Category: Jason McGrath News / Media

How Do You Expand Your Company Into North Carolina From Another State?

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Categories: business law, Business Law & Contracts, Charlotte, Jason A McGrath, Jason McGrath News / Media, North Carolina, small business
As a business law attorney, one of the most frequent questions I am asked is some variation of “How do I transfer or expand my out-of-state company to North Carolina?” I’ll address the most common scenarios and the reasonable options available. I’m using South Carolina as the “other” state for example purposes, since we also practice in SC. However, the same general process is true regardless of which state your company originated in.Scenario B: “I live in South Carolina, which is where my company is and will be based, but I want to expand my region of operations to include North Carolina. What should I do and how do I do it?”

Option 1: keep your South Carolina LLC open and register it with the State of North Carolina as a foreign business authorized to transact in North Carolina. You’d obtain a “Certificate of Good Standing” or similar from Florida. You then provide that to the Secretary of State for North Carolina as part of your North Carolina Application for Certificate of Authority (to conduct business in North Carolina). Assuming you are approved by NC, you’re now good to go to conduct business in both states, or either state, and you can have your principal place of business in either state. You will likely be required to pay annual fees to each state and file taxes in each state, which are important factors to consider.

Option 2: start an affiliated company or subsidiary in North Carolina. In certain specific instances, you may keep your South Carolina LLC open, and instead of registering it with North Carolina, you’d prefer to create and register a separate but related business entity in North Carolina. This is typically referred to as a “subsidiary” or an “affiliated company”. You will likely be required to pay annual fees to each state and file taxes in each state, which are important factors to consider.

Additional notes. Under any of the above options, you’ll have to have a registered agent with a “continuous presence” in NC. Many law firms (like mine) agree to provide that service for a small annual fee, but your company’s “RA” doesn’t have to be a business lawyer or law firm. Of course, we also provide the very services needed to transfer your business overall.

These actions can be accomplished without an attorney, but you should at least consider consulting with an attorney any time you make a significant change to your business entity. Good luck!

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Jason McGrath Interviewed Regarding Internet Security for Law Firms andtheir Clients

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Categories: charlotte business journal, cybercrime, Internet & Technology, Jason A McGrath, Jason McGrath News / Media, Life and the Law, The Legal Profession, virtual law

Law firms warned to be vigilant against cybercrime – The Charlotte Business Journal

Jan 30, 2015 – The N.C. State Bar released ethics opinions about cybersecurity, and … so they can be more efficient,” says Jason McGrath,  partner at McGrath & Spielberger . . . . (click link above for full story or read it below)

Law firms warned to be vigilant against cybercrime
LEGAL INC. SUBSCRIBER CONTENT: Jan 30, 2015, 6:00am EST
Bea Quirk, Contributing Writer

At the Mecklenburg County Bar’s recent monthly luncheon, the speaker, FBI Agent Colleen Moss, told attendees that although small and midsized law firms don’t regard themselves as targets for hackers, they are. As supervisor of the Charlotte Division’s Computer Intrusion Cyber Squad, she knows firsthand the firms’ vulnerability, no matter the size.

“Anytime there’s a large pot of money involved — escrow, a trust — you’re going to be a target,” Moss told the lawyers. “Criminals look for the fastest and quickest way to make the most money possible. If they find any other data that’s usable and sellable on the Internet, that’s fair game, too.”

Hackers aren’t always subtle in their attacks, as seen in a form of malware called ransomware that is gaining popularity. Hackers install a “cryptolock” on a company’s files and won’t provide access until a ransom is paid, says Clark Walton, an attorney at Alexander Ricks. He has a digital forensics consulting business and previously worked in cybersecurity at the Central Intelligence Agency.

Moss and Walton say regularly updating operating systems, firewalls and antivirus software is the best defense.

Email remains the entry point of choice for hackers. Moss says up to 85% of incidents stem from phishing emails — messages that look legitimate that ask the recipient to click on a link or open an attachment. That allows a hacker to install malware that infects the user’s computer — and an entire system.

