Insuring title for property currently vested in an irrevocable trust is not hard, you just need to confirm the terms of the trust.
You'll need a signed copy of the full trust and any amendments. If the trustee has a signed memorandum/certificate of trust, take a look at that first. Many attorneys will prepare this short certificate which outlines the important parties and powers. A signed copy of this certificate can be relied upon. Some folks will record a copy of the certificate as an exhibit with the deed.
BTW I have found that trustees who do not have a certificate of trust are sometimes reluctant to give us a copy of the full trust. We just tell them we need it and wait until they comply.
I strongly suggest that you let your title underwriter walk you through your first trust transaction or two just to be safe. There are just a few issues to keep an eye on that you'll not want to miss.
We reviewed an interesting case last week in which two real properties were supposedly deeded into a trust. Turned out that one was and the other was not. The attorney who had prepared the deeds used the wrong legal description for one of the properties. The settlor is deceased so the successor trustee now has to raise an estate and will be signing the deed into our insured in the capacity of successor trustee and executrix of the estate.
Monday, October 29, 2007
query: what does raise an estate mean
I recommend that you hire an attorney. Raising an estate simply means that you go to the Register of Wills at the courthouse and open an estate file. There are many possible issues to be considered. Your attorney will walk you through the process and prepare the necessary paperwork.
snot nosed kid running a sham
A nice young lady called me today representing a title agency whose name suspiciously sounds a lot like a real estate office in Allegheny County.
She was looking at a title report and asked about an outstanding commonwealth lien filed against a prior owner - just checking to see if we had paid the lien as we had insured title two years ago. She implied they were getting ready to close ASAP and so I asked her to fax her title commitment since I did not see reference to a lien on the HUD or our cover notes. We have a file scanned that is over 200 pages and I'd need time to look, etc., etc. and if there is a valid lien out there I'd like to have her commitment in hand to deal with it, etc., etc., etc.
Five seconds, maybe two, after I hung up, I get another call, this time from a threatening brassy young lady who just wanted to tell me that she was ordering a payoff on that lien no matter what and I'd better be prepared to get a call from our insured......breathe........ok.......
......so, as I now had the abstract scrolled up and in front of me,
I asked, "Oh, do you mean the Commonwealth of Pennsylvania lien filed against Mr. ?" "Yes." she said.
"Oh", I said, "and are you showing the vesting as Mr. & Mrs. as husband and wife?" "Yes", she said.
"Unless you have evidence of a divorce we missed, the lien doesn't stick. It doesn't penetrate the tenancy by the entireties."
She had absolutely no idea what I was talking about. I suggested she call her title company and she reluctantly agreed though she snarled through her teeth that she was sure I was dead wrong.
In the course of the conversations both women told me they had to order the title commitment. Gee, isn't the preparation and issuance of the title commitment a core service performed by the title agent?
So, this likely Realtor owned controlled business arrangement is manned by a couple of inexperience, untrained women who are prepared to force a seller, my insured, to pay for a lien that is not valid. They were prepared to push him to pay for this lien without giving any opportunity for a reasonable defense from his title company.
Granted, our insured has an obligation to say no and call us himself but let's just say that these women are pushy - the one certainly was - and they convince him he has no alternative.
These women my friends, are dangerous. These woman are title agents owned and operated by a Realtor whose sole interest is closing the deal fast and without regard to the interests of the parties involved.
It's a down right dirty shame that snot nosed sham operators can get away with this crap and no one is doing a damn thing about it. The title underwriter who is doing all the work for this sham operation should at the very least tell them to NOT pretend in any way that they understand anything. They should keep their mouths shut and just cash the checks.
Oh, I forgot. It's entirely possible that they are looking at a title underwriter title report that was automatically generated and perhaps they are looking at conditions generated by a machine.
So you combine a machine generated title report with a snot-nosed-brat-don't know-nothing sham operator and what do you get?
A consumer in the hands of an imbecile predator.
Gee, what a rosy future.
She was looking at a title report and asked about an outstanding commonwealth lien filed against a prior owner - just checking to see if we had paid the lien as we had insured title two years ago. She implied they were getting ready to close ASAP and so I asked her to fax her title commitment since I did not see reference to a lien on the HUD or our cover notes. We have a file scanned that is over 200 pages and I'd need time to look, etc., etc. and if there is a valid lien out there I'd like to have her commitment in hand to deal with it, etc., etc., etc.
