containing coverages in the proper amounts, you’d probably suffer a total loss of all you’d worked so hard to acquire.

So How Does The Bank Figure Into All Of This?

When a bank makes a home mortgage loan this creates the need for the bank to protect its interest in the collateral supporting the loan, otherwise known as the home. So the bank is fully within its right to require you keep certain coverage on the home.

What Creates The Need For The Force-Placed Home Insurance?

Your mortgage is composed of four (4) basic components:

  1. Principal, or the amount which amortizes or reduces the amount you owe the bank.
  2. Interest, or the cost of the money you’re borrowing. (What, you thought you get a $500,000 loan for free?)
  3. Taxes, or what your local municipality charges you for your home to sit in or on dirt. This amount is usually based on the number of stories, square footage and lot size of the house. That’s right, you’re paying more just to have the huge burned lawn.
  4. Insurance, which is my favorite part.

The portion of the mortgage for the taxes and homeowners insurance are escrowed monthly. That means a part of the quarterly or annual bills for each are collected and held by the bank each month, presumably to make payments when due. The key point to remember is the escrow system works well when your monthly mortgage payments are made on time each and every month. Fall behind by even one payment and you ‘ve developed a shortage in your escrow account.

Now here’s the kicker. Let’s say you bought a home during the period I will always call “The Time of Home Purchase Madness.” First, you paid too much for the house. Second, you someone qualified for a mortgage by being able to fog a mirror. No documentation, lousy credit score, and no down payment? Heck, certain mortgage brokers would knock their mommas out of the way to get you a loan.

Let’s move forward to what I call the “What The Hell Were We Thinking?” or, “What Do We Do Now?” time. That’s when too many people realized they should’ve stayed in their rent-stabilized apartments, kept the affordable home they already had, or kept sleeping on Mom’s couch. Suddenly, you miss first one mortgage payment, then another. Now, banks will move heaven and earth to make sure  the real estate taxes on your home are always paid on time. The last thing they want is to lose a property they’re holding a note on to someone who purchases a tax lien.

Banks Do The Same Thing For The Home Insurance, Right?

Wrong.

Let’s imagine your escrow is now short by two to four months payments. Home insurance bills are usually sent to the bank or mortgage servicing company 30 days before the due date.

In the worse case scenario, you have an escrow shortage when the bill from your homeowners insurance company arrives.

Guess what? Since you failed to keep up your end of the bargain, the bank is not required to go out of pocket to pay your homeowners insurance premium . The policy usually lapses. And then guess what happens? Because your world is collapsing around you, and each day brings more despair, you stop opening the mail or answering the telephone. It’s only months later when you learn your homeowners insurance policy lapsed and the bank placed another, force-placed policy on your home. And what gives you a clue? The sudden increase in the negative balance of your escrow account to the tune of $3000 to $8000.

Why so much? Because they can. It’s stupid, really. Instead of just paying a premium of say, $1800, the bank instead buys a policy for you which will cost at least three times as much. With less coverage. See, that’s the real zinger: Every force-placed policy I’ve ever seen covers only one thing – the outstanding mortgage balance.

There’s no coverage for your personal belongings in case of fire or theft. No coverage for liability should someone injure themselves on your property. No coverage to help you with the added expenses of renting an apartment while your home is being rebuilt.

Not even the full replacement cost of your home.

Just the outstanding mortgage balance.

And you’re paying at least three times as much for the privilege to get less coverage.

In my next post about force-placed home insurance, I’ll talk about how it will continue to drag down the economy, how to avoid having it happen to you, and what to do if it does happens to you. Also, I’ll include a link to a radio interview I did back in 2009, about the force-placed home insurance problem.

Eustace L. Greaves, Jr., LUTCF is a Brooklyn-based independent insurance agent and broker. Contact him today to make an appointment to review your home, life, disability, flood, renters, condo, coop, and auto insurance program. You can also reach him by email at Eustace@insuremeeg.com. And please take a moment to subscribe to BrooklynCovered.com.

Ask For A Receipt Then Check It | Brooklyn Covered

“Tell you what” I said. “Either you give me my $2.10, or you can have everything back and return all of my money. Don’t take to long to think about it, because I’m going anywhere. The line will get long and this won’t be friendly.”

Ask For A Receipt Then Check It

When I was a youngster, I went grocery shopping with my Mom each week. I’ll always remember her teaching me to ask for a receipt, then check it against your purchases when you get home.

On more than one occasion, she’d drag us back to the supermarket because the cashier had overcharged her for an item. And there were more than a few occasions when she’d drag us back even faster when the cashier failed to charge her for an item or two, or gave her too much change.

If the cashier owed her money she’d go to the manager, (She knew them all on a first-name basis), and she’d show him the register receipt. She’d tell him not to hold it against the employee: Everybody made mistakes.

When the cashier gave her too much change, or failed to charge her for an item, my Mom would patiently wait around until no one was around, and quietly return the overage to the cashier. As far as she was concerned, the manager didn’t have to know everything.

“I don’t want a cashier to lose their job just because I kept a dollar or fifty cents. (Remember, back in the 50’s and the 60’s, fifty cents was fifty cents.)

“They need their jobs.”

When  you think about it, my Mom and other Moms like her created the concept of street cred.

Exam Time Means Sunflower Seeds

So, let’s fast forward to Wednesday morning. I’d driven my daughter to school because this is midterms and finals week. Since the beginning of time, or at least since she’s been taking midterms and finals, she gets a good breakfast and gets to relax to Mozart on the way to school.

On the way to my office, I decided to stop at a Mobil station and purchase the newspapers, some truly rot-gut coffee and a Drake’s Cake. While there, I noticed they had Sunflower seeds in stock. These were the Jumbo seeds, for a tagged price of $1.49 a bag.

Two Bags of Seed for $1.49 each

Before I continue, my daughter studies and does her homework best while enjoying sunflower seeds. Some kids blast music: She’s a  Seeder.

I prefer her choice.

So, purchasing three (3) Jumbo Bags of Original Sunflower Seeds for just $1.49 each was a real bargain. Nothing like keeping the seed supply cabinet fully stocked, I say.

So, I happily brought the three bags of seeds, newspapers, stomach-acid supplement, and cake to the counter. When the clerk behind the counter totalled everything he told me it was $12.54.

When I heard the total, something didn’t sit quite right with me, so I asked him for a receipt. Twice.  He finally complied, and I returned to my car.

Mom would be proud because while studying my receipt I saw the clerk charged me $2.19 for each bag of seeds. So, instead of paying $4.47, I’d been charged $6.57. Now to some of you, $2.10 may not sound like a lot, but I have to generate an average of $26.00 in gross revenue to net $2.10.

So, I returned to the store and showed the young man his error. His explanation? “That’s what the computer says.”

What Is This? Colossus, The Forbin Project?

I told him I didn’t care what the obviously poorly programmed computer said. The price of $1.49 was clearly stamped on each bag. He huffed and he puffed and I stood my ground. He again insisted he charged me the correct price.

“Tell you what” I said. “Either you give me my $2.10, or you can have everything back and return all of my money. Don’t take to long to think about it, because I’m not going anywhere. The line will get long and this won’t be friendly.”

Grudgingly, he returned the $2.10. He kept the receipt, but that’s okay.

I’m going to keep the bags as proof.

Well, two of them anyway. She’s got an AP B/C calc midterm in the morning. One bag is  already gone.