“These criminals are good at socially engineering emails that look legitimate or are designed to pull at your heart strings,” Moss says.

One such effort surfaced last year, when hackers were found to have penetrated pharmaceutical companies and their outside advisers in banking and law. Emails were written in “flawless English” and tailored to recipients, who were duped into revealing information that allowed hackers to profit in stock trades, The New York Times reported.

Moss says information on a firm’s website and employee Facebook pages can be used to create credible email. Even though employees of law firms are generally aware of the danger, Moss says they still fall for scams offering financial rewards in exchange for providing access to a checking account.

But law firms have a difficult situation to balance. They are businesses and need to respond to emails. They can’t be ignored, even if they appear suspicious. Moss suggests employees contact their IT department, server host or a consultant. She also recommends reporting apparent scams to www.ic3.gov, an information clearinghouse for Internet crime.

If a law firm in North Carolina is hacked, the state’s Identity Theft Protection Act mandates that customers and clients be informed. Moss also hopes a firm will contact the FBI, which might be able to curb additional damage. Doing so also helps the agency track criminals and can increase the public’s awareness of current scams.

Both the state and national bars are aware of the growing problem. The N.C. State Bar released ethics opinions about cybersecurity, and the American Bar Association published a guide to security.

Moss says cybersecurity is often a matter of risk management. Law firms must consider the costs of security and their tolerance for risk. Small firms must do this kind of analysis as their work and communications are increasingly digitized.

“Smaller firms are moving more to technology so they can be more efficient,” says Jason McGrath, partner at McGrath & Spielberger and chair of the Bar committee that organized Moss’ presentation. “You have to invest in security once technology becomes your bread and butter. It’s just common sense.”

Jason McGrath Interviewed by TV Station Regarding BOA Fraud

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Categories: bank of america, boa, foreclosure, Foreclosures amp; Mortgage Loan Relief, fraud, Jason A McGrath, Jason McGrath News / Media

Former BofA workers claim they received bonuses for foreclosures… – WSOC tv

www.wsoctv.com › News › Local Posted: 3:14 p.m. Monday, June 17, 2013

Jun 17, 2013 – “I’ve seen all of those things that this lawsuit has mentioned. Yes I have,” said Jason McGrath a foreclosure attorney in Charlotte. McGrath helps …  (click here to see the TV broadcast story and interview excerpts)

By Blair Miller

CHARLOTTE, N.C. —

Former Bank of America employers said they received $500 cash bonuses and gift cards when they sent distressed homeowners into foreclosure.

Eyewitness News took a closer look at the allegations in the latest lawsuit on Monday night.

The lawsuit against Bank of America lays out some strong accusations. It claims the Charlotte-based bank gave cash bonuses and gift cards to employees who pushed homeowners into foreclosure.

It was the heart of the recession, at a time when many homeowners were looking for help, but on Monday night, according to a new federal lawsuit, former employees claim loan collectors who put customers into foreclosure were rewarded with gift cards to Target and Bed, Bath and Beyond.

The suit said those who would put at least 10 customers into foreclosure would get $500 bonuses.

According to Bloomberg, ex-Bank of America employees said mortgage workers falsified records and were told to delay applications for government loan assistance by asking customers to fill out paperwork that had already been received.

“I’ve seen all of those things that this lawsuit has mentioned. Yes I have,” said Jason McGrath a foreclosure attorney in Charlotte. McGrath helps clients save their homes.

He said on Monday night that he works with Bank of America often and he is glad that the public is hearing the claims.

“It’s one of those things that it’s great for folks like me because we experience this on a day-to-day basis and we are finally glad to see it see the light of day,” said McGrath.

On Monday night, in a statement to Eyewitness News about the lawsuit, Bank of America said, “These attorneys are painting a false picture of the bank’s practices and the dedication of our employees. While we will address the declarations in more depth when we fire out opposition to the plaintiff’s motion next month, suffice it is to say that each of the declarations is rife with factual inaccuracies.”

