Friday, March 30, 2007

query: do I need to reissue a new title policy for a refinance no cash out

Yes, probably.

Most mortgage lenders require a loan title policy. The loan policy is tied to one mortgage and doesn't transfer to a new mortgage. So, when you are paying off one mortgage to get another, the new mortgage will get its own loan policy. The old policy dies with the payoff.

There are very few mortgage lenders, if any, who will do a modification. These are lenders who do not sell their mortgages. Yes, it's rare, but there are still some mortgage lenders who loan for their own portfolio. In the case of a modification, the old loan policy can stay in place and a modification endorsement is used to extend coverage to the modified lien. There are costs involved but usually less than a total refinance.

Now, getting back to reality, most borrowers are closing a full refinance, with or without cash back. Talk to more than one title insurance agent to explore discounted rates. Don't rely upon your mortgage lender. They may not understand the available discounts. Shop around.

In Pennsylvania, we have a few levels of reduced premiums depending on the length of time since your last mortgage closed.

Thursday, March 29, 2007

Wise words from First American Title on good funds.

Wise words for the English comprehension deprived title agents who don't understand the simple phrase "goods funds required".

FATIC has thoughtfully expanded their explanation in an agency bulletin that says:

"DO NOT DISBURSE ANY FUNDS IN ANY TRANSACTION UNLESS YOU HAVE GOOD FUNDS IN YOUR ACCOUNT. Not even just this once. Not even for your best customer. Not even if the realtor, mortgage broker, next door neighbor, or borrower's brother's wife's father would like his check yesterday! NOT WITHOUT GOOD FUNDS!

Good funds means that you have confirmed with your bank that a wire has been transferred into your account and that the wire cannot be recalled, or that you have received a cashier's or certified check. Good funds does NOT mean that you have received a funding number from the lender. Good funds does NOT mean that the lender told you the money was wired, even with a Federal Reserve reference number."

Good job, FATIC.

In fact, the message is so clear I'm posting it on Radical Title Talk and Active Rain.

Wednesday, March 28, 2007

query: title endorsements how to show on HUD-1

Good question. I like to disclose the endorsements on the next separate line beneath the title premium line of the HUD. Here's a typical endorsement disclosure on my HUDs.

Loan Policy Endorsements 710 & 900 (short form policy 100 & 300 included) $200.00

FYI - In Pennsylvania our ALTA endorsements have different numbers.

Note that the endorsements are for the benefit of the lender, not the owner.

The 710 is an adjustable rate endorsement and the 900 is the environmental lien endorsement.

A short form or instant loan policy when issued in PA includes in the body, the restrictive covenant and survey endorsements.

If I had endorsements being issued for the benefit of the owner, I would list them on a separate line to distinquish them from the lender's endorsements.

That's how I do it. Hope that helps.

incidental boundary line change requires title search

You're not going to believe this but I had TWO of these cases to examine today. How weird is that? Both cases were virtually the same.

First let me explain an incidental boundary change. A boundary change is a minor subdivision in which adjoining property owners agree to exchange portions of their land.

How do you do it? Hire an attorney who specializes in real estate. The attorney will:
  1. run a title search on each property to confirm ownership and verify lien status
  2. hire a surveyor to measure and map the parcels for exchange
  3. obtain required municipal or county approvals, if any, for the subdivision
  4. obtain releases from mortgage lenders, if any, for the parcels to be conveyed
  5. file deed(s), subdivision, and releases, if any
That's not too tough, right? So what's the problem? Unreleased mortgages on both cases.

In the first case, we had issued title insurance in 2004 and were surprised to find a boundary change on record. Our previous customers, now the sellers, had negotiated the subdivision after they purchased the property. The new buyer now has to pay for an additiional chain search [probably $150] and the seller will have to pay for release prep and recording [probably $130]. I'm hoping they aren't in a big hurry because the neighbor and their mortgage lender might not move quickly. Fingers crossed.

In the second case, the new parcel was given a separate tax map number so we knew to search it. The buyer will still pay for an additional chain search [I have the invoice already. It's $100.] and the transaction is being delayed while we contact the neighbor, find their lender, and go through the logistics of getting a release. The seller will, of course, have to pay for release prep and recording.

Some lenders want an appraisal before they will issue a release. In both cases, the sellers may have to pay for appraisals and the transactions will be on hold while they are processed.

See how important it is to get good professional advice?

I still think it's strange to see two deals like this in one day but maybe someone out there needs incidental boundary change help and a little angel wanted to make sure I posted it. Who knows? ;)

Tuesday, March 27, 2007


I picked this up in a Google Alert:


DEAR BOB: We had a very bad experience with our owner's title insurance policy. Several months after we bought our home it was discovered we did not have clear title. The title company admitted they made a mistake and offered to pay a percent of the insurance claim. They wanted to go to arbitration. The arbitrator ruled we suffered no loss because the property went up in market value after our purchase. We were ordered to pay the title insurance company more than $8,000. It seems the arbitrator was clearly on the title insurer's side. Do we have any recourse? --Neal C.

