Friday, August 10, 2007
query: charge to rate to waive escrows
What a minute. I think I know what you are asking. In my experience the interest rate isn't changed when there is a waiver of escrows. If a lender is willing to waive the escrow, they usually charge a flat fee at closing, like $100. Every lender is different, so be sure to get your quote in writing.
BTW - Even when a lender waives escrow, they still have an interest in the payment of insurance and taxes. If they find out you aren't paying either, you may be in default, so be careful.
BTW - Even when a lender waives escrow, they still have an interest in the payment of insurance and taxes. If they find out you aren't paying either, you may be in default, so be careful.
query: charge to rate to waive escrows
I'm not sure what that means. Would you rephrase the question?
Thursday, August 09, 2007
the beautiful worker bees need your help
I'm talking about the beautiful worker bees in prime mortgage lending offices.
These folks aren't the predators you've read about.
These are the folks who work hard maintaining quality standards and helping consumers buy homes that they can afford.
What's the problem?
Well some folks have them all mixed up with the bad killer bees. You see, they look so much alike.
The killer bees - the folks who deserve to go out of business cause they've caused so much harm are the predators and the subprime and frankly the Alt-A pushers.
Our worker bees - the sweet honey makers - are being exterminated by folks who can't tell the difference.
PLEASE, if you are in a position of to help prime mortgage paper producers, the quality mortgage lenders, continue operation, please help.
Consumers may not understand that their ability to buy, sell or refinance real property is dependent on money flowing through to our good quality mortgage companies.
This is no longer a "subprime" issue, it's a money flow issue.
Did you know home warranties are covered under RESPA?
RESPAnews.com has a fine Q & A section making it a very worthwhile subscription investment for anyone engaged in the business of real estate sales or finance. Here's part of a response on the question of home warranties:
The following is abstracted from a
"A home warranty is a settlement service covered by RESPA (24 CFR § 3500.2 definitions). The RESPA regulations do not prohibit a person from receiving more than one fee in the transaction. However, where a person is receiving an additional fee and is in a position to refer settlement service business (as a real estate agent is), the payment must be for services that are actual, necessary and distinct from the primary services provided by such person (24 CFR § 3550.14(f)(3)).
"Additionally, the fee itself must be reasonably related to services actually performed. So long as the tests cited are met, and you appear to represent that they are, there is no objection to the payment of a fee to the agent for services performed. If, on the other hand, the transaction only consists of referring the home warranty business and no actual services are provided, this would be a violation of Section 8(a) of RESPA. We have made no independent evaluation of the value of the warranty services you describe."
automated versus human title seach product
Ed Rybczynski does a superb job explaining this issue in a letter to his Senator, a copy of which is posted on his Title-opoly blog.
Wednesday, August 08, 2007
query: is it too late to talk with your mortgage lender about making a mortgage payment
It's never too late to talk. So, give it a shot.
In normal circumstances, there is a point in the foreclosure process where you reach an all or nothing point. This is your "Last Chance Texaco" moment called reinstatement.
Read your mortgage document and look for that word - reinstatement. The FNMA 3039 PA Mortgage 1/01 contains this language in Section 19. It reads:
"Borrower's Right to Reinstate After Acceleration. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of: (a) five days before sale of the Property pursuant to any power of sale contained in this Security Instrument; (b) such other period as Applicable Law might specify for the termination of Borrower's right to reinstate; or (c) entry of a judgment enforcing this Security Instrument. Those conditions are that Borrower: (a) pays Lender all sums which then would be due under this Security Instrument and the Note as if no acceleration had occurred; (b) cures any default of any other covenants or agreements; (c) pays all expenses incurred in enforcing this Security Instrument, including, but not limited to, reasonable attorney's fees, property inspection and valuation fees, and other fees incurred for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument; and (d) takes such action as Lender may reasonable require to assure that Lender's interest in the Property and rights under this Security Instrument, and Borrower's obligation to pay sums secured by this Security Instrument, shall continue unchanged. Lender may require that Borrower pay such reinstatement sums and expenses in one or more of the following forms, as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality or entity; or (d) Electronic Funds Transfer. Upon reinstatement by Borrower, this Security Instrument and obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, this right to reinstate shall not apply in the case of acceleration under Section 18."