McGrath said in some ways the lawsuit helps his clients.

“Some of my clients say I’m so glad to hear you tell me other people are going through this and it’s not just me. They feel much more persecuted. It’s weird since they feel better that other people are going through this as well,” he said.

Seven former loan employees are pushing to get the lawsuit approved for class-action status.

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Jason McGrath Quoted in Story About Pace of Foreclosures

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Categories: Charlotte, charlotte observer, foreclosure, foreclosures, Foreclosures amp; Mortgage Loan Relief, Jason A McGrath, Jason McGrath News / Media, mortgage relief
September 12, 2013 By Deon Roberts droberts@charlotteobserver.com  … Jason McGrath, a Charlotte-based lawyer who defends struggling homeowners … (click below link for full story, which is also excerpted below)

Charlotte-area Foreclosure Filings Decline 16%

By Showcase Realty On October 14, 2014

By Deon Roberts
droberts@charlotteobserver.com
Posted: Thursday, Sep. 12, 2013

Charlotte-area foreclosure filings dropped 16 percent in August from a year ago, as they also fell across the U.S.

The Charlotte region had 982 filings – which comprise default notices, scheduled auctions and bank repossessions – down from 1,166 a year ago. North Carolina filings fell to 2,361, a decline of 12 percent.

Nationwide, foreclosure activity fell largely as a result of fewer properties starting the foreclosure process, according to real estate data firm RealtyTrac. U.S. foreclosure starts dropped to 55,775, their lowest level since December 2005.

For Charlotte, it was the third month in a row of year-over-year declines.Observers point to at least two trends driving down Charlotte foreclosure filings: Rising home prices are increasing equity in homes that are “underwater,” making the owners less likely to allow their properties to fall into foreclosure. Also, they say, some lenders are opting to sell distressed Charlotte-area homes to investors.

“Some of the institutions don’t really want to be in the foreclosure business, so they unload some of their notes that are in default, or nonperforming notes, they call them,” said Nancy Braun, owner of Charlotte-based Showcase Realty.“They sell them to investors at a fraction of the value,” she said. “The investors then can take on the unpleasantries of possibly foreclosing on the party or renegotiating the note with the borrower or doing a short sale with the borrower.”

In Charlotte, investors such as private equity firms have been snapping up bank-owned properties to convert them into rentals. Braun said investor purchases are a factor in Charlotte’s tight inventory situation.

“That’s part of the reason … there’s a shortage of inventory,” she said.

Charlotte’s drop in foreclosures also coincides with home prices increasing here and elsewhere. On Tuesday, the Charlotte Regional Realtor Association reported the average home price in the region rose to $237,635 in August, the largest year-over-year gain so far in 2013. That’s up 11 percent from $213,846 in August 2012.

Home prices are rising across the U.S. as mortgage rates increase and supplies of homes for sale remain tight in many areas. RealtyTrac says the increase in prices is good news for homeowners who are underwater – those who owe more on their homes than they are worth. Those owners have more equity as prices overall rise.

Foreclosure filings in Charlotte remain below their peak of 2,141 in August 2009.

Even though overall filings fell in the Charlotte region, bank repossessions and default notices increased year over year in August, RealtyTrac said. Repossessions climbed 33 percent to 330 properties, compared with 249 properties a year ago. Default notices increased 1,620 percent, to 172 from 10 a year ago.

‘Desperate homeowners’

While overall foreclosure filings are down, Charlotte homeowners who have already fallen into foreclosure are still battling their lenders.

Jason McGrath, a Charlotte-based lawyer who defends struggling homeowners, said his office, in roughly the past few months, has seen an increase in demand from clients facing foreclosure hearings that are only a week or two away or whose homes are already scheduled for foreclosure sales.

“There are clearly many desperate homeowners out there that are still facing foreclosure and are still struggling to make every effort they can to avoid it,” he said.