DEAR NEAL: Your situation shows the pitfalls of agreeing to arbitration because there is no right of court appeal from an arbitrator's decision. In the future, if you foolishly agree to arbitration (perhaps involving a small amount), please remember the arbitrator probably works for your opponent frequently and is likely not to rule in your favor.
Contact the state insurance commissioner to file a complaint against that no-good title insurer who failed to pay a legitimate claim without hassle. After you bought your owner's title insurance policy, you should never have to pay a dollar to protect your property title rights.

Guess what? The new 2006 ALTA owner policy has this arbitration language built right in.

a. If permitted in the state where the Land is located. You or We may demand arbitration.
b. The arbitration shall be binding o both You and Us. The arbitration shall decide any matter in dispute between You and Us.
c. The arbitration award may be entered as a judgment in the proper court.
d. The arbitration shall be under the Title Insurance Arbitration rules of the American Arbitration Association. You may choose current Rules or Rules in existence on Policy Date.
e. The law used in the arbitration is the law of the place where the Land is located.
f. You can get a copy of the Rules from Us.

I'd be very interested in the facts of Neal's case. Since arbitration is agreed to by consumer where allowed, simply by purchasing the owner policy, it's an issue that bears some looking into. I'm a title agent and I know there are often matters not covered that the consumer doesn't understand. At the same time, I know there are title insurers who are less than ethical.

Neal, if you're out there reading this, please contact me. Thanks!

Sunday, March 25, 2007

query: what states do abstractors need to be licensed in

No license is required in Pennsylvania, that's for sure. I'm unware of any state requiring a license to abstract. Are you? I'd like to know, so please send a comment our way.

The title insurer is responsible to the consumer for the work of the abstractor. Title insurers can and should use care when selecting an abstractor because the abstract provides the raw data used in examination. It's key to a safe transaction.

Besides having E & O coverage, I prefer an abstractor with 10 or more years experience and someone who "gets it", meaning understands quality and reliability.

I could use cheaper abstractors if I didn't care about quality, but crappy standards are an anathema to me.

query: unsatisfied construction lien found by a title examiner

Is this a mechanics lien? Mechanics liens are tricky and title insurance may or may not cover the lien. A good title examiner will report the lien and the title underwriter will analyze the situation and decide if the lien is valid. If so, the owner of the property must clear title.

About two years ago we processed a refinance transaction and found a mechanics lien. The borrowers had failed to pay a contractor for work on the property and he filed a lien. The lien was valid and to issue a loan policy for the new lender, we had to deal with it.

The borrowers said they were negotiating with the contractor and asked for an alternative. We offered to insure the lender provided the borrowers put money into an escrow account pending resolution.

A title agent setting up escrow is taking a risk. They must escrow more than enough money to pay the lien. They must escrow sufficent funds to pay for interest, maybe an attorney, or whatever it might take to resolve the matter should the escrowees fail to perform.

We escrowed twice the amount of the lien and gave the borrowers one year to settle and have the lien satisfied. The escrow agreement is detailed, in writing, and irrevocable. The agreement also has an "out" clause. The "out" clause tells us what to do with the money at the end of the escrow period.

In this case, the year ended without resolution. We contacted the contractor, obtained a payoff letter and his agreement to satisfy the lien upon receipt of funds. We cut him a check and refunded the balance to the escrowees, the homeowners.

They were not happy with the amount we paid the contractor, but had failed to resolve the matter themselves.

I guess, the moral of the story is, when you are having work done on your home or building a new house, be sure to pay your contractors and realize that in most jurisdictions, they have the power to lien the property. That's serious leverage.

query: title insurance indemnification fraudulent transfer

Indemnification is compensation for loss or damage. Losses due to fraudulent transfers are covered by title insurance unless, of course, the insured had knowledge of, or participated in the fraud.

query: title insurance policy issue within 6 months

In Pennsylvania, a title insurance commitment is only good for six months so if the insurer has not converted the commitment into a policy, the title must be re-examined and another title commitment issued.

Now, why might the issuance of a policy be delayed?

Well, you can purposefully delay the issuance of a policy.

I've had consumers purchase land with cash, obtain a title commitment and delay the issuance of their owner policy until they obtain construction financing. The owner policy could be issued at the same time as the loan policy. In Pennsylvania our title premium includes both policies so in some cases, the consumer may save money. Two important points in this kind of transaction. First, by closing two transactions separately, you are incurring some double fees; and by delaying the issuance of the owner policy, you would have no coverage or protection until the policy is issued.

The issuance of a title policy may also be delayed by the negligence of a title agent. Be a diligent consumer. Monitor the receipt of your title policy. If you have not received a policy within 60 days of closing, contact your title agent for an explanation. If you are getting no reasonable explanation and haven't resolved the policy issue within 90 days, I suggest you contact your state insurance department. Most, if not all states, have a consumer complaint portal on their web site. It's an easy way to communicate and file a complaint.

Remember, a title commitment is not a policy and there is no insurance protection in place until the policy is issued. In a previous post, "mortgage loans not paid off", you can see how a bad attorney/title agent not only stole the mortgage payoff money and also failed to issue the title policies, further compounding the damage by theft.

It's a shame consumers have to help police their title transaction. The title insurance companies could so easily police agents themselves, but for some crazy reason, some don't.

