Friday, March 30, 2007
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
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
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.
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:
- run a title search on each property to confirm ownership and verify lien status
- hire a surveyor to measure and map the parcels for exchange
- obtain required municipal or county approvals, if any, for the subdivision
- obtain releases from mortgage lenders, if any, for the parcels to be conveyed
- file deed(s), subdivision, and releases, if any
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
TITLE INSURANCE ARBITRATION WAS A RIP-OFF
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.
Section 11. ARBITRATION
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
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.
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.
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
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.
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
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.
Monday, March 19, 2007
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
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........
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.
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.
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.
LENDERS - PLEASE TAKE NOTE. TITLE INSURERS IN PENNSYLVANIA ARE REQUIRED TO USE THE ALTA 2006 FORMS. THE OLD FORMS WILL BE ENTIRELY UNAVAILABLE FOR ISSUANCE.
Monday, March 12, 2007
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.
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
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. ;)
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.
3.2 ESCROW SERVICE CHARGE
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.
3.3 COMMITMENT ISSUED UNDER THE APPROVED ATTORNEY PROCEDURE
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.
3.4 PASS-THROUGH CHARGES
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.
3.5 CLOSING SERVICE LETTER - TRANSACTION SPECIFIC
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).)
IF THIS CONVEYANCE OR REFINANCE OCCURS WITHIN TEN YEARS OF A PREVIOUS INSURANCE OF THE SAME PROPERTY, YOU MAY BE ENTITLED TO A REDUCED RATE.
Here's my post comparing the two:
title search vs. attorney title opinion vs. owner title insurance
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.
Ask about mechanics liens and whether or not they are covered by title insurance in your market.
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.
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.
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.
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.
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.
(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
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
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
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
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
“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
MANUAL OF TITLE INSURANCE RATING BUREAU OF PENNSYLVANIA
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 http://www.tcsclosing.com/ website and its related Blog, Title Insurance Talk. We are sharing the material to help consumers understand regulated products and rates.]
NOTICE: THIS RATE MANUAL HAS BEEN APPROVED BY THE PENNSYLVANIA INSURANCE DEPARTMENT AS AMENDED THROUGH MAY 1, 2006.
TITLE INSURANCE RATE MANUAL, COMMONWEALTH OF PENNSYLVANIA
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.
MEMBERS OF TIRBOP AS OF THE MOST RECENT AMENDMENT DATE ARE:
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
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.
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.