Five seconds, maybe two, after I hung up, I get another call, this time from a threatening brassy young lady who just wanted to tell me that she was ordering a payoff on that lien no matter what and I'd better be prepared to get a call from our insured......breathe........ok.......
......so, as I now had the abstract scrolled up and in front of me,
I asked, "Oh, do you mean the Commonwealth of Pennsylvania lien filed against Mr. ?" "Yes." she said.
"Oh", I said, "and are you showing the vesting as Mr. & Mrs. as husband and wife?" "Yes", she said.
"Unless you have evidence of a divorce we missed, the lien doesn't stick. It doesn't penetrate the tenancy by the entireties."
She had absolutely no idea what I was talking about. I suggested she call her title company and she reluctantly agreed though she snarled through her teeth that she was sure I was dead wrong.
In the course of the conversations both women told me they had to order the title commitment. Gee, isn't the preparation and issuance of the title commitment a core service performed by the title agent?
So, this likely Realtor owned controlled business arrangement is manned by a couple of inexperience, untrained women who are prepared to force a seller, my insured, to pay for a lien that is not valid. They were prepared to push him to pay for this lien without giving any opportunity for a reasonable defense from his title company.
Granted, our insured has an obligation to say no and call us himself but let's just say that these women are pushy - the one certainly was - and they convince him he has no alternative.
These women my friends, are dangerous. These woman are title agents owned and operated by a Realtor whose sole interest is closing the deal fast and without regard to the interests of the parties involved.
It's a down right dirty shame that snot nosed sham operators can get away with this crap and no one is doing a damn thing about it. The title underwriter who is doing all the work for this sham operation should at the very least tell them to NOT pretend in any way that they understand anything. They should keep their mouths shut and just cash the checks.
Oh, I forgot. It's entirely possible that they are looking at a title underwriter title report that was automatically generated and perhaps they are looking at conditions generated by a machine.
So you combine a machine generated title report with a snot-nosed-brat-don't know-nothing sham operator and what do you get?
A consumer in the hands of an imbecile predator.
Gee, what a rosy future.
Thursday, October 25, 2007
query: are property surveys required in Pennsylvania
You know it's funny, in PA, title insurance customs evolved differently in Philadelphia and Pittsburgh. We have or used to have a kind of east vs. west mentality.
east - no surveys
west - surveys
east - reissue rate regardless of eligibility
west - basic rate regardless of eligibility
east - special warranty deed
west - general warranty deed
Each side thought the other was crazy or they had no idea that anybody ever did anything differently at all, they lived in a metro title vacuum.
After vendor management style title insurance became vogue, the title underwriters did some education and now most folks do special warranty deeds, watch eligiblity for discounts and issue loan policies with survey coverage WITHOUT getting a survey.
So, a title insurer MAY require a survey in PA but most don't.
east - no surveys
west - surveys
east - reissue rate regardless of eligibility
west - basic rate regardless of eligibility
east - special warranty deed
west - general warranty deed
Each side thought the other was crazy or they had no idea that anybody ever did anything differently at all, they lived in a metro title vacuum.
After vendor management style title insurance became vogue, the title underwriters did some education and now most folks do special warranty deeds, watch eligiblity for discounts and issue loan policies with survey coverage WITHOUT getting a survey.
So, a title insurer MAY require a survey in PA but most don't.
query: why must HUD-1 be signed
The HUD-1 is signed so that the parties have acknowledged and agreed to the movement of money in the transaction. The settlement agent signs to certify that they have or will disburse funds as noted on the HUD-1.
The HUD-1 is a settlement statement designed to aid consumers in a federally related mortgage transaction. It is not required nor it is always used or signed in transactions that do not fall under the federal regulations.
For instance, though we use a HUD-1 in cash transactions, I would still close even if the HUD-1 was not signed. I prefer a signature but I would not require a signature.
The HUD-1 is a settlement statement designed to aid consumers in a federally related mortgage transaction. It is not required nor it is always used or signed in transactions that do not fall under the federal regulations.
