Sunday, December 28, 2008

What about title insurance and refinancing?


Get the message?

If you are in Pennsylvania and refinancing, you'll not get a better deal than our CHOOSE AND SAVE program.

Most title companies use independent notaries and you'll end up paying a signing fee or closing fee of some kind. If you are in our market area, we'll come to you at no extra charge. We close 8 to 8 Monday thru Friday and 10 to 5 on Saturday.

So, shop for title insurance and closing services. Do not just go wherever your mortgage lender wants you to go.

Here's our easy to use title insurance premium calculator. Look at those discounts for refinancing!

good article on Mercury


Wednesday, December 24, 2008

perfect title versus insurable title

We've chatted before about automation in title searching and I think you know that I tried the First American Eagle Search/Fast Web system for awhile and decided I don't like that kind of search.  I'm a hands on kinda examiner.  I want a full search and all the raw data to review for myself.  Anyway....

Recently I recieved a call from an insured owner who we closed while using the automated search product.  He was trying to sell his property and the buyer's title agent had found a life estate.  I checked our file and we hadn't dealt with the matter because it wasn't disclosed in the automated search product.  Nevertheless, I told him I knew First Am would indemnify his buyer's title insurer so he didn't have anything to worry about.

I contacted the title agent, got a copy of the title commitment and faxed a request to First Am for indemnification.  The attorney from First Am called me with a question or two, grumbled about whether or not to issue the indemnification, why I don't know, but conceded to doing so.

As a follow up, I had a copy of the deed in question pulled and reviewed and I checked the Social Security Death Index and found that the party vested with the life estate had died in 1997.  That meant that any potential inheritance tax risk had nine years remaining.  I also considered the facts and came to the conclusion that the life estate was probably the only asset of the deceased.  No estate had been filed and so the risk as I considered it was minimal and so the issuance of indeminity, giving insurance to the buyer, would be customary, reasonable and a good solution.

Then I got word that the buyer's attorney wasn't happy with indeminity.  I chatted with the title agent who said they, the title company, would accept indemnification but the buyer and the buyer's attorney wanted the problem fixed.

I called the insured owner and asked if he had an attorney because in my mind, his attorney needed to advocate on his behalf based upon the terms of the sales agreement.  Our insured owner asked about filing a claim with the title company.  I said that he could file a claim , however, he hadn't suffered a loss related to the life estate.   His problem was one of marketable title.  I called his attorney.  Never got a call back.  I called the buyer's attorney and discussed the concept of "perfect" title versus marketable title and insurable title.

Consider if you will, perfect health versus insurable health.  If you want to buy life insurance, the insurance underwriter will examine your lifestyle, current state of health, etc. and make a determination whether or not to issue the policy.  They will NOT expect you to have perfect health, rather they are assessing the level of risk and determining if they wish to insure.  Get it?

Title insurance underwriting is the same.  We don't find perfection in title.  We don't expect it.  We look for insurable title and that's what marketability is based upon.

I explained to the attorney that, while the insured buyer is welcome to file a claim, it is unlikely that the title company will pay inheritance tax when no lien has been filed by the Department of Revenue.  Insuring against the potential lien is customary and reasonable.  He agreed, said he would explain that to his buyer and asked me to shoot him an e-mail with that explanation and that I did.

I heard nothing further from the title agent, the buyer's attorney and never heard from the insured owner's attorney so I presumed case closed.  Then the other day I received a mysterious hard to understand voice mail which when I listened carefully, I'm pretty sure it was our insured owner.  He said the deal fell thru and I owed him $55,000 and his attorney would be contacting me.

I'll report back if I ever hear from these folks again, but I'm posting this for a few reasons.  First, realize that perfection in title is an unreasonable expectation and so attorneys and buyers must embrace the concept of marketable and insurable title.  Second, attorneys representing consumers must communicate with all parties and they have a duty to control their clients.  That means that the attorney for our insured owner should have been actively engaged in the resolution and advocating on behalf of his client based upon the terms of the agreement of sale which called for marketable title, not perfect title.  Further, if they wished to pursue a resolution from the title company beyond the offered indemnification, they could and should have done so.

