Saturday, September 21, 2013

query: one week before closing freddie mac listing agent finds a problem with title do they still have to honor contract

The specifics of your case should be reviewed by your attorney, but in general unless the Freddie Mac sales contract gutted provisions that the property would be sold with good and marketable title, I would think Freddie Mac would have a chance to correct the problem. If they can't within the allotted time, the parties may or may not agree to an extension.

Wednesday, September 11, 2013

TIP - Change the locks when you buy a house.

Yesterday I was copied on a letter from a woman who purchased a house recently.  Title insurance doesn't cover this type of loss.  I'm not certain that she can hold the agents responsible. It's a good reminder to take control of your property upon purchase by changing the locks.  You never know who has keys and should not rely upon and statement from the seller.  Just change the locks.

"I will also be contacting you in another email requesting restitution from
Ms. redacted and Mr. redacted for not appropriately providing a completed
disclosure state for this property and also, allowing keys to the property
to remain with individuals whom I did/do not know.  

This was my home as of redacted 2013, which was accessed by individuals
without my authorization, with items being removed from the house after my
father and I did a walk through on redacted 2013.  The carpet in the bedroom
upstairs was urinated on; furniture left in the home was removed or changed
out, light fixtures were removed and replaced with others; the hot water
valve on the hot water tank was broken after we tested it; the refrigerator
portion of the refrigerator no longer works; cables were taken out of the
house; there was a self and holy water holder in the hallway upstairs.

This is completely unacceptable.  On Monday, redacted 2013, someone whom I did
not know, nor my parents', brought keys over to the property and would not
leave their name because individuals had been coming and going from my home.
If the family of Mr. redacted wanted items out of the home, I should have
been contacted to set up a time when I was on-site. This was unethical and
against the law.

 I do believe I paid for and purchased the home, all of the utilities and
homeowners insurance is in my name along with the responsibility. Now, my
family can identify this(these) individual(s).

 And, I will be seeking damages and restitution based upon the Pennsylvania
Code of Real Estate from both estate agents, Ms. redacted and Mr. redacted."

Friday, September 06, 2013

query: what does it mean "liens to be divested"

Usually when we talk about divesting liens, we are talking about foreclosure. Divesting can also take place in a judicial sale of real estate aka a free and clear tax sale.

What happens is that a court action is used to clean the title.  If proper procedure is followed certain types of liens can be cleaned from the record - or divested.

For instance, if a mortgage lender is in first lien position and they foreclosure, if they gave proper notice to a second mortgage lender, then  the second mortgage lien is divested through the foreclosure action.

Some types of lien are not typically divested such as municipal liens or property taxes.

query: what is an unsatisfied mortgage

When a mortgage lender receives payment in full that mortgage lender must file a document at the county courthouse to let the public know that the mortgage has been satisfied.  In PA mortgage lenders have 60 days to file this document.  It is not uncommon for mortgage lenders to fail to file the satisfaction document and so unsatisfied mortgages are a constant source of title insurance claims.

When a title search reveals an unsatisfied mortgage the first order of business is to determine whether or not the mortgage had in fact been paid in full.  If not, then someone must pay the balance before the mortgage lender will file the satisfaction document.

If the mortgage has been paid in full, there are options for moving the transaction forward.  The best option is to contact the mortgage lender and get them to file the satisfaction.  This may take time and if time is of the essence other options may be more appealing.  The title insurance agent who is in charge of the current transaction will decide whether or not they will accept a letter of indemnification from a previous title policy or perhaps they may accept a letter from the mortgage lender affirming that the loan is paid in full and that they are in the process of satisfying the mortgage.

There are some cases in which the mortgage lender cannot be located and there is no acceptable way to cover the unsatisfied mortgage with indemnification.  In these cases the owner of the property may need to hire an attorney and file an action to quiet title and remove the mortgage lien.

Thursday, September 05, 2013

Obamacare rude awakening for small business owners

Health Care Reform impacts ALL of your employees - even those who are part-time, seasonal, and currently not eligible for or purchasing benefits - as well as all of their family members. A key provision of the Affordable Care Act is the "Individual Mandate," which requires most individuals to purchase health insurance coverage or pay a penalty.  

On August 27, 2013, the IRS issued final regulations on the individual mandate. The rules clarify whether certain types of coverage are acceptable. 
The penalty for not obtaining health insurance coverage will be phased in over a three-year period, as follows:

2014: The penalty will start at $95 per person or up to 1 percent of income.
2015: The penalty will increase to $325 per person or up to 2 percent of income.
2016 and after: The penalty increases to $695 per person or up to 2.5 percent of income.
The penalty is calculated on a monthly basis and will be assessed for each month in which an individual goes without coverage!

The ChamberChoice Client Resource Center can help your employees and their family members understand the Individual Mandate. The health care arena is changing and all individuals have a responsibility to comply with new legislation or pay a penalty. Our representatives can help any individual sort through the confusion, understand their options and responsibilities, and find the solution to meet their specific needs.  

Please share the enclosed Health Care Reform bulletin with your employees and encourage them to call our CRC at 1-800-377-3539 to speak with one of our licensed representatives.

Wednesday, September 04, 2013

Richard wants to know if the seller has to pay taxes that the title agent failed to collect.


I would appreciate your thoughts on this situation:

Preliminary title report lists property taxes for the current year as due, supplemental taxes as payable.  But it doesn't show up in the HUD-1, so seller receives more than she would have if they were accurately reflected. Two months later, the title company tells the seller they have to reimburse the title company for the taxes they paid (the ones in the title report).  Would seem they made a mistake and while they may not be required to pay all the taxes, the seller shouldn't have to pay their fees, since as the title company's representative has indicated they "screwed the pooch".  

Your thoughts much appreciated.

Hi, Richard.  One of the documents required for title insurance is an owner/seller affidavit used to bind the seller legally in the event of just such an error.  Title insurance covers human error.  Some errors happen in the closing process because people are human and often rushed at the end of the process.  There are checks and balances in the system to help find and eliminate these types of errors.

The seller has personal knowledge of the property and thus should have noticed that the taxes were not collected on the HUD-1.  The affidavit is supposed to jiggle their memory.  When the seller signed that affidavit, the seller affirmed that all taxes are paid or are being paid on the HUD-1.  The affidavit is made for the purpose of inducing the title insurer to insure.

The seller should pay the taxes.  If the seller does not, the title insurer may litigate to recover damages.

It's a bit like having a store clerk give you the wrong change or a bank accidentally depositing money into your account and discovering the error later.  It's not your money and you can't keep it.  In this case, the seller was unjustly enriched. ;)