don't get snookered

That 6-inch stack of documents you sign when you buy a house or refinance your mortgage? Well, here's something to keep you awake at night: It could contain fraud or errors that would expose you to hundreds of thousands of dollars in costs or even criminal charges.

Borrowers sometimes blithely sign papers at their mortgage closing without comprehending them. It's understandable. You're eager to get the business wrapped up. But even though the end is in sight, don't relax yet. The closing conference, where you sign contracts and disclosure papers, is a crucial moment, and one that could expose you to serious risks.

http://realestate.msn.com/11-ways-to-keep-from-getting-snookered-at-the-closing-table

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

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

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

I have a new web site under construction, if you want to take a peek.

Once it's done, our domain tcsclosing.com will point here.

This has been a fun project.  While I've been an active blogger since 2006, I've not been the designer of our main website.  I want you to know I took a 4 class technology boot camp before creating this new site.

Let me know how you like it.  It's got a mobile version and I'm just so excited.  We'll have to put the "code" on our cards now and feel so trendy.  LOL

a comparison of the old versus new PA title insurance rates for a refinance

Closings on or after July 1, 2012 will be charged according to a new rate schedule which offers only two rate categories, SALE and NON-SALE.  For our example, today, I am using a $150,000 refinance.

Under the old system I would need to know when the last insurable transaction took place because our old rate categories are tiered based on a timeline.  For our example I am presuming that the last transaction was three years ago.  That would make our consumer eligible for the 80ML/Refinance rate.  At $150,000 the premium would be $798.30.

Under the new system there is no timeline, only a distinction between a sale or non-sale transaction.  The NON-SALE rate at $150,000 is $1002.50.

Today is June 1, 2012.  If a consumer is considering refinancing today - and interest rates are great BTW - they may have a shot at closing before July 1, 2012 and avoiding the $204.20 rate increase.

We have made a marketing decision here at The Closing Specialists and with the implementation of the new rate structure we are amending our fee structure to ELIMINATE THE SETTLEMENT FEE.  We've only been charging $150 for out of office closings anyway and that's a very competitive rate, however, we've decided to just make things easy.  The $150 is GONE.

To keep things simple, we are also eliminating our Choose and Save Program.   So all of our consumers, even those who do not give us a deposit up front will save the $150 and HAVE NO SETTLEMENT FEE.

We think that's a rocking good deal!

So, FYI, starting with closings July 1, 2012 we'll be charging the all-inclusive PA title rates which will include out of office and after hours closings in our market area.

We will still charge for optional additional insurance or services such as:

• endorsements [as application with the typical being $150]
• closing services letter $75
• printing electronically delivered lender document packages $50
• courier for lender doc return $10
• document prep, if needed, $95 [for things such as deed or specific POA]
• outgoing wire $25
• incoming wire $5

If you have any questions, please shoot me an email.

money is on sale...time to buy or refi!!!

Check out our title premium calculator for Pennsylvania rates. Use our Choose and Save program and you'll get the most affordable title insurance and settlement service available in Pennsylvania.

We are determined to give consumers the best in service and value. Here's our service area map. If you are buying or refinancing in our market, we'd sure like to give you a quote.  Don't just follow the lead of your mortgage lender or real estate agent.  If they aren't leading you to our Choose and Save program, you're not getting the best deal in Pennsylvania.  YOU have a choice. It's YOUR money.

When you choose The Closing Specialists, you get an expert title search and examination performed by experience human beings.  Does that sound like a hilarious and ridiculous pitch?      Got news for you.  There are lots of title agencies out there who have little or no experience and they order their searches by computer and let someone else do the thinking for them.  Lots of that work is outsourced to foreign countries.  Can you believe that?  It's true.

We only use experienced abstractors who work in the county where the real estate is located. We do our own title examination and we use only on-staff closers.  Our staff is experienced and we consider YOU, the consumer, our customer.  YOU pay for our services, not the mortgage lender or the real estate agent.  It's YOUR transaction.  We focus on YOU.

WE STAY OPEN SO YOU CAN CLOSE.

tie up the loose ends of a divorce, please!

Examined title for a purchase transaction and found that the vested owners were a now divorced couple who had never dealt with the separation of the real estate. Criminy.