I have a feeling that somewhere, earlier in the transaction, when the title was reviewed, someone blew the life estate issue WAY out of proportion and created an insurmountable fear in the buyer.  Title agents and attorney need always to remember that consumers rely upon us to help them grasp the realities of real property.

I know this post is getting really long and I don't like to write or even READ long posts but here's another case just to drive this point home.  We just closed a purchase transaction of vacant land, several acres, in a rural setting.  The buyer freaked out because we reported that mineral rights had been reserved by a prior owner.  He wanted absolute insurance that surface operations would not take place on the land.  The deal almost fell thru until we got him to understand that unless he purchased property in a highly and closely developed area, this risk was present in virtually all parcels of land.  A core risk you take purchasing large parcels in our market is that someone may own the mineral rights and they may use them.  Commercial developers will pay for the necessary mineral rights searches and surveys, however, residential purchasers rarely do.  This buyer, once he grasped that reality, he decided to accept the risk.  We have this conversation over and over with out of town mortgage lenders who freak out over mineral rights.

So, to stop this beating of the issue, let's just remember that title to real property is not expected to be perfect, just insurable, which means reasonable risk.

Tuesday, December 23, 2008

using a power of attorney to convey

If you intend to sell real estate using a Power of Attorney, here are a few tips:

  1. Provide a legble copy to the buyer's title agent or attorney for review prior to closing.
  2. Be prepared to give the ORIGINAL power of attorney up at closing so it can be recorded prior to the deed.  If you wish, you may record the document yourself, however, you must do so well in advance of the closing so that the recordation can be verified.
  3. Make certain that the document is acknowledged in front of a notary, that it specifically gives the power to convey real estate and that it meets the statutes of the state in which it was created.  It pays to have the document prepared by a competent attorney.

Friday, December 19, 2008

roller coaster ride over...Fidelity purchase approved

Dec 19 (Reuters) - Fidelity National Financial Inc (FNF.N: Quote, Profile, Research, Stock Buzz) said it received approval under the Hart Scott Rodino Act for the purchase of two underwriting units from bankrupt title insurer, LandAmerica Financial Group Inc (LFGRQ.PK: Quote, Profile, Research, Stock Buzz). Read more...

money is on sale...time to buy or refi!!!

Check out our title premium calculator for Pennsylvania rates. Use our Choose and Save program and you'll get the most affordable title insurance and settlement service available in Pennsylvania.

We are determined to give consumers the best in service and value. Here's our service area map. If you are buying or refinancing in our market, we'd sure like to give you a quote.  Don't just follow the lead of your mortgage lender or real estate agent.  If they aren't leading you to our Choose and Save program, you're not getting the best deal in Pennsylvania.  YOU have a choice. It's YOUR money.

When you choose The Closing Specialists, you get an expert title search and examination performed by experience human beings.  Does that sound like a hilarious and ridiculous pitch?      Got news for you.  There are lots of title agencies out there who have little or no experience and they order their searches by computer and let someone else do the thinking for them.  Lots of that work is outsourced to foreign countries.  Can you believe that?  It's true.

We only use experienced abstractors who work in the county where the real estate is located. We do our own title examination and we use only on-staff closers.  Our staff is experienced and we consider YOU, the consumer, our customer.  YOU pay for our services, not the mortgage lender or the real estate agent.  It's YOUR transaction.  We focus on YOU.


Wednesday, December 10, 2008

query: HUD-1 signing requirements on Sheriff's sale

In my neck of the woods, the Sheriff does not sign a HUD-1.  Most purchases at Sheriff's sale are for cash so there is no HUD-1.  

If the buyers are getting a mortgage, there will be a HUD-1 prepared, however all costs will be on the buyer side.  The buyer needs to discuss this with their lender up front so the lender has had an opportunity to think through the issues.  

When we do this kind of closing, the lender pre-funds the loan, we meet the buyers at the courthouse, sign the mortgage docs, then walk over to the Sheriff's office to exchange the proceeds check for the deed.  That's it.

Monday, December 08, 2008

had an interesting call today from a lady who didn't know where else to turn....

She was the executrix of an estate and had sold real estate in 2005 to a buyer who used a now closed title agent.  Follow?

Anyway, I recognized the name of the agency as one of the regional multi-ABA machines.  You know the kind - one address - and fifteen million so-called title agencies under one roof?

