Monday, December 31, 2007

Happy New Year!

Welcome, 2008.

TCSPICE is still for sale. She's a sweetie.

TCSPICE is being retired from our fleet at 101,000 miles. Price reduced to $9500.00.

2005 Minicooper automatic with navigation


unguarded money

If state regulators and the public truly understood how unguarded are the staggering amounts of money in title agencies and 1031 exchange companies, I suspect they'd take seriously the need for tighter control.

Here's a title agent who caused great harm:

The money is helping relieve some frustration that claimants displayed during Athey's sentencing. Cheryl McElhaney of Wyoming, Mich., spoke through tears during the sentencing as she addressed how Athey's actions had affected her.

"I am unable to ever recover," she said. "This is a life sentence. This is a lifetime debt now for me. By virtue of Nicole Athey's crime, I have become a criminal as well with collection agencies. Oh, what this low-life criminal has stolen from us.

"In terms of people devastated, probably less than 20 were seriously affected by it," she said. "A lot were under $200 (but) it could mean the difference between having your house or losing everything for people with low income."

Consumers should carefully select their title agent and not simply allow the Realtor or mortgage lender to make the selection. This doesn't mean that your Realtor or mortgage lender can't be relied upon for a good referral. I mean, simply, that you should also ask questions and shop around some before making your own decision.

Regulators who have not already done so, should reform auditing standards and licensure criteria so that bad actors lose the easy entry into the business and all players are more carefully monitored.

I don't know who is supposed to be keeping an eye on 1031 exchange agents but I do know title underwriters are supposed to watch their agents and they have been doing a poor job of it.

Nicole Athley could not have abused the escrow account to this extent if Stewart had been prudently monitoring her. Yes, Stewart has suffered a loss, but I have to say that title underwriters have taken the position of recent years that defalcations are a cost of doing business. It's right up there with fines and penalties imposed by the states. So far, they are able to absorb these costs and still not change their methodology.

This is an industry who has refused to police itself. Isn't it time somebody did?

Friday, December 28, 2007

posterchild for jerk predators

Honestly, I read comments like this and want to toss this child into detention and that's what regulators ought to do. Listen to this unkind creature:

Now you’ve got to be kidding me. Let me guess you work retail? The reason brokers will be around is because we’re smarter than you. We realize that the costs you’ll endure will always make us more profitable obviously depending on scale. I can work from my home with a $800 laptop, $350 all in one, and a couple of online accounts (credit,point,leads). Make $6000/mo selling 2 loans to some small start up regional bank only charging my borrower 1.5% ysp beat your rate by .5 and your costs by .5% or more(average LA 250K). You and all the other retail/bank people just don’t understand that we were 75% of the business coming in up until recently, you can’t believe how many of us kept in touch with our old clients. Is it going to be tougher to find 2 clients a month YES will I still play 4-5 rounds of golf a week YES…Good luck with your PREDICTIONS career, your going to need it.

Aaron makes this comment on a blog article that laments the future faced by mortgage brokers following the subprime crisis.

Aaron is a classic predator type who is wired differently than the good guys. He sees mortgage lending through his predator eyes and thinks he's smarter than the rest because he captures a couple of juicy meals each month that support his lazy ass. Can you imagine how corrupted the pricing of mortgage loans has become when two - TWO - transactions can support one person. This isn't how it used to be and mortgage lenders and lawmakers ARE working to restore some sense of reason and sanity.

Consumers, I've got some advice. Yes, it will be hard to separate the good mortgage brokers from the predators. Here's one easy test. Look for a mortgage broker who can offer FHA mortgages. Even if you are not in the market for an FHA mortgage, knowing your mortgage broker is APPROVED by the FHA adds loads of credibility.

The FHA requires net worth and audited statements. The FHA also audits the business practices of their approved mortgage lenders.

So, don't stop using mortgage brokers, just stop being easy prey for predators.

Thursday, December 27, 2007

if you are 62 or older and facing foreclosure, read this

interesting post from Calculated Risk. Here's a blurb:

The WSJ (sub only, I'm afraid) had a piece yesterday on a process it never actually names--the "short refi" (related to the "short sale"). What makes these short refis--refinance transactions where the new loan is less than the balance due on the old loan, with the old lender agreeing to call the loan paid in full and write off the difference--so unusual is that the old loans are nasty high-rate subprime loans to old people, and the new loans are reverse mortgages.


The business of title insurance moves in tandem with mortgage lending and what we are experiencing is a parallel version of the subprime mortgage collapse. It simply isn't being noticed because it's not on TV.

