Wednesday, December 30, 2009
RESPRO's Model GFE Cost Indemnification Agreement identifies the responsibilities of both the loan originator and the third-party settlement service provider if the final cost of a settlement service subject to HUD's new 10% tolerance requirement exceeds the new limit. Read more here.
Friday, December 18, 2009
If you see a NEW GFE, you will see a NEW HUD.
Some lenders, namely Wells Fargo, are already using the new GFE. We choose our HUD on a case by case basis depending on the type of GFE used.
The NEW GFE will be mandatory for RESPA covered transactions on January 1st.
We'll still be using the old style HUD for cash transactions and other transactions not subject to these RESPA guidelines.
What this tells me is that a loan officer who gives a reasonable effort in the numbers is usually safe.
What this also tells me is that loan officers must take their skills to a higher level and be aware of those odd circumstances that ARE discoverable with reasonable due diligence at the point of GFE prep and make certain they account for these oddities as needed. In the circumstances where the figures went outside of the 10% tolerance, it was due to either an extra chain or additional documents which were BOTH circumstances the loan officers could have discovered if they had asked the right questions.
Asking the questions up front - even if it feels irritating to the real estate agents or consumers is the ONLY way to ferret out the oddball deals that will put the lender outside of tolerance with no changing circumstances on which to hang their hat.
Questions to ask?
Well, let's start with "May I have a copy of the deed?" Confirm you know how many parcels are to be mortgaged and just how many deeds there really are behind this transaction. If you have multiple parcels and deeds, you know there may be extra chains, lien letters charges, or recording costs. Having that deed in hand gives you the REAL municipality so you can get that deed transfer tax spot on.
Also, think through whether your transaction will call for additional document prep. In refinance settling a divorce for instance, there is often a deed prep and recording fee that you might not have thought to quote in the past. THAT was the past and this is the NOW and you've got to make that quote.
Thursday, December 17, 2009
Friday, December 04, 2009
"Marketing agreements certainly have their place in the real estate industry. They are one way to test whether or not you want to enter into a deeper business relationship with another company. They are also a way to generate leads to possible customers. However, it is often difficult to get these agreements established in a compliant, yet profitable manner."
My question: why can't people just engage in the title business and market to the consumer?
Thursday, December 03, 2009
Most are within 10%. Some aren't.
Shouldn't be too darn hard to make the adjustment though. I'm relieved.
Saturday, November 28, 2009
Tuesday, November 24, 2009
For those of us in the biz, get ready to rock and roll on RESPA. We're gearing up and working to get our arms around all the issues.
I'm glad to have taken a mental break from the RESPA discussion. I'm thankful HUD stayed the course. I absolutely believe the new GFE will be a good tool for shopping consumers, which was the original intent of the form in the first place.
HUD has successfully and ruthlessly [in a good way, though scary] cut out all the freaking BS. It's apples to apples, baby and that's the way to shop.
Yes, lenders will have to create an extra form or two and yes that means more paperwork. You'll need a separate CASH TO CLOSE summary. Hope you make it real easy for the consumer to find that figure and I do hope folks use similar language. Having a uniform GFE puts everyone on the same page but we'll still have to coach consumers about finding that "other" form and the magic "cash to close" figure.
So, I'll be back. We're putting the final touches on a new service tying into the new GFE. I want to get a techie vet on it before giving you the details, but I like to share ideas and the give and take and group problem solving is a good thing, eh?
Have a Happy Thanksgiving everyone. See you on the other side of the stuffing. ;)
Friday, November 20, 2009
Thursday, October 29, 2009
Wednesday, October 28, 2009
Read more on RESPA Lawyer Blog.
Thursday, October 22, 2009
Members of the House Financial Services Committee approved the exemption amendment Wednesday by a voice vote.
The committee is marking up H.R. 3126, the bill that would create the CFPA. When the Obama administration proposed creation of the CFPA in August, it proposed that the CFPA might regulate insurance products typically sold in connection with banking services, such as credit life insurance.
The original draft of H.R. 3126, drafted by the Obama administration and House Financial Services Committee Chairman Barney Frank, D-Mass., would have given the CFPA the authority to regulate credit insurance, title insurance and mortgage insurance products.
Read more on National Underwriter.
Monday, October 12, 2009
Friday, September 25, 2009
The lender CAPPED the seller assist.
When this happens a GOOD title agent will contact all parties and explain prior to closing. This gives parties a chance to decide if they want to close or postpone and renegotiate the contract.
In this case the parties were not working with a GOOD title agent. They were working with a BAD title agent who chose instead to make the HUD-1 meet the lender and FHA instructions but to adjust the actual checks to reflect the terms of the sales contract.
DOESN'T ANYBODY READ? THIS IS A CRIMINIAL ACT. THE HUD-1 ADDENDUM THAT EVERYONE SIGNED CLEARLY COVERS MONIES MOVING OFF THE HUD-1.
The seller had not attended closing and neither had the real estate agent. The seller was represented by an attorney who saw no problem with this arrangement. Once the real estate agent realized what had happened, she recognized the fraud and the potential for criminal penalties and called everyone including the attorney, lender and title agent and everyone thought she was a nut. So, she called me.
It took her some doing but she has fully documented her efforts to rectify the transaction and it was the mortgage lender who - though they will not acknowledge the wrong doing of anybody - decided to send the seller the balance of proceeds so that the seller has in hand the full amounts reflected on the HUD. So, she covered her client and she is stopping there.
What bugs me about this case is that none of the professionals except this vigilant agent can see the fraud. Geez, how can they be so out to lunch?
A forensic audit of this file would have held all parties accountable for the fraud. I commend this agent. She was spot on with her assessment of the wrong doing and as for the other so-called professionals in the transaction, the seller's attorney, the title agent, the mortgage broker, the mortgage lender AND the layman, the buyer - all of whom should be capable of reading the HUD-1 Addendum..........brainless or willful frauds all.
