In a recent unpublished U.S. Bankruptcy Court case, a debtor was denied a discharge when the Court found she knowingly and fraudulently misled the Court when she sought and received permission to sell her home for $200,000 but failed to disclose the existence of an agreement which permitted her to lease the property after the sale and then buy it back in two years for $300,000. The Debtor had entered into an exclusive listing agreement with a real estate broker without Court approval to sell the home for $300,000, but sold it instead for $200,000 subject to the related lease purchase agreement. The Court also held that the sale defrauded creditors because the value of the property, in excess of mortgages and Debtor's exemption, was not realized for the benefit of the bankruptcy estate.

As a general rule, if the Seller is in bankruptcy, a court order is required for a sale and any listing of the property and the Court must be apprised of all the pertinent facts.

We may be seeing more mortgage insurance in real estate transactions. Mortgage insurance (often called "private mortgage insurance" or "PMI") is required by lenders of most home buyers who obtain loans of greater than 80% of their new home's value. Mortgage insurance protects the lender in the event of a default by the borrower and can be terminated when sufficient equity in the home has built up. In recent years, to avoid the extra cost of mortgage insurance premiums, home buyers would take out two (2) mortgages: one for their primary loan; and the other for all or part of the 20% deposit on their home in the form of a home-equity loan or line of credit. We may be seeing less of these 'piggyback' loans due to tightening credit requirements for home buyers. Home buyers may also wish to avoid the fluctuating interest rate in the piggyback mortgage (which is based on the prime rate) preferring a set rate in their primary mortgage with a fixed private mortgage insurance premium which won't fluctuate. Only time will tell.

Buyers purchasing residential property classified under N.J.A.C. 18:12-2.2 as Class 2 'residential' for consideration in excess of $1.0 million are just one group of Buyers obligated to pay to the State of New Jersey a 1% transfer fee on the amount of consideration recited in the deed.

Unless exempt, Sellers in the above million dollar plus transfers will also be obligated to pay a realty transfer fee to New Jersey.