Wednesday, December 19, 2007

query: how to talk to HUD anonymously

That's easy. Use this link.

In CE for two days.....

and got this great tip today from Rebecca Bowman who is both an engineer and an attorney. She's a terrific instructor who places much emphasis on really getting to know the parcel. She uses Google Earth as an extra tool in her toolbox for a fast peek and I think that's really neat.

Last week I was trying to locate a driveway and a roadway without the help of a drawing. A shot from the heavens would have helped. Thanks, Rebecca!

Sunday, December 16, 2007

query: what does one do when your bank sells your mortgage to another bank

The best course of action is to watch all transactions very carefully. Most of these servicing transfers happen without incident, so don't be too nervous. The terms of your mortgage will not change.

Potential problems are payments in transit during the time the file is being setup with the new servicer. Also, there can be some confusion with property taxes or homeowners insurance if you have an escrow. So, keep an eye on due dates and check in to make certain your account has made the transition without incident.

Federal rules govern the procedures the banks must follow when they sell your loan. You should expect to receive a "hello" letter from the new bank and a "goodbye" letter from the old bank. Each of these letters must provide a toll free customer service number for your use and most importantly, a very special address for written correspondence.

This very special address is different than a payment address. Federal rules require that any written correspondence you mail to this address be logged and tracked. Use of this address helps the consumer get a prompt response to any inquiry concerning the servicing of their mortgage loan.

It happens to most of us, so you're not alone. ;)

query: must a mortgage company be informed about a life estate deed

If the life estate deed exists before you put the mortgage on record, it will impact the mortgage lien position. Most mortgage lenders will want the life estate extinguished or they may consider having the owner of the life estate sign the mortgage to validate the lien and allow it to take priority over the life estate.

If you already have a mortgage in place and wish to create a life estate, you'll need to review the terms of your mortgage. Look for a "due on sale" clause. This type of clause would give the lender the right to demand payment in full if you transfer any ownership interest without their permission.

I would presume the life estate deed would be created by an attorney, so your attorney can review your mortgage and give you the proper advice.

Thursday, December 13, 2007

query: what title insurance documents need to be executed at the closing

I have to presume each state may have it's own version, but I would expect to at least have an owner/seller affidavit and a buyer affidavit. These affidavits bind the parties legally to disclosures of issues that would impact the validity of lien position or the title itself. We have to presume that the parties to a transaction, having personal knowledge of their own circumstances would advise the title insurer of items missed in the title search and not resolved on the HUD-1 statement.

For instance, let's say you are selling property and you know you had not yet paid the 2007 school tax. If you did not see this tax dealt with on the HUD-1 you would be obligated to raise the issue with the title insurer.

Tuesday, December 11, 2007

hmmm...I have 4 or 5 abandoned escrows for PA inheritance taxes on my desk

The escrows have expired. The amounts we collected are likely more than the actual tax that might be owed. The folks whose money we are holding decided not to follow up and file inheritance tax returns.

Well, I'll just be sending all of this cash to the PA Dept. of Revenue at the end of the month.

Go figure.

Monday, December 10, 2007

query: spouse non-title right to rescind

When a spouse is not vested in title, marital rights may create a right to rescind. [This is an issue determined by state law.] The mortgage lender, in these cases, will require that the non-vested spouse sign both the Right of Rescission and the Reg Z disclosure.

Saturday, December 08, 2007

query: can a lender foreclose if all parties can't be notified

Yes. The abandonment of property is not uncommon and so notification rules include court approved procedures for these situations. If certified mail isn't acknowledged as received, they will often approve posting a notice on the dwelling.

Friday, December 07, 2007

Did you know that your Realtor or mortgage lender probably thinks you are clueless doormat and a total dolt?

I have been arguing for over a year that consumers CAN READ AND THINK and if you just give them a place with information available THEY CAN MAKE THEIR OWN DECISIONS concerning what services they want for closing and title insurance. IT'S YOUR MONEY.

I believe shopping for title insurance and closing services is no more hard than shopping for a Realtor or mortgage lender or a washing machine. Heck, buying a car is more expensive and more complicated than picking a title insurer and closing service. If the info is there, you can decide.

Realtors and mortgage lender seem to think that they should do the shopping for you.

This means that they can play the referral fee game or the favor game but what it doesn't necessarily mean is that you will get quality service at a fair price.


Would you help me and comment here on the subject? You can be anonymous but I AM interested in your opinion.

query: what does successors and assigns mean on an insurance policy

Successors and assigns is for legal entities what heirs and assigns is for human beings.

