RIGHT FREAKING ON. You GO Rep. Kelly. Well said.

GOP Congressman Mike Kelly Receives Standing Ovation After He Rips IRS Commissioner

REP. MIKE KELLY (R-PA): This has nothing to do with political parties. This has to do with highly targeted groups. This reconfirms everything the American public believes. This is a huge blow to the faith and trust that the American people have in their government. Is there any limit to the scope where you folks can go? Is there anything at all? Is there any way that we could ask you is there any question that you should have asked?

My goodness. How much money do you have in your wallet? Who do you get emails from? Whose sign do you put up in your front yard? This is a tax question? And you don't think that's intimidating? It's sure as hell intimidating. And I don't know that I got any answers from you today. And I don't know that -- what Mr. George said is great work -- but you know what? There's a heck of a lot more that has to come out in this. Any anybody that sat here today and listened to what you had to say, I am more concerned today than I was before, and the fact that you all can do just about anything you want to anybody? 

You know, you can put anybody out of business that you want. Any time you want. I gotta tell you. You could talk about how you're a horribly run organization, if you're on the other side of the fence, you're not giving that excuse. And the IRS comes in, you're not allowed to be shoddy, you're not allowed to be run horribly, you're not allowed to make mistakes, you're not allowed to do one damn thing that doesn't come in compliance, and if you do, you're held responsible right then. I just think the American people have seen what's going on right now in their government. This is absolutely an overreach and this is an outrage for all Americans

consumers - PLEASE - do not invest money into a house before you get the title insurance commitment

We had a title order come in.  The transaction had been moving forward to closing and suddenly they remembered to order title insurance.  The order came in with the request to set up closing as soon as we could.

When the abstract arrived I hoped for a nice clean title so these folks could have a fast closing.  What I saw when I opened the report was a foreclosure in process and numerous state and federal liens and judgments related to a business failure.

What were these folks thinking?  This isn't a title that can be rushed to close.

Wait - I tallied up the liens and even without payoff figures in hand the total was far more than the agreed sale price.

I called the listing agent and found that the seller had no idea that personal judgments and liens would attach. They thought all they had to worry about was the mortgage.

I called the buyer and got a very disappointing report.  The buyer has been living in a mobile home on a rented lot.  They have already sold the mobile home and given notice to vacate the lot by the end of this month.  In addition, they have invested $2000 in this property by making numerous repairs.  They say the sellers wanted a fast closing and the real estate agents had pushed them to make the repairs as quickly as possible to clear municipal hurdles prior to closing.

Neither the real estate agent or the mortgage loan officer suggested to the consumer that they wait for the title insurance commitment.

Why would everyone ASSUME that the title to the property is clear if no one checked?

I had to tell a tearful and angry buyer to make arrangements for another place to live at the end of the month.  It will take time but we'll see how the payoffs come in and whether this transaction can be saved.  In the meantime, the foreclosure process is moving forward quickly.

Our consumers, the buyers, are in a quandary.  Should they just move on and find a different house?  Will they ever recoup the $2000 they sunk into this house? Maybe they should wait for the liens to be divested by foreclosure and buy the house later, eh?  Do they want to live with their parents for all that time?

All of this could have been avoided if the consumers were thinking for themselves and told the real estate agents to back off and wait for the title insurance commitment.

FOLKS.  Please be a savvy consumer.  Don't sell the house you live in before you are sure you have another place to go.  Don't put money into a house you don't own unless ALL contingencies have been eliminated and you have a full disclosure on the situation.

satisfying privately held mortgages....gotta watch it!

Hi Diane,

I was reading your blog and wondered if you could answer a question.  I purchased a townhouse in 2005 (in Maryland), and the owner held the mortgage.  In 2006 I refinanced, using the same title company I used in 2005.  In 2009 I again refinanced, using a 2nd title company.  I am in the process of refinancing and it has come to light that neither title companies cleared the lien when I refinanced in 2006 - it still shows that the owner has a lien although that was paid in 2006.  I purchased an owners title policy as well as a lender's policy when I bought the home in 2005.  Will this help me to clear the lien, and am I entitled to anything for the anxiety this is causing me (seems I should be able to recoup what I paid 2 title companies to do but which they didn’t do)?  My current refinance company suggested just getting the last owner to sign off, but she retired and moved out of Maryland 7 years ago – I have no idea where she is now.

Thank you for any information you can give me.

N

Hi, N:  Wow, crappy title agents in the two previous refinances!  You are in a pickle as the owner policy won't cover it.  I can only think of four courses of action.