So, she has to file a revised inheritance tax return for reasons unrelated to the real estate transaction and she is wondering how she can find out how much inheritance tax this now defunct title agency paid to the state.  Luckily, she had in hand a copy of the HUD-1 which showed an escrow.

It's always interesting to me that folks allow money to go into escrow and never follow-up.  Yes, large sums are abandoned, especially inheritance tax escrows.

Anyway, I suggested that the title agency might have remitted the entire sum to the PA Dept. of Revenue if she had not resolved the escrow and that she might check with the Department.  If they had not received payment, she might check with the title company which we were able to identify from the HUD-1 as First American.  I gave her the phone number of the Pittsburgh First American office just in case.

Lastly and again, just in case, I gave her the toll-free hotline for the PA Dept. of Insurance....just in case.

Friday, December 05, 2008

query: has title insurance ever paid off on an easement dispute

Easements are one of the most common exceptions to coverage - UNLESS - you see the words "together with" in the legal description. If you see "together with" or some other language citing the easement in the legal description in the policy, then the insurer has INSURED that you have rights to the easement. If the only reference to the easement is found in exceptions, it likely is not covered.

In the case of shared driveways, it really depends how they were set up. If I can see a clear legal right of use, I will insure the right. If not, the only mention of the driveway is as an exception.

In our area, the access to the land is insured from a public roadway. That access may or may not be on and over the shared driveway.

okay, title folks, what do YOU think about this one...

Earlier this year we insured a purchase of property in a REO transaction.  The county tax claim bureau sent a tax certificate to the Sheriff's office but the Sheriff forgot to pay the taxes out of the proceeds.  Our abstractor noticed this and discussed it with the Sheriff's folks and they said sorry but the lenderr who bought back the property at the sale took it subject to the delinquent taxes.

Our abstractor checked tax claim and reported taxes owing for years 2003 thru 2008.  The REO seller paid the taxes at closing and we insured.

Last month our insured buyer got a notice from tax claim that 2002 taxes are still due and will move to a tax sale later in the year.

Our abstractor goes back to see what happened.  You need to know that the structure on our insured real estate is a doublewide.  Turns out that this doublewide was on a rented lot in 2002 and was assessed with its own parcel number in 2002.  

Tax claim says the old parcel number for the DW was merged into the parcel for our insured land when the trailer was moved.  We checked.  There is no notation of a merger.  There is nothing an abstractor could have been expected to find to tell them this.  It was an entirely different tax parcel number on different land.  It could have been a different DW.  There's really no way to know.

What do you think?   Any thoughts?

Right now the matter is in the hands of our underwriter's claim department but I am curious to hear your comments.

Monday, December 01, 2008

I think we share the same goal but I have a differing view on the new RESPA rule.

ClosingCorp says:

Under the Good Faith Estimate provision of the new rule, a mortgage lender can "guarantee" to its customers that the price of its designated vendors' settlement services will not increase by more than 10 percent at closing. If, however, borrowers elect to shop for their own real estate closing service providers, they have no such protection. "It should be no surprise that a borrower, when faced with this choice, will decline to shop for settlement service providers and be relegated to use those vendors preselected by the lender," the company said in its comments on the rule filed last May. ClosingCorp urged that HUD provide consumers who prefer to shop for their own real estate settlement services with clear information as to what services they can shop for; explain that they may find lower rates or more acceptable providers on their own; and even refer consumers to online or other resources that will assist them in comparing vendors and prices, or even initiating a transaction. Alternatively, HUD could provide these links and references on a newly-created consumer assistance page on its own Web site.

I agree that consumers should be encouraged to shop but I think the folks at ClosingCorp are missing the value the 10% tolerance brings to the GFE. Loan originators have had very little motivation to get their settlement service quotes right. These new tolerances at least pull the quotes into some sort of reality when the loan originator is making a referral.

Remember, that just giving a quote doesn't obligate the consumer to use that company BUT having this price quote in hand will give consumers reliable figures with which to go out and comparison shop. Isn't that great? It's a major step forward in consumer centric disclosures.

Loan originators who would prefer not to make a referral, don't have to give an accurate quote, they just tell consumers to go find someone to do the job.

Either way, the consumer has more information and more power than they did under the old rules.