[Section 18, BTW, is the "due on sale clause", which a lot of people ignore for some reason. I never understood why.]
Sooooooo, call your lender and ask if it's too late to start making payments again. These are not the usual circumstances and so there may be lenders, who hoping to avoid foreclosure, will modify your terms and extend the maturity date. Then again, they may not. But what have you got to lose by calling?
In normal circumstances, there is a point in the foreclosure process where you reach an all or nothing point. This is your "Last Chance Texaco" moment called reinstatement.
Read your mortgage document and look for that word - reinstatement. The FNMA 3039 PA Mortgage 1/01 contains this language in Section 19. It reads:
"Borrower's Right to Reinstate After Acceleration. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of: (a) five days before sale of the Property pursuant to any power of sale contained in this Security Instrument; (b) such other period as Applicable Law might specify for the termination of Borrower's right to reinstate; or (c) entry of a judgment enforcing this Security Instrument. Those conditions are that Borrower: (a) pays Lender all sums which then would be due under this Security Instrument and the Note as if no acceleration had occurred; (b) cures any default of any other covenants or agreements; (c) pays all expenses incurred in enforcing this Security Instrument, including, but not limited to, reasonable attorney's fees, property inspection and valuation fees, and other fees incurred for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument; and (d) takes such action as Lender may reasonable require to assure that Lender's interest in the Property and rights under this Security Instrument, and Borrower's obligation to pay sums secured by this Security Instrument, shall continue unchanged. Lender may require that Borrower pay such reinstatement sums and expenses in one or more of the following forms, as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality or entity; or (d) Electronic Funds Transfer. Upon reinstatement by Borrower, this Security Instrument and obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, this right to reinstate shall not apply in the case of acceleration under Section 18."
[Section 18, BTW, is the "due on sale clause", which a lot of people ignore for some reason. I never understood why.]
Sooooooo, call your lender and ask if it's too late to start making payments again. These are not the usual circumstances and so there may be lenders, who hoping to avoid foreclosure, will modify your terms and extend the maturity date. Then again, they may not. But what have you got to lose by calling?
Tuesday, August 07, 2007
Wiggle room left the building last week.
Do you take checks from attorneys or title companies that are not cashiers checks?
If the answer to that question is yes, then you must reconsider. Anybody with a pulse on the current climate has discontinued taking risks.
A title agent who takes a check from another company does so with no guarantee that the money is truly available.
I can think of no other time in my career when absolute adherence to good funds policies is necessary. Wiggle room left the building last week.
If the answer to that question is yes, then you must reconsider. Anybody with a pulse on the current climate has discontinued taking risks.
A title agent who takes a check from another company does so with no guarantee that the money is truly available.
I can think of no other time in my career when absolute adherence to good funds policies is necessary. Wiggle room left the building last week.
Consumers should be asking blunt questions.
After all, title agents control millions of dollars. Ask away and don't be shy. This is how you choose a title insurer. Be picky.
Ask - Do you triple reconcile your escrow accounts every month?
Ask - Do you disburse on transactions before verifying receipt of good funds from all parties?
Ask - Can the seller get a cashiers check or wire for proceeds without a fight?
Correct answers would be yes - no - yes. If you get any hesitancy from the title agent you may wish to move on to someone who has better control over their accounts. Be safe. Be well.
Ask - Do you triple reconcile your escrow accounts every month?
Ask - Do you disburse on transactions before verifying receipt of good funds from all parties?
Ask - Can the seller get a cashiers check or wire for proceeds without a fight?
Correct answers would be yes - no - yes. If you get any hesitancy from the title agent you may wish to move on to someone who has better control over their accounts. Be safe. Be well.
Check out the latest in Washington state.
Tim Kane's blog is always thought provoking.
After all that has gone down this year, wouldn't you think Stewart Title would take dramatic steps to curtail crime in the ranks?
After all that has gone down this year, wouldn't you think Stewart Title would take dramatic steps to curtail crime in the ranks?
Monday, August 06, 2007
Sunday, August 05, 2007
query: where can you get a copy if you lose title insurance documents
Did you lose the entire document package from closing or just the title policy?
