Connecticut Real Estate Attorney Law Blog

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People are Refinancing their Mortgages again! Closing costs?

Not that this is news to anyone, but rates are amazingly low and staying low!  People who can (equity and good credit) can get amazing rates.  But you still have to pay closing costs.

I have written about this before, but it amazes me that people refinancing try to save a few dollars on their closing costs here in Connecticut and do not use an attorney.  When you compare the charges by a so-called title or escrow company (none of which to my knowledge are based in Connecticut) with what a local attorney (i.e. me!) charges, In many cases I actually charge less than the outfits that send a notary to your house.  I recently had a call from someone who had used an out of state outfit and the person who came to her to close could not answer any questions (since they were a notary and answering the questions would be practicing law).  She closed, was utterly confused by the numbers, and ended up canceling the deal in the rescission period for the refinance.  When I looked over her paperwork, it actually looked OK to me, but by then she was o confused and felt mislead that there was no convincing her.  If she had closed with a (competent) attorney, she would have had the closing figures explained to her.  Ironically, in this case, there as even a "legal fee" charged, for what I do not know!

If you are considering refinancing your Connecticut mortgage, please contact me directly for an easy to understand rate quote.  All loan documents will be explained to you at closing and I will be your one and only point of contact.

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About the author:  Attorney Begemann is a member of the Connecticut Bar and practices real estate and business law in Connecticut.  As an experienced real estate attorney he represents individuals and lenders in residential and commercial loan closings across Connecticut, including the purchase, sale and refinance of real estate.

Attorney Paul H. Begemann, 2764 Whitney Avenue, Hamden, CT  06518

Phone 203-230-8739                                       Fax 800-483-1904

email

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3 commentsPaul Begemann • August 17 2010 09:54PM

HUD relaxes 90 day property seasoning rule for FHA loans!

HUD announced today January 15, 2010 that it is temporarily relaxing its 90 day seasoning rule which currently prohibits FHA loans for properties owned by the seller for less than 90 days.  See the HUD press release for more details.

According to the press release, "The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities."

The new rule will take effect February 1, 2010 and will be in place for one year.  To try to avoid the use of the FHA financing for flipping HUD is putting certain restrictions in place.  The new policy will only apply to sales meeting the following guidelines (from the HUD link above):

  • All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
  • In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions.
  • The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

There is more detail on the HUD site which contains the specific requirements applicable.

This change may be of major assistance to borrowers who want to but recently foreclosed property but cannot purchase directly from the bank.  It will also benefit  real estate investors (and some "flippers") since it allows FHA financing where it has been previously prohibited.  A resale can be for up to 20% more than the prior sale within the 90 day period.  If it is over 20% more, certain requirements must be met, including things such as verifying that improvements have been made in the property.

This rule change or waiver should be of major interest to real estate agents marketing foreclosed property.

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About the author:  Attorney Begemann is a member of the Connecticut Bar and practices real estate and business law in Connecticut.  As an experienced real estate attorney he represents individuals and lenders in residential and commercial loan closings across Connecticut, including the purchase, sale and refinance of real estate.

Attorney Paul H. Begemann, 2764 Whitney Avenue, Hamden, CT  06518

Phone 203-230-8739                                       Fax 800-483-1904

email

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6 commentsPaul Begemann • January 15 2010 05:32PM

Do I need an Attorney for my Connecticut Mortgage Refinance?

While the topic of this blog post is titled "Do I need an Attorney for my Connecticut Mortgage Refinance?"  the better question is not if you NEED an attorney for your mortgage refinance in Connecticut, but SHOULD an attorney do your mortgage refinance closing?  Of course as a CT attorney performing many mortgage refinance closings, you may consider my answer biased, but I say why would you NOT want an attorney to do your closing?

Answers people may give are expense and/or convenience.

