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Paulus Title: 10 Last Minute Christmas Gift Ideas

1. For the men on our list, a subscription to the The Red Bulletin, the official Red Bull magazine. 

2. For your family members you have no clue what to get, a Rowenta Steamer. So random I know but one of the best gifts I’ve ever received.  

3. For something visual and heart warming,  Project 50/50 by Richie Wendell Carter. 

4. For the practical gift receivers on your list, a Herman Miller coat rack. 

5. For the family members that travel a lot or just want some peace and quiet, Noise Cancelling Headphones. 

6. For the earth friendly friends on your list, a S’well Water Bottle. Keeps cold for 24 hours and warm for 12! Plus environmentally friendly!

7. For a twist on “table tennis,” a Poly Pong Table, a four sided ping pong table. You thought just regular ping pong was fun! 

8. For the musicians, a Cajon Drum Box. Less “hippie” than bongos, same concept. 

9. For all the outdoorsy people on our list, a Hennessy Hammock. Not only is it a hammock but an entire shelter system in one piece. 

10. For all the Apple fans out there, a Hard Graft I-Watch Charger. 

Merry Christmas from all of us at Paulus Title! 

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Paulus Title: Father’s Day Gift List

1. Every dad needs a great weekender bag. Here’s one we recommend by Herschel Supply Co.

2. Customize him a pair of Ray Ban sunglasses. You can't go wrong with Original Wayfarers.

3. A wooden desk puzzle from Office Playground.

4. The Working Man's Hygiene Kit full of natural kit filled with "manly slaves, scrubs, and balms."

5. For the bookworm: "Posterity: Letters of Great Americans to Their Children" by Dorie McCullough Lawson.

6. Inflatable Pillow Necktie. Don't worry, the inflatable pouch is undetectable to coworkers.

7. Create a flashcard memory game to play with your kids. You can use your own photos with Shutterfly. 

8. Candy Bar Time Capsule. Surprise him with a candy filled capsule from his favorite decade

9. Molecular Gastronomy Kit for the Foodie.

10. Star Wars: The Complete Saga on Blu-Ray for the dad who can't wait for the next Star Wars film to hit the theaters in December.

Have a happy Father’s Day!

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New Laws, New Forms.

The Consumer Financial Protection Bureau (“CFPB”) has an opportunity to reverse a troubling trend in residential real estate closings.  Unfortunately, the CFPB is not going to take advantage of it, but seems intent on making matters worse.

  Real estate closings can be confusing.  Agreed.  But, the problem is not complexity of the transaction, it’s the paper.  Every authority from Congress down to the neighborhood association wants to add some document or disclosure to the closing, but no one ever takes anything away.  Over the last seven or so years, the amount of paper it takes to close an average residential deal has gone (in my rough estimation) from about 50 or 60 pages to about 80 or 90.  Are closings easier to understand now?  I think not.  Simple commercial loans on the other hand are easy to understand because every document has direct impact on the terms and conditions of the loan.  These closings only require about 20-25 pages of documents.  Another example of this trend is the settlement statement itself.  Three years ago, a HUD-1 Settlement Statement had 2 pages.  Now it has at three.  The new CFPB form will have 5 or 6.  Residential loan packages are already so cluttered with junk that when it’s over, consumers have no idea what they signed. 

Obviously, it’s the CFPB’s turn to add to the pile.  This government agency was created in 2010 by the Frank-Dodd Act.  In its fourth draft, the CFPB’s form (available at http://www.consumerfinance.gov/blog/know-before-you-owe-the-last-dance-or-is-it/) is absolutely clogged with unnecessary information (e.g. contact information for everyone involved and a “yes/no” disclosure on whether changes from original estimates have occurred).  Remember: It’s a settlement statement.  It should be a clear and concise explanation of charges and that’s it.  Every additional piece of information on the form adds a risk of saying something inconsistent with the controlling documents (like the Note or Mortgage).  And, the CFPB’s draft form would create far more work and risk for settlement agents, which means higher costs for closings.  Almost all of this new work has nothing to do with making a clear and concise explanation of the monies disbursed at settlement. 

Also, remember that the overwhelming majority of closings involve simple, fixed-rate mortgages.  In those transactions, consumers want to know three things:

How much do I bring to closing?

What is my payment?

When will this be paid off?

The CFPB should leave it at that.        

                                         © 2012, Craig Paulus 

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Alabama Property Tax Relief: Homebuilders and Developers Must Act to Cut Their Alabama Property Tax in Half for 2012.

In the aftermath of April’s tornadoes, Alabama passed the Homeowners’ and Storm Victims’ Protection Act of 2011.  Simply stated, this law expands the ad valorem tax break already given to homeowners, by giving it to those who lost their homes in the storms as well as homebuilders and developers.  But, to benefit from this law, you must file paperwork with your local Tax Assessor or Revenue Commissioner. 

