Tuesday, August 28, 2012

There's blood on the walls!

I know we're not the only folks in this business who enjoy the company of a dog or cat in the office.  When well behaved they are great stress relievers for us and some consumers.

We currently have two feline office mates.  Other than Gracie being a shedding long hair, these cats are no trouble at all.

This morning, however, we had a big surprise or should I say JC had a big surprise. He walked into his office and started working.  DH came in and asked what was that all over his printer - it looks like blood.  That's when they noticed blood spattered all over his office walls and everything else.  There were little bits of blood everywhere.

Best we can think it that a bat came in and had a confrontation with Gracie and KC.  We can't find anything else, but WHOOBOOY, what a creepy discovery!

What's the best way to learn this business?

Hi Diane,

I came across your name online as I'm doing some research regarding being a title closer. I've just begun this career and I am still in the learning phase. I've done about 5 or 6 closings on my own but am looking for more knowledge. My experience and background are not in finance or real estate so it's all very new to me. I'm looking for someone to answer some ABC's: how to mark up a report, as well as to explain what each document means (especially if clients ask as well as for my own knowledge). Any advice or guidance you have is greatly appreciated. 



Hi, C:

The only way to learn is to apprentice at the side of a knowledgeable title agent.  Find one and work for them.

Good luck.

Saturday, August 18, 2012

acting as a scrivener versus legal counsel

Every state is a bit different.  In Pennsylvania we have licensed title insurance agents who may or may not be an attorney.

Non-attorney title agents are permitted to create documents that are directly related to the title insurance policy being issued for the transaction but they perform this task as a scrivener.  Much care must be taken to assure that the non-attorney title agent does not engage in the unauthorized practice of law.

How do we handle that in our office?  We look at the sales contract and mortgage commitment letter - as applicable - and incorporate the language of any special conditions into the document.  Where such language is not already crafted, we ask the parties to draft it.  Put in writing what you want the document to say and we'll insert it.  Sometimes it is the mortgage lender who crafts language and sometimes it is the buyer or seller who craft language.

The basic rule about being a scrivener is that you are a scribe.  You write what they tell you.  You fill in the blanks.

There are many documents we will not create even when related to our title insurance transaction.  We keep it simple.

Even attorneys often choose to note that they are acting as a scrivener.  We see this on deeds all the time.  It means that the attorney likely did not examine title or act in an advising capacity.  It simply means they acted as a scribe and prepared the deed in the manner requested by the consumer.

So - keeping this explanation useful for a consumer - keep in mind that there are limits in authority or professional relationships and if you expect the person handling your case to act as an advocate or legal adviser, then you need to voice that expectation. You will pay for that service and you will need to formally establish that kind of a relationship with an attorney in writing.  Legal counsel is a special type of service.  It identifies conflicts of interest and specific tasks.  The price for such service is beyond that of simple deed preparation.

The bottom line is that to be a savvy consumer you must understand what you are paying for.  If you are capable of representing yourself by thinking through your transaction and making your own decisions, using a scrivener - attorney or non-attorney title agent is the least expensive path.  If you expect and desire legal advice or advocacy - someone to think for you, then expect to pay for services beyond simple document preparation and/or title insurance.

Tuesday, August 07, 2012

RESPA 2010....lenders are more accurate and closing costs have dropped!

"This is the second year in which lenders are required to estimate third-party fees within 10 percent of the final cost. It seems like they're getting more accurate, which helps explain the sharp decrease in these fees over the past year," said Greg McBride, CFA, Bankrate.com's senior financial analyst. "The main lesson of this survey for consumers is to shop around for at least three different estimates. While no one is going to move to a new state just because closing costs are lower, it's important for people to realize that there is variation even within their neighborhood, and that they can save by being an educated consumer."


Sunday, August 05, 2012

Title insurance does NOT cover the seller.

Last week I was contacted by a seller in a transaction we had closed last month.  He was concerned because he had received a notice of tax sale for the property and thought we had paid all of the delinquent property taxes.  I asked him to fax or email the tax sale notice which he did.

The first thing I noticed was that it was for a different tax map number. My immediate concern was that this may have been a parcel that they intended to sell but had not clearly identified it as part of the transaction.  The tax sale notice was for a Lot No. 108.

Our file was scanned so I was able to quickly determine that we had insured the conveyance for two lots - 107 and 108 - but they were both a part of ONE tax assessment and it was a different tax map number than the number on the tax sale notice.

Ah-oh...a merger...an undiscovered merger - likely not discoverable by a regular title search.

If you don't operate in the rural counties of Pennsylvania, you might think a merger of a two tax parcels would be clearly notated by the tax assessment office and thus easily discovered. That is the case in some counties but not all. In the rural county in which this property is located, the tax assessment office makes no such notation and so unless an abstractor stumbles onto something, they won't find it.

I asked our abstractor to re-check the assessment and get back to me.  He did and reported that in 2010 our seller had sent a letter to the tax assessor asking that the two lots be merged into one tax assessment.  The following year -2011 - both lots were billed under one number.

The delinquent taxes we collected from the seller at our closing were for years 2009 through 2011.  We did not know at the time of closing that there was outstanding additional taxes for years 2009 and 2010 under a different map number.  It would have been helpful if the seller had noticed but he didn't.

I contacted the seller and advised that he needed to pay the tax.  He refused and insisted that the title insurance should cover this error.  I explained that the title insurance protects the buyer and the lender.  I further explained that the seller gave a warranty to the buyer and signed affidavits for us that acknowledged he is responsible for the taxes and that if he doesn't pay, we will pay and then sue him.  I said this nicely, not in an angry way but with no wiggle room.

To help him better understand I said that if we had known about the tax parcel merger, he would have paid this additional money the month before at closing, right?  He's just paying it now, instead of then, nothing more, nothing less, just a month later.

So, I contacted the lender and the buyer - they know I am giving the seller a week to pay before we step in and take care of it.  I am hopeful the seller will ante up, but either way, the owner and lender are protected.

This is a good example of a title insurance claim - one that doesn't get logged at the title company or show up in the statistics.  We just resolve it and move on.

We've been very busy lately. The market in Pennsylvania has kicked into gear.

I'm so happy that I had a chance to update our web site before things got crazy.  I use our title premium calculators all the time.  I don't even have a rate card on my desk anymore.

I'm particularly tickled that the web site is smart phone ready. Thanks, Blogger.