Based on my own experience, the answer to both questions is that the attorney is usually no more expensive and just as convenient.  I know in my own practice, my legal fee is very reasonable and is equivalent to that charged by non-attorney closing or escrow companies.

For every refinance someone or some company needs to do the closing.  This includes handling the funds, explaining the terms of your new mortgage, explaining the closing process, paying off your prior mortgage, overseeing the proper execution of the closing documents, recording the new mortgage, verifying the proper release of your prior mortgage, etc.  In Connecticut, refinance closings are currently handled by attorneys and by closing or escrow companies, which typically do not use an attorney to explaining or oversee the process.  As an initial matter, the only person legally able to perform all those functions is an attorney, since a non-attorney cannot legally explain the legal impact of mortgage documents, which is the practice of law.  So by not using an attorney you are losing the benefit of having an explanation fo what you are signing.  The escrow or closing company are also typically chosen by the lender, are unlicensed, and have no legal obligation to the borrower.  And after the closing, who do you ask if there is a question or a problem?  With a local attorney you have a knowledgeable individual, licensed by the State of Connecticut, subject to ethical guidelines, and whose bank accounts are subject to audit by the State of Connecticut.  Escrow and closing companies do not provide any of those protections.

But for many people, it is simply cost and convenience.  So I would urge potential borrowers to find out what the non-attorney is charging, and then find out what an experienced real estate lawyer, naturally such as myself, will charge.  I think you will be not only pleasantly surprised at the competitiveness of the attorney fees but their willingness to work with you and explain the closing process.  In my case, I personally provide all answers and advice, and I am glad to speak to people about the closing process and what to expect.

With the new RESPA guidelines applicable in 2010 and the new Good Faith Estimate forms, shopping for settlement services (closing services) which are now called title related services should be easier.  Rather than facing what is sometimes a variety of different charges, the new GFE is supposed to have all title related services as one charge plus the title insurance.

Along with the GFE the lender may supply you with a name or names of a company who can close your loan.  However, except in limited circumstances where a lender has a closed list, any licensed Connecticut real estate attorney can close the loan.  The new HUD GFE requires a list of provider(s) be given to the borrower, but for settlement services, closing services or title related charges, the borrower can and should still shop around (which the new GFE is designed to encourage!).

If you are considering a refinance, or other closing, in Connecticut, I encourage you to contact me directly for a specific quote on your closing costs and title insurance.

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About the author:  Attorney Begemann is a member of the Connecticut Bar and practices real estate and business law in Connecticut.  As an experienced real estate attorney he represents individuals and lenders in residential and commercial loan closings across Connecticut, including the purchase, sale and refinance of real estate.

Attorney Paul H. Begemann, 2764 Whitney Avenue, Hamden, CT  06518

Phone 203-230-8739                                       Fax 800-483-1904

email

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0 commentsPaul Begemann • January 08 2010 09:36AM

What are the Proper Terms in a Mortgage Contingency in my Real Estate Purchase Agreement

As I have written before, contract contingencies are very important elements of a real estate purchase agreement.  They are especially significant for the buyer, since a properly drafted and implemented contingency provision can provide significant legal protections for the buyer.

One of the most important and basic contingency provisions in the real estate purchase agreement is the mortgage contingency.  In basic terms the mortgage contingency provides that the buyer (who we assume has signed a binding purchase and sale agreement) is not obligated to complete the purchase if the buyer cannot obtain written mortgage approval.  This is a basic protection for the buyer, that if she cannot get financing for the purchase, the contract is canceled and she gets her earnest money deposit back. However as with the real of the purchase agreement,  the details of the contingency are very important.

The basic elements of the mortgage contingency are the mortgage amount, the interest rate, the term of the mortgage, and the date by which the mortgage must be obtained.  Connecticut actually has a statute which states the minimum requirements for a mortgage contingency (See Section 49-5b).  But the issue for the buyer is not usually satisfying the minimum requirements for a valid contingency, but protecting himself against unforeseen circumstances that interfere with obtaining a mortgage approval, but are not covered by the contingency language.