Either way, start by contacting the company who performed your closing and issued the title insurance. If you are lucky they will still be in business and have an easily accessible data base. If you contacted my office, I could e-mail you a pdf of your entire file while we were chatting on the phone. Most companies aren't that accessible though, so let's assume you aren't having any luck there.
If you have a copy of the HUD-1 Settlement Statement, look at the 1100 section and see if you paid for title insurance. A premium paid on a HUD-1 is evidence of title insurance. The HUD-1 may even have the name of the actual title insurance company. Google them or contact your state insurance department for assistance. Contact the company and ask for a copy of your policy. It may take time but they should be able to track it down. By time, I mean it could take months, because title companies don't always have a good way of tracking title policies.
If you can't find the HUD-1, your mortgage lender, Realtor or even the seller may have a copy that they will share with you. Good luck and let this be a reminder to all to keep those documents in a safe place. ;)
Either way, start by contacting the company who performed your closing and issued the title insurance. If you are lucky they will still be in business and have an easily accessible data base. If you contacted my office, I could e-mail you a pdf of your entire file while we were chatting on the phone. Most companies aren't that accessible though, so let's assume you aren't having any luck there.
If you have a copy of the HUD-1 Settlement Statement, look at the 1100 section and see if you paid for title insurance. A premium paid on a HUD-1 is evidence of title insurance. The HUD-1 may even have the name of the actual title insurance company. Google them or contact your state insurance department for assistance. Contact the company and ask for a copy of your policy. It may take time but they should be able to track it down. By time, I mean it could take months, because title companies don't always have a good way of tracking title policies.
If you can't find the HUD-1, your mortgage lender, Realtor or even the seller may have a copy that they will share with you. Good luck and let this be a reminder to all to keep those documents in a safe place. ;)
avoid any consideration of double locking or dual submissions
We are having a relatively orderly - it could be worse, folks - reorganization of the entire business of mortgage banking.
Pure mortgage banking as traditionally done with warehouse lines alone may be a thing of the past. Mortgage bankers who are not owned by a bank or thrift or some other large funding source may go the way of dinosaurs.
That said there is still a possible life for mortgage brokerage if brokers contain themselves and act responsibly. I am presuming that the market correction will rid us of the fraudsters, inexperienced, predators, etc. and that what we will have left is a population of largely professional mortgage brokers who can and will originate prime paper, okay?
So, that said, I am talking to you, the professional mortgage broker, the prime player who understands that there are larger duties in performance than just self gratification.
First, let's talk about the risk to mortgage brokerage. In a liquidity crunch, we have less money. [I know you know that but I am explaining it for those reading this who may not.] When we have less money, mortgage lenders may be strongly motivated to funnel that money into retail operations rather than wholesale. If we lose wholesale, we lose mortgage brokerage.
This isn't a real horrible problem for consumers because they can easily get their mortgages directly from lenders through retail operations, so consumers won't be too concerned.
From a mortgage brokerage point of view, though, you can help your mortgage lenders by moving into pure prime product sooner rather than later AND you can avoid any consideration of double locking or dual submissions. Yes, I know you think you are protecting yourself and your consumer, but think of the greater whole.
Secondary market managers are going to be traveling through rocky waters and they have to depend on the pipeline data to produce stability. If anyone gets the idea that mortgage brokers en masse are feeding fake locks into the system, mortgage brokers will be cut off. Secondary market managers know that their retail originators cannot double lock and so if the pipeline is purely retail, it is more stable. Remember that.
So, act responsibly. In the grander scheme of mortgage banking, good wholesale relationships provide the volume needed to create a lucrative operation. If the players aspire to good old fashioned standards, agency prime lending, and act responsibly, the professional mortgage brokers will find solid ground in a shorter recovery.
Pure mortgage banking as traditionally done with warehouse lines alone may be a thing of the past. Mortgage bankers who are not owned by a bank or thrift or some other large funding source may go the way of dinosaurs.
That said there is still a possible life for mortgage brokerage if brokers contain themselves and act responsibly. I am presuming that the market correction will rid us of the fraudsters, inexperienced, predators, etc. and that what we will have left is a population of largely professional mortgage brokers who can and will originate prime paper, okay?
So, that said, I am talking to you, the professional mortgage broker, the prime player who understands that there are larger duties in performance than just self gratification.