Title insurance companies audit their agents. When they find an agent who habitually refuses or simply can't reconcile their escrow account and/or habitually refuses to issue policies in a timely fashion, you would think they would rescind their license or at least put them on some kind of remedial probation until they get their act together. It seems to me this would be of paramount importance to protect the public and the title company itself. Doesn't it seem logical to you? Well, some title insurance underwriters are using pretzel logic and they refuse to police their own actions, let alone the actions of their agents.

I have yet to hear any good reason for such systemic negligence. I can only account for it by presuming some are so hungry for volume that they forego responsible management in favor of the "let's not get caught" philosophy.

The good news is that regulators are starting to understand what is really happening and many states are re-writing their title insurance laws and regulations to raise the standards. If you are concerned, please drop a note to your legislator.

I'm here to help you. Title insurance is a valuable and necessary product. There are honest title agents and title company underwriters out there ready to help you.

When you are shopping, make sure you get a quote in writing and ask them when and how you will receive a title insurance commitment for review prior to closing. If you get any flack over either of these two issues, MOVE ON, and find a reputable title agent.

Wednesday, March 21, 2007

query: not telling the lender that you pay child support will they find it on the preliminary title report

Can you spell fraud? FRAUD, yes that's what you are committing when you fail to disclose a child support obligation to your mortgage lender. And, yes, they just might find it on the preliminary title report.

In Pennsylvania, we check the child support web site for every buyer and seller in a purchase transaction, and every borrower in a refinance transaction.

query: refuse to pay title insurance

Well, if you are paying cash for the property, that's an option, but I would advise against it.

Most mortgage lenders will require a loan policy and they expect you to pay for it.

In Pennsylvania, we are required to issue an owner policy in a purchase transaction unless you affirmatively say you do not want it. We are expected to assume that you DO want an owner title policy. Want to know why?

Because a whole heck of a lot of title insurance agents assumed consumers did NOT want an owner policy and those consumers who paid for a loan policy thought they were covered. Big surprise when they went to make a claim.

If you tell us you do NOT want an owner policy, there is a state mandated waiver form you MUST sign which acknowledges that you have ABSOLUTELY NO PROTECTION.

Tuesday, March 20, 2007

query: why should the seller have title insurance

DW - Please contact the seller and see if they have an owner policy. DC

That's a note a put in a file today when I examined title for a buyer. Why? Because I found a problem, actually two problems. One problem we will resolve prior to closing. The other problem is more tricky and I would like to request indemnification from the seller's title company.

Here's what I found. My seller purchased the property in 2005 from a credit union. The credit union had acquired title by deed in lieu of foreclosure a couple of months earlier.

My problems were two unsatisfied mortgages.

The most recent was the mortgage held by the credit union. They had started and never completed a foreclosure action. A "deed in lieu" does not divest the mortgage like a foreclosure action would, so we'll ask the credit union to satisfy their mortgage. That won't be too difficult as the credit union is still in operation and local.

The other mortgage is a slightly older mortgage -2000 - to a big consumer discount company. The company has been merged into another super large consumer discount company from whom it is notoriously tough to get a satisfaction. It is this problem I am hoping to resolve through the seller's owner title policy.

If the seller does not have title insurance, the closing will have to be delayed or we may be able to escrow a giant chunk of the seller's proceeds while they pursue a satisfaction.

THAT is why a seller should have title insurance. The key, though is to get the insurance when you are buying the property so that someday when you are a seller, you have protection.

Remember, title problems not discovered before you purchase real estate are most often found during the next examination, at the point of sale.

query: title insurance affirmative coverage oil & gas

A typical residential title search is not adequate when you are interested in minerals, oil, and gas. You should notify your title insurer up-front that you want affirmative coverage. They may not have the ability to handle your needs. Look for an attorney or title company who specializes in mineral rights. Affirmative coverage is available once the rights are established. Expect to pay more for the search and for the coverage.

Monday, March 19, 2007

drive by purchase

"When they saw that I had researched that and paid the liens it built a trust and through our discussions they decided to bypass the costly title insurance and then I also persuaded them to bypass the attorney to draw up the deed and in doing so we both saved quite a bit of money."

Let's hope this story has a happy ending. I doubt it. These buyer bought a pig in a poke as far as I am concerned.

The last time I met buyers who gave a seller all their trust and $100,000, we all ended up in court about a year later.

Be smart. Don't trust. Buy title insurance.

Sunday, March 18, 2007

National Insurance Act

Gotta take some time here and read this.

You know, when you have an industry refusing to police itself, draconian measures are often deemed necessary.

ALTA, MBA, NAMB, NAR have proven themselves untrustworthy in their testimony before lawmakers, state and federal. Under the illusion of leadership they perform the same ole dog and pony show while their members rape and pillage the citizens of these United States.

Isn't it time lawmakers and regulators open their eyes and see that the establishment in the real estate industry doesn't give a doodooda about the consumer.

Left to their own devices these folks are all about paying fines and hoping they don't get caught. That is NOT responsible leadership.

For the greater good, let's look for new options, new ways of structuring the business of real property transfer.