For instance, what if you obtain an approval but that approval has significant conditions, such as verification of income or credit, or sale of an existing property?  Is that a sufficient approval to allow the seller to force performance of the contract of sale?  What if it is a condo and the lender approves the mortgage but denies approval of the condo complex?  Is the buyer required to simply not be approved for financing by the mortgage contingency date, or is the buyer required to actually prove a denial or adverse action notice was issued?  What if the buyer does not actively pursue the mortgage approval?  What if the buyer does not get an approval, but the time set for the contingency provision passes and the seller is not notified?

These are all valid questions that should be addressed by a properly worded mortgage contingency provision.  In the event of a dispute, it is the language of the written contract that will control the obligations of the parties.  The typical mortgage contingency provision in a residential purchase agreement is a fill in the blank proposition, in which the operative terms of the contingency are part of the form contract being used (typically supplied by one of the real estate agents).  However, that form may or may not deal with the issues described above.  The best course of action is to review the proposed contract language with your real estate agent and mortgage provider as well as an experienced real estate attorney prior to signing the contract.

If you have any questions on a real estate contract in Connecticut or the proper terms of a mortgage contingency, please contact me.

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About the author:  Attorney Begemann is a member of the Connecticut Bar and practices real estate and business law in Connecticut.  As an experienced real estate attorney he represents individuals and lenders in residential and commercial loan closings across Connecticut, including the purchase, sale and refinance of real estate.

Attorney Paul H. Begemann, 2764 Whitney Avenue, Hamden, CT  06518

Phone 203-230-8739                                       Fax 800-483-1904

email

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5 commentsPaul Begemann • November 10 2009 01:12PM

New Connecticut Foreclosure Advertising Procedures

Most foreclosures in Connecticut occur without there being an actual auction.  When there is no equity in the property,  the foreclosure is done by what is known as a strict foreclosure, and there is no auction and the Superior Court (all Connecticut foreclosures are judicial) determines when title vests in the bank (as long as no one redeems).  See my prior blog post summarizing the foreclosure process in Connecticut.

In those cases where there is a public auction, until a November 1, 2009 change in court procedure, the foreclosure sales were only advertised in the newspaper local to the property.  There was no central listing of foreclosure auctions from all the different court houses.  However, for foreclosure judgments entered after November 1, 2009, the foreclosure sale will be advertised both in the local paper and on the Connecticut Judicial Branch web site.  Because the online ads for the foreclosures are being phased in, at this time (11/9/09) there are not that many online foreclosure advertisements listed.  Over the next couple of months, all foreclosures by sale will be listed on the Judicial website.

Hopefully the new advertising procedure, which includes the ability to insert a picture and some descriptive information, will result in more traffic at the foreclosure sales and better auction prices.  Please feel free to contact me with any foreclosure or real estate law related questions in Connecticut.

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About the author:  Attorney Begemann is a member of the Connecticut Bar and practices real estate and business law in Connecticut.  As an experienced real estate attorney he represents individuals and lenders in residential and commercial loan closings across Connecticut, including the purchase, sale and refinance of real estate.

Attorney Paul H. Begemann, 2764 Whitney Avenue, Hamden, CT  06518

Phone 203-230-8739                                       Fax 800-483-1904

email

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2 commentsPaul Begemann • November 09 2009 10:29PM

Updated Information on Short Sale Negotiator Licensing in Connecticut

As I discussed in a prior blog post, fee based short sale negotiators or mortgage modification companies need a license to do business in Connecticut as of October 1, 2009.  In addition to a license, the new law also limits the fees that can be charged and requires a written agreement with the borrower, among other requirements.

The State Department of Banking (DOB) has now issued the required forms as well as provided further information on the licensing process.  The DOB has updated their web site to provide some guidance on who must be licensed, as well as providing links to the licensing forms.  The exemptions from licensing are listed, which include a CT licensed attorney, a lender, a CT licensed debt adjuster, and non-profit institutions.  The application fee is $1,600.00.  A number of forms must be filed and a bond must be obtained to apply for a license.