Under Alabama law, all property is divided into four classifications (only 3 concern real estate), which factors into the calculation of the tax bill.  First, the property is assessed to establish its value for tax purposes.  Then, the property is classified.  Class I property (utilities) is taxed at 30% of the assessed value; Class II (all property not classified) at 20%; Class III (residential, agricultural, forest, and historic sites) at 10%.  Lastly, the millage rate is applied for the jurisdiction where the property is located.  As you can see, classification makes a huge difference.  All things being equal, a non-residential property has twice the tax bill as a residential property.  Prior to this law, only owner-occupied, single family dwellings qualified as “residential.”  But now, some unoccupied properties owned by homebuilders and developers are Class III. 

Taxpayers must take action to benefit from this new law.  Builders with lots under construction must fill out a Form ADV-44 (Homeowners’ and Storm Victims’ Protection Act of 2011 Application for Reclassification Single-Family Dwelling and Underlying Lot).  Homebuilders must also document that the house is under construction by producing a building permit, on-site sewage permit, a certificate of occupancy, or a temporary power permit.  Developers must fill out a form ADV-45 (Homeowners’ and Storm Victims’ Protection Act of 2011 Application for Reclassification Fully Developed Lot) and provide proof of compliance with subdivision regulations.  Contact your local Tax Assessor to obtain the forms and ask about any of their local rules and practices for documenting eligibility for reclassification.  

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A quick introduction to title insurance from Craig Paulus at Paulus Title LLC.

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Think of selling your house as paying off your biggest debt.  That's a big deal, and title insurance doesn't protect sellers.  So, you need to protect yourself by closing at a title company that is serious about protecting your money.  Paulus Title LLC uses the most comprehensive fraud protection system in the industry.  It's just one part of what makes us the best choice.  

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It's time to take control of your real estate closing.  Don't be steered into closing at an office that is owned by your real estate agent or lender.  Use an independent, forward-thinking title company that competes on merit.  Use Paulus Title LLC.

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Computers, Activism, and Protest, Oh My!

Computers, Activism, and Protest, Oh My!  

- © Craig Paulus, 2011

A few years ago, I had the privilege of meeting one of the leaders of my town’s civil rights movement.  Dr. Sonnie Hereford III spoke about the methods they used and he showed film footage he took during the 1960s.  One method I remember most vividly, was a protest against businesses that would not serve black people.  The activists would descend in mass to a restaurant that served only whites.  They would take up all the seats.  They would then wait for the business owner to close his restaurant, for the police to arrest them, or to be served.  Dr. Hereford also showed us film of a line of young men going to the movie theatre asking to buy a ticket, when they were turned away, each young man would go to the end of the line and start over.  The lines tied up the theatre’s ability to sell tickets.  In the restaurant, eventually they got served.  At the theatre, eventually they could buy tickets.

Imagine if the American civil rights movement didn’t happen when it did.  Image it’s happening in today’s world.  How would you tie up eBay, iTunes, or Amazon if they wouldn’t serve you?  How about PayPal?  What if the government decided to deny you essential services because they didn’t like your point of view?  Would you fight back by vandalizing their websites?  Would you try to deny other people the ability to use them?

There are groups doing this already.  I first heard about one called Anonymous a couple of years ago.  They were in the news for protesting the actions and policies of the Australian government.  Apparently, the Australian government decided to address what it decided was “inappropriate” content on the Internet.  From what I read, the idea was to close certain websites and monitor Internet traffic in Australia.  Someone leaked a list of the websites that were to be shut down and a file-sharing website used by hackers was on the list.  A group of hackers calling themselves Anonymous didn’t want one of their favorite websites shut down, nor did they think the government should be infringing on the freedom of communications on the Internet. 

I admit that I immediately had a great deal of sympathy for their point of view.  How could Australia, an English-speaking country with English common law legal traditions, even think to monitor private communications?  It’s not China or Iran.  It’s Australia.  Who are they to decide what should or should not be published?  And how on Earth did they come up with the arrogance to try so stupid an idea. 

And, I was intrigued by the response.  Anonymous started Distributed Denial of Services (DDoS) attacks that overloaded government computer systems; they sent black faxes to government offices; and they hijacked websites to express their content.  It wasn’t just sticking it to the Man; this was new wave civil disobedience.  They had a point and were annoying enough to draw attention to it.  But unlike other civil unrest, when they were done, no one was hurt and nothing had been burned to the ground.

I recently saw Anonymous in the news again and read a manifesto “they” wrote comparing their activities to traditional civil disobedience.  This lead to some discussions among my friends about the legitimacy of is new wave hacktivism (Sorry, I hate contrived terms, but everyone is using this one).

It is easy to see the similarity between a DDoS and large group of activists descending on a government office, restaurant, or theater and overwhelming it with numbers.  It makes the government unable to function and costs the businesses money.  Break-ins to vandalize a government office are destructive.  Hacking a website to hijack its content is similar, only cheaper to fix and less dangerous.  Stealing information from a computer is like looting.  Stealing someone’s account information and their money is just stealing.  Somewhere in that mix, you probably draw the line on what you consider acceptable.  But, hacking probably never killed anyone (directly anyway), though thousands have died in street protests so far this year.  And, just like the “real world,” there are certainly computer ne’er-do-wells who will cloak larceny in political ideology.  And many malicious attacks and computer break-ins are attributed to computer activists when they shouldn’t be.  So far, this seems very similar to traditional activism. 