- When building a new house or addition to an existing dwelling, hire a surveyor to come out, locate and mark the placement of the foundation BEFORE the builder breaks ground. One of our recent insured consumers had her property surveyed prior to the start of construction on a major addition. She failed to have the surveyor mark a location for the foundation. She allowed the builder to mark off and measure. Result? The addition is two inches over the lot line and the neighbor - who warned her she was close or over the line when he saw the construction - will not give an easement for less than a few thousand dollars.
Monday, September 14, 2009
Friday, September 11, 2009
Why in heavens name would a mortgage lender or a government agency put a person's social security number on a document intended for public recording?
We have a call in to the lender to find out if we can remove the number prior to recordation.
Wednesday, September 09, 2009
In a move aimed at strengthening the land title industry by protecting the
association`s top industry product, the American Land Title Association has
launched an initiative to license the use of its uniform title insurance policy
"ALTA`s uniform policy forms have become the `gold standard` throughout the
lending and legal communities. Because land title insurance coverage is
standardized, the secondary market readily accepts mortgages that carry title
insurance. This has greatly contributed to the growth of demand for title
insurance across the country," said Mike Pryor, president of ALTA.
Read more here on Reuters.
Wednesday, September 02, 2009
Media reports and court records reveal that on August 24, 2009 a complaint was filed in the US District Court in Orlando by the Secret Service which alleges that Victor Cedeno had stolen over $1.5 million dollars from the proceeds of short sales he managed on behalf of his former employer Taylor, Bean and Whitaker (TBW). Read more on the Mortgage and Real Estate Fraud blog.
Monday, August 31, 2009
Thursday, August 27, 2009
I was called today by an attorney hired by a seller whose funds we are holding pending satisfaction of an old unsatisfied mortgage. The mortgagee was an individual now deceased. The attorney is having trouble with an heir and so chatted with First American - not the underwriter on this file - and they said they'd just insure over it. He wants to know if I'll rethink my position and insure over it.
Excuse me while I laugh.
Does he really think I'll buy into that proposal?
Monday, August 24, 2009
Thursday, August 20, 2009
It's no longer in business. Despite their claims that they were RESPA compliant, they weren't. The entire illegal operation has been shut down by the Commonwealth of Pennsylvania and the FBI.
Why is this web site still sitting up there in the cloud making unsuspecting surfers confused? Their claims are bogus but some people believe everything they read.
Let's stop the kickback cycle. It stops one step at a time. Who do we need to talk with to get this kickback promising calculator off the net?
Friday, August 14, 2009
Well, read this article. I think it's all finally over. Their operations were shut down by the state and federal government last year or perhaps the year before. Now a major player in the operation pleads guilty to embezzling 1.6 million dollars from the escrow account.
Gee, I guess scofflaws can't be trusted. Duh.
We along with other good and reputable title agents are spending our time, one transaction at a time, sweeping up the mess left behind by these and other crooks who played at the title insurance game for a few years and are now, hopefully, out on their asses.
We will slowly help consumers rectify the errors and right the wrongs as we find them. We won't be paid extra to do it. That's part of what a title insurance premium pays for, the finding and correction of title defects. It's all part of the job.
I'm glad I'm still here and they are not.
I'm glad you are still here because if you are reading this, you're probably part of the good, so hello, good guys. We're still here. ;)
Monday, August 10, 2009
Flagler Title's underwriters already have paid about $5 million in claims. Other claims still are being investigated, while a few have been denied. These claims are from people who had deposit money held by Flagler or people who were supposed to have mortgages paid by Flagler. Also making claims are real estate agents owed commission checks on sales.
And where in the world is Roger Gamblin? "Hell if I know," Saichek said.
None of the lawyers contacted said they know where he is.
Read more in the Palm Beach Post.
Sunday, August 02, 2009
In my pre-title life, I was a mortgage underwriter - FHA direct endorsement, VA automatic approval and FNMA/FHLMC. I had the pleasure of managing a couple of high volume retail/wholesale underwriting departments, so when you ask "What happens in mortgage underwriting?", I'll use my experience to answer that question. I say that because the automated pre-underwriting takes place earlier in the transaction and so when your file "goes to underwriting" it's going to a human being.
The biggest question on everyone's mind is how long will it take?
The actual file review will take about an hour if your case is fairly straight forward and the underwriter has the experience to make decisions on the risks identified in your circumstance.
Most of the time lost "in underwriting" is waiting for your turn at the decision table. When I managed underwriting departments our goal was always to get a file in and out inside of 24 hours. In high volume situations we shot for 48 hours, but the reality is that sometimes the flow of files due to rate fluctuations can be overwhelming and the wait can be days.
Why? Well, human underwriters are highly trained individuals and there aren't many of them, especially these days. Mortgage lenders are recreating and retraining underwriting teams.
So, are there any tips on how to make the process work for you - maybe make your file go through a bit faster? Your job as a borrower is to first have patience. Secondly, provide as much clear concise documentation as you can to demonstrate you have assets, stable income and a credit profile that demonstrates a willingness to repay the debt.
If you fight with your loan officer and complain about having to provide information, your loan officer might be forced to send your file into underwriting without sufficient data to convince the underwriter that you are a good risk or that your circumstances meet the guidelines of the program. So, your file will wait it's turn only to go into suspense or worst yet, be rejected. If that happens, you end up having to provide the data then go back into a waiting line again.
So, be your own best friend, realize that the mortgage underwriting guidelines - while they may seem onerous - are there for a reason - one that you may not understand, however, if you need a mortgage, you've got to play the game. Be honest but be thorough. Help your mortgage lender find in your financial profile a willing and able borrower.