In addition, the DOB has issued a schedule of the maximum feesthat can be charged for performing short sale or mortgage modification services.  The maximum fee for a short sale or loan modification is $500.00, which can only be charged after the successful completion of the activities listed in the required written contract with the borrower.

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About the author:  Attorney Begemann is a member of the Connecticut Bar and practices real estate and business law in Connecticut.  As an experienced real estate attorney he represents individuals and lenders in residential and commercial loan closings across Connecticut, including the purchase, sale and refinance of real estate.

Attorney Paul H. Begemann, 2764 Whitney Avenue, Hamden, CT  06518

Phone 203-230-8739                                       Fax 800-483-1904

email

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0 commentsPaul Begemann • October 21 2009 10:47AM

Beautiful Fall Day in Hamden, CT!

Had a nice leisurely Sunday today, and since Columbus day is holiday here in CT, we get another Sunday tomorrow!

We did two enjoyable activities in town today.  First I had a nice nature walk with my two younger children (10 year old twins) on same land of the Hamden Land Conservation Trust (http://www.hlct.org) that they have helped to protect from development.  It was informative and beautiful.  We had some great views from the ridge line we were on, only wish I had some pictures to share!  The fall foliage is starting and it was such a clear day, and we met some nice folks from town.

Then we went to our local Hamden orchard and farm store, Hindinger Farm (http://wwww.hindingersfarm.com) and again enjoyed the beautiful fall day,  the great views and the excellent local apples (we bought a bag of McIntosh and a bag of Fortune, not familiar with those but they taste similar to a Delicious or at least have some Delicious in them).  This farm has been in the Hindinger family for generations and is now protected from development under the state farmland preservation program.

Later my daughter went to a farm in nearby Cheshire with one of her friends do some apple picking of her own.

All in all a great day, and a reminder of why I like living here so much!

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About the author:  Attorney Begemann is a member of the Connecticut Bar and practices real estate and business law in Connecticut.  As an experienced real estate attorney he represents individuals and lenders in residential and commercial loan closings across Connecticut, including the purchase, sale and refinance of real estate.

Attorney Paul H. Begemann, 2764 Whitney Avenue, Hamden, CT  06518

Phone 203-230-8739                                       Fax 800-483-1904

email

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2 commentsPaul Begemann • October 11 2009 03:58PM

What are the Typical Closing Costs on a Connecticut Mortgage Refinance?

With mortgage rates at new lows, people all across Connecticut are once again applying for and closing on refinance loans.  Even with the drop in real estate values and the changes in the types of mortgages that are available, many people can and are refinancing.  With rates this low, now is the time to refinance your CT mortgage if you can!  But along with the rate and the other parts of your mortgage approval, a borrower should also consider their closing costs. 

Who does refinance mortgage loan closings in Connecticut?  Do I have to use an Attorney?

Historically in Connecticut, mortgage loans have been closed by a Connecticut real estate attorney.  Connecticut is considered an 'attorney state' meaning that real estate closings are performed by Connecticut licensed attorneys.  However, for better or worse, closings are also increasingly done by title companies.  These closings are usually not done by or under the supervision of an attorney, and are usually performed by a company that the lender chooses, and may even have a financial relationship with.  The actual loan closing is commonly performed by a notary, who is prohibitedfrom actually explaining the loan documents.  While frequently the borrower is told this is a cost saving measure, it has been my experience that the services of an attorney frequently cost no more, and sometimes are even less expensive than paying for a notary and title company to do the closing.  There is really no reason not to insist on having an experienced real estate attorney do your loan closing.

What are the common refinance loan closing costs?

