Thursday, August 30, 2007

Terrific news for jumbo VA homebuyers

Housing Wire is reporting that GNMA - Ginnie Mae - has raised their pooling limits for VA loans.

GOOD MOVE GUYS!!

Well, I have to give them credit for doing a full search.

While grumbling over a make work project, I decided to smile instead......

Just got a call from a very nice lady who works for an attorney who is insuring title for a property WE insured last year.

Their title search revealed an unsatisfied mortgage from 1935.

ERgggghhhhh, hmmmm..........

Well, I said I'd have passed on a mortgage that old and she put me on hold.......

Nah, her boss thinks he'll have trouble getting title insurance with that unsatisfied mortgage.

So, instead of arguing that IT WAS 72 YEARS AGO and full searches in these parts only go back 60 years, I decided to be grateful that he had done a full search and was taking the title seriously.

I offered to process an indemnification letter for them and they were happy, so I am enjoying my coffee and pondering a new found appreciation for the attorneys who are learning to be title agents and are at least taking the high road. ;)

What is a title plant?

A title plant, in the traditional definition, is a database of old title policies backed by good title examination. Use of a title plant is part of the normal search and examination process. Why recreate the wheel on every transaction?

We've got our own little title plant. We've got the files for every transaction we've insured back to 1991. Most of them are scanned and accessible on our network while processing a new title order. So, if we find the property in our title plant, we ask our human abstractor aka title searcher to search back to the date of our last title policy. If we have no prior file, we order a full search.

Some title companies have changed their title plants to include data gleaned from courthouse indices and other internet accessible real property related sites. I call these title plants garbage.

Why do I call them garbage? Well, there are no qualified human eyes reviewing the data before it's considered usable. I would not want to rely on a title search using this type of title plant. I take the ownership of real estate too seriously. I want a professional title search because we talking about the roof over a person's head and we're talking about the largest investment in the lives of most families.

Wednesday, August 29, 2007

query: does a non-borrowing spouse have to come off title on a FHA deal

Apparently. It stinks, doesn't it? I am hoping the FHA might come up with a new rule on this issue while they are rewriting programs in response to the subprime refinance wave.

query: can I buy a house without using a title company except for title insurance

Yes, but a reliable professional must perform and control the closing and disbursement. Each state has its own rules. In Pennsylvania you could use the services of an approved attorney for closing. The attorney would arrange for title insurance through a licensed title insurance agent.

Tuesday, August 28, 2007

Are you trying to refinance out of a bad mortgage?



If you are in our service area, check out our Choose and Save Program. With the mortgage loan discounts available for refinancing AND the waiver of optional fees, it's a great deal.

query: how does a realtor protect themselves in a joint venture

Read all of RESPA thoroughly yourself and believe the words you are reading.

The joint venture [aka affiliated company aka ABA aka CBA aka AfBA] must be a real company. Most are not.

Consider your fiduciary duty to your customers and keep that in mind while making referrals.

If you refer a customer to your affiliated company provide the correct RESPA disclosure before you make the referral.

query: if you have title insurance on your land house debt free do you need additional title insurance

Make sure you have an owner policy. You only need the one policy and it will protect you for long as you have an interest to defend. If the value of the property has appreciated beyond the amount of the policy and you wish to increase the coverage, your title insurer can do that for you.

query: can you get title insurance on foreclosed properties in pa

Yes. You can get title insurance on foreclosed properties in any state. A title insurer will examine title and indicate any exceptions or liens that can't be insured. This procedure and method is no different than that used for properties that have not gone through foreclosure.

Problems, if found, will be offered up for solution. If you are getting a mortgage to buy the property, problems must be corrected. If you are buying cash, you will decide if you want to take title with problems in place.

Normally the mortgage lender selling the foreclosed property is willing to fix the problems.

It's definitely a buyer beware situation so be sure you have a true professional vetting title for you.

Saturday, August 25, 2007

query: mortgage lenders who accept IRS liens

Mortgage lenders who want first position will NOT accept an IRS lien that takes priority over their lien position.