First, let's talk about the risk to mortgage brokerage. In a liquidity crunch, we have less money. [I know you know that but I am explaining it for those reading this who may not.] When we have less money, mortgage lenders may be strongly motivated to funnel that money into retail operations rather than wholesale. If we lose wholesale, we lose mortgage brokerage.
This isn't a real horrible problem for consumers because they can easily get their mortgages directly from lenders through retail operations, so consumers won't be too concerned.
From a mortgage brokerage point of view, though, you can help your mortgage lenders by moving into pure prime product sooner rather than later AND you can avoid any consideration of double locking or dual submissions. Yes, I know you think you are protecting yourself and your consumer, but think of the greater whole.
Secondary market managers are going to be traveling through rocky waters and they have to depend on the pipeline data to produce stability. If anyone gets the idea that mortgage brokers en masse are feeding fake locks into the system, mortgage brokers will be cut off. Secondary market managers know that their retail originators cannot double lock and so if the pipeline is purely retail, it is more stable. Remember that.
So, act responsibly. In the grander scheme of mortgage banking, good wholesale relationships provide the volume needed to create a lucrative operation. If the players aspire to good old fashioned standards, agency prime lending, and act responsibly, the professional mortgage brokers will find solid ground in a shorter recovery.
Saturday, August 04, 2007
Three things must be said to those who watch the eagle.
Basing reserves on current market conditions ignores looming defalcations.
When asking about escalating claims due to underwriting, the risk isn't off shore versus on. The question posed should be human versus non.
"Unlocking the hidden value" in various enterprises all related to data mining is like looking for the key to Pandora's box, at least from the perspective of those who cherish privacy.
query: remove expired judgment lien by closed company on title pa
If the judgment has expired and not been revived, it shouldn't have impact on title. So, unless you are embarassed by its being reported or unless you are dealing with a title agent who thinks its an issue, just ignore it.
I review title reports all the time that have issues reported in the abstract that do not impact the title. I like to make a note on the abstract so an auditor knows I saw the issue and why I passed. This note is not required but it's useful if there are questions later on.
If you are a seller and the buyer's title agent is giving you grief over an expired judgment I suggest you tell the buyer to find another title company. You can't be expected to resolve title issues that are not real.
On the other hand if you have a judgment that IS impacting title and you can't find the party to whom payment is owed, you might offer to place funds in escrow with the title company so you can close and work on a resolution over time. If the issue isn't resolved, the title company can eventually escheat the money to the Commonwealth of PA showing the judgment holder as the owner of the funds. This is one way to create an official audit trail of attempts to resolve a problem should it ever rear its ugly head.
I review title reports all the time that have issues reported in the abstract that do not impact the title. I like to make a note on the abstract so an auditor knows I saw the issue and why I passed. This note is not required but it's useful if there are questions later on.
If you are a seller and the buyer's title agent is giving you grief over an expired judgment I suggest you tell the buyer to find another title company. You can't be expected to resolve title issues that are not real.
On the other hand if you have a judgment that IS impacting title and you can't find the party to whom payment is owed, you might offer to place funds in escrow with the title company so you can close and work on a resolution over time. If the issue isn't resolved, the title company can eventually escheat the money to the Commonwealth of PA showing the judgment holder as the owner of the funds. This is one way to create an official audit trail of attempts to resolve a problem should it ever rear its ugly head.
Friday, August 03, 2007
scared into normalcy
"The fright among investors is forcing lenders to go back to more-conservative practices that were the norm before the housing boom of the first half of this decade. Many now are focusing on loans to borrowers who are willing to document their income, can make a down payment of at least 5% and have a history of paying bills on time."
Read that here.
Responsible lending makes a comeback. Thank heavens.
Some day folks will look back at the underwriting standards of the last decade and wonder how this foolishness ever got started. I for one am happy sanity is back in style.
Read that here.
Responsible lending makes a comeback. Thank heavens.
Some day folks will look back at the underwriting standards of the last decade and wonder how this foolishness ever got started. I for one am happy sanity is back in style.
query: is good faith estimate required for pre-approval
No, for now it's not, BUT I highly recommend including a good faith as part of the package.
Current regulations only require that the borrower receive a good faith estimate within 3 days of mortgage application. Frankly, I just don't know how a borrower can shop for a lender without having good faith estimates in hand.