The NASD has a good model. Standardize expectations and put a compliance officer into every licensed office. Create an army of people fully trained and vetted, unbeholden to those they supervise and with the power and authority to force compliance every day.

hmmmm...compliance storm troopers......I've got a great pair of boots....and a crop........

query: commitment for title insurance not issued

If you have ordered an owner policy, you have a right to review the title insurance commitment prior to closing.

I recommend that you not close unless you do review the commitment.

If your title insurer refuses to provide the commitment upon request, fire them and find an honest title insurer.

Bear in mind that the title insurer cannot produce the commitment until the title has been examined. If you have a rush transaction and have scheduled your closing before the commitment has been issued, then I suggest for your own safety that you slow down, take a breath and wait for the commitment.

query: mortgagee title policy vs. owner title policy

Actually, it's called a loan policy, but that's ok. I'll bet you are a lender because most people don't know the word mortgagee. ;) Anyway.....

The loan policy insures the lender only. That's the biggest difference.

Homebuyers who pay for a loan policy are receiving absolutely no protection at all.

Lenders are smart. They won't loan money without title insurance protection. How did they get so smart? They got burned many times over with title problems. Lenders have learned the value of title insurance.

That doesn't mean that your loan officer has learned the value of title insurance. In fact, your loan officer might not understand title insurance at all. I am saying that lenders - the people at the highest level, who set the underwriting guidelines and assess risk, understand the importance of title insurance. That's why you have to buy it.

Some people might make the incorrect assumption that a loan policy issued = good title search = they don't have to buy an owner policy. BAD MOVE.

Title insurers may not use the same search criteria or decision making method when they are only issuing a loan policy. WHY?

It's a numbers game. Title insurers know that the lender will only be making a claim IF the mortgage goes into foreclosure and IF there is a title problem. They aren't as strict when they review title because they are making a bet. What are the odds that you will go into foreclosure AND have a title problem.

Now, with an owner policy, the title insurer really has risk. You are covered from day one and your coverage even survives the sale of the property. The odds are considerably greater that you will make a claim so they will do a much more thorough search and title correction prior to issuance.

Buy an owner policy. It's money well spent. Don't stop there, though, because owner title insurance is not enough.

query: what does TIRBOP stand for

TIRBOP is the Title Insurance Rating Bureau of Pennsylvania. Here's an excerpt from their manual.

BTW, a revised manual has been issued effective 4-1-07. I will begin posting the changes this week. The revisions, I believe, are mainly references to the new ALTA 2006 policies which become mandatory in Pennsylvania for title commitments issued on or after 4-1-07.


Monday, March 12, 2007

query: owe title search fees reimbursement buyer refinance

I'm not real sure about the buyer and refinance connection. If you are being asked to reimburse the cost of a search, expect to also cover lien letter costs. These fees vary so much geographically it's hard to quote a range here. In our market, search costs for one chain run $100 to $150 roughly. Lien letters can run anywhere from $5 to $250. Lien letters in most of our market would run less than $50.

query: approved attorney fee share of the fees in Pennsylvania for title insurance

See TIRBOP Manual 5.0 Methods of Operation, C. "The charge for search, examination of title and the settlement by the Approved Attorney is not governed by this Manual."

The issuing title agent must follow TIRBOP guidelines. They will issue an invoice with fees you will itemize on the HUD-1 and show payable to the agency. You may charge anything else you please for search, examination and settlement.

TIRBOP Policies and Rates


A. "Company or Agent Procedure". Under this procedure, the Insurer or Agent examines title and handles settlement and issues a Commitment and/or policy. The Charges for policies issued under this procedure are set forth in Section 5.50 of this Manual.

B. "Approved Attorney Procedure". Under this procedure, the Approved Attorney certifies the title to the Insurer or Agent on a preliminary report of title based upon the Approved Attorney's examination of title. "Examination" for purposes of this section is the process of abstracting or searching or causing an abstract or search to be made of the appropriate public records for those matters affecting title to a specific parcel of land, examining the results thereof, and reporting such results and conclusions to the Insurer or its Agent in a preliminary report of title. The Insurer or its Agent, in reliance upon such report, may issue a Commitment and the Approved Attorney may conduct a settlement or closing based upon such report and Commitment. Subsequently, the title insurance policy shall be issued by the Insurer or Agent based upon the Approved Attorney's final certificate of title. In certain cases an Approved Attorney may submit only a final certificate of title to the Insurer or Agent, and based upon such certificate the Insurer or Agent may issue the title insurance policy. The Charge by Insurer for policies issued under this procedure are set forth in Section 5.51 of this Manual.

C. The charge for the search, examination of title and the settlement by the Approved Attorney is not governed by this Manual.

Sunday, March 11, 2007

query: judgment liens place on wrong property

Well, I'll have to limit my comment to Pennsylvania because I don't know if this applies where you are. Judgments, unless they are tied to an equity action, are personal and may attach to all property. Those tied to an equity action are property specific.

query: what does permitted exception mean

I'll take a stab that the permitted part is lender based.

A title policy can include any exception that is relevant. Whether or not it's permitted would be the determined by the insured, either the lender or the homeowner.

For instance, a mortgage lender may prohibit exceptions for restrictive covenant violations, but permit exceptions for oil and gas leases. I know that might seem confusing, but for a question like this, you really need the person giving permission to define which exceptions they will allow.