We consider IRS liens as valid for 10 years and 30 days. IRS liens penetrate tenancy by the entireties and they attach to after acquired property.

You may want to contact lenders who are willing to take second position. Tell them about the IRS lien up front to no one wastes their time.

query: how can I take my husband's name off the deed

If your husband is deceased, there is no need to change the deed, however, if you'd like to change the deed, contact an attorney. Provide a death certificate as proof of death.

If your husband is alive, he can sign a deed conveying his interest to you alone. You'll still need the services of an attorney who will prepare the deed and review other concerns with you.

I would want to check whether you have an outstanding mortgage. The terms of most mortgages contain a "due on sale" clause. This language prohibits transferring an ownership interest without the permission of the mortgage lender.

I would also suggest discussing marital rights with your attorney. In Pennsylvania, spouses can make claims in divorce even if they are not vested on the deed. Your attorney may want to add language to the deed which eliminates the right moving forward. As an example, "John Smith now and forever releases any marital rights he may have in the herein described premises. "

Hire an experienced real estate attorney and let them take care of it for you. Don't forget to shop around just a little so you know the going rate for deed prep in your area. For instance, in our area, deed preparation over $150 would be considered excessive unless the circumstances involved lots of extra work.

Save the baby!


This little baby didn't fly out the window with the bath water. Let's hope our quality mortgage lenders and title insurers are safe, too.

query: seller listing agent refuses to work with my loan officer

I have to presume that your loan officer is acting in an ethical manner and is not asking the seller or their agent to engage in any acts of fraud, etc. So, if everything is on the up and up, I'd have to say....

Geez. How childish and unhelpful can you get? Most agents want to move the deal along and will cooperate with all parties as long as the actions are ethical and legal, BUT, they can choose not to, soooooooo...........then I have to ask why the listing agent needs to deal with your loan officer at all?

You are dealing with your loan officer. Your agent, the selling agent would be the person to deal with the listing agent, not the loan officer.

The agents have an obligation to take your offer to the seller. If the seller accepts an offer with a mortgage contingency, the seller has an obligation to allow an appraiser onto the premises. If the seller accepts an offer with contingencies for inspections, the seller has an obligation to allow inspectors onto the premises.

Frankly, I see no obligation for the seller or their listing agent to deal with your loan officer.

Who knows. Maybe the listing agent has personal reasons for not helping but I think you can move the transaction along with the help of your selling agent alone.

Thursday, August 23, 2007

query: when do lenders submit 4506

The 4506 is an IRS form used by lenders to obtain a copy of a borrower's tax return. Borrowers sign these forms at closing.

Mortgage lenders have quality control programs that perform routine audits. If your file is selected for an audit they will submit the 4506.

Audit selection may be random or not. If a mortgage lender suspects fraud they may tag your file for an audit. Random auditing is typically 10% of all closed files.

Really good quality control programs randomly select not only 10% of all production but they make certain they are checking 10% of each originator's production, 10% of each appraiser's work, etc.

A really good quality control program will catch crooks. They are easy to spot if you are really looking for them.

Wednesday, August 22, 2007

query: what is systemic fraud - 2

Sorry it took me so long to get back to this topic. I presume we are talking about the systemic fraud I've mentioned from time to time when discussing subprime mortgage lending.

The fraud play in the subprime mortgage lending origination departments - retail and wholesale - was that from the top to the bottom, the players paid no heed to the underwriting rules.

My perspective as a title agent is from the bottom. I'm the last person in the chain. Title agents and attorneys witness the interplay between the loan originator and the borrowers. We also see the final lending underwriting conditions. Those title agents and attorneys who refused to fudge facts and tried to report bad acting to a higher level found in most cases, loan processors, underwriters and management saying "just do it". I believe this is really why the subprime lenders prefer notary signing agents. The signing agents are more likely to be ignorant and less likely to really understand what's going down at the table.