For instance, though we use a HUD-1 in cash transactions, I would still close even if the HUD-1 was not signed. I prefer a signature but I would not require a signature.
query: what happens if there is an issue with title insurance after it is issued
I'm not sure what you mean but let me take a stab at it.
If you find an error in the policy, you can contact the title company and request a corrective endorsement. You have to be certain however that it's a true error. We have to hope that you really read the title commitment before you closed because some things can't be fixed or changed later without a lot of effort, if at all.
For instance, let's say you are in your new home and you receive your title policy and now you finally have time to sit and relax and read it and OH MY HEAVENS you find the property described is not the property you thought you were buying. Yes, this happens, especially in cases were the sellers own more than one parcel. In that case, the title agent would have to research the title again, obtain a corrective deed then correct the policy. You should expect to pay for the extra work because you had an obligation to read and review prior to closing.
I hope that helps.
If you find an error in the policy, you can contact the title company and request a corrective endorsement. You have to be certain however that it's a true error. We have to hope that you really read the title commitment before you closed because some things can't be fixed or changed later without a lot of effort, if at all.
For instance, let's say you are in your new home and you receive your title policy and now you finally have time to sit and relax and read it and OH MY HEAVENS you find the property described is not the property you thought you were buying. Yes, this happens, especially in cases were the sellers own more than one parcel. In that case, the title agent would have to research the title again, obtain a corrective deed then correct the policy. You should expect to pay for the extra work because you had an obligation to read and review prior to closing.
I hope that helps.
query: florida title defect incorrect legal description need corrective deed original grantor not available
Is the original grantor not available because of death? If so, the estate or heirs can sign a corrective deed. If you just can't find the original grantor you'll need to hire an attorney to perform a quiet title action and correct the record.
Wednesday, October 24, 2007
Are home warranties worth it?
Home warranties have been on my mind lately. It seems to me that much attention has been paid to the cost of title insurance and related claims but no one thinks twice about the home warranty.
Let's say you are purchasing a home here in western PA at a cost of $100,000. The title insurance premium at reissue would be $772.88. That one time premium pays for the examination of title and owner coverage up to $100,000. In the title business there is a true risk of catastrophic loss and therefore the title company could be forced to pay a claim up to the $100,000 mark. Title insurance has no expiration. Owner coverage continues so long as you have an interest to defend.
Got it? It's $772.88 for examination and insurance.
Now let's consider the physical components of the structure. A home inspection would cost about $400 and home warranty around $400, too. So to examine and then insure certain of the physical components of the structure you'd have to pay roughly $800.
Read this article. Here's a blurb:
Let's say you are purchasing a home here in western PA at a cost of $100,000. The title insurance premium at reissue would be $772.88. That one time premium pays for the examination of title and owner coverage up to $100,000. In the title business there is a true risk of catastrophic loss and therefore the title company could be forced to pay a claim up to the $100,000 mark. Title insurance has no expiration. Owner coverage continues so long as you have an interest to defend.
Got it? It's $772.88 for examination and insurance.
Now let's consider the physical components of the structure. A home inspection would cost about $400 and home warranty around $400, too. So to examine and then insure certain of the physical components of the structure you'd have to pay roughly $800.
Read this article. Here's a blurb:
By Tuesday, she had been referred to five plumbers. Four of them wouldn't call her back and the one who did said he couldn't come out for four days.
The customer service representatives at First American were unsympathetic, she said.
"There was no hurry, no urgency," she said. "I would be on hold for 45 minutes at a time."
So Ledford got estimates on her own from two plumbers.
But she said First American told her that it wouldn't pay the bill because she had to use one of the plumbers it referred to her.
After two days of missed work, endless phone calls and no running water, Ledford had enough and called The Watchdog.
After some research, we gave her the name of the company's chief operations manager and a number for corporate headquarters.
Suddenly, Ledford starting getting some help.
Shortly after leaving a message for the executive, Ledford received a call back from Rebecca Richwine, a claims analyst for the company.
Richwine apologized profusely, Ledford said, but more importantly, by late Wednesday afternoon she got Ledford an authorization code to use a plumber outside First American's referral network.
Four days after the pipe burst, it was fixed and the water was turned back on.
Ledford had to pay the $350 plumbing bill out of pocket and submit a claim for reimbursement. She received the check last week.