Current regulations only require that the borrower receive a good faith estimate within 3 days of mortgage application. Frankly, I just don't know how a borrower can shop for a lender without having good faith estimates in hand.
Kudos to Pennsylvania Association of Notaries
for a great article published in Notary Notes August/September 2007. It's actually a reprint of a 2004 article called Notary Signing Agent Basics. I couldn't find a link to share from their web site www.notary.org but if you contact mmiller@notary.org you may be able to get a copy.
This is the first and only article I have read that correctly outlines the role of a notary signing agent who is not otherwise licensed to perform other roles in a transaction.
Thank you!!!!!!
This is the first and only article I have read that correctly outlines the role of a notary signing agent who is not otherwise licensed to perform other roles in a transaction.
Thank you!!!!!!
Thursday, August 02, 2007
query: purchasing title insurance outside your state
The title agent or insurer must be licensed in the state in which the real estate being insured is situate. So, if you live in Florida but are purchasing land in Pennsylvania, the title insurer must be licensed in Pennsylvania. Kapeesh?
Wednesday, August 01, 2007
The soulmate of panic is opportunity.
I love that line. Got it on a blog from down under.
In this crazy real estate market, buyers with cash or access to good credit are poised to build wealth.
We're poised to help. People have asked if our Choose & Save Program is really a good deal.
Heck, what are you nuts?
It's a fantastic deal.
query: are the exclusions in a title insurance contract binding
Yes, I would argue that they are binding. This is way it's so important to review your title insurance commitment prior to closing. You need to look at those exclusions so you understand them. Folks who want to rush to close without taking time to really understand the title may have regrets later on.
We provide copies of the commitment to both the lender and the consumer as soon as it's issued. There are some circumstances in which the consumer has scheduled the closing before the final search results are in. In those cases we may be issuing the title commitment on the day of closing and the consumer is taking their first peek at the exclusions at the closing table. I'd rather they wait and take time to understand the transaction but it's their choice and we aims to please.
We provide copies of the commitment to both the lender and the consumer as soon as it's issued. There are some circumstances in which the consumer has scheduled the closing before the final search results are in. In those cases we may be issuing the title commitment on the day of closing and the consumer is taking their first peek at the exclusions at the closing table. I'd rather they wait and take time to understand the transaction but it's their choice and we aims to please.
Consumers should choose quality title expertise.
Look for demonstrative knowledge when selecting a title insurer. Call and ask some questions. Ask if they are just doing current owner searches or will they perform a full search? Do they even understand the question?
Here's a good post by Jeanne Johnson on her Landrecs.com blog.
Here's a good post by Jeanne Johnson on her Landrecs.com blog.
query: title insurance hidden oil tank
My apologies for not answering this query sooner. I needed to ponder on it and having done so I would say no, I don't believe title insurance covers hidden oil tanks. I write coverage in many rural areas where underground oil tanks are on practically every property. Though I've never had a claim or this question come up before, I can't see any reason for title insurance covering any matter related to a hidden oil tank.
That doesn't mean that coverage does not exist, it's just my opinion. If you are faced with a real life situation involving a hidden oil tank and you have an owner policy, just contact the title insurer and make a claim.
If any readers have experience with hidden tanks and title claims, I'd be happy to receive your comments.
That doesn't mean that coverage does not exist, it's just my opinion. If you are faced with a real life situation involving a hidden oil tank and you have an owner policy, just contact the title insurer and make a claim.
If any readers have experience with hidden tanks and title claims, I'd be happy to receive your comments.
query: title insurance on cash transaction
not required but highly recommended..........
A homeowner buying real estate with a mortgage or cash has just as much risk. You either buy title insurance coverage or you don't.
Remember, in a mortgage transaction the lender is only requiring that you purchase a loan policy. You can waive owner coverage if you choose.
Why under any circumstances you would allow an asset of that size to be uninsured is beyond me but it's your choice. Make it a good one! Be safe. Be happy.
A homeowner buying real estate with a mortgage or cash has just as much risk. You either buy title insurance coverage or you don't.
Remember, in a mortgage transaction the lender is only requiring that you purchase a loan policy. You can waive owner coverage if you choose.
Why under any circumstances you would allow an asset of that size to be uninsured is beyond me but it's your choice. Make it a good one! Be safe. Be happy.
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