What really kills me is that both husband and wife were represented by legal counsel AND the property had been processed through a relocation company who is represented by legal counsel.

Nobody, I mean NOBODY, gave a thought to taking care of transferring the interest of Mrs. Seller - now ex-Mrs. Seller.

You know, from the perspective of the buyer, thank heavens they selected a title agency with humans who examine title and have a clue.

So, she's in Chicago and not making this easy for anyone. Closing has been delayed each day while we wait for deeds - 3 deeds - wife to husband, husband to relo, relo to our proposed insured.

Now, you may wonder what might have happened if the buyer had not selected a title agency who caught the error OR what might have happened if the buyer had decided NOT to purchase title insurance. Remember, at least THREE attorneys totally missed what to me is a real easy issue to spot.

Ex-Mrs. Seller might have figured out at some point that she hadn't conveyed her interest and made some demands for payment. The marital settlement agreement did not specifically state that she was giving up her equity. It simply said the husband would refinance as soon as possible to relieve her obligations on the mortgage.

Even if ex-Mrs. Seller made no claims, eventually someone would notice the cloud on title, maybe when the new owner wanted to sell or refinance. Clouds on title really muck up the best made plans to refinance or sell. Can you imagine how hard it might be to find her at some future date? If the new owners had skipped title insurance, they'd be on their own. Even with title insurance, the fix might take time and headaches.

It's a hard concept to embrace but most of what you buy when you purchase title insurance is the preventative expert examination. The policy itself is a safety net. So, PLEASE, select your title insurance agent carefully.

I'm back on the street doing closings.....

We reduced our staff this year as most did in response to the credit crisis. In the process, we shuffled our more experience staff into key positions, lost two employees for personal reasons and moved two closers in to fill those spots. We hired a new closer but were still left with only two full time closers and that's not enough. I decided to be the third closer and we have two other inside employees able to jump in and take closings if needed.

As the third closer, I'm not full time, I just jump in if the schedule gets too crazy for two people to handle.

Yesterday afternoon I got a panicked call from one of our favorite loan officers. He was on the beach with his family, hoping to enjoy a vacation. There was a renovation loan - FHA 203K - that he had been working on since February. It was finally ready to go but there was a catch. If it didn't close today, it would have to be postponed until next month because the borrowers were on their way out of town this morning.

I looked at the schedule and saw that our Saturday closer was already booked for a ten o'clock in Altoona. The 203K was in Pittsburgh, so I said, OK, I'm on it! We booked the closing for 8:30am so we'd be done and the borrowers could get out of town by 10am which was really important to them.

All went well and it did close, but I experienced a bit of disengagement with the borrower that I thought was worthy of a mention here.

In a construction loan or renovation loan, I take my time going over the obligations of the borrowers in the construction phase just to make sure they fully and completely understand. I do this by reading the construction or renovation agreement to them verbatim.

Trust me, it's not boring to the borrowers. This is a big project and they have spent a good deal of time thinking through the logistics. It's important that both lender and borrower are on the same page. So, this morning I read the rehabilitation agreement - including the part about the default of they don't comply with the terms. We paused. They expressed surprise and I said, yes, you must carefully consider the terms of this agreement. You cannot make changes without the lender's approval.

We continued and got to the deadline for the completion of the work. The borrowers both said "That ain't gonna happen." I said that they must take seriously the date in the contract. They expressed once again that there was no way that they expected to get the work done by that date. I once again reiterated that the terms are clearly spelled out and that this is the agreement. They decided to sign the agreement and proceed with the transaction commenting further that they would discuss it with their loan officer. I stopped and said that I have no idea to what extent the loan officer can adjust or change the agreement after closing. It is likely that he will not be able to do so. They decided to close anyway.

I offer that discussion here so that I can express to borrowers in the most sincere but firm way that you must take seriously the terms of any loan document you sign. I do hope that all works out for these folks. I hate to see anyone walk into a contract with the mindset of not taking it seriously. It's their choice. The lender's terms were clear. They accepted. Let's hope all goes well.

query: the cost of title insurance on a condo

In PA the cost for title insurance on a condominium is not different than title insurance on any other piece of real estate. If you are getting a mortgage, your mortgage lender may want a condominium endorsement added to the loan policy. If so, the cost for the endorsement is $50.

