New Laws Protect Homeowners, Whistle Blowers

HARRISBURG, Pa. -- Gov. Ed Rendell has signed two bills into law to crack down on mortgage fraud in Pennsylvania.

[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.

Read more...

On Iran....Read this if you want to help or get help!

The government in Iran is still increasing internet filtering and throttling in an attempt to silence their people. Anonymous info shows that many in Iran are looking for proxy and Tor information in Tehran and all around the country. Please donate your bandwidth to help bring down the Iran Curtain. Here are links on how to help and get help on this:

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.

Is this a good thing?

AUSTIN, Texas, June 25 /PRNewswire-FirstCall/ -- First American Spatial Solutions (FASS), a member of The First American Corporation (NYSE: FAF) family of companies and a leader in spatial and natural hazard risk solutions, announced today that it has digitally mapped more than 120 million of America's property parcels - something no other public or private entity has been able to accomplish previously. Read more...

skipping legal advice with a trust and living to regret it

Here's a case to ponder.

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?

and this is why we need mandatory annual CPA audits of agents

"It opened my eyes," he said. "It felt like a check from the title company was just as good as one from the bank. That is not the case. It's no better than a personal check."

Read more....

transcript

I love that the PA Dept. of Insurance published the transcript of the hearing but I have to say court reporting must be tough. Many remarks are quite different in the transcript than they were in the room. I'll have to remember to speak slowly and carefully next time....if there is one. ;)

PA public hearing on Title Insurance

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.pa.us. As a reminder, any submissions received after today will be posted after the deadline for submissions has passed. Please forward this message to any other persons that may have an interest in this notice. Thank you.

Cherie Leese | Administrative Officer

Pennsylvania Insurance Department

1326 Strawberry Square | Harrisburg, PA 17120

Phone: 717.525.5884 | Fax: 717.346.9423

E-mail: cleese@state.pa.us

www.insurance.state.pa.us

query: can I cancel owner title insurance

If you haven't already paid for the policy, you can cancel the order. The title company may charge you for services rendered to this point and if you are in PA, you'll need to sign a strongly worded waiver. PA wants you to know you are totally unprotected without an owner policy.

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?

that ole survey situation again

It never fails. Several times every year we get calls from consumers who decided to get a survey some time after their purchase and guess what? They found a problem.

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.

one underwriter taking a stand against short sale flips

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.

Read more....

perfect? marketable? insurable?

Here's an e-mail exchange that might help understand the issues faced when folks try to figure out the difference.

Dear Ms. Cipa,

While researching a title insurance matter on the internet I made my way to http://titleinsurancetalk.blogspot.com/ where I read some of your postings. I have long been searching for someone as knowledgeable and erudite as you on title matters.

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.

You're welcome.

this is interesting...Buyer's Choice Act

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.

Read more....

question

Do notary signing agents aka independent closers intend to comment as part of the PA Dept. of Insurance public hearing process?

those illusive mining rights can really screw with your plans

I have a customer who is trying to buy a farm out here in the country on which to home school his children, raise organic beef and chickens, vegetables...basically live out his dream.

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. ;)

the title agent and surveyor did their job and the county engineer still ignored it

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...

these e-mail excerpts are fascinating

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.

Read more...

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?

Mozilo accused of fraud

WASHINGTON — The government is charging Angelo R. Mozilo, the former chief executive of the mortgage lender Countrywide Financial, and two other company executives with civil fraud.

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.

Read more....

message from the Department

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.pa.us. Please note that, at the time the transcript is posted to our Web site, we anticipate also posting any testimony or submissions that have been received to date. Any submissions received after the transcript is posted will be posted after the deadline for submissions has passed. Please forward this message to any other persons that may have an interest in this notice. Thank you.

here's a probable for PA........

The new law establishes a zero tolerance policy for enticing realtors and lenders with food or beverage or entertainment as an inducement to refer title business. Read more...

there is so much we could discuss concerning title insurance

but... ..you have to pick and choose and so this is what I ended up submitting as testimony for the PA public hearing:

Testimony before the
Pennsylvania Insurance Department
Title Insurance Issues
Presented by:
Diane Cipa, Title Insurance Agent
General Manager, The Closing Specialists
204 West Main Street, Ligonier, PA 15658
724-238-7783
dcipa@tcsclosing.com

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
rare.

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.

• SEARCH/ABSTRACT
• EXAMINATION
• TITLE INSURANCE COMMITMENT
• RESOLUTION OF TITLE ISSUES
• CLOSING COORDINATION
• CLOSING
• ESCROW FUNDING AND DISBURSEMENT
• RECORDATION
• 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
signing agents.

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
wrong.

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
affiliation.

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.

Thank you.

if I could wave a magic wand

..tax assessment and recorder of deeds offices would understand the meaning of corrective instruments.....