If you can't do that honestly, then wait until you can. Fudging the data is fraud and criminal. If you cannot yet demonstrate stability of income or a willingness to repay debt, then start now and create your new financial future by being a more conservative manager of your money. After a year or two of a new financial profile, you should be able to get through the underwriting process successfully.
Hope that helps and good luck. ;)
Thursday, July 30, 2009
Lessons to take away from it:
Always read your title insurance commitment prior to closing.
Always buy a professional survey prior to closing.
This homebuyer did neither. Buying real estate is a major purchase and a consumer must participate with a thinking cap on.
When you shop for your title insurance and settlement services, confirm that you will have a title insurance commitment for your review prior to closing. That's critical, because most title agencies send the copy to your lender and presume they will forward it to you. That rarely happens. At The Closing Specialists, we recommend in writing that you buy a survey and we have you sign a hold harmless if you choose not to. We mail a copy of the title insurance commitment and ask that you review it prior to closing.
Never - ever - rely upon visual cues for lot lines. Hedges and mowing lines are not reliable indicators.
Why does title insurance not cover items that would be discovered by a survey? Because without a survey in hand, title insurers would be taking on unknown risk. You have to purchase a survey to have that knowledge. Most people don't want to spend the money, but as you can see, buying real estate without a survey is very risky. This consumer should not be blaming title insurance. He should have been a more prudent consumer.
If you are reading this blog post, I know YOU are a prudent consumer, so stay cautious and do it the right way, eh?
Wednesday, July 29, 2009
Tuesday, July 28, 2009
Monday, July 27, 2009
TIRBOP withdrew it's request for a premium overhaul following pressure by the office of the Attorney General.
So, the only change is to the CSL which extends coverage to buyers and lessees. Effective 9-14-09.
Thursday, July 23, 2009
Tuesday, July 21, 2009
The U.S. title-insurance industry faces increasing pressure from regulators to justify the fees charged to consumers for ensuring they have clear ownership of their homes.
For most people, title insurance is just another mysterious fee they must pay when they buy a home or refinance a mortgage. Unlike some of those fees, though, title charges aren’t negligible. They range from several hundred to several thousand dollars—and last year totaled more than $10 billion for the title industry. Lenders insist on the insurance to protect them against the possibility that a taxing authority, another creditor or a disgruntled heir may have a claim to the property, among other risks.
Friday, July 17, 2009
Monday, July 13, 2009
David H. Stevens was the past President & COO of Long & Foster Realtors; Vice President of Mortgage, Title, and Insurance Division for Longer & Foster; Executive Vice President for Wells Fargo Home Mortgage; on the Lender's Advisory Council for the Mortgage Bankers Association (MBA); on the Board of Directors of the National Association of Mortgage Brokers (NAMB); on the Board of Directors of the Real Estate Services Providers Council (RESPRO).
Friday, July 10, 2009
Monday, July 06, 2009
June 6, 2009
Commissioner Joel Ario
Pennsylvania Insurance Department
1326 Strawberry Square
Harrisburg, PA 17120 RE: final comment on public hearing for title insurance
Dear Commissioner Ario:
The give and take in the public hearing on title insurance was insightful and certainly raised some ideas that were outside of the box for me. Thank you for creating the thoughtful forum and shaking things up a bit in our creaky old industry.
DEREGULATING THE TITLE AGENT PORTION OF THE TITLE INSURANCE PREMIUM: It is clear to me that maintaining fixed pricing of title premiums has not helped to foster better quality in product or service. I don’t think breaking down that wall of price regulation will make much of a difference in quality. We have lots of crappy title agents with high prices so we might have lots of crappy title agents with low prices. On the other hand, if prices come down through competition, maybe some of the crappy operators who are only there for the big bucks will find some other easy money scheme and get the heck our of our once honorable profession.
SET AUDIT STANDARDS AND REQUIRE TITLE AGENTS TO HAVE AN ANNUAL CPA AUDIT: I believe we can achieve better quality in product and service by stiffening oversight of licensees. Key oversight has got to be escrow account related. This is where defalcations take place and is one of the largest sources of claims for title companies. An annual audit, perhaps similar to that performed for FHA mortgage lenders which looks at more than simply the financial records but also tests a random selection of files for adherence to regulatory guidelines, paid for by licensees, would help separate those who are serious title insurance professionals from those who are in the business for a fast easy buck.
CONSUMER DISCLOSURE: Teaming with other licensed persons in a position to make title insurance referrals, such as licensed real estate brokers and licensed mortgage lenders, so that consumers receive good disclosure BEFORE their title insurance order has been processed would help break up title agency steering relationships.
ANCILLARY FEES: Consumers are most confused when shopping by the ancillary fees charged by one title insurance agent versus another. The difference can be hundreds of dollars on the same transaction but if the consumer doesn’t know to ask for a thorough quote, they will make their shopping decision without having full disclosure of costs. Whether or not you move to deregulate the title agent portion of the premium, I believe we need a better way of helping consumers shop and consider these ancillary costs.
NOTARY SIGNING AGENT/INDEPENDENT CLOSER: I see the notary signing agent as sort of like an untested or unlicensed dental hygienist who is out there working on the public but not under the supervision of a dentist. I don’t know anything about dentist operations but as a consumer of dental services I presume a dental hygienist is tested or licensed and works under the supervision of a dentist. I have to think consumers of title insurance services make the same presumption about a closer who comes to their home and handles their very private information and very important transaction. The fact is that we presently have no official standards for closers in a title insurance transaction. I’d like to see the department require that closers in a title insurance transaction be either licensed title agents or employees of a licensed agent.
Should you have a question or concern, please feel free to contact me.
THE CLOSING SPECIALISTS
204 West Main Street, Ligonier, PA 15658
Amended Rate Filing
Original Rate filing
Here's my comment to the PA Dept. of Insurance concerning the amended rate filing:
I'd like to offer these comments concerning the request by TIRBOP to increase the CSL fee to $75 and extend coverage to consumers.