Am I warm? If not, let me know and I'll take another stab at it. ;)

query: title examiner pay

There are two functions, abstract and examination, and they vary according to the custom of your area. Here in Pennsylvania, the abstractor is typically paid $100 to $150. The cost to the consumer of abstract and examination is included in the title insurance premium.

query: typical time to provide title insurance

Once a transaction is closed, the title insurance may be issued. Most title agents wait until the recorded documents come back from the Recorder's office. I would wait 60 days following closing, then call to check the status of your policy.

TIRBOP Supplemental Charges


If application is canceled after the Commitment is issued under Company or Agent Procedure, a minimum Charge of $100.00 is to be made for such cancellation.


All escrows and escrow services shall be the subject of a written agreement when the Insurer or its Agent holds funds from a settlement or closing for disbursement at some later date. A minimum service Charge of $25.00 shall be made for the first 6 months and a minimum Charge of $25.00 shall be made for each year beyond the initial 6 month period for which the funds are held.


When under the Approved Attorney Procedure an Insurer issues a Commitment, the Charge for same shall be a minimum of $25.00. The Charge may be applied as a credit toward the applicable rate for title insurance.


Search and examination services are included in the basic and reissue rates for policies issued under the Company or Agent Procedure. Additional Searches and Certifications may be required in a particular closing. If so, they must comply with the following rules:

(a) The actual fee charged the appropriate party will not exceed the charge made by the issuing government agency for the Searches and Certifications shown below. When a HUD-1 Settlement Statement is used, these charges must be reported in the 1300 Section.

(1) Real Estate Tax Searches and/or Certifications.
(2) Water and Sewer Searches and/or Certifications.
(3) Municipal Lien Searches and/or Certifications.
(4) Domestic Relations and Support Lien Searches and/or Certifications.

(b) The actual costs of obtaining certain other Searches and Certifications shown below may be passed on to an Interested Party.

(1) Corporate Lien Searches.
(2) Corporate Good Standing Certificates.
(3) Uniform Commercial code Searches.
(4) Condominium, Cooperative and Planned Community Certifications.


This letter, which is limited to a specific transaction, when requested provides a Lender with certain protection against fraud, misapplication of funds or failure to follow written closing instructions by the Agent or Approved Attorney, subject to the provisions contained herein. The Charge for the issuance of this letter shall be $35.00, and it shall be remitted in its entirety to the Insurer (which for purposes of this Section does not include Agent or Approved Attorney). (See Supplemental Form Closing Service Letter - TIRBOP PA CSL (10/01/00).)

TIRBOP General rules, continued...

2.9 A written notice must be provided to every purchaser of a title insurance policy at or prior to closing, which shall be signed by or on behalf of the purchaser of the title insurance policy, and shall include language substantially in the following form:


query: title insurance versus legal opinion states

Both are available in every state. I recommend you purchase an owner policy no matter where you are. Most mortgage lenders will require a loan policy no matter where the property is located.

Here's my post comparing the two:

title search vs. attorney title opinion vs. owner title insurance

query: lender tax cert. liability Pennsylvania

I confess I'm having trouble with the exact issue but let me take a stab....

We have a crappy system in Pennsylvania for collecting taxes, both current year and delinquent years. It's pretty darn hard to verify what's been paid and who collects it. The really crappy thing is that even when you find the correct tax collecting authority, they won't back their certifications.

So, when the tax certification contains errors, the homeowner must pay.

If the error is covered by title insurance, the insured is covered and the title insurer may go after the previous owner for the tax.

Each case is decided based on the facts of the case.

Not sure if that helps, but I hope so.

query: should I buy title insurance new construction?

Yes. You should always buy title insurance when you buy real estate.

Ask about mechanics liens and whether or not they are covered by title insurance in your market.

query: subprime problems affect title companies

You betcha. Title insurance underwriters and agents who made a market serving the subprime lenders will most definitely be affected. The loss of volume alone will be tough but look for the more interesting development. Watch to see who get taken out for fraud. Much of the subprime collapse is linked to fraudulent transactions. As the FBI unravels the subprime fraud tapestry look for title insurers who colluded and enabled fraud to get nailed right along with consumers and lenders.

One of the primary functions of a professional, honest title insurer and closer is the guardianship of fidelity. This function has been devalued over recent years much to the detriment of the real estate world. I look for and am hoping for a resurgence in quality.

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.

query: title insurance underwriting mortgage foreclosure

Got to guess this is an examiner looking for tips. Here's one. Make sure you carefully look at evidence of service. Make sure all possible liens and interests were divested.

One pretty serious misstep is service to the federal government. Some folks disagree, but the federal government may choose to ignore any action that does not list them as the defendant in the suit. That's the only surefire way to give good service to the feds.

query: how to compare good faith estimates

I have two posts which should help:

compare interest rates and "good faith estimates"

real life title insurance cost comparison

query: skipping four mortgage payments at closing

hmmmmm........I'm guessing you are talking about a refinance transaction.

Depending on the timing of your closing, you may have a breather from payments but you're not really skipping any. Here's an example:

You have an existing mortgage with a payment due date of the 1st of April. The grace period is 15 days.