The typical charges include the cost of a title search to verify ownership of the property and what mortgages or liens are on it; a settlement fee or an attorney fee (the charge for actually performing the closing); the title insurance that the new lender requires; FedEx or overnight mail charges; copy costs; rundown or bring to date service; recording service; wire fees; title examination; and title binder.  These are in the 1100 series line in the HUD-1 Closing Statement.  These fees are in addition to whatever the lender charges, such as prepaid interest, escrows, points, etc.  As you can see, the list seems endless!

How do I compare my loan closing costs on a refinance loan?

It can sometimes be difficult to compare different closing costs since not all closing agents, be they attorneys or title companies, charge in the same manner.  Sometimes a low settlement fee will be quoted, but there will be numerous additional charges.  Sometimes the settlement or attorney fee will seem high, but there will not be many other fees.  Bottom line, you have to ask all the fees being charged before you can make an apples to apples comparison.  And do not assume an attorney is going to charge more than a title company.  As a borrower, I would not agree to close without a firm estimate and understanding of the total loan closing costs.

How much are the closing fees?

Unfortunately the fees range greatly.  Title insurance in Connecticut is one thing that you should be able to get a direct quote on, since each company sets its rates in a rate filing with the State of Connecticut Insurance Department and then is required to follow the rate it has filed.  The only discount is for a refinance, and that discount is a 40% reduction in the premium for a refinance of an institutional mortgage within the past ten years, up to the amount of the existing mortgage.  So be sure you are getting the refinance or reissue rate!  As very general estimates, I will provide the following information: a title search can be from $75 to $200, depending on what type of search is required; loan settlement or attorney fee from $450 to $800; title examination $50; rundown and record or bring to date or recording service $50 to $75; FedEx/copies from $8 to 45.  These are just estimates.

Can I get a fee quote?

I willingly provide fee quotes for my services, and I think all providers should do the same.  All I need is some basic information about the closing and I will provide an estimate of the fees required for me to perform the closing.  You may contact me by email at  and I will provide a prompt and accurate response to your inquiry.  You will receive the services of an experienced, dedicated real estate attorney, and you will have the peace of mind knowing that the loan was properly closed.  I can provide loan closing services throughout Connecticut.

Here is a link to a page on my web site that provides more information about mortgage refinances in Connecticut and the role of the real estate attorney.

 

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About the author:  Attorney Begemann is a member of the Connecticut Bar and practices real estate and business law in Connecticut.  As an experienced real estate attorney he represents individuals and lenders in residential and commercial loan closings across Connecticut, including the purchase, sale and refinance of real estate.

Attorney Paul H. Begemann, 2764 Whitney Avenue, Hamden, CT  06518

Phone 203-230-8739                                       Fax 800-483-1904

email

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0 commentsPaul Begemann • October 08 2009 09:38PM

FHA ........ Major Condo Approval Change!!!

There has been much discussion about recent changes in FHA approvals for condos.  By way of background, when an FHA loan is made for a condo unit, the complex must be 'approved' by HUD before the FHA loan can be made.  In the past (or more accurately until November) this could be done by a formal approval by HUD itself or by a 'spot approval' whereby the lender would review certain aspects of the condo complex for the purposes of making that one loan.  HUD has now abolished the spot approval, and generally made the pprocess more complex, while at the same time loosening some of the requirements.  See the blog post below as well as the links in this post for a good explanation of the changes and their potential impact.  In addition to the blog post below, here is a link to a blog from a Massachusetts attorney that also explains the changes.  The National Association of Realtors and other organizations have requested modifications to the changes, so this may still be a work in progress.  Personally, I am not quite as pessimistic as to the effect of these changes.  Some of them will make the approval process easier in substance, although the paperwork required is more significant.  Plus once a complex is approved using this new process, it will not need to be reviewed again (unlike the spot process which was loan specific).  I will keep an eye on this issue to see what happens as November 2 approaches.

Here is a blog post from an experienced FHA lender in Connecticut that explains the recent delay in the changes and provides a good explanation of what we can expect.