Let's give consumers a choice.
We know mortgage lenders will require a CSL, most do. Do purchasers need or desire the type of coverage offered in the CSL? Perhaps. Should a purchaser in a mortgage transaction be forced to pay for the coverage if they do not want it?
I would think the purchaser most at risk of financial loss in a defalcation is the purchaser buying property without a mortgage, paying cash. If there is value in the extra coverage offered in the CSL, will it be available to cash purchasers and should they be forced to pay for lender coverage?
In addition, there are two other parties who suffer when a title agent goes south with the money, and that's the seller and a borrower in a refinance. I realize that neither of those parties are purchasing a title insurance policy and perhaps for that reason the coverages offered under a CSL cannot be extended to them for a fee.
From a title agent point of view, this new CSL isn't going to impact me directly. As a professional who tries to keep the interest of the consumer in the radar of decisionmakers, I think the underlying question is really what causes losses covered by the CSL and how best to prevent these losses so that our title companies remain solvent an the public isn't damaged.
I continue to be a proponent of annual independent CPA audits of title agents. Raising the bar of quality in our licensing and regulatory process will do more to fix our solvency problems and uncovered consumer/lender losses than just tossing money in the CSL bin.
I know there are some in the industry who will argue that consumers do not understand the risks and therefore will not understand that they need this coverage. I tend to trust consumers to make their own decision about how they want to spend their hard earned dollars provided they have been given sufficient data and a chance to think.
Friday, July 03, 2009
Tuesday, June 30, 2009
[The first bill mandates better communication between homeowners and their lenders. The other bill will protect employees at mortgage companies who report illegal activity.]
The first bill mandates better communication between homeowners and their lenders. The other bill will protect employees at mortgage companies who report illegal activity.
The first will mandate better communication between homeowners and their lenders. The other will protect employees at mortgage companies who report illegal activity.
Sunday, June 28, 2009
English: Tor and the Iranian Election - Bring down the Iran Curtain | Ian's Brain
Farsi: Tor: ?????? Tor
Help us set up more bridges on Tor here: Torrents list � Rivolta in Iran
Images and vids and instructions on how to send them to us:
Helpers with expertise in the field of medecine, translation and such:
“Medici Cu Internet is a collaboration between piratbyran.org, HackersWithoutBorders and werebuild.eu trying to organize contacts with medical expertise online since there are problems in Iran with hospitals being monitored by the government. Join the IRC-channel at #mci-ir - WebIRC - AnonNet or send an email to us at embassy [at] piratbyran.org for more info. Medical experts, Farsi-translators and people who know the medical situation in iran are welcome to join and collaboratively set up an index with common injuries and their best treatments.”
People Outside Iran: This is as clear and concise as I can be. I have not included ANYTHING that I have sensed to be remotely fishy, but humans always err.
People Inside Iran: Don't believe a WORD of what I am telling you. Do what you think is best, keeping everything in mind. I know LITTLE of what you know so make your decisions based on your OWN judgment.
P.S. Please post this around and tweet and retweet.
Friday, June 26, 2009
Tuesday, June 23, 2009
An elderly lady is in a nursing home. We'll call her Sally. Sally deeded her real estate into a Trust. She also gave a Power of Attorney to her granddaughter, we'll call her Polly.
Polly listed the real estate for sale and signed the sales agreement using the POA.
I examined title, including the trust document and found no authority for using the POA. Instead what I found was that Sally was the trustee unless we got a certification from a doctor that she was physically or mentally incapacitated. [We have that letter.] If so, then Suzy, Sally's daughter and Polly's aunt would be the successor trustee. The trust went on to say that if Suzy died or was declared mentally incompetent by a court, then Polly would be the successor trustee.
So, Suzy is our decision maker and deed signatory, not Polly.
Polly was not happy. Polly wants us to talk with an attorney because she doesn't understand trusts.
I called Suzy. Suzy lives pretty far away. She has been trying to manage her mother's affairs, keeping Polly in the loop and trying to do it as a family. Suzy had no idea that her mother's real estate had been deeded into a trust. Turns out that Polly and her dad - without using an attorney - found a trust form and filled in the blanks and had Sally sign it. They did the same thing with a Quit Claim deed.
So, NOW Polly is seeking legal counsel to try to undo what she has already done and that's putting Suzy in complete control of the real estate and the trust.
Interesting. I don't think Polly or her dad even read the trust document before they had Sally sign it. That's a big DUH, huh?
Monday, June 22, 2009
Friday, June 19, 2009
To all Interested Parties,
Thank you for your interest and participation in the recent informational hearing on title insurance that was held by the Pennsylvania Insurance Department on May 28, 2009. Please be advised that the transcript of that hearing and any testimony or submissions received to date have now been posted to the Department’s Web site. As stated in an earlier e-mail, the cut-off date for submissions will be two weeks from the date the transcript is posted to permit parties to reference the transcript in their comments, if desired. Accordingly, we will be accepting those submissions until Monday, July 6, 2009 at 5:00 P.M. Please send all written comments or submissions to ra-in-consumerliaison@state.
Cherie Leese | Administrative Officer
Pennsylvania Insurance Department
1326 Strawberry Square | Harrisburg, PA 17120
Phone: 717.525.5884 | Fax: 717.346.9423
Saturday, June 13, 2009
Now, if you have already paid for the policy you don't have any reason to cancel it. It's a one time charge and it protects you for as long as you have an interest to protect. I would venture to say that title companies don't even have procedures for cancelling owner policies that have already been issued. There'd be no point. ;) The premium has been earned. They insured and they certainly would not issue a refund, so why not just keep the policy?