I know that due diligence suffered in subprime, but what really galls me and what I see as such a rude affair is the total disregard for the minimal standards lenders agreed to when they sold the paper.

You have mortgage lenders selling high risk paper and telling analysts that it at least meets such and such minimal guidelines then the lender's origination network takes those guidelines and throws them out the window by faking the numbers and engaging in team spirit fraud.

That's systemic fraud - whole subprime departments from top to bottom supporting each other's bad behavior in the name of volume, coaching the willing borrowers and just fudging the data of the unwilling borrowers.

These folks regularly and systematically defrauded their employers. The employers made reps and warranties to the secondary market and the rest is history. It might have been easier to stand on the corner and throw money away.

Can we avoid this moving forward? Yes, reinstate qualified human "in house" quality control with real teeth. Good quality control with regular audit selections would have caught the crap early. We know how to do due diligence, we just have to decide that it's important.

query: how can I take my husband's name off my home loan

If he's still living, refinance. If he's deceased, it doesn't matter.

stated income mortgage MUST GO

I couldn't have said this better myself so I'm just linking to Calculated Risk. Well done.

Sunday, August 19, 2007

query: is a mortgage broker owner liable for the actions of their employees

I don't see why not. I see an employee as an extension of the employer so in my opinion, negligence in the performance of work done by an employee for the mortgage brokerage would create liability on the part of the company and its owners.

Actions by the employee outside of their job function is another matter entirely.

query: if my title insurance has the incorrect property description how do I fix it

First, contact your title insurer and raise the issue. Listen to what they say. There may not be a mistake but rather a different way of describing the same parcel.

If there clearly is a mistake, ask for a general endorsement correcting the description but don't stop there. Make sure all documents such as your deed and mortgage are correct.

It is entirely possible that the title insurer searched the wrong property and that's a problem. To protect your interests I always recommend that you review the title commitment PRIOR to closing. We like to give our customers copies of any maps or surveys found on record so they can look at the parcel and visually confirm we have searched the correct property.

Since we started sending the maps along with the title commitment prior to closing, we have eliminated doing at least two or three corrective deeds each year.

You might ask, well, how do these mistakes happen? Well, sometimes the sales agreement does not clearly identify the parcels being sold. This is especially an issue when the seller owns more than one parcel.

BTW- The danger of selecting the wrong property or creating a description error increases significantly if the title examiner has little or no experience. The risk of error goes through the roof when the lender or title agent relies on an automated search. Be picky and select a title company with expertise and one that assures you they are doing a FULL search performed by a human being and not a computer.

Saturday, August 18, 2007

query: impact of subprime collapse on escrow and title companies

The fates of escrow and title companies are riding in tandem with the lenders they serve.

Those that expanded and built their business plans on serving subprime lenders and adopted the relaxed crappy standards the subprime culture created may find it hard to survive the collapse.

Forensic quality control reviews shouldn't find it too hard to connect vendor management style processing with inadequate due diligence.

query: how do you start a title insurance company in PA

I find it very interesting that I got this query twice in the last 24 hours. The first was from the new manager at our bank across the street and the second was a Google query that hit this blog.

WAZZUP, PEOPLE? Don't you know that there is a major correction taking place and even very experienced title people are losing their companies or jobs?

Just thought I'd ask.

Anyway, IMHO - I really dislike that phrase but it fits here - if you have to ask that question, you aren't qualified to do the work.

query: tax cushions for escrows in PA

It's not a state thingy, it's a federal thingy.

Mortgage lenders are permitted to cushion escrow accounts by up to two monthly installments. Most who escrow use the full two months.

query: does 15 day grace period affect credit

Nope, that's why they call it a grace period. Grace is the gift of time to pay.

Most mortgages have payments due on the first day of the month with a 15 day grace period. That means as long as they receive your payment by the fifteenth, it's considered on-time. Any payment received by the lender after the end of the grace period is late and will affect your credit record.

If you are not sure about the due date and grace period for your mortgage, you can find the terms in the NOTE signed at closing.