1.  Hire an attorney to try to find the mortgagee - prior owner - and get her to sign a satisfaction.  With the internet, it is usually pretty easy to find people.  I like to use Super Pages "find people"  - it works pretty well is they have a land line.  Anyway, if the attorney can't find her, he can file a quiet title action to remove the mortgage.

2.  Discuss with your attorney options to sue the two title agents who missed the lien.  Even though title insurance doesn't cover it, their professional liability coverage may.

3.  Report both title agencies to the state insurance department and attorney general and CFPB.  They serve consumers and these entities will want to know that they aren't doing such a great job.  They may even compel them to help you.

4. Notify your current lender that they are NOT in first position.  They may put pressure on the last title insurance company to fix the problem.

I'm afraid your plans to refinance are on hold for now.  Good luck!

Diane

heads up from ALTA...eminent domain considered for underwater mortgages.....that's CRAZY!!!!

ALTA Joins Coalition Opposing Use of Eminent Domain for Underwater Mortgages
A private investment firm is working to set up deals in Richmond, California, and North Las Vegas, Nevada, asking the cities to use eminent domain to buy out underwater mortgages. Under this scenario, the private investment firm, Mortgage Resolution Partners (MRP), would then resell the property. The concern is that the properties will be undervalued and the original investors that own the mortgages are left holding the bag. Last week, ALTA joined a coalition of industry partners in opposing this Advisory Services Agreement.

The California letter is available here and the Nevada letter can be read here.

The coalition stated, “We believe that the MRP proposal raises very serious legal and constitutional issues. No jurisdiction has ever used eminent domain to acquire underwater mortgages in securitized pools. Such a novel use of the eminent domain powers is unprecedented and would, in our view, not survive the multiple legal challenges that would ensue.”

For more information on this issue, please contact ALTA’s director of state government affairs, Madeleine Nagy.

Have you read this book, Other People's Money?

I am reading it but I confess that I got stuck about halfway through and haven't felt like finishing it.  It's well written, don't get me wrong, but it's not the book I thought it would be.  I thought it would be an interesting story about the housing crisis but so far it's nostalgia for a NYC housing development interspersed with an anti-capitalist undertone.

I'll be back to comment again after I finish the book but for now I'd say it is less about the housing crisis and more about the ever changing value of real property and how unless you have control over the land beneath your feet, you are vulnerable to losing it.  That's life and that has nothing to do with what we went through these last several years.

fines levied for illegal kickback affiliations

The CFPB cited the following firms: Genworth Mortgage Insurance Corp., United Guaranty Corp., Radian Guaranty Inc. and Mortgage Guaranty Insurance Corp.

The consumer agency claims the four insurers received lucrative business referrals from lenders by purchasing captive reinsuance that the CFPB has deemed "essentially worthless but was designed to make a profit for the lenders."

As part of the deal, the insurers have agreed to end the practice, paying $15 million in penalties and undergoing constant monitoring by the CFPB.

http://www.housingwire.com/news/2013/04/04/breaking-four-mortgage-insurers-pay-15-million-cfpb-action

Sure...let's make the same damn mistake again....sure.

The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.

President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.

http://www.washingtonpost.com/business/economy/obama-administration-pushes-banks-to-make-home-loans-to-people-with-weaker-credit/2013/04/02/a8b4370c-9aef-11e2-a941-a19bce7af755_story.html

PS - The comment section is great.  ;)

I don't know about you, but I'm loving...

that all the title insurance trade papers are talking about best practices and escrow account management rather than how to create affiliations and joint ventures.

Hallelujah.

lol..sorry couldn't help it. ;)

indictments in the Burgh

A resident of Verona, Pa., and three residents of Pittsburgh, Pa., have been indicted by a federal grand jury in Pittsburgh on charges of conspiracy, wire fraud, bank fraud, filing false tax returns, and failing to file tax returns, U.S. Attorney David Hickton announced on March 26.

The 20-count superseding indictment, returned on March 26, named George Kubini, 48, of Verona, Penn.; and Dov Ratchkauskas, 46; Sandra Svaranovic, 52; and Arthur Smith, 63, all of Pittsburgh.

According to the superseding indictment presented to the court, Kubini, Ratchklauskas, Svaranovic, Smith, and a number of other individuals who have already pleaded guilty, participated in a multi-faceted mortgage fraud conspiracy involving hundreds of properties and tens of millions of dollars worth of fraudulent loans.

http://www.thetitlereport.com/TTR/Articles/Four-facing-mortgage-conspiracy-charges-in-Pa-57606.aspx?utm_source=vwTTRget&utm_medium=email&utm_campaign=TTR_Fri_Enews

ALTA reports business is good. Hey, we knew that, right? It's a big wheel turning. ;)

Washington, D.C., March 20, 2013 — The American Land Title Association (ALTA) reported title insurance premiums written during 2012 increased greatly when compared to the previous year.