Richwine told The Watchdog that Ledford did everything she was supposed to do under the terms of her warranty contract.
I have some questions. Perhaps you, dear Reader, have the answers.- How often are claims made against home warranties?
- How long does the warranty last?
- Does the Realtor earn a portion of the warranty premium as a commission or referral fee?
- If a referral fee or commission is earned, is it disclosed to the consumer?
Tuesday, October 23, 2007
Meet Mr. Much Ado's cousin Mr. I'll Insure Over Anything Because I'm An Idiot
Yes, it's the lovely Laurel Highlands again, the water coolers of certain law offices must brimming with wacko Kool-Aid.
We have a local tax collector who flew the coop over some domestic issue - can't be found - can't get tax certificates. [It's rural country title insurance routine crapolla.] The last time this happened it took a year before the authorities had to step in an take over. In that time, checks were lost, unaccounted for and tax claim finally had to eat mucho bucks. We had to mail all tax payments via certified mail just to have evidence that we sent something to that house and so here we go again into LaLaLand - rural tax collector running from the bruiser-style.
Transaction supposed to close today. We set up escrow pending evidence of payment of current year taxes - tax certificate or tax receipts.
Mr. I'll Insure Over Anything BIAI refuses to close with an escrow. He wants me to accept his letter with his personal guaranty - I have dealt with this law firm before and I wouldn't lend them a dime. - or he won't close.
I offer to take his letter if the seller can substantiate in any way that he paid the taxes - cancelled checks, etc. Seller has no cancelled checks so Mr. I'll Insure Over Anything BIAI earns his name by saying "I'll insure it if you won't!"
I respond by saying I'll postpone closing.
The real shame is that IF the buyer and the lender decide they want to move the transaction to a crappy title provider and I call the crappy title provider's underwriter to protest, they won't give a damn either.
We are living in "Crappyland" and I'm not going to fret anymore about it this morning. Chips fall......
We have a local tax collector who flew the coop over some domestic issue - can't be found - can't get tax certificates. [It's rural country title insurance routine crapolla.] The last time this happened it took a year before the authorities had to step in an take over. In that time, checks were lost, unaccounted for and tax claim finally had to eat mucho bucks. We had to mail all tax payments via certified mail just to have evidence that we sent something to that house and so here we go again into LaLaLand - rural tax collector running from the bruiser-style.
Transaction supposed to close today. We set up escrow pending evidence of payment of current year taxes - tax certificate or tax receipts.
Mr. I'll Insure Over Anything BIAI refuses to close with an escrow. He wants me to accept his letter with his personal guaranty - I have dealt with this law firm before and I wouldn't lend them a dime. - or he won't close.
I offer to take his letter if the seller can substantiate in any way that he paid the taxes - cancelled checks, etc. Seller has no cancelled checks so Mr. I'll Insure Over Anything BIAI earns his name by saying "I'll insure it if you won't!"
I respond by saying I'll postpone closing.
The real shame is that IF the buyer and the lender decide they want to move the transaction to a crappy title provider and I call the crappy title provider's underwriter to protest, they won't give a damn either.
We are living in "Crappyland" and I'm not going to fret anymore about it this morning. Chips fall......
Monday, October 22, 2007
If you cancel your mortgage, they can't foreclose.
Read this.
Did your loan officer or "closer" really follow the federal guidelines? If not, you might be able to cancel your mortgage. If you cancel your mortgage, they can't foreclose. It might not lead to anything but if it's your house you are trying to save, it's worth having an attorney take a peek at your paperwork. Isn't it?
Talk this over with your attorney if you think you might have a case. If you are successful, you might have to repay the principal but could you recoup the interest, closing costs and fees? At the very least you may be able to delay the foreclosure process OR gain the upper hand in renegotiating mortgage terms.
I am very interested in the comments of others. Has anyone out there been directly involved in a TILA case like this?
This looks like a good link. Here's another good link. And another.
Did your loan officer or "closer" really follow the federal guidelines? If not, you might be able to cancel your mortgage. If you cancel your mortgage, they can't foreclose. It might not lead to anything but if it's your house you are trying to save, it's worth having an attorney take a peek at your paperwork. Isn't it?