Friday, August 17, 2007

query: can a lender require hazard insurance on a tool shed in florida

Huh?

OK, well, I don't think it really matters what state the property is in, the issue is more a collateral issue. Any mortgage lender is going to want to protect the security for their loan. That means that if you have a tool shed that is really terrific - so terrific that its loss would impact the value of the collateral, well then I wouldn't blame the lender for requiring the insurance.

Grant you, it's a rarity, but that must be some tool shed.

query: died in lieu of foreclosure

Heavens. Given the choice, I think I would have gone for the foreclosure.

query: what is systemic fraud

This is a great topic and one I want to give some time to, so I'll be back later today to expound. ;)

Strangely, we have an example in play, right now, today. We're standing our ground against two Realtors and one mortgage lender employee who don't understand that they are trying to defraud the mortgage lender.

Soooooo, I'll be back.

Thursday, August 16, 2007

Well, one man's crisis is another man's opportunity.

There are many savvy investors just waiting for the right moment to buy. Why? Because there is real value being undersold right now. Panic pushes some people to make rash decisions and sell to avoid additional losses.

If you can afford to wait it out, there's lots of money to be made. Remember, money doesn't disappear. It just changes hands. ;)

Hey, it might be a good time to buy some Countrywide stock. Who knows?

Wednesday, August 15, 2007

Hey - if there are any regulators reading this post, here's one for you.

Check out these folks.

I'm seeing red flags, are you?

query: home is burned down while under a construction loan is there any insurance to cover loss

This type of damage falls under your hazard insurance policy aka fire insurance aka homeowners insurance. So, contact your insurance agent immediately.

I do hope that you purchased a policy prior to the start of construction. Most construction lenders require that the borrower put the insurance in place at closing.

I am very sorry for your loss. We often have to explain to our construction customers who complain about having to purchase the insurance before the house is completed that the materials on the site and the partially completed house may still be lost in a fire.

Monday, August 13, 2007

query: if you paid for title insurance at closing should you have a paper copy

Yes, you should at least have a paper copy of the title insurance commitment. I strongly prefer that you review this copy prior to closing, however since many people are operating at lightening speed, the title commitment may be issued on the same day as closing. In that case, you should demand and get your copy to review before you complete the closing.

What if there is a restriction against parking RVs in the driveway and you have a big beautiful RV? Buying real estate is like marriage. Once you say "I do.", you did.

homebuyers shouldn't panic over the loss of sub-prime lending

Did you know that many homebuyers who used sub-prime lending over the last 15 years didn't need it? That's right.

The rise of sub-prime lending created a lending environment in which some unscrupulous mortgage lenders could make more money by taking homebuyers through sub-prime rather than prime programs. These creeps used and abused borrowers and basically made them think they weren't eligible for prime lending.

Don't get me wrong. There ARE folks who have really poor credit and have too much debt. Those folks just shouldn't be buying real estate. But if YOU have your financial house in reasonable order you should be able to find a mortgage lender.

So, don't panic. Regular conventional lending requires 5% down plus closing costs. The seller can pay some towards those costs to help you. If you don't have that much available, consider going FHA. Both the FHA and VA programs are still considered prime lending and with these programs the credit review is slightly more lenient and the cash requirements are lower.

Before sub-prime reared it's ugly head, I put many many families into homes using these tried and true programs.

In my experience the average family can afford to buy the average house using these programs as long as interest rates are 10% or less.

This assumes that you have had a reasonable credit history - not perfect, but reasonable. It also assumes that you are not underwater with debt.

If you can't make timely payments on your current debt, you shouldn't be buying real estate. Take time to get your financial house in order.

Here's a conservative formula to use. Take 28% of your GROSS monthly income. That's your maximum mortgage payment including taxes and insurance. If you stay in that ballpark, you won't be house poor and you'll likely not face foreclosure.

query: indemnification letter satisfies title cloud

Well, actually it doesn't. I presume you are speaking of the typical indemnification letter given by one title company to another. The letter simply extends the insurance under a prior owner policy to the new insurer.