So, why do so many people that I talk to find hacktivism offensive?  They make some pretty good points, though I don’t think they really matter.  First, there is something about anonymous speech that creates suspicion.  Everyone knows that free speech is diluted when it lacks a face willing to brave the slings and arrows of the world.  Many people just won’t trust people who won’t show themselves.  But don’t forget that The Federalist papers, the political essays in support of the adoption of America’s Constitution, were mostly written anonymously.  Also, U.S. Supreme Court has flatly stated that anonymous speech is protected free speech.  In case you don’t believe me: “Under our Constitution, anonymous pamphleteering is not a pernicious, fraudulent practice, but an honorable tradition of advocacy and of dissent.’’ McIntyre v. Ohio Elections Comm’n, 514 U.S. 334, 357 (1995).  So, there is nothing wrong with point of view simply because it is expressed anonymously.  Judge for content, I say.

The second issue is about action as opposed to speech, and consequences.  Some people object to computer activism because it seems like the hactivist will “get away with it.”  If you were a part of a sit- in in the 1960s, you were easy to arrest.  Now, there is a perception that if you hide behind a proxy server, you can get away with anything (not true by the way).  So, if you want to protest, put some skin the game. 

Now, it is tempting to point out that “getting away with it” will only bother you if you disagree with the point of view of the activist, otherwise, why should you care if a crime is done with a computer or by throwing a rock?  But, there is a point under there somewhere.   If proxy servers really could free you from consequences, there should be a legitimate concern that someone will misuse that freedom.  In other words, it seems wrong that a group could cause a disruption disproportionate to its size. 

How many people are behind the activities of Anonymous?  You don’t really know.  “They” don’t even know: Anonymous is a group without structure, a collective.  About itself, Anonymous says “Anonymous doesn’t exist.”  And don’t forget the real bad guys: because many real computer criminals purport to be part of political movements - like looters in a traditional riot - the political activities of groups like Anonymous are called into disrepute. 

In the end, however, this discussion is based on a false dichotomy.  There is no real world apart from some cyber world.  We live in a world with computers, and people will do what they want with them.  In the home movies of the civil rights movement, I saw the restaurant owner and theater owner waving their arms in exasperation.  You can’t hear them, but you get the sense that the words, “it’s not fair” crossed their lips.  It didn’t help them.  So don’t cry foul because Internet activists aren’t fighting fair.  Activists never did, never do, and never will.  Don’t define freedom by what’s safe and easy to control.  Decide your point of view by its merits. 

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Alabama Non-Resident Withholding Tax- 3 Years In.

Alabama Non-Resident Withholding Tax (Alabama Act 2008-504) - 3 years in.

We are sad to announce that it took us less than three years to waste over a mile of paper, one 8.5” by 11” sheet at a time.  This paper died so that we might help others comply with Alabama’s Non-resident Withholding Tax.  Another unfortunate fact is that the law never required us to send a penny to the Alabama Department of Revenue (“ADOR”). 

Just to recap, this is the state law version of FIRPTA, the federal government’s Foreign Investment in Real Property Tax Act.  FIRPTA withholds taxes from foreigners who Congress worries will go back to wherever they are from without paying taxes on their real estate ventures in America.  Alabama’s law goes after people from other states who sell property in Alabama.  Neither law is really a tax; it is just a withholding requirement to make sure that any tax liability that might exist actually gets paid. 

The fact that we have hit the mile mark without sending in a penny made me curious.   So, I called ADOR and this is what they said: 

-  In the law’s first full year (2009), ADOR collected 102 checks totaling $961,696.89. 

-  In 2010, there were 75 checks totaling $1,168,480.12. 

Not bad in dollar terms, but only 177 closings required withholding in two years!  According to the Alabama Center for Real Estate (ACRE), there were 74,152 residential closings in that same time period.  That figure does not count commercial sales, timber and mineral rights sales, and it excludes sales conducted without a realtor.  But even using these numbers, ADOR gets a check in a tiny fraction of closings: less than three-tenths of 1%.  

If other closing offices are like mine and average 5 sheets of ADOR forms per closing, our industry has killed 370,760 pieces of paper to make sure that ADOR gets 177 checks.  I forgot to ask ADOR how many people are on the payroll to process those 177 checks, but I can say that my business can’t afford to add people to handle the 7500 sheets of paper that have been thrust on us by the Alabama Legislature. 

And that is where the blame lies.  ADOR has been the best thing to happen to this law.  They crafted the rules to make this law work as well as it does.  Without their well-crafted exceptions to the withholding requirements, this law would be almost completely unmanageable.  For instance, ADOR added exceptions for when the seller has no tax liability because there is no profit, where the seller has negative equity, and when the sale is not taxable on a federal level.  The Legislature didn’t think of that.  The best exception for residential sales is where the purchase price is less than $300,000.  Without those exceptions, this law would be the centerpiece of every real estate closing and sellers would be rioting in the streets. 

Perhaps you’ve wondered why prices creep up while service slows down.  Laws like this are part of the problem. 

© 2011 Craig R Paulus