Via George Souto (McCue Mortgage) FHA, CHFA, VA Mortgages CT.:

Back on June 16 of this year I wrote a blog "FHA ........ Major Condo Approval Change!!!" which covered the New FHA Condo Approval Process that was to go into affect on October 1st of this year.  Well FHA has just made it known that the New Condo Approval Process will now not go into affect until November 2nd.  This means that we have an additional month now to be able to do "Spot Condo Approvals" instead of a "Full Condo Complex Approval" on Condo Complexes that are not presently on the FHA Condo Approval List.

A quick recap of what the major changes will be to the new process are:

  • FHA will now allow lenders who are "Direct Endorsement Lender" to determine project eligibility, review project documentation, and certify to compliance of Section 203(b) of the NHA and 24 CFR 203 of HUD’s regulations.
  • An Environmental Study will no longer be required in most cases.
  • The Right of First Refusal will not longer be an issue.
  • Spot Condo Approvals will be eliminated.

I will try to keep everyone informed on any further changes or delays to the New FHA Condo Approval Process as I am made aware of them.

 

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or [email protected]

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About the author:  Attorney Begemann is a member of the Connecticut Bar and practices real estate and business law in Connecticut.  As an experienced real estate attorney he represents individuals and lenders in residential and commercial loan closings across Connecticut, including the purchase, sale and refinance of real estate.

Attorney Paul H. Begemann, 2764 Whitney Avenue, Hamden, CT  06518

Phone 203-230-8739                                       Fax 800-483-1904

email

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0 commentsPaul Begemann • October 08 2009 07:31AM

Debt Negotiators on Short Sales now Require a License to do Business in Connecticut

The Connecticut legislature has recently passed legislation that was effective October 1, 2009 which will for the first time explicitly regulate people and companies that (for a fee) assist consumers in negotiating their mortgage debt, including fee assisting with short sale negotiations.  The legislation is Senate Bill 950.

This legislation applies to all in state and out of state companies and individuals who charge a fee for negotiating someone's debt.  The new law prohibits advance fees, and requires licensing and bonding for those who want to engage in this type of activity.

What this means is that if a fee is charged to a consumer in the course of settling or negotiating a debt, that activity is now regulated by the state and a license to perform it is required.  The license will be obtained from the State Department of Banking.  Attorneys admitted to practice law in Connecticut are exempt from the new law (attorneys NOT admitted in CT do not appear to come within this exemption).

So lets say you are a Realtor and have a short sale listing, and you help the owner negotiate with their bank.  Do these activities come within this new legislation?  I must say I do not know the answer to that question.  The statute is written very broadly and does not provide a specific exception for Realtors.  The argument the Realtor would make is that they are not expecting a "fee, commission or other valuable consideration" from the act of the debt negotiating, but rather from the sale of the property for which they have a separate commission agreement,and the short sale negotiations are ancillary to that.

So if you are a Realtor and have a separate business doing fee-based debt negotiation or the like, you will  have to be licensed and your contracts and activities will be regulated.  If you are a Realtor and doing short sales but do not charge extra for the service, I would get a legal opinion or advice from an attorney to verify that such activities are OK.

I have the text of the relevant portion of the proposed statute if anyone is interested in reading it in detail.   Just contact me and I will email it to you.  It is also available on the web site for the CT legislature,

If you are interested in becoming licensed under this new law, or want further information about its applicability, please contact me.

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About the author:  Attorney Begemann is a member of the Connecticut Bar and practices real estate and business law in Connecticut.  As an experienced real estate attorney he represents individuals and lenders in residential and commercial loan closings across Connecticut, including the purchase, sale and refinance of real estate.

Attorney Paul H. Begemann, 2764 Whitney Avenue, Hamden, CT  06518

Phone 203-230-8739                                       Fax 800-483-1904

email

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7 commentsPaul Begemann • October 01 2009 05:02PM