Friday, June 12, 2009
That's why we make a recommendation to every consumer that the only way to know what you are buying is to get a current up to date survey BEFORE you close. If you don't get that survey, we're gonna have you sign a hold harmless just to remind you later that we told you so. We make this recommendation in writing to you more than once before you go to closing because we think it's that important.
So, today, we get a call. Closed the purchase in 2005. Just got a survey now and - OH - there was supposed to be TWO lots included in the purchase but only one was conveyed.
Interesting. The real estate agent does acknowledge that the sales agreement only described the one lot. The deed and the mortgage and all documentation signed by both buyer and seller only described the one lot. It was the intention of the seller and the buyer that TWO lots be conveyed but, folks without a survey, it's hard for most folks to grasp the reality of a legal description.
Thursday, June 11, 2009
The investor negotiates a short sale with the lender by convincing the lender that the price it is offering is the market value of the property. The investor then finds a buyer for a much higher price. The sales happen simultaneously, and the lender pockets the difference.
The problem is that "the original lender is not told that the buyer is flipping the property on the same day for thousands more than the lender has been told is the market value of the property," the letter states.
The fund's decision could have a major affect on short sale flips because many investors use attorneys to close deals when traditional title companies won't.
Dear Ms. Cipa,
While researching a title insurance matter on the internet I made my way to http://titleinsurancetalk.
I am writing to ask for your help in locating a title industry person who can give an authoritative analysis the following scenario:
Buyer bought a house in California. The Title Company that issued Buyer’s title policy paid off an IRS tax lien at closing, but a release of lien was not recorded. Buyer discovers the lien while attempting to negotiate a loan modification and asks for it to be removed immediately based on unmarketability of title.
Title Company expects that it may take months or years to cause IRS to record the release of lien due to IRS bureaucracy. Title Company insists that Buyer accept Title Company’s offer to “insure around” the IRS lien.
Does Buyer have to accept Title Company’s offer to “insure around” the IRS tax lien? Does a prospective cash buyer or an institutional refi lender have to accept it ?
Is there any procedure available to Title Company whereby a bond or a cash surety can be posted to get the IRS to issue a release immediately?
Hi, Robert. Please feel free to call me Diane. In PA, at least, getting a release on an IRS lien isn't that tough or time consuming. I would first demand evidence that the lien was paid in full. Ask the title agent for a copy of the cancelled check. With the cancelled check and the executed HUD in hand, you have good evidence that the item was paid and just not satisfied. In that case, it would be reasonable for the buyer and their lender to accept an indemnification from the new title insurer. This is common procedure for paid but unsatisfied liens and mortgages. The title company who issues the indemnification still has an obligation to follow up and pursue the satisfaction, but this will at least allow this transaction to move forward with all parties protected.
Hope that helps!
Diane, Thank you for responding. The thing that is different about this case is that the Buyer wants to resell the property to a Private Party by the end of the month for cash subject to the mortgage that Buyer obtained when Buyer bought the property. However, the Private Party will not accept the notion of insuring around the tax lien. Can the title company be compelled to post a bond with the IRS to obtain an immediate release of the lien?
In most markets the definition of marketability is title that would be insured by a reputable title insurance company at regular rates. The insured owner can file a claim but it's not certain that would get him any relief. When a buyer acts outside of the norm and demands perfect title, rather than marketable or insurable title, the seller has to decide if they are willing to foot the bill to attain perfection. Perfection may not be offered by title insurance. Reason generally prevails.
A middle ground might be holding money in escrow pending satisfaction. That may be the price the seller is willing to pay - not having their proceeds while the issue is worked out.
In the meantime, I wouldn't do anything without first making certain the lien was actually paid in full and isn't sitting there like a ticking time bomb.
Remember, I am a blogging PA title agent and not an attorney. These are just my thoughts for whatever they are worth. The insured owner should be consulting an attorney. ;)
O.K. That helps a lot. I see the difference between marketable and perfect title. Thank you.
Wednesday, June 10, 2009
A bill to help California's smaller title companies compete in the foreclosure resale market has cleared the Assembly and is now in the Senate.
The Buyer's Choice Act, introduced in February by Assemblywoman Cathleen Galgiani, D-Stockton, will likely be sent in the coming weeks to the Banking, Finance and Insurance Committee and later to the Judiciary Committee. It could be on the Senate floor in July.
Monday, June 08, 2009
Friday, June 05, 2009
It took some time but he found a parcel of 65 acres. We ran the title search and discovered that coal and mining rights had been conveyed to a local coal mining company back in 1967. The deed was pretty scary. It spelled out all kinds of things that they could do to that land, including strip mining, building roads - all kinds of things which we spelled out in an exception in the title insurance commitment and sent to our buyer and his lender.
They did a stop drop and roll and said WHAT?
In the process of researching this issue we found that the last two property owners had NO clue that this deed was in the chain. WHY? Well, the exception, if they got a title commitment, was probably worded...coal and mining rights as set forth in yatta yatta yatta.
Now, I'm not saying we never use that kind of vague lingo. We do, but only when the vague lingo is what we find in our search, meaning that the rights were conveyed back beyond our 60 year search and we only find references to it in other deeds.
How is this being resolved? The buyer and his lender have asked the seller to buy back the rights or get a release. The seller has hired a mineral rights attorney who is pursuing the matter.
Makes ya think, eh?
Will be back with an update. For now, the mining company owners have gone fishing, literally. ;)
They built their parking lot over the right of way! People - read the reports before you build!
The title search was put together by the Ohio Bar Title Insurance Co., with Bill Geyer as local agent. Title insurance of $200,000 was taken out.
Noted in the title search is that two of the tracts of land were separated from the remaining purchased land by a strip of land that was former railroad right-of-way acquired by the Downing Companies.
A survey map by TCW Inc., a New Lexington engineering firm, also confirmed the title search. Read more...