BTW - Though I've never had a consumer ask for this extra coverage, the endorsement is available as an addition to an owner policy for a cost of $50, too. It's PA 810 which if the PA equivalent to the ALTA 4.-06 endorsement.

Here's what is says:

The Company insures against loss or damage sustained by the Insured by reason of:

1. The failure of the unit identified in Schedule A and its common elements to be part of a condominium within the meaning of the condominium statutes of the jurisdiction in which the unit and its common elements are located.
2. The failure of the documents required by the condominium statutes to comply with the requirements of the statutes to the extent that such failure affects the Title to the unit and its common elements.
3. Present violations of any restrictive covenants that restrict the use of the unit and its common elements and that are contained in the condominium documents. The restrictive covenants do not contain any provisions that will cause a forfeiture or reversion of the Title. As used in this paragraph 3, the words "restrictive covenants" do not refer to or include any covenant, condition, or restrictions (a) relating to obligations of any type to perform maintenance, repair, or remediation on the Land, or (b) pertaining to environmental protection of any kind or nature, including hazardous or toxic matters, conditions, or substances, except to the extent that a notice of violation or alleged violation affecting the Land has been recorded in the Public Records at Date of Policy and is not excepted in Schedule B.
4. Any charges or assessments provided for in the condominium statutes and condominium documents due and unpaid at Date of Policy.
5. The failure of the unit and its common elements to be entitled by law to be assessed for real property taxes as a separate parcel.
6. Any obligation to remove any improvements that exist at Date of Policy because of any present encroachments or because of any future unintentional encroachment of the common elements upon any unit or of any unit upon the common elements or another unit.
7. The failure of the Title by reason of a right of first refusal to purchase the unit and its common elements which was exercised or could have been exercised at Date of Policy.

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.

query: how long is mortgage title insurance effective

A loan policy aka mortgage title insurance protects the mortgage lender so long as they have an interest to protect. The interest of the mortgage lender expires when the note is paid in full and the mortgage is satisfied. If, however, the mortgage lender must foreclose, the loan policy converts to an owner policy for the lender and will protect them so long as they have an interest to protect.

So, let's say a mortgage lender forecloses and ends up owning the property, attempts to sell it a new buyer and that buyer's title agent finds a title problem which precedes the issuance of the loan policy. The mortgage lender could make a claim even though their original insured mortgage was divested in the foreclosure.

Consumers should take heed that a loan policy benefits the mortgage lender only. Your interests and the interests of the mortgage lenders are not the same. If you want protection, you must purchase an owner policy.

query: can we refinance with a mechanics lien

If you have a valid mechanics lien against the property and your new mortgage lender wants first position, you won't be able to refinance unless the holder of the mechanics lien agrees to postpone their lien in favor of the mortgage lender. They may agree to postpone if you offer to pay them something. They'll still have their lien and they may need money enough to make a deal.

Wow, I can't believe it's been a week since the last post.

We are nicely busy and been cranking out title commitments without many problems. Hmmm...trying to think of something interesting that might have popped up. Most everything has been run of the mill stuff which is good. Keeps transactions moving and everyone happy.

Oh, we had a deal this morning......seller had filed bankruptcy. The attorney had gotten a court order to list the property but they forgot to go back and get a court order approving the specific sale. The attorney tells the parties that this might take two months to get. Geez.........everyone must have forgotten. Buyer had to put their plans on hold.

Must be a court order kinda week. We had one with an incapacitated seller. Thankfully there was a court order naming a guardian but they all forgot to go and get the court order approving the sale. Let's hope that one doesn't take two months.

removing exceptions from a title commitment

I had a credit union ask me to remove standard exceptions from Schedule B2 in a title commitment. This is my response and I thought I'd share it with you.