For instance, if there is an unsatisfied mortgage on record that everyone believes has been paid in full, the receipt by your title company of an indemnification letter from the prior title company - under an owner policy - allows you to move forward and close. It doesn't satisfy or clear the title cloud. The prior title company still must makes efforts to satisfy the mortgage. They are expected to contact the lender and work to get the satisfaction recorded so the cloud is eventually removed.

query: title underwriters versus title companies

I don't blame you for being confused. Basically you have title agents and title underwriters. Both are called title companies.

The easiest way to understand it is to think of homeowners insurance companies. You have insurance underwriters like Allstate, State Farm, and Nationwide. You have agencies owned by local business people that sell the insurance.

In title insurance, the big underwriters are First American, LandAmerica, Fidelity, Chicago, Old Republic, etc. The consumer can buy directly from the underwriter, but most often buys through an agent.

In Pennsylvania where we have regulated rates, the premium paid by the consumer is the same no matter where they buy it. The variations are in service and optional fees. There is also a difference in expertise and sadly in the willingness to give regulated discounts.

Check out our title premium calculator and you'll see some of the available discounts in PA.

Friday, August 10, 2007

I'm sorry, but this is highway robbery

and likely a RESPA violation.

Just look at these fees I saw posted on the Notary Rotary:

1117. Notary Service/Signing Fee $700.00 to XX Title
1120. Edoc/Email fee $200.00 to XX Title
1121. Post closing review fee $250.00 to XX Title

It's obvious from the post that the notary who is actually performing the service isn't earning anything near these fees. This unfortunate Wyoming consumer has been ripped off by their title company.

query: can a person change title companies before closing

Yes, but be prepared to pay for any services already rendered on your behalf by the first company. For instance, the title company you are currently working with may have already performed the title search. Before you cancel, ask for the invoice or some other written statement of fees.

query: charge to rate to waive escrows

What a minute. I think I know what you are asking. In my experience the interest rate isn't changed when there is a waiver of escrows. If a lender is willing to waive the escrow, they usually charge a flat fee at closing, like $100. Every lender is different, so be sure to get your quote in writing.

BTW - Even when a lender waives escrow, they still have an interest in the payment of insurance and taxes. If they find out you aren't paying either, you may be in default, so be careful.

query: charge to rate to waive escrows

I'm not sure what that means. Would you rephrase the question?
Thank you.

Thursday, August 09, 2007

the beautiful worker bees need your help


I'm talking about the beautiful worker bees in prime mortgage lending offices.

These folks aren't the predators you've read about.

These are the folks who work hard maintaining quality standards and helping consumers buy homes that they can afford.

What's the problem?



Well some folks have them all mixed up with the bad killer bees. You see, they look so much alike.

The killer bees - the folks who deserve to go out of business cause they've caused so much harm are the predators and the subprime and frankly the Alt-A pushers.

Our worker bees - the sweet honey makers - are being exterminated by folks who can't tell the difference.

PLEASE, if you are in a position of to help prime mortgage paper producers, the quality mortgage lenders, continue operation, please help.

Consumers may not understand that their ability to buy, sell or refinance real property is dependent on money flowing through to our good quality mortgage companies.

This is no longer a "subprime" issue, it's a money flow issue.

Did you know home warranties are covered under RESPA?

RESPAnews.com has a fine Q & A section making it a very worthwhile subscription investment for anyone engaged in the business of real estate sales or finance. Here's part of a response on the question of home warranties:

The following is abstracted from a Nov. 15,1996, letter signed by former HUD General Counsel Nelson A. Diaz which is published in a number of RESPA treatises. The inquiry was whether a real estate agent could receive a fee for placing a home warranty with a homeowner:

"A home warranty is a settlement service covered by RESPA (24 CFR § 3500.2 definitions). The RESPA regulations do not prohibit a person from receiving more than one fee in the transaction. However, where a person is receiving an additional fee and is in a position to refer settlement service business (as a real estate agent is), the payment must be for services that are actual, necessary and distinct from the primary services provided by such person (24 CFR § 3550.14(f)(3)).