Despite the falling number of foreclosure filings, some predict a surge in foreclosures in coming months.

Daren Blomquist, vice president for RealtyTrac, said foreclosures are expected to rise in some U.S. markets as lenders move forward with foreclosure starts that had been delayed.

McGrath expects an increase in Charlotte, too.

“There’s some theory out there that we’re going to see a ramp up in foreclosure filings in 2014,” he said.

Source: http://www.charlotteobserver.com/2013/09/12/4306203/charlotte-area-foreclosure-filings.html

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Jason McGrath Reappointed to City of Charlotte’s Civil Service Board and Remains Chair

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Categories: Charlotte Fire Department, City of Charlotte, civil service board, Jason A McGrath, Jason McGrath News / Media
Charlotte Business Journal: Professional Recognition, September 26, 2014, Jason McGrath

Attorney Jason McGrath of McGrath & Spielberger, who serves as the Chair of the City of Charlotte Civil Service Board, was recently reappointed to the Board for another three year term. The Board has certain quasi-judicial authority over Charlotte Mecklenburg Police Department and Charlotte Fire Department.

Jason McGrath Quoted in Story About NASCAR Hall of Fame Loans

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Categories: Charlotte, charlotte city council, Collections, Credit, Debt, Jason A McGrath, Jason McGrath News / Media, Life and the Law, loan, NASCAR Hall of Fame
City Lab, a division of The Atlantic, Jan 12, 2015 – Yet, as highlighted by a recent Charlotte Observer editorial, the project’s … Jason McGrath, a Charlotte attorney experienced in real-estate … (full story linked and pasted below)

Investing in NASCAR: What Could Go Wrong?

SAM STURGIS  JAN 12, 2015

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Charlotte’s NASCAR Hall of Fame crashed hard. As the city preps for an $18 million debt-forgiveness vote, homeowners wonder where their bailouts are.

NASCAR-Hall-1
A beautiful disaster. (Flickr/Daniel Lobo)

We just rang in 2015, but the city of Charlotte, North Carolina, would love to see the calendar flipped back to 2005.

That was the year NASCAR cemented its position as one of the United States’ most popular sports. Fortune magazine drooled over the racing juggernaut a decade ago, proudly declaring NASCAR “the fastest-growing, best-run sports business in America—with the emphasis on businesses.”

But the financial viability of NASCAR has crashed in recent years amid plummeting race attendance and growing disinterest in car racing among Americans. And nothing symbolizes the sport’s tragic decline more than its Hall of Fame, which broke ground with great expectations in 2007 and officially opened in 2010—and is now hemorrhaging money for the city of Charlotte.

Monday night, Charlotte’s city council is expected to pass a loan-forgiveness deal that will eliminate nearly $18 million in debt the city owes on the NASCAR Hall of Fame. Opening the glitzy development cost the city $200 million, but the project was viewed as a crucial job creator for downtown Charlotte, undergoing noticeable revival. Today, to call the NASCAR Hall of Fame a financial disaster would be an understatement.

NASCAR-Hall-2
The NASCAR Hall of Fame, under construction in 2007, features a 278-seat theater, meeting halls, and a cafe. (Flickr/James Willamor)

Early projections had the city-owned Hall of Fame pulling in revenues of up to $1 million annually. Instead, according to Sporting News, the venue has lost over $5 million since opening. Attendance is abysmal. Developers expected at least 400,000 visitors annually, with the potential to attract up to 800,000. Over the past five years, however, only about 170,000 NASCAR fans have visited the venue each year, or 470 per day. One official representing the NASCAR Hall of Fame acknowledges some financial projections have not been met, but insists, “the Hall is doing well.” Tom Murray, CEO of the Charlotte Regional Visitors Authority, which overseas large city-owned assets, says the NASCAR Hall of Fame will earn money or break even if the debt deal is agreed upon.