Excerpts of E-Mails From Angelo Mozilo
Sept. 26, 2006 — following up a meeting with Sambol the previous day about the Pay-Option ARM loan portfolio:
We have no way, with any reasonable certainty, to assess the real risk of holding these loans on our balance sheet. The only history we can look to is that of World Savings however their portfolio was fundamentally different than ours in that their focus was equity and our focus is fico. In my judgement [sic], as a long time lender, I would always trade off fico for equity. The bottom line is that we are flying blind on how these loans will perform in a stressed environment of higher unemployment, reduced values and slowing home sales.
What I read here are the thoughts of a "real" lender. Surprisingly to me, Mr. Mozilo recognizes the poison in the product and also knows that his own staff is completely out of control and ignoring even their own crappy underwriting standards. Question: What did he try to do about it? Was he so disconnected that he couldn't fix the problem? Was it like a runaway locomotive and there was nothing he could see to do but bail out?
Thursday, June 04, 2009
The Securities and Exchange Commission said Thursday afternoon that its case also accused Mr. Mozilo of illegal insider trading.Countrywide was a major player in the subprime mortgage market, the collapse of which in 2007 touched off the financial crisis that has gripped the United States and global economies.
Thank you for your interest and participation in the recent informational hearing on title insurance that was held by the Pennsylvania Insurance Department on May 28, 2009. We hope to have a transcript of that hearing posted to the department’s Web site in the near future. An e-mail will be sent to you advising you when the transcript has been posted. In addition, we are extending the deadline for written submissions. The cut-off date for submissions will be two weeks from the date the transcript is posted to permit parties to reference the transcript in their comments, if desired. Please send all written comments or submissions to ra-in-consumerliaison@state.
Wednesday, June 03, 2009
Tuesday, June 02, 2009
Testimony before the
Pennsylvania Insurance Department
Title Insurance Issues
Diane Cipa, Title Insurance Agent
General Manager, The Closing Specialists
204 West Main Street, Ligonier, PA 15658
Good afternoon. My name is Diane Cipa. I am a licensed title insurance agent. Thank you for
arranging this public hearing and for the opportunity to talk with you today about title insurance.
Title insurance is not a casualty product. The premium is meant to pay for quality examination
and a reliable vetting for insurability prior to the issuance of a policy. The insurance was always
meant to act as a back up safety net not to replace the competent examination. Claims should be
The title insurance business moves in tandem with mortgage banking. It’s like a parallel universe. The subprime, crappy standards culture of the mortgage business manifested itself in title insurance and so what we have created over these last 10 or 15 years is a business populated with people who don’t know what they don’t know or don’t care what they don’t know. What we need is a restoration of competence and quality, which will provide stability to title insurance and give the consumer value for their premium dollar.
Since we’re primarily talking about money, let’s talk about core services, the value brought to the transaction by the traditional title agent.
• TITLE INSURANCE COMMITMENT
• RESOLUTION OF TITLE ISSUES
• CLOSING COORDINATION
• ESCROW FUNDING AND DISBURSEMENT
• POST CLOSING DOCUMENT STACKING/COPYING FOR LENDER
• TITLE POLICY
Without considering optional fees for extra services or work, all of these core services would be
covered by the all inclusive rate. In my current agency contract, I retain 85% of the premium.
My staff and I perform all of these core services except the search/abstract and recordation. We
pay independent qualified abstractors to handle those services. We do not charge the consumer.
The fees are absorbed and paid from the all-inclusive rate. Only members of my staff conduct
closings. We do not use independent closers aka signing agents.
The Department allows us to charge optional fees for extra services. The most typical are:
• OUT OF OFFICE CLOSING $150.00
• COURIER $10.00
• MORTGAGE LENDER EDOC PRINTING $50.00
We do closings 8 to 8 Monday thru Friday and 10 to 5 on Saturdays and do not charge extra for
these odd hours. In addition, we give consumers a chance to avoid optional fees by opting into
our CHOOSE AND SAVE PROGRAM. In exchange for giving us a $300 deposit to cover the abstract and lien letters, we waive optional fees. The consumer gets the deposit back if they close within 90 days and for our remote consumers – we serve 34 counties – the typical savings is $210.00.
Visit www.chooseandsave.com for more information.
My average title policy is somewhere around $125,000. If you look at reissue rate $817.88 plus
typical endorsements $150.00 and take 85% of that, our share would be $822.70 minus say $150 for abstract services and the $150 I pay my closers, that leaves $522.70. We may or may not get additional revenue from optional fees. Just for comparison sake, let’s say the consumer opted into Choose and Save and we earn no extra fees. That remaining $522.70 pays for me and my staff and our office overhead including whatever it takes to perform those core services as outlined above.
Well, what do the NON-TRADITIONAL agents do? Less……and for the same consumer dime.
Let’s look at some typical NON-TRADITIONAL agents:
• INDEPENDENT CLOSER aka SIGNING AGENT ONLY: In this scenario, the consumer is working with a title agency who has no employee closers. Rarely does the title agency absorb the cost of the independent closer as part of the all-inclusive rate. In fact, most often the consumer is
paying a marked up fee to a third party “signing service” who acts as a vendor manager for
These types of title agencies may or may not be affiliated businesses but they are usually tied
to some party in the transaction, the lender or the seller in a foreclosed REO closing.
I have two objections to this type of agency. Consumers aren’t given the option of going to
the title agency’s office and having an employee conduct the closing. Their only option is to
pay for a signing/settlement service. Consumers expect that the party who conducts their
closing, the person who comes to the closing table is qualified and under some umbrella of
licensure. In the case of a signing agent, the process of hiring the closer is much like an
auction. The title agent or signing service calls around looking for notaries and asks them to
basically bid for the deal. The cheapest, most available notary/signing agent gets the order.
