hey...give your lender a break!!!

Your lender gave you the money in exchange for your promise to repay it with interest.  Don't get mad when they get grumpy when you want them to modify terms without cause, okay?

I closed a transaction last week and the sellers were just fuming over their mortgage lender.  First the mortgage payoff letter included $1200 in interest.  What crooks!  I calmly explained that since the February mortgage payment hadn't yet been paid, the lender was collecting the interest owed for the month of January.

In case you didn't know, mortgage interest is paid in arrears.  That means you are always paying for the previous month so when you pay off a mortgage, you will always be playing catch up with the interest.  It's normal and should be expected.

Okay, so they weren't happy about that but they did understand.  Then they started really expressing anger that their mortgage lender wouldn't allow them to freeze their payments.  I couldn't quite understand what that meant.  Turns out that they thought it was completely acceptable to stop making mortgage payments once they decided to sell the property.

What?

Yes, when they decided to sell, they called their mortgage lender and asked for a freeze in the payment process.  Of course the lender said no.

Mind you there is no financial distress here, no subprime crapola, no default pending,  just a simple unrealistic expectation that their mortgage lender would go along with this plan.

The property being conveyed was an investment property with a positive cash flow.  I just couldn't get any clarity on why they thought their mortgage lender should take a vacation in the promise of repayment other than the news of mortgage modifications out there in the media.

I'll probably not see this kind of pretzel logic again...

Irish Blessing

May the road rise to meet you
May the wind be always at your back
May the sun shine warm upon your face
and rains fall soft upon your fields
and until we meet again
may God hold you in the hollow of his hand

query: difference between effective date and issued date on the title commitment

The title searcher (abstractor) will note a cover date on the title search.  This is the date through which the courthouse records are up to date in their system.  The abstractor can not go further in time than the records allow.  The cover date would be the effective date of the title commitment.  The date of issuance would be the date the commitment is issued by the agent.

For example, I may be examining a title search (abstract) today, March 11th, with a cover date of March 3rd. My effective date of the title commitment is March 3rd even though I am issuing the commitment today.

query: who is responsible for sending out the title insurance policy to the buyer

The issuing title agent, attorney or title underwriter is responsible for sending policies to the lender and the buyer. You should have a copy of the title insurance commitment in your hands before you close. Whoever issued the commitment, will issue the policy. Sixty days is a reasonable period to wait after closing without getting worried. After sixty days, make inquiries.

Some attorneys and title agents have bad habits. Some never issue policies. What crooks!

BTW - If you are trying to determine whether the title insurer you are working with is a good guy or a bad guy, ask about the title commitment and when you will receive a copy. The answer to that question is very revealing. It will separate the knowledgeable and dependable from those who are neither.