You schedule your refinance closing for the 10th of April. Even with the rescission period, the payoff will reach your mortgage lender before the end of the grace period so you don't make April's payment.

Your new lender collects interest from the disbursement date through the end of April and sets up your first payment due date on June 1st. You don't make a mortgage payment for either April or May.

In both cases, you are paying interest to each mortgage lender for everyday you are using their money, but those funds are being reconciled through the payoff and closing.

It's important to know that most mortgages have interest paid in arrears. That means the June payment for the new mortgage is actually paying interest for the month of May.

I hope this answer is somewhere near the basis of your query. It only covers two payments in the "skip" scenario and I confess I can't account for the four skip theory.

query: does title insurance cover adverse possession?

The question isn't entirely clear, are we surprised because you didn't know I would try to answer it!

Two comments:

If you are hoping your title insurance will help you make a claim of adverse possession, I would say no.

If you are being threatened by an adverse possession claim by another person against your property, contact your title insurance company immediately. Make your inquiry in writing and include a copy of any letters you have received. Expect to get a prompt response. You may wish to call and make certain are you sending the claim to the correct location. If you want me to help, I'll need the name of the title company from your policy and the location of the property. I can direct you to the office of the underwriter in your area.

Search engine queries will be answered...

I use to gage traffic to my blogs. I can see the words used for search engine queries driving readers to the blogs. I just had a "DUH" moment. I promise to start specifically answering your query. Why not? If I know the answer, I will post your query exactly as entered into the search engine so you can find it again. I will comment and hopefully offer assistance. I have to presume if you are asking the question, other people are, too. BTW, I don't actually know who you are, so don't freak out. LOL I can see the path, the URL of your last position before you hit this site. OK?

TIRBOP General rules, continued...

2.8 Sections 5.3, 5.4 and 5.6 of this Manual provide that reduced rates are applicable when evidence of previous insurance is provided within a specified period of time. As evidence of previous insurance, an Insurer shall rely upon:

(a) the recording (within the period of time specified within the applicable Section of the Manual) of either:

(1) a deed to a bona fide purchaser for value, or
(2) an unsatisfied mortgage to an institutional lender; or in the alternative,

(b) any of the following documents produced by or on behalf of the purchaser of the title insurance policy:

(1) a copy of the prior policy;
(2) a copy of the marked-up commitment;
(3) a settlement sheet showing payment of a title insurance premium; or
(4) other written evidence acceptable to the Insurer that title insurance coverage was purchased for the property.

[This section is really important and you should read it again if you are buying title insurance. The title insurer is required to use evidence found in the title to give you a reduced rate. The title insurer may only ask you for documentation if the title report itself does not produce relevant recording data to support a reduced rate.]

Friday, March 09, 2007

TIRBOP General rules, continued...

2.5 Insurer may withhold delivery of the policy of title insurance and have no liability until all applicable Charges, set forth in this Manual, have been paid in full and all conditions of the Insurer's Commitment satisfied.

2.6 All Charges made pursuant to this Manual must be paid at the time of closing, unless otherwise agreed to by Insurer or as otherwise set forth in this Manual.

2.7 No policy, endorsement or other coverage may be issued which varies the terms, conditions, stipulations or exclusions of a policy unless first approved by the Department. Approved policies and endorsements are for use by members and subscribers of TIRBOP as set forth in Sections 8 and 9 of the Manual.

2.8 Sections 5.3, 5.4 and 5.6 of the Manual provide that reduced rates are applicable when evidence of previous....... wait this is a really important section of the Manual, so I'll put it into its own post so we can chat about it.

Thursday, March 08, 2007

TIRBOP General rules, continued...

2.2 Insurer, upon notification to its applicant, may decline to search, examine, issue its Commitment or insure any title, or to issue any endorsement to a policy. Insurer may, at any time, in its sole discretion, refuse an application or cancel any unclosed application of the applicant, without liability on the part of the Insurer.

2.3 Insurer may impose additional Charges in especially difficult title matters. Insurer may impose additional Charges for examination of title which may involve multiple chains of title, land under water, coal, oil, gas or mineral searches, railroad property searches, land in beds of streets, right-of-way, driveways, foreclosures, tax sales, proceedings under federal bankruptcy or state insolvency related statutes, or which involve other unusual difficulties or unusual expenditures. There shall be a reasonable relationship between the services performed, expenses incurred and the amount charged by the Insurer or Agent.

These Charges will be filed with the Department each quarter by Insurer. Agents are responsible for the filing of this information with Insurer for inclusion in Insurer's quarterly report which will report on Charges collected both by Insurer and by the Agent under this Section of the Manual.

2.4 Nothing herein shall prohibit Insurer from charging an additional special fee for affirmative risk coverage(s) not contained in this Manual. These fees will be filed with the Department each quarter by Insurer. Agents are responsible for the filing of this information with Insurer for inclusion in the Insurer's quarterly report which will report on Charges collected both by Insurer and the Agent under this Section.

[I know this section is a little ho-hum, here's one item you'll see every once in a while. Note the ability to charge extra for multiple chains. A title examiner usually doesn't know there are multiple chains until the search has started. The typical premium quote is for one chain. If your property has more than one chain, there may be more work involved in the search. That extra search cost can be passed on to you.]