According to ALTA’s preliminary 2012 Year-end and Fourth-Quarter Market Share Analysis, the title insurance industry generated $11.4 billion in title insurance premiums in 2012, up nearly 21 percent from 2011. During the fourth quarter of 2012, the industry reported $3.3 billion in title insurance premiums, up more than 30 percent from the fourth quarter of 2011.

The states generating the most title insurance premiums during 2012 were California ($1.7 billion, up 25 percent compared to 2011), Texas ($1.4 billion, up 24 percent), Florida ($893 million, up 24 percent), New York ($825 million, up 15 percent), and Pennsylvania ($505 million, up 23 percent).  Overall, 48 states and the District of Columbia reported increases in title insurance premiums written during 2012 when compared to 2011. States reporting the largest percent increase from 2011 to 2012 were Illinois (43 percent), North Dakota (42 percent), and Georgia (30 percent). 

During the fourth quarter of 2012, 49 states and D.C. reported increases in title insurance premium written compared to the fourth quarter of 2011. The states with the highest percent increase in title insurance premium volume compared to the fourth quarter of 2011 include Illinois (82 percent), Kansas(49 percent), Tennessee (48 percent), Delaware (47 percent) and Missouri (47 percent).  

In terms of market share, the Fidelity Family of title insurance underwriters captured 34 percent of the market in 2012, the First American Family garnered 26 percent, the Old Republic Family recorded 14 percent, and the Stewart Family had 13 percent. Meanwhile, independent companies comprised 13 percent of the market in 2012.

Market share data is preliminary as year-end totals have been estimated for three companies. ALTA expects to release its first-quarter 2013 Market Share Analysis around June 1. 

lender's most concerned about data security

The data security problem

The reputational risk road leads us straight to the issue of data and site security, which Reed labeled as the issue she is most worried about at the title level. Any sort of data breach involving a lender’s funds or customer information will be an incredible strike to reputation, even though it would have been a third-party’s negligence that caused it.

“If you’re [the title agent] working 1,000 closings and seven of them are ours, and if your office is broken into and that data ends up in someone’s hands, the headline will say ‘Wells Fargo’s data stolen,’ so we are cautious about that,” Reed said.

http://www.thetitlereport.com/TTR/Articles/Lenders-name-data-security-top-issue-Whats-it-mean-57499.aspx?utm_source=vwTTRget&utm_medium=email&utm_campaign=TTR_Wed_Enews

O, joy, rapture.....

Our voice mail system HD is fried.  Criminy! Waiting for the new system and handling the phone the old fashioned way.  Funny, how that seems mighty ancient now.  ;)

underwriting alert that deserves repeating

If you are asked to close a deal with any Lender where good funds, incoming money from the lender have not been received,  please contact the Underwriter prior to closing the transaction. 

In Underwriting Directive Numbers 30, 35 and 47 we drew your attention to the Mortgage Broker’s Act which requires a mortgage broker to disburse the proceeds of a mortgage loan as cash, wire transfer, certified check, or cashier’s check. At the end of 1998, Senate Bill No. 94 was signed into law by Governor Ridge which amended the Mortgage Broker’s Act. The Amendment, however, was a minor change and did not in any way change the requirement that a title agent receive good funds from any licensee under the Mortgage Broker’s Act. In fact, the amended section now reads "(a) prohibitions - a licensee shall not: (3) disburse the proceeds of a loan mortgage in any form other than cash, electronic fund transfer, certified check, or cashier’s check where such proceeds are disbursed by the licensee to a closing agent." Should you need a copy of the pertinent section of the Senate Bill, please do not hesitate to contact our office.

We would also like to remind you that these protections, which are for your benefit, do absolutely no good if you do not have the funds in your account prior to disbursing a loan. We have received more reports of delays or failures to fund and changes in the amounts actually funded from the amounts required to fully fund the transaction. All of these problems can be avoided by requiring that all transactions are funded in accordance with the above, prior to your disbursement.

I frankly cannot believe that there are still title agents out there closing and disbursing without having good funds in hand.  Can you?

query: can a lender in PA foreclose and divest the PA Department of Revenue of its inheritance tax lien

Yes.  Just give them proper notice.  Check with the Department for the appropriate address.

vague restrictive covenants

Hey.

I had a few cases of vague restrictive covenants cross my desk today so I thought I'd share them with you.

