Tuesday, May 15, 2012

mortgage fraud rears its ugly head once again in an unexpected place

We've been working on a refinance transaction for a number of weeks.  The file has been stuck in mortgage underwriting because we reported a pending lawsuit and the borrower didn't know how to handle creating a letter of explanation or why one was needed.

So, last week, finally, the borrower's attorney provided an explanation which I thought was terrific and if I had been the mortgage underwriter, I'd have approved the mortgage.

Imagine my shock yesterday when the mortgage underwriter requested that I amend my title insurance commitment so it showed no pending lawsuit.

She said they had a guideline that says they will not approve a mortgage if the borrower has a pending lawsuit.

HUH?  I know that sometimes mortgage underwriting rules defy logic but anyone could have a lawsuit filed against them without merit and was she telling me that these people cannot get mortgages?  I have to believe that this is a misinterpretation of the rule, however, IF that is the rule, then so be it.  This borrower has a pending lawsuit and if your guidelines say you cannot approve his mortgage, then deny the loan.  Don't ask me to scrub the title commitment to show no pending lawsuit because that is MORTGAGE FRAUD and I will not go there.

As I had this conversation with the underwriter through emails and on the phone, I did suggest that I did not think this was her intention but that she needed to realize that this is really what she is proposing.  I calmly asked that she review this with her supervisor and she said she would.  I am awaiting their response and do hope that this is a rogue underwriter who needs more training and not the beginning of yet another round of mortgage lending gone bad.

Fingers crossed.

Wednesday, May 09, 2012

buyer didn't want home warranty

Last month we closed a transaction - conventional loan with a large down payment.  On the HUD-1, pursuant to the sales contract, the seller paid for a home warranty.  We remitted the fee to the home warranty company.

Today I received a call from the buyer who said he had contacted the home warranty company and cancelled it.  They told him they would be sending our check back to us.  He was calling me because he wanted that money.  I told him I couldn't redirect the money to him.  I would be refunding it to the seller.

He then explained that he never wanted the home warranty and had asked the real estate agent to change the contract and have the seller give him a credit for the fee.  There was no seller assist in the contract so there wouldn't have been any problem, I think, getting approval from the lender to do this.

For some reason his agent told him to just take care of it outside of the closing.  This is how people get into trouble.  There is no way the consumers would know that doing things outside of closing isn't kosher.

Tuesday, May 08, 2012

note to Jerry who needs help with a title mark-up

I couldn't hear your phone number clearly on the voice mail.  Please call again or shoot me an email to dianecipa@gmail.com.

Saturday, May 05, 2012

Here's a question for notaries.

If a seller, a spouse in a messy divorce, clearly states that they are signing the deed under duress, do you sign and seal the acknowledgment?

I say no.

What if this person is forced under duress to sign a separate document which says they are not signing the deed under duress?  I know it sounds implausible but that's what one of our readers says happened to her.

How would you handle that situation?

adding labels to old posts

I like this new blog format mainly because I think it is easier for you to find content of interest.  I'll try to make that even easier.  I'm slowly going back through posts and creating a more expansive label base.  It will take a long time to get through all of the posts but I'll use the "swiss cheese" approach.  Do a little bit at a time and eventually it will all be done.  ;)

Friday, May 04, 2012

trying a new dynamic blog look and experimenting with the snapshot thingy

Title Insurance Talk has a new look.  Please let me know if you like it or not.  The tool bar gives you different options for viewing posts.  Pick the one you like.  I have no idea what SNAPSHOT is or why it shows no posts.  Will continue to experiment.  ;)

Wednesday, May 02, 2012

Pennsylvania title insurance rates are changing.

Effective July 1, 2012 you'll no longer see basic and reissue rates.  Other rate categories have also been eliminated.  We'll simply use SALE or NON-SALE rates.  More info to follow.

Tuesday, May 01, 2012

Brian says, "what a mess"

hello Diane..just found your blog....wonder if you could take a look at this mess....

1. Nov 2005 Refinanced a property through American Home Mortgage Acceptance
2. Closing Attorney mistakes: Deed of Gift was not signed by Guarantor
3. Date referenced on Note is 10NOV2005 which is not the Date on the Deed of Trust.
4. Deed of Trust: the recorded copy has a date of 12NOV2005, but the one I signed at closing has a date of 11NOV2005.
5. AHM files CH6 in AUG2007 and force places insurance and property taxes along with fees which causes monthly payment to triple (basically manufactures a default)
6. JAN2008 servicing rights sold to CountryWide (they begin foreclosing)
7. JUN2008 CW sends a "Modification" agreement to me while processing a Foreclosure sale (I sign it)
8. CW hires local Foreclosure firm that files a Quiet Title action before I sign the Modification....(the Firm realizes the Guarantor never signed the Deed of Gift/Warranty Deed)
9. BAC Home Loans/BOA now claims they own the Loan and the Servicing rights and want to Foreclose/Short Sale

1. Negotiated Solution: could BOA be put back into the position it paid off at the time of the Refinance? equitable subbrogation?
2. Does BOA have to prove that they own the Note? holder in due course etc...in order to be allowed a seat at the table?
3. Should a Counter Claim be filed to put AHM/CW/BOA on the defensive to have the "True" Chain of Title" proved prior to any negotiations?

would like to post on your blog....


Hi, Brian:

First, if I were in your position, I'd want an attorney giving me a hand.  That said, there's much in your email that I cannot address, but perhaps we have a reader who will.

I can speak to a few items.  

Bank of America is the owner of the mortgage by succession.  They would not need to file an assignment of mortgage or prove ownership of the note.  When Countrywide was failing, Bank of America stepped up to the plate.  It was a well publicized event and a matter of public record. You can use a search engine to pull information if you'd like to read more about it.

I am curious about the quiet title action.  These procedures require notice to the property owner giving you an opportunity to respond.  I don't see this step as an end run around you but a matter of perfecting the lien position and it should not impact a pending modofication.

If Countrywide offered modification and you accepted and signed a document, I don't understand why it hasn't been filed of record or why BOA wouldn't honor it.  Someone dropped the ball.  You may get help on this item by contacting the Consumer Financial Protection Bureau.  Go to their web site and submit a complaint concerning the modification.

I think it is important to keep the complaint simple.  Too much information - at least at the beginning - could confuse someone at the mortgage servicing department of BOA and also at the CFPB.  Focus on the pending modification.

So, to wrap up.  This is a serious matter and so having legal advice is a good idea.  If the modification is the answer to your problem, I'd concentrate on finding out where the ball was dropped and seek assistance to rectify that matter.

One more thing,  certified mail is a good tool to get attention.  It shows people you are serious and keeping a good record.  Be sure to follow up all phone calls with a certified letter reviewing the status and moving the case forward.  When sending such a letter to BOA, be certain you use the address for "qualified written requests".  It's a special address and you can probably verify it with the state banking regulator or get it in writing from BOA.

Good luck!