City officials are framing today’s debt deal as a “restructuring” rather than a bailout. Yet, as highlighted by a recent Charlotte Observer editorial, the project’s downfall can’t really be spun:

It doesn’t camouflage that the Hall of Fame couldn’t survive on its own. It doesn’t change the fact that the city, when it bid for the hall, miscalculated everything from attendance projections to the arc of NASCAR’s popularity.

The failure of the deal becomes even more clear as cities struggle to pull out of the Great Recession. Charlotte was spared the crippling housing crisis that hit cities like Detroit and Las Vegas. Still, North Carolina’s largest metro was hit hard, according to the Brookings Institution. Single-family properties financed with a mortgage lost 23 percent of their value during the recession and, despite a marginal recovery, are still nowhere near pre-recession rates.

NASCAR-Hall_housing-prices
(Brookings)

Jason McGrath, a Charlotte attorney experienced in real-estate litigation, says the community’s support for the debt-forgiveness deal is “mixed.” Given how badly the venue has underdelivered, taxpayers naturally balk at wiping its financial slate clean so easily. However, McGrath says, residents know they are likely to benefit, at least indirectly, if the city’s debt toward the project is written off. (McGrath chairs a civil service committee for the city, but spoke to CityLab from the perspective as an independent lawyer).

“Of course, the folks that are facing foreclosure and have not been able to get help are looking at this and likely thinking to themselves, ‘Well, here we go again,’ where it’s always the big fish that seem to get the big breaks,” McGrath says.

Nearly 16,000 foreclosed properties in Charlotte are either for sale or auction, according to RealyTrac, an online housing database. Would the $18 million being written off for the NASCAR Hall of Fame have better served residential properties currently underwater?

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Jason McGrath Quoted in Charlotte Observer Story on Mortgage Relief Tax Issues

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Categories: Foreclosures amp; Mortgage Loan Relief, Jason A McGrath, Jason McGrath News / Media, mortgage relief, North Carolina, Tax Issues, taxes
Feb 16, 2015 – The Charlotte Observer | CharlotteObserver.com ….. Jason McGrath, a Charlotte-based attorney who works with clients dealing with mortgage disputes and foreclosures, said that . . . (full article linked and posted below).
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Tax-change renewal could hurt troubled homeowners in North Carolina

By Deon Roberts and Jim Morrill – deroberts@charlotteobserver.com jmorrill@charlotteobserver.com
FEBRUARY 16, 2015 6:00 AM

North Carolina lawmakers are poised to renew a rule requiring homeowners to pay state income taxes on mortgage debt forgiven by lenders – a move that could cost some homeowners thousands of dollars in additional taxes.

For years, North Carolina allowed taxpayers not to count written-off mortgage debt as taxable income after Congress, responding to the mortgage crisis, enacted a similar exclusion on federal income taxes.

In 2013, North Carolina took away the exclusion for the first time since the crisis. And last week the N.C. Senate passed a bill that would not allow the exclusion for tax year 2014. The House is expected to vote on the measure this week.

To illustrate what the bill would mean, if a homeowner received $20,000 in mortgage principal forgiveness, he or she would have to pay $1,160 in additional taxes, based on the state’s individual income tax rate of 5.8 percent. If $40,000 were forgiven, he or she would owe $2,320 in additional taxes.

Analysts say the proposal, which is included in a bill changing the state’s gasoline tax, could affect as many as 4,000 N.C. homeowners caught up in the mortgage crisis.

Republican and Democratic lawmakers are divided on the proposal, which General Assembly staffers estimate will bring in about $14 million in 2014 tax revenue.

Republicans say the move would be consistent with other tax changes that have lowered rates and eliminated many deductions.

But Democrats and some consumer advocates say it would hurt homeowners struggling to recover after falling into foreclosure and defeat the purpose of a lender providing the debt relief in the first place.

“This is not a good policy,” said Al Ripley, director of consumer and housing affairs for the North Carolina Justice Center. “We want to try to create situations where they will be able to afford to stay in their house … not engage in policies that will take resources away from those families and make it more likely that they will end up in foreclosure or face other economic hardship.”