In case you didn't know, restrictive covenants are rules created by a seller at some point in the history of the property that run with the land.  These are usually meant to preserve some desired character or atmosphere in the neighborhood.  The thing about restrictions is that they often reflect the values of the time in which they are created and can cause problems later, especially if they are vague.

Let's look at each restriction:

• No building hereafter erected thereon shall be erected as or for or used or occupied as or for a public garage, manufacturing establishment, commercial business or any offensive or malodorous occupation or purpose, or to be used for any purpose other than that of a private dwelling house with or without private garage.

What to do about offensive or malodorous which are highly subjective words? What if you occupy yourself in some hobby that your neighbors find offensive but to you is lawful and acceptable on your own land? I have a neighbor who constantly makes noise in the garage poking around with machinery.  I have another neighbor who target shoots. I like to have campfires.  Perhaps the smoke is offensive to a neighbor. And, what to do about operating a web based business from your home? Could a neighbor force you to stop because of this restriction against commercial business? Even if you occupy the dwelling, is the mixed use of the home business a violation of the covenant?

• No trailers or mobile homes shall be erected on said lot.

Interestingly, the dwelling sitting on this lot is a manufactured home which has a mobile home title that we are in the process of having surrendered to the state.  Could the neighbors have forced removal of this dwelling under the restrictive covenants?

• Each of said lots is hereby designated as a residential lot with no structures to be erected thereon other than a one family dwelling, not less than 1600 square feet in area, exclusive of garage, breezeways, and porches, which said house and garage may be constructed of any recognized building material, but shall not have affixed thereto any imitation siding.

What is a recognized building material?  What the heck is imitation siding?  Can you imagine the problems neighbors could make for each other trying to sort out those restrictions?

robo forger is facing 20 years

In addition to the criminal charge brought against Brown, Schuette reached a$2.5 million civil settlement with Lender Processing Services, the parent company of the now defunct DocX, on Jan. 31 to settle claims of unlawful foreclosure practices.

Brown is facing 20-years in prison when she is sentenced in May.

http://www.mortgageservicingnews.com/dailybriefing/former-docx-mortgage-processor-pleads-guilty-to-racketeering-1034505-1.html

what is a qualified written request?

For the first time, the federal Court of Appeals for the Ninth Circuit recently opined on what constitutes a “qualified written request” under the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. Section 2605(e), in Medrano et al. v. Flagstar Bank, FSB et al., 2012 U.S. App. LEXIS 25274 (9th Cir. Dec. 11, 2012). While the Court held that there are no “magic” words in order for a written request to be deemed a Qualified Written Request (QWR) under RESPA, which would trigger a mortgage servicer’s obligation to respond, in Medrano, the Court sided with the mortgage servicer nonetheless because the borrower’s letters did not raise the appropriate issues necessary for the letters to become QWRs.

http://www.jdsupra.com/legalnews/qualified-written-request-under-respa-87090/

good article on surveys

"The original surveyor did an incomplete recording the topography of the site. The house was built and the driveway as designed was found to be much steeper than the code allowed.  In addition, the surveyor neglected to include space for a 4% maximum grade at the garage to prevent cars from “bottoming out.”  Since the house was already constructed, the owner had no choice but to install a serpentine driveway that took up a large and unsightly portion of the front yard.  Could the owner have sued the surveyor?  Yes, but the original surveyor had no insurance.  The owner’s chances of recouping anything were slim and he was left with an unattractive and devalued property."   

In another example Hoffman cites, an inaccurate survey was used to build a house.  It was later found that the property lines were placed incorrectly and a corner of the site was located in the middle of a public roadway.  The owner wanted to take out a mortgage on his property but no bank would accept him as a result.  The owner had the option to wait for 3 years for the boundary lines to qualify as “pre-existing non-conforming” (something usually applicable to older properties), but the long wait wouldn’t guarantee he could still obtain favorable mortgage rates.  

http://www.godfreyhoffman.com/Civil-Engineering-Blog/bid/261316/?utm_campaign=Engineering&utm_source=linkedin&utm_medium=social&utm_content=49f37f2b-a7de-4a4f-8e16-82dabe9f481e

We all have storied we can share about issues discovered by consumers when they have a survey done.  I wouldn't buy property without one and I would be careful when choosing a surveyor. Make certain you set expectations for the job before getting a price quote.  

For instance, in our region we have two competing surveyors.  One gives the consumer a full report including rights of way, setback lines, and even draws shrubs and trees.  The other does the outside boundary and locates the building but draws nothing else unless you ask him to and HE charges more than the thorough surveyor.

d

interesting case on several levels

http://www.ca11.uscourts.gov/opinions/ops/201210495.pdf

owner versus loan policy
legal right of access
assumed risk and a title insurer's need to document that for the file, just in case.....etc.

and speaking of being snookered....