These phrases follow the name of a person or an entity in a legally binding document so that the rights or obligations will survive the death or demise of the person or entity.

For instance, when you purchase real estate your deed will show that the property was conveyed to YOU, your heirs and assigns. This means that the ownership would survive your death by flowing to your heirs and also that you can assign or sell your ownership to another person.

The insurance policy has a mortgagee clause in which the mortgage lender is identified in case of loss. If the house burns down, the mortgage lender wants the insurance company to work through them to protect their collateral.

Let's say your mortgage lender is a bank and that bank is merged into another bank, the new bank would be a successor.

Let's say your mortgage lender sells your mortgage to another bank, in that case, the new bank would be an assign.

Does that make sense?

Tuesday, December 04, 2007

query: what does post-closing mean

Post-closing literally means after closing. It's a catch all phrase for jobs or tasks that take place AFTER the actual closing. Post-closing includes the final takedown/bringdown of title and recordation of documents, the issuance of title policies, disbursement of funds not disbursed at the closing table, stuff like that.

Sometimes lenders and title agents use it in their day to day lingo like "Oh, we'll take care of that post-closing." That just means they'll do it later and won't postpone the closing for the sake of whatever it is they need to do.

Monday, December 03, 2007

I received this question via e-mail. What are your thoughts?

I am hopeful you are able to provide some direction.
We just closed on a house in PA. Here’s a quick recap of the situation:
Sellers needed to pay about $2500 for repairs to bring property “to code.”
Our mortgage lender said there couldn’t be any type of credit on the settlement statement for repairs.
We asked for that $2500 to be taken off the selling price of the house. Our agent told us the $2500 couldn’t be taken off the selling price (later, after talking with our mortgage lender the lender stated this is not true).
Our agent told us the $2500 would be handled “behind the scenes” by not charging the total amount of taxes to us that would have typically been required to pay back to the seller. Therefore the amount of taxes recorded on the settlement statement are less the $2500.

Here's my opinion. I just wish everyone would have been up front and clear about the options. The Realtor had an obligation to adjust to consider adjusting the sale price if that is what the buyer wanted to do. The seller could have said no, but at least the parties would have discussed it.

I am leery when anyone suggests doing something "behind the scenes" as they are most typically suggesting mortgage fraud.

So my question now is - - can the HUD be adjusted to reflect the true charge of the taxes? We owe them for the taxes they paid – and they owe us for the repairs. The money is basically a wash - - - except for how it impacts us when we file our income taxes and itemize our deductions. In that situation the $2500 that we will truly outlay does have a financial impact for us.
Thank you for your time.

If what you are saying is that you owe the seller taxes "off HUD", then a fraud has been perpetrated on the mortgage lender. You may wish to consult an attorney.

The so-called professionals you relied upon lead you astray.

Sunday, December 02, 2007

query: why do I have to sign a quit claim deed to get a reverse mortgage

I find this query extremely disturbing. I can think of no reason that you would need to sign a quit claim deed to get a reverse mortgage.

Please contact your attorney or at the very least have someone you trust - NOT THE MORTGAGE LENDER OR TITLE AGENT - review the situation.

You can also contact HUD's predatory lending section directly for assistance using this e-mail address:

query: what does paid in arrears mean as related to property taxes

Paid in arrears means you are paying for a period of time that has already past. The subject as it relates to property taxes usually comes up when we explain tax prorations.

At closing, the settlement agent will calculate what taxes have been paid by the seller as of that date, then work out credits and/or debits between buyer and seller so that both have paid their fair share as of the date of closing.

Today is December 2nd. If I were prorating the school taxes on a parcel of ground in western PA, I would have the buyer reimburse the seller from today thru June 30, 2008. That is because the fiscal school tax year runs from July 1st thru June 30rd. The tax bills come out at the end of the summer and so often sellers and buyers think we should prorate as of the tax bill due date. We prorate on the fiscal year, whatever that is.

I like to use the analogy of the federal income tax. Though your payment to the IRS is due by April 15th of 2008, you are actually paying and reporting on taxes for the prior year.

I hope this answers your question. If not, please ask again but give me the context of the question.

Saturday, December 01, 2007

Yes, there is hope and yes, this is a great idea.

Talk of freezing the interest rates for some subprime borrowers -- somewhat heretical when floated by FDIC chief Sheila Bair in October -- now seems like a good idea even to Wall Street investors in securities backed by subprime mortgages.

The Bush administration has been negotiating with members of its HOPE NOW coalition of lenders and loan servicers to engage in wholesale loan modifications, and an agreement is expected soon.

by Inman News blog