Taxpayers can still claim the exclusion on 2014 federal income taxes after President Barack Obama signed an extension in December. The exclusion stems from the Mortgage Debt Relief Act of 2007.

As recently as two years ago, North Carolina was one of seven states not allowing taxpayers to exclude canceled mortgage debt from taxable income, according to a study by H&R Block.

The N.C. Department of Revenue said it is still compiling data for tax year 2013 and does not know how much additional tax revenue the state collected on canceled mortgage debt that year.

Lawmakers divided

The proposal to not allow the exclusion prompted a passionate debate in the N.C. Senate on Thursday. Among other tax changes in the bill is the loss of a taxpayers’ deduction of college tuition expenses.

Together, the changes are expected to mean an additional $73 million in state revenue.

Republican Sen. Harry Brown of Onslow County said not having that revenue would hurt working families.

“What you’re talking about is 70-some million of revenue that the state would have to come up with …” said Brown, co-chair of the Senate Appropriations Committee. “Are you going to take it from teachers? … Or Health and Human Services? Or the court system? That should be part of the argument.”

Senate Finance Committee Chairman Bob Rucho, a Matthews Republican, said lawmakers are seeking the changes to be consistent with other tax changes that have lowered rates and eliminated many deductions.

“We just feel like consistency is important,” Brown said later. “It’s pretty much aligned with our tax reform. We think driving the rates down will serve (the middle class) in the long run.”

But Senate Minority Leader Dan Blue of Raleigh said the bill means that “we kick people while they’re down.

“If they had money they wouldn’t be in foreclosure,” he told colleagues. “What we’re doing is saying you have to come up with money because you managed to get the mortgage company to forgive this loan. You’re wrapping something around their neck probably for the rest of their lives.”

Democratic Sen. Joel Ford of Charlotte said in a $21 billion state budget, Republicans could make up for the revenue elsewhere.

“We just need to prioritize working families rather than corporations and special interests,” he said. “You mean to tell me you folks can’t find ($73 million) for the working families of North Carolina? If you can’t find it you should be ashamed of yourselves.”

Bart Hildreth, executive director for the Washington, D.C.-based National Tax Association, said it’s appropriate for state legislatures to take a second look at tax policies, such as those put in place in response to the mortgage crisis.

“Policy experts typically recommend that states revisit each of those periodically to see if they’re still meeting public policy goals,” he said. “You don’t want it all to be on autopilot.”

N.C. foreclosures still high

The proposal comes at a time when foreclosure activity in North Carolina and Charlotte remains higher than in much of the U.S.

According to a report released Thursday by data firm RealtyTrac, one in every 711 housing units in the Charlotte region had a foreclosure filing in January, the 35th-highest rate in the U.S. among 213 metro areas. North Carolina posted the 14th-highest rate: one filing for every 1,044 housing units.

The proposal also comes as Bank of America is just starting to provide $7 billion in consumer relief nationwide as part of its $17 billion settlement with the U.S. government announced last year. Some of that relief is expected to take the form of principal reductions on mortgage loans.

Bank of America spokesman Dan Frahm said the bank has forgiven more than $164 million in principal on 3,600 home loans in North Carolina since 2008. The average amount forgiven over that period is nearly $45,000, he said.

Jason McGrath, a Charlotte-based attorney who works with clients dealing with mortgage disputes and foreclosures, said that while foreclosure activity is falling nationwide and locally, many homeowners are still fighting to keep their homes.

“My firm is as busy as we have ever been with regard to those kinds of cases,” he said. “The overall numbers may be down, but it’s still very much an ongoing issue.”

He said some homeowners might pass up an offer of mortgage relief that could give them much-needed assistance because of the increase in taxes the homeowners might have to pay later.

“It certainly can be part of a self-defeating process” to forgive mortgage debt only to tax consumers on that aid, “smacking them on the back end.”

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http://nchousing.org/housing-matters-newsletter/archives/