"Additionally, the fee itself must be reasonably related to services actually performed. So long as the tests cited are met, and you appear to represent that they are, there is no objection to the payment of a fee to the agent for services performed. If, on the other hand, the transaction only consists of referring the home warranty business and no actual services are provided, this would be a violation of Section 8(a) of RESPA. We have made no independent evaluation of the value of the warranty services you describe."

automated versus human title seach product

Ed Rybczynski does a superb job explaining this issue in a letter to his Senator, a copy of which is posted on his Title-opoly blog.

Wednesday, August 08, 2007

query: is it too late to talk with your mortgage lender about making a mortgage payment

It's never too late to talk. So, give it a shot.

In normal circumstances, there is a point in the foreclosure process where you reach an all or nothing point. This is your "Last Chance Texaco" moment called reinstatement.

Read your mortgage document and look for that word - reinstatement. The FNMA 3039 PA Mortgage 1/01 contains this language in Section 19. It reads:

"Borrower's Right to Reinstate After Acceleration. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of: (a) five days before sale of the Property pursuant to any power of sale contained in this Security Instrument; (b) such other period as Applicable Law might specify for the termination of Borrower's right to reinstate; or (c) entry of a judgment enforcing this Security Instrument. Those conditions are that Borrower: (a) pays Lender all sums which then would be due under this Security Instrument and the Note as if no acceleration had occurred; (b) cures any default of any other covenants or agreements; (c) pays all expenses incurred in enforcing this Security Instrument, including, but not limited to, reasonable attorney's fees, property inspection and valuation fees, and other fees incurred for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument; and (d) takes such action as Lender may reasonable require to assure that Lender's interest in the Property and rights under this Security Instrument, and Borrower's obligation to pay sums secured by this Security Instrument, shall continue unchanged. Lender may require that Borrower pay such reinstatement sums and expenses in one or more of the following forms, as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality or entity; or (d) Electronic Funds Transfer. Upon reinstatement by Borrower, this Security Instrument and obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, this right to reinstate shall not apply in the case of acceleration under Section 18."

[Section 18, BTW, is the "due on sale clause", which a lot of people ignore for some reason. I never understood why.]

Sooooooo, call your lender and ask if it's too late to start making payments again. These are not the usual circumstances and so there may be lenders, who hoping to avoid foreclosure, will modify your terms and extend the maturity date. Then again, they may not. But what have you got to lose by calling?

Tuesday, August 07, 2007

Wiggle room left the building last week.

Do you take checks from attorneys or title companies that are not cashiers checks?

If the answer to that question is yes, then you must reconsider. Anybody with a pulse on the current climate has discontinued taking risks.

A title agent who takes a check from another company does so with no guarantee that the money is truly available.

I can think of no other time in my career when absolute adherence to good funds policies is necessary. Wiggle room left the building last week.

Consumers should be asking blunt questions.

After all, title agents control millions of dollars. Ask away and don't be shy. This is how you choose a title insurer. Be picky.

Ask - Do you triple reconcile your escrow accounts every month?
Ask - Do you disburse on transactions before verifying receipt of good funds from all parties?
Ask - Can the seller get a cashiers check or wire for proceeds without a fight?

Correct answers would be yes - no - yes. If you get any hesitancy from the title agent you may wish to move on to someone who has better control over their accounts. Be safe. Be well.

Check out the latest in Washington state.

Tim Kane's blog is always thought provoking.

After all that has gone down this year, wouldn't you think Stewart Title would take dramatic steps to curtail crime in the ranks?

Monday, August 06, 2007


I love this picture.

No, it's not a Tibetan title insurance agent, but I'll bet he brews a mean tea.

Sunday, August 05, 2007

query: where can you get a copy if you lose title insurance documents

Did you lose the entire document package from closing or just the title policy?