Wednesday, March 07, 2007

TIRBOP General rules

2.1 All Charges for title insurance coverage provided by the approved policies and endorsements must be made as set forth in this Manual.

The Charge(s) set forth in this Manual include transmittal of documents and/or funds by first class U.S. Mail, transfer of funds by the issuance of checks, the delivery of documents and checks for recording, and the delivery of documents and checks to the lender, purchaser, creditor and/or other person with an interest in the insured transaction (collectively "Interested Party") by first class U.S. Mail and other means chosen by the Insurer or Agent.

The Charge(s) set forth in this Manual do not include the following:

  • document preparation, other than the commitment, closing statement and title insurance policy with endorsements;
  • government charges for recording documents;
  • overnight delivery requested by an Interested Party;
  • bank wire transfer of funds requested by an Interested Party; or
  • receipt and printing of documents (other than the commitment, closing statement and title insurance policy with endorsements) transmitted electronically by an Interested Party.

Tuesday, March 06, 2007

an interesting refinance tale

A few weeks ago I received a call from a former customer seeking a quote for a refinance. She said her lender wanted her to use their affiliated title agency but since she was happy with our service and price, she preferred to use our office.

That's not so unusual, but there ARE two unusual things that happened and I decided to take a break from the TIRBOP manual typing to share them here.

1. The lender inadvertently ordered title from the affiliated agency anyway. Though they did NOT attempt to charge the borrower for the extra title work, they faxed us a copy of the title commitment and invoice. We didn't need it, but I took a look at it anyway. I was shocked because the affiliated agency was overcharging for the loan policy.

The transaction was clearly, without question, eligible for the 70% Mortgage Loan Rate and the affiliated agency had invoiced a Reissue Rate. That's a difference of $366. These are regulated rates and the title commitment was definitely issued under the agency system so the 70% Mortgage Loan Rate was mandatory.

Aren't you glad you have an opportunity here to read the TIRBOP manual? You are going to learn how these rates work so you'll be an informed consumer.

2. Because the lender inadvertently ordered title from the affiliated agency, their loan document delivery folks screwed up and e-mailed the 1st mortgage documents to the affiliated agency. The closing was delayed.

When we received the documents, the lender chose to NOT amend the dates and asked us to amend the right of rescission form. We used white out, made a new copy to create an original with corrected dates and proceeded to close. The lender rejected the right of rescission forms even though there was no white out on the form.

They wanted new forms printed though again they did not amend the dates. They wanted us to draw a line through the old date and handwrite the new date. The dates were to be revised so that the borrower had to go through another rescission period before disbursement. I argued unsuccessfully that though the lender might prefer the strike through method, it was not a regulatory requirement, the borrower had received sufficient notice of their right to cancel, and each day of delay in the disbursement was costing the borrower $21 in extra interest on their existing mortgage.

The newly revised document was signed and the lender representative instructed us to fax it to him, then send the original via regular mail. We did so.

The transaction was set to disburse today. Our post closing manager argued all day with the lender's funding department over the right of rescission form. The funder wanted the original, not a fax. By the time the funder conceded and decided to wire funds, we had lost yet another day and the borrower lost another $21. All in all the extra days of interest paid by the borrower on the existing mortgage loan payoff, if I am counting the days correctly, came to $126.


Monday, March 05, 2007

TIRBOP Definitions

“Insured” is the party to whom coverage is extended by the terms of the policy. “Insurer” is a title insurance company which is a member or subscriber of the Title Insurance Rating Bureau of Pennsylvania. Unless otherwise indicated, “Insurer” includes all who are expressly authorized to act on behalf of the Insurer, including its employees and Agents.

Agent” is a person, firm, association, corporation, partnership, cooperative or joint stock company expressly authorized by written contract with an Insurer to solicit risks, collect fees, and prepare Commitments and/or title insurance policies on its behalf and certified by the Insurance Department of the Commonwealth of Pennsylvania (“Department”).

“Approved Attorney” is an attorney admitted to practice in Pennsylvania who because of experience and knowledge of real estate law in Pennsylvania is approved by an Insurer and upon whose examination of title and report the Insurer or Agent may issue a policy of title insurance. Such Approved Attorney must take financial responsibility for the search, examination, closing, and the final certification of title to the Insurer or Agent in a real estate transaction. Such Approved Attorney may not also act as an employee of an Insurer, an Agent, or an employee or affiliate of an Agent in a transaction in which he or she acts as an Approved Attorney.

“Commitment”, as used herein, is the agreement of an Insurer to issue its policy or policies of title insurance to a proposed Insured, as owner or mortgagee of an estate or interest in the land described therein, all subject to the provisions set forth in the Schedules and Conditions and Stipulations of said Commitment. The Commitment sets forth the requirements including payment of premium and Charges, that must be complied with prior to the issuance of the policy or policies.