The consumer’s mortgage document package is then e-mailed to the signing agent who makes
copies and goes to the consumer to conduct the closing. You may not know it but these
document packages contain sensitive private information including a full mortgage application.
That might not be of interest to the insurance department but it should be of interest to
someone. Should non-employees be conducting closings in a title insurance transaction? If
yes, should there be a sub-license of some kind?
This title agency does not provide the core service of conducting the closing. They do not hire
or train a closing staff. They do not have the overhead for a closing staff. Also, they do not
print or copy the lender documents. Should the consumer have to pay extra to cover a signing
service? Should the consumer even pay the same all-inclusive rate?
• UNDERWRITER/TITLE COMPANY DOES THE WORK: I call this kind of title agent a FAUX agent. Most often I see it in the affiliated business arrangements but not always. It’s usually a person or entity who has a good source of referrals but either doesn’t know much about title
examination and/or doesn’t want to know much about title examination, they just want to set
up a title agency.
Here’s how it works. The underwriter/title company gives the title agent access to their
computer system. The title agent inputs a title insurance order. The underwriter/title
company hires an abstractor, gets the search product using some automation, some human
work at the courthouse and some offshore outsourcing. I tried this type of product with First
American when I had an agency relationship with them. At that time, the legal descriptions
were being typed in the Philippines. Anyway, the underwriter performs an examination and
delivers back to the title agent a title insurance commitment. These title commitments do not
include a chain of title and the exceptions to coverage are rarely detailed in any way that
might be useful to a consumer. Using this system the underwriter also relieves the title agent
of liability for abstract error. The agent does pay the underwriter for the search. It’s about
the same fee I pay for a full abstract but remember I do my own examination and prepare the
commitment and the policy.
So, the title agent has less risk and performs less work. The consumer gets less information.
Should the consumer pay the same all-inclusive rate to this agent?
• SHORT SEARCH AGENT: This title agent never gets a full search. Always orders the current
owner or property report even though it’s a violation of published underwriting standards and
gets away with it. Does the consumer know their policy carries with it a higher risk of
producing a claim? No. Maybe there is a market for an econo-policy? Maybe the consumer
should be able to choose a crappy policy with a higher risk for a lower price.
There’s a ton of stuff we could talk about but I don’t want to close without suggesting in the most
strong terms I can that we need oversight of escrow accounts. Please think about how many
millions of dollars flow through the hands of title agents. Consumers think someone is watching
their money. They assume it is safe. This is one area where I think title companies can use the
regulatory help. Help them help themselves. Require that agencies pay for independent audits by a CPA annually. This is one type of claim that is self-created. Why should consumers have to pay to cover losses for mismanagement of funds? Set audit standards and force licensees to comply.
Thank you and good day.
EXTENDED COMMENTARY SUBMITTED VIA E-MAIL JUNE 2, 2009
The numbers presented by the Office of the Attorney General on page 9 of the statement by
Messrs. Crocker and Kleit were most interesting to me. I am not a statistician, however, I am a
witness at street level of the dynamics of the real estate/mortgage/title insurance industry over
more than 3 decades. Their chart on page 9, Title Agent and Agency Numbers in Pennsylvania,
2000-2009, is key to understanding where we are, how we got here and how we can fix what’s
I’d like to take it further and see the title agency numbers going back to 1983, for that’s when the first real estate brokerage affiliated title agencies were formed. At that time I was in mortgage banking with a large savings institution. I managed a high volume mortgage department. We purchased mortgages from mortgage brokers. In that capacity I had to work with many title agencies, including those affiliated with mortgage brokerages owned by real estate companies. There weren’t many because at that time, by my observation, only the very large real estate companies entered the mortgage and title insurance business.
It didn’t take too long for the wider real estate sales community to see mortgage brokerage and
title insurance as potential profit centers and once they fully recognized their “point of purchase”
power, being the first consumer contact in a typical real estate transaction, a new cottage industry was born. Trade associations, law firms, consultants, and title companies clamored to build relationships and create new entities by providing literature, seminars and road maps for
Once our PA title insurance law was amended to officially permit banks and other mortgage
lenders to act as title agents, I think in 1999 though I can’t find my copy of the amendment to
confirm that date, the weaving of the referral net was complete.
I agree with the Office of the Attorney General that our problem is reverse competition. We need to find a way to empower consumers and safely change the delivery system of title insurance and its related settlement services without divorcing the product from prudence.
TECHNOLOGY: Real competition will drive technological productivity. We need a free competitive market where pricing and delivery of products and services are improved without sacrificing security, fidelity, and the underlying integrity of land records. We are not ready for full search and examination automation. Anybody who tells you we are is lying or ignorant. Automating title search and examination once the land records system has fully integrated technology and the system has matured to a point where reliability is tested and proven by impartial experts is a reasonable long term goal but it’s not something we can reasonably count on for help right now.
DISCLOSURE given at the point of sale is a powerful consumer tool. Compelling disclosure by
those holding a professional license – real estate or mortgage - in the Commonwealth who are in a position to make title insurance referrals – affiliated or not - might work. I strongly suggest that consumers be encouraged to contact the title agents directly to get a written quote before the order is placed by them or on their behalf. We often see circumstances in which the real estate agent or mortgage lender places the title order without the knowledge of the consumer making it uncomfortable for the consumer to change providers. Unless the premium itself is deregulated, consumers must be informed that shopping must include a clear quote of ancillary charges. As an aside, I have over the past three years had ongoing problems with a large state bank who owns a title insurance agency. They don’t like our Choose and Save program because it makes their own pricing look bad so they tell consumers they cannot use our company. I have evidence that they are happy to use our company if we place the title insurance with their agency, so it is not a question of competence. It’s a question of hiding from the consumer pricing options which will save them some cash.