Either way, start by contacting the company who performed your closing and issued the title insurance. If you are lucky they will still be in business and have an easily accessible data base. If you contacted my office, I could e-mail you a pdf of your entire file while we were chatting on the phone. Most companies aren't that accessible though, so let's assume you aren't having any luck there.

If you have a copy of the HUD-1 Settlement Statement, look at the 1100 section and see if you paid for title insurance. A premium paid on a HUD-1 is evidence of title insurance. The HUD-1 may even have the name of the actual title insurance company. Google them or contact your state insurance department for assistance. Contact the company and ask for a copy of your policy. It may take time but they should be able to track it down. By time, I mean it could take months, because title companies don't always have a good way of tracking title policies.

If you can't find the HUD-1, your mortgage lender, Realtor or even the seller may have a copy that they will share with you. Good luck and let this be a reminder to all to keep those documents in a safe place. ;)

avoid any consideration of double locking or dual submissions

We are having a relatively orderly - it could be worse, folks - reorganization of the entire business of mortgage banking.

Pure mortgage banking as traditionally done with warehouse lines alone may be a thing of the past. Mortgage bankers who are not owned by a bank or thrift or some other large funding source may go the way of dinosaurs.

That said there is still a possible life for mortgage brokerage if brokers contain themselves and act responsibly. I am presuming that the market correction will rid us of the fraudsters, inexperienced, predators, etc. and that what we will have left is a population of largely professional mortgage brokers who can and will originate prime paper, okay?

So, that said, I am talking to you, the professional mortgage broker, the prime player who understands that there are larger duties in performance than just self gratification.

First, let's talk about the risk to mortgage brokerage. In a liquidity crunch, we have less money. [I know you know that but I am explaining it for those reading this who may not.] When we have less money, mortgage lenders may be strongly motivated to funnel that money into retail operations rather than wholesale. If we lose wholesale, we lose mortgage brokerage.

This isn't a real horrible problem for consumers because they can easily get their mortgages directly from lenders through retail operations, so consumers won't be too concerned.

From a mortgage brokerage point of view, though, you can help your mortgage lenders by moving into pure prime product sooner rather than later AND you can avoid any consideration of double locking or dual submissions. Yes, I know you think you are protecting yourself and your consumer, but think of the greater whole.

Secondary market managers are going to be traveling through rocky waters and they have to depend on the pipeline data to produce stability. If anyone gets the idea that mortgage brokers en masse are feeding fake locks into the system, mortgage brokers will be cut off. Secondary market managers know that their retail originators cannot double lock and so if the pipeline is purely retail, it is more stable. Remember that.

So, act responsibly. In the grander scheme of mortgage banking, good wholesale relationships provide the volume needed to create a lucrative operation. If the players aspire to good old fashioned standards, agency prime lending, and act responsibly, the professional mortgage brokers will find solid ground in a shorter recovery.

Saturday, August 04, 2007

Three things must be said to those who watch the eagle.


Basing reserves on current market conditions ignores looming defalcations.

When asking about escalating claims due to underwriting, the risk isn't off shore versus on. The question posed should be human versus non.

"Unlocking the hidden value" in various enterprises all related to data mining is like looking for the key to Pandora's box, at least from the perspective of those who cherish privacy.

query: remove expired judgment lien by closed company on title pa

If the judgment has expired and not been revived, it shouldn't have impact on title. So, unless you are embarassed by its being reported or unless you are dealing with a title agent who thinks its an issue, just ignore it.

I review title reports all the time that have issues reported in the abstract that do not impact the title. I like to make a note on the abstract so an auditor knows I saw the issue and why I passed. This note is not required but it's useful if there are questions later on.

If you are a seller and the buyer's title agent is giving you grief over an expired judgment I suggest you tell the buyer to find another title company. You can't be expected to resolve title issues that are not real.