“Charge(s)” used herein means “fee” as defined in Section 701 of The Insurance Company Law of 1921 and includes “premium, examination and settlement or closing fee and every other Charge” provided for in this Manual made by an Insurer, Agent or by Approved Attorney

Pennsylvania Title Rate Manual TIRBOP

I decided sharing portions of the TIRBOP manual might help consumers understand title insurance in Pennsylvania. I decided to actually type the material because I find typing relaxing AND it's a good refresher. Since I'm typing, I'll leave out parts that I think aren't really necessary and are hard to type, like the table of contents which looks like a real killer. LOL.......okay, here goes.....



150 Strafford Avenue, Suite 215, P. O. Box 395, Wayne, PA 19087-0395

[Portions of the TIRBOP manual are reproduced here for informational purposes only for use by visitors to the website and its related Blog, Title Insurance Talk. We are sharing the material to help consumers understand regulated products and rates.]



This manual sets forth the definitions, general rules, rating systems, coverages, schedule of rates and Charges, and approved policy forms, endorsements and other forms for use by members of and subscribers to the Title Insurance Rating Bureau of Pennsylvania (“TIRBOP”).

TIRBOP is licensed by the Pennsylvania Insurance Department pursuant to Section 741 of The Insurance Company Law of 1921, Act of May 17, 1921, P.L. 682, 40 P.S. 910-41 (“The Insurance Company Law of 1921”).

This Manual and its content have been filed with and approved by the Pennsylvania Insurance Department in accordance with The Insurance Company Law of 1921. The provisions of this Manual are binding upon all members and subscribers of TIRBOP and their agents and must be used on and after the effective date hereof unless a specific deviation from this Manual has been filed by an individual member or subscriber company with, and approved by, the Pennsylvania Insurance Department.


American Guaranty Title Insurance Company

Censtar Title Insurance Company

Chicago Title Insurance Company

Commerce Title Insurance Company

Commonwealth Land Title Insurance Company

Commonwealth Land Title Insurance Company of New Jersey

Fidelity National Title Insurance Company

First American Title Insurance Company

Guarantee Title and Trust Company

Guardian National Title Insurance Company

Investors Title Insurance Company

Lawyers Title Insurance Corporation

Manito Title Insurance Company

National Land Title Insurance Company

Old Republic National Title Insurance Company

Southern Title Insurance Corporation

Stewart Title Guaranty Company

T. A. Title Insurance Company

The Security Title Guarantee Corporation of Baltimore

Ticor Title Insurance Company

Ticor Title Insurance Company of Florida

Transnation Title Insurance Company

United General Title Insurance Company

Westcor Land Title Insurance Company

Thursday, March 01, 2007

mortgage loans not paid off?????

This is a horrible story.

Unfortunately, where there is a lot of money, you will find predators. That's why good regulatory standards and enforcement are so important.

I've heard this story before. Attorneys and title agents stealing the escrow accounts. We as an industry should be policing ourselves and we've been having that discussion on Radical Title Talk.

This Title Insurance Talk forum is for consumers so let's discuss how you can protect yourself from predators.

First, remember, predators are not easy to spot. Until their house of cards falls down, everybody in town thinks they are a-okay. You might get a creepy vibe, you might not, so don't rely on your instincts alone. Here's what you should do:

ALWAYS get a copy of the title insurance commitment prior to closing. Review it carefully. A title insurance commitment connects you, the property and a title underwriter. If you have any concern about the license of the person you are dealing with, you can call the title insurance underwriter or the state insurance department.

AT CLOSING check the HUD-1 Settlement Statement and make sure you have paid for title insurance, not just a search.

ASK FOR A COPY OF THE MORTGAGE PAYOFF LETTER. We routinely provide copies of payoffs. The payoff letter will give you all the info you need to follow up after closing. Give it a few days then check with your lender to make sure the payoff posted as expected.

Any honest attorney or title professional will not be offended when you take actions to protect yourself.

Action in Equity

I'm pretty busy today but the file I'm working on is one I feel compelled to share with you. It's a cash transaction. The buyer, thankfully, decided to purchase title insurance.

I am reviewing title and find an action in equity involving a private roadway. An action in equity is a lawsuit that is specifically tied to a the property identified in the suit. This means that any decision will affect the underlying property and not simply follow the people.

According to the complaint our seller obstructed an existing private right of way cutting off access to an adjacent landowner. The roadway in question used to be the neighbor's exclusive access but he has since acquired another means of getting to his property. He has not, however, relinquished his rights to use the secondary roadway.

Our sellers apparently placed top soil over the road and extended their sidewalk into the roadway. The plaintiff is requesting that the roadway be restored to the original shale surface and all obstructions be removed.

Interestingly, the buyer is not aware of the suit. The seller failed to include it in their disclosure. When queried, the selling agent recalls the seller mentioning a pending suit but she accepted their assurances that the buyer would not be impacted in any way.

This transaction is set to close on the 9th. I have a call into the buyer and will send her a full copy of the suit. I understand she has legal counsel to advise her.

Possible solutions? Well, besides walking away from the deal, she could require that the seller fix the road prior to closing. She could also obtain a contractor estimate of cost and require an escrow from the seller so the closing can move forward as planned. It's a cash deal, so the buyer is in the driver's seat. She could also just decide to buy the property and deal with the suit herself. In any event the suit is an exception on her owner policy.

Interesting, huh?