Lisa Gerideau-Williams, 46, New Kensington, Pennsylvania, an attorney, pleaded guilty in federal court to charges of wire fraud, filing false income tax returns, and failing to file income tax returns.

The defendant pleaded guilty on Jan. 25, 2013, to sixteen counts before Chief United States District Judge Gary L. Lancaster.

In connection with the guilty plea, the court was advised thatGerideau-Williams was an attorney who operated a mortgage broker business called Genesis Home Solutions, and two companies specializing in closing real estate transactions calledMillennium Settlement Services and Professional Settlement Solutions. Through these companies Gerideau-Williamsoperated a complex and multi-faceted fraud scheme.

http://mortgagefraudblog.com/perp-walk/item/21288-attorney-pleads-guilty-to-mortgage-scam

don't get snookered

That 6-inch stack of documents you sign when you buy a house or refinance your mortgage? Well, here's something to keep you awake at night: It could contain fraud or errors that would expose you to hundreds of thousands of dollars in costs or even criminal charges.

Borrowers sometimes blithely sign papers at their mortgage closing without comprehending them. It's understandable. You're eager to get the business wrapped up. But even though the end is in sight, don't relax yet. The closing conference, where you sign contracts and disclosure papers, is a crucial moment, and one that could expose you to serious risks.

http://realestate.msn.com/11-ways-to-keep-from-getting-snookered-at-the-closing-table

a restrictive covenant situation... always read the restrictions before buying real estate

An online advertisement described the 10-acre, four-bedroom Mount Abu mansion in Ligonier Township as the ideal weekend getaway.

A group of seven neighbors on Wicklow Lane thinks otherwise.

They have filed a lawsuit seeking to prevent John and Paragi Stewart from renting out their home to vacationers.

Attorney Jim Fox, representing the neighbors, wants a county judge to step in and enforce a restrictive-use covenant, signed by the Stewarts in 2009 when they purchased their home, that bars its use for rental purposes.

Read more: http://triblive.com/news/westmoreland/3384718-74/neighbors-ligonier-rental#ixzz2JTAWKNHj 
Follow us: @triblive on Twitter | triblive on Facebook

interesting discussion..Don does a good job helping this homeowner.

http://www.biggerpockets.com/forums/95/topics/81560-title-insurance-admits-they-are-wrong-but-i-have-some-questions-on-what-to-expect-next

employment changed before closing...what to do?

My refinance went through in November, but I lost my job in October. The refinance closed, but as a routine post-close audit they now want proof of income, either where I am working now or where I was working between October and November, in their words " In order to make the loan compliant with standard underwriting guidelines we need to obtain her current Employer details and supporting income documents (paystubs) for borrower". I've worked one 2 week job and now have another small part time job, and am still looking for full-time employment. What does this mean? Can they change my refinance, even though I've started payments? Can I be penalized, and what should I say or give to them?  I'm worried this will affect my loan. Thank you so much, I sure hope to hear from you!!

S

Hi, S:   At the time of closing the loan application would have been presented for you to confirm the accuracy of the information.  Did you disclose to anyone at the closing or prior to closing that your employment had changed?  If you did and the person you told did not stop the transaction, then they may have put you in a bad position.  Contact your mortgage lender and explain what happened and whether you did tell someone or you didn't understand that you should have done so. Be honest and hope for the best.  Good luck.

Diane

I want to add some thoughts for readers who may be facing a similar situation.  Failure to notify your mortgage lender that you have had a change to your financial profile - including but not limited to income or liabilities - is MORTGAGE FRAUD.  Yes, that's right.  You have to take seriously that the mortgage lender is agreeing to loan this money to you based upon the financial status you disclosed and they verified.  If your employment changes before you close and your lender does not discover this new information, you have an obligation to tell them.  Yes, this will stop your closing but you do not have the right to take the lender's money under false circumstances.

Unfortunately we do have loan personnel or real estate agents or settlement officers who may suggest to the consumer that they NOT tell the mortgage lender. These folks don't want to risk losing the income on the transaction but what they are doing is colluding to defraud the mortgage lender. If their participation in such a fraud is discovered, they too may be subjected to criminal charges or face some other penalty which may impact their employment or licensure.

It is entirely possible that S will be subjected to a demand for full payment of the mortgage balance.  It is even possible that S may be subjected to criminal charges.  That's very scary but depending on the loan program and the lender's policy for circumstances such as this, the remedy, harsh or less severe, is not going to be a joy for S.

Each consumer must take seriously their legal obligations when disclosing information to the mortgage lender.  Don't fool around with mortgage fraud.