The title insurance commitment is like a mortgage loan commitment. The marking up by the title agent is like the mortgage loan underwriter clearing conditions. Marking up takes place at the time of closing as a final check list by the title agent that all issues have been complied with and then final instructions are given to staff for preparation of the policies. Exceptions are not removed form commitments. They are removed from policies. The following notes demonstrate how the Schedule B2 of the title commitment for the redacted file will be marked up at closing:

1. out

2. 300

3. NYDP

4. out

5. NYDP

6. 100

7. limit loan

8.

9.

10.

11. 100

12.

13.

14. 300

15.

16.

17.

18.

The items not marked stay as is in the loan policy. Items marked "out" will be removed. NYDP means "not yet due and payable" and that language will be added in the policy. Endorsement 300 is the PA survey endorsement. Items marked 300 will be removed from the loan policy by way of the language in the endorsement. Endorsement 100 is the PA restrictions & covenants endorsement. Items marked 100 will be removed from the loan policy by way of the language in the endorsement. "Limit loan" on #7 means language will be added to the loan policy which limits the exception to under surface operations.

query: when you submit title insurance mortgage claim with old republic do you have to give proof of loss or damage

When you submit a title insurance claim to ANY title insurance company, you'll need to prove damage or loss are at least the threat of damage or loss. By threat, I mean that you should get your title insurance company involved in your defense if your are threatened by loss or damage related to items that may be covered by your title insurance policy. The title insurance company claims department will decide whether to defend, settle, whatever based upon the facts of the case.

Your job is to file the claim as soon as you know you are at risk. If you are unhappy with the response you get from the title insurance company, have your attorney review the matter.

query: how do mortgage underwriters take

I'm taking a good guess here because I used to be a mortgage underwriter back in the ole days when FICO wasn't king and underwriting involved the human brain. I gauge my reply on the return of manual underwriting and the likelihood that we have plenty of newbies looking at files who are now learning from their aged underwriting teachers just how to make these credit and saleability judgments.

The underwriter will take about an hour with your file once the file gets onto their desk - give or take 20 minutes or so. The issue really is how long it takes to get your file onto that desk.

We are living in the aftermath of a credit hurricane that trundled mortgage processing and underwriting staff and blew up all the rulebooks that the remaining staff had come to know and love. The business of mortgage banking is short staffed with folks who are having to re-learn their craft one file at a time.

This is good because it's a restoration of quality in decision making. This is hard on borrowers and loan originators and real estate agents because the greater real estate community and consumers have come to expect instantaneous decision making.

The rule is patience. I am hearing that it takes a file roughly two weeks to make it through the underwriting process.

Trust me, this will get better. Eventually you should expect manual aka human underwriting to stabilize at roughly 48 hours, give or take a day or so as volume swings.

In the meantime, don't totally freak if your mortgage lender calls you for more documentation because your loan application has been suspended. That simply means that you aren't rejected but you aren't approved. The mortgage lender thinks there may be merit in your loan approval but needs you to help them support a positive decision with truthful documentation. Cooperate and help your lender help you. Sometimes a good attitude is the tipping point in a manual credit decision. A mortgage underwriter is assessing your ABILITY to repay and your WILLINGNESS to repay. Willingness is all about attitude.

query: what If I dont agree with the charges in HUD and walk away from closing

That's a good one. If it's a refinance, that's easy, just rescind, but if you are thinking about walking away from a purchase it raises all sorts of issues.

There are several parties to every transaction besides the seller and the buyer. All parties have a duty one to another to act in good faith. I would hope that a buyer would be a good consumer and get quotes from all settlement service providers up front. Remember, you don't go shopping at the closing table. You make all of your selections up front. If you skip the shopping obligations, don't expect sympathy from anyone at the closing table. Even if you have shopped and gotten quotes, there are always unforeseen circumstances. Be patient and listen to the explanations. You may find that there is a valid reason for an additional charge.

So, if you are acting in good faith and not just trying to weasel out of costs you had already agreed to absorb, and a provider is not living up to their agreement, you can threaten to walk away.

Making the threat will often push the bad actor into making good, especially when all other parties in the transaction are looking at them and wondering if they are nuts.

If no one agrees to change the figures and you want to walk away, I would advise taking a break and getting legal advice from your own attorney, not the attorney working for the title company or real estate agency or the seller or the lender. Walking away from a closing is potentially defaulting on a contract and you may have legal obligations.