I am attaching copies of a Power Point presentation on management of title agency escrow
accounts. It’s the best presentation I have seen on the subject and since I do hope you’ll consider
setting audit standards, it may be useful.
Bottom line – consumers deserve a better deal.
Saturday, May 30, 2009
I noted that a local attorney handled the conveyance. I'm pretty certain he is not a title agent but he is the solicitor for the municipality and that helps because two of the liens are municipal liens. I called the municipality and they will satisfy the liens for us.
Municipal liens are not divested by foreclosure. Keep that in mind. If the attorney had known that he would have insisted that the REO lender pay the liens when they sold the property. They weren't huge liens, but the municipality might have been happy to receive about $2,000.
The other two surviving liens are federal tax liens and they survive because the USA was not named as a defendant in the foreclosure action. That's the proper way to give notice to the USA.
So, I am hoping this won't take too long to resolve. I'm fairly certain we'll have an argument from the attorney who handled the last transaction but if he issued title insurance to our seller, the underwriter will assist.
Consumers should remember that attorneys and non-attorney title agents make mistakes. They are human and that is why you must always purchase an owner policy from a reputable and solvent title company. Title insurance is your safety net.
Thursday, May 28, 2009
Friday, May 22, 2009
Wednesday, May 20, 2009
Monday, May 18, 2009
James Robert Maher, 59, a retired executive with the American Land Title Association, died May 5 of kidney cancer at his home in McLean.
Mr. Maher joined the American Land Title Association, the trade association for the abstract and title insurance industry, as general counsel in 1984 and was promoted to executive vice president four years later. He was responsible for managing the association's legislative, legal and research activities, as well as its education and public relations work. He retired from ALTA in 2007 but continued working as secretary and counsel of the Title Industry Assurance Company and the Title Reinsurance Company. He also was a board member of Mortgage Electronics Registration Systems.Read more....
Friday, May 15, 2009
The title company was generous. I'd cash that check and be grateful.
Whether you have recourse with others, well, I think you need to pose that question to an attorney.
Glad you were able to find some relief and clarity on the issue. Thank you for the follow up. I will post this as it will be helpful for others. Take care!
Wednesday, May 13, 2009
Monday, May 11, 2009
Thursday, May 07, 2009
Topics discussed at the hearing will range from the basic structure of the product, the pricing of the product and the relationships between the title insurance companies and those who sell the product. Consumers and those from the title industry who are interested in testifying are encouraged to attend.
The department is charged with overseeing the title insurance business in
Information about the upcoming hearing and related materials are available for review on the department's Web site. Interested parties should visit www.insurance.state.pa.us, go to "Topical Information" on the right side of the site and click on "Title Insurance Hearing."
Tuesday, May 05, 2009
That's reading a bit into your query but in my title world, that's the meaning of those words. ;)
I immediately did three things. I sent letters to the seller and the tax claim bureau, then opened a claim with the title underwriter.
Response from tax claim - not sure what happened but taxes are owing, pay up!
Response from seller - knew the taxes were owing and mistakenly thought they had been paid during closing. Doesn't have the money anymore but will try to send some in a few months.
Response from title underwriter - contacted the director of the tax claim bureau and successfully made the case that the tax claim bureau system must be reliable. Tax claim researched the matter and found that it had been a software malfunction. The director of tax claim got the software company to pay the tax.
YEAH! Good job, title underwriter [Old Republic] and director Samuel Runco of Cambria County. Nicely done.
Saturday, May 02, 2009
When a typographical error is discovered, such as an incorrect lot number, the title agent or title company would normally prepare and file corrective instruments at no charge to you.
If you are getting the run around from a title insurance provider, go up the chain. Use certified mail and send a letter to the title company you see named on the title policy jacket. If an address is provided, use that address. Copy your state insurance regulator.
Thursday, April 30, 2009
On Tuesday, April 28, 2009, the House Financial Services Committee voted in favor of attaching an amendment to H.R. 1728, "The Mortgage Reform and Anti-Predatory Lending Act of 2009" that would withdraw the Final RESPA Rule. The amendment, offered by Representative Judy Biggert (R-IL), stated that the Department of Housing and Urban Development (HUD) should work in conjunction with the Federal Reserve Board (Board) to develop and issue a new rule to address simplifying the mortgage process within six months of the passage of H.R. 1728.
This is a victory for NAMB as we have requested that HUD withdraw the RESPA Rule and work together with the Board to simplify the mortgage process in our comment letters, calls to action, and communications to Congress. H.R. 1728 is tentatively scheduled to be voted upon by the full House of Representatives on May 7, 2009.
My question is this. Does the legislative branch have the authority to direct HUD to withdraw its final rule? I don't think so. They can certainly apply pressure but unless they are re-writing RESPA itself, the rulemaking is the prerogative of the regulator isn't it?
Friday, April 24, 2009
Wednesday, April 22, 2009
Well, a lot has been happening at NAILTA headquarters. If you have not had
a chance, please check-out our new and improved website www.nailta.org.
As with any new start-up, the process of forming NAILTA has taken longer
than some might have wanted or expected but you can be assured that your
President, Board of Directors, and Committee Members have been working
diligently to bring to you an organization that is on the path to being a
voice and a forum for the independent title insurance agent and a resource
for the consumer and public officials. But we are not done, there is much
more to be accomplished and we need your support, your expertise, and your
Please consider joining NAILTA today - it is as easy as 1-2-3. Go to
www.nailta.org and pay by check or credit card - it is that simple and while
you are there, register for the NAILTA Spring 2009 Conference in Atlantic
City, New Jersey. You can register at the website or simply print the
attached flyer - all the information you need is contained in the
Finally, I ask you to please pass this information on to your colleagues,
industry partners, and vendors. Ask for their support, it is not hard to
do, I am doing it right now!
Francine D'Elia Wirsching
National Association of Independent Land Title Agents