On the other hand if you have a judgment that IS impacting title and you can't find the party to whom payment is owed, you might offer to place funds in escrow with the title company so you can close and work on a resolution over time. If the issue isn't resolved, the title company can eventually escheat the money to the Commonwealth of PA showing the judgment holder as the owner of the funds. This is one way to create an official audit trail of attempts to resolve a problem should it ever rear its ugly head.

Friday, August 03, 2007

scared into normalcy

"The fright among investors is forcing lenders to go back to more-conservative practices that were the norm before the housing boom of the first half of this decade. Many now are focusing on loans to borrowers who are willing to document their income, can make a down payment of at least 5% and have a history of paying bills on time."

Read that here.

Responsible lending makes a comeback. Thank heavens.

Some day folks will look back at the underwriting standards of the last decade and wonder how this foolishness ever got started. I for one am happy sanity is back in style.

query: is good faith estimate required for pre-approval

No, for now it's not, BUT I highly recommend including a good faith as part of the package.

Current regulations only require that the borrower receive a good faith estimate within 3 days of mortgage application. Frankly, I just don't know how a borrower can shop for a lender without having good faith estimates in hand.

Kudos to Pennsylvania Association of Notaries

for a great article published in Notary Notes August/September 2007. It's actually a reprint of a 2004 article called Notary Signing Agent Basics. I couldn't find a link to share from their web site www.notary.org but if you contact mmiller@notary.org you may be able to get a copy.

This is the first and only article I have read that correctly outlines the role of a notary signing agent who is not otherwise licensed to perform other roles in a transaction.

Thank you!!!!!!

Thursday, August 02, 2007

query: purchasing title insurance outside your state

The title agent or insurer must be licensed in the state in which the real estate being insured is situate. So, if you live in Florida but are purchasing land in Pennsylvania, the title insurer must be licensed in Pennsylvania. Kapeesh?

Wednesday, August 01, 2007

The soulmate of panic is opportunity.


I love that line. Got it on a blog from down under.

In this crazy real estate market, buyers with cash or access to good credit are poised to build wealth.



We're poised to help. People have asked if our Choose & Save Program is really a good deal.

Heck, what are you nuts?

It's a fantastic deal.


query: are the exclusions in a title insurance contract binding

Yes, I would argue that they are binding. This is way it's so important to review your title insurance commitment prior to closing. You need to look at those exclusions so you understand them. Folks who want to rush to close without taking time to really understand the title may have regrets later on.

We provide copies of the commitment to both the lender and the consumer as soon as it's issued. There are some circumstances in which the consumer has scheduled the closing before the final search results are in. In those cases we may be issuing the title commitment on the day of closing and the consumer is taking their first peek at the exclusions at the closing table. I'd rather they wait and take time to understand the transaction but it's their choice and we aims to please.

Consumers should choose quality title expertise.

Look for demonstrative knowledge when selecting a title insurer. Call and ask some questions. Ask if they are just doing current owner searches or will they perform a full search? Do they even understand the question?

Here's a good post by Jeanne Johnson on her Landrecs.com blog.

query: title insurance hidden oil tank

My apologies for not answering this query sooner. I needed to ponder on it and having done so I would say no, I don't believe title insurance covers hidden oil tanks. I write coverage in many rural areas where underground oil tanks are on practically every property. Though I've never had a claim or this question come up before, I can't see any reason for title insurance covering any matter related to a hidden oil tank.

That doesn't mean that coverage does not exist, it's just my opinion. If you are faced with a real life situation involving a hidden oil tank and you have an owner policy, just contact the title insurer and make a claim.

If any readers have experience with hidden tanks and title claims, I'd be happy to receive your comments.

query: title insurance on cash transaction

not required but highly recommended..........

A homeowner buying real estate with a mortgage or cash has just as much risk. You either buy title insurance coverage or you don't.

Remember, in a mortgage transaction the lender is only requiring that you purchase a loan policy. You can waive owner coverage if you choose.

Why under any circumstances you would allow an asset of that size to be uninsured is beyond me but it's your choice. Make it a good one! Be safe. Be happy.