Talk this over with your attorney if you think you might have a case. If you are successful, you might have to repay the principal but could you recoup the interest, closing costs and fees? At the very least you may be able to delay the foreclosure process OR gain the upper hand in renegotiating mortgage terms.
I am very interested in the comments of others. Has anyone out there been directly involved in a TILA case like this?
This looks like a good link. Here's another good link. And another.
Sunday, October 21, 2007
query: how to file a claim
Sorry! I thought I had covered this but perhaps not directly. It's important so thanks for raising the issue.
First, get your owner title insurance policy in front of you. Make a copy of it to submit with the claim. If you can't find your policy, make a copy of your HUD-1 Settlement Statement. The HUD-1 is proof that you paid for an owner policy.
Look for the name and address of the actual title underwriter, not the agent. Some but not all policy jackets will have this information prominently posted, some will not. If you can't find it, look for a large office of the title underwriter in the closest metropolitan area. You can find it on-line if you Google their name.
Now, write a letter explaining the nature of the claim. Include all supporting data such as a letter you may have received from someone asking for money. Be specific and be sure to sign the letter.
Mail the letter along with supporting documentation and a copy of your policy to the title underwriter via certified mail. You want to get a prompt response and by sending it certified mail you will get their attention. BTW - send it to the attention of "claims department". that will get it to the proper person.
I suggest that you also call your title agent or attorney to let them know you are making a claim. WHY? Well, if they are responsible providers, they will likely jump on the issue and try to resolve it ASAP because they want to help you. Under no circumstances should you let them talk you out of making a formal claim. It's your right to do so and the sooner you get it started, the sooner you will get an answer.
Your responsiblity in any claim situation is to mitigate damages. That means you cannot delay contacting the title underwriter. Give them an opportunity to step up to the plate and defend you before you give anyone any money.
Once you have the signed receipt back from the post office confirming that your letter has arrived, if you haven't heard from anyone, follow-up with a phone call and find out who is assigned to your case.
If the claim is rejected and you feel the rejection is not fair, you can contact an attorney or the state attorney general or the state insurance commission for assistance.
There ARE circumstances that are NOT covered by title insurance and your title insurer should be able to clarify that in a way that you understand. IF, however, it's not clear and you think they are brushing you off, then pursue the matter.
Good luck!
First, get your owner title insurance policy in front of you. Make a copy of it to submit with the claim. If you can't find your policy, make a copy of your HUD-1 Settlement Statement. The HUD-1 is proof that you paid for an owner policy.
Look for the name and address of the actual title underwriter, not the agent. Some but not all policy jackets will have this information prominently posted, some will not. If you can't find it, look for a large office of the title underwriter in the closest metropolitan area. You can find it on-line if you Google their name.
Now, write a letter explaining the nature of the claim. Include all supporting data such as a letter you may have received from someone asking for money. Be specific and be sure to sign the letter.
Mail the letter along with supporting documentation and a copy of your policy to the title underwriter via certified mail. You want to get a prompt response and by sending it certified mail you will get their attention. BTW - send it to the attention of "claims department". that will get it to the proper person.
I suggest that you also call your title agent or attorney to let them know you are making a claim. WHY? Well, if they are responsible providers, they will likely jump on the issue and try to resolve it ASAP because they want to help you. Under no circumstances should you let them talk you out of making a formal claim. It's your right to do so and the sooner you get it started, the sooner you will get an answer.
Your responsiblity in any claim situation is to mitigate damages. That means you cannot delay contacting the title underwriter. Give them an opportunity to step up to the plate and defend you before you give anyone any money.
Once you have the signed receipt back from the post office confirming that your letter has arrived, if you haven't heard from anyone, follow-up with a phone call and find out who is assigned to your case.
If the claim is rejected and you feel the rejection is not fair, you can contact an attorney or the state attorney general or the state insurance commission for assistance.
There ARE circumstances that are NOT covered by title insurance and your title insurer should be able to clarify that in a way that you understand. IF, however, it's not clear and you think they are brushing you off, then pursue the matter.
Good luck!
Saturday, October 20, 2007
this still floors me
Read this:
"I did a loan app for them the first of October and the lady wouldn't sign the docs. They told me NOT under any circumstances, to contact the borrower but to just show up. That should have been a red flag then - but since it was just a loan app I didn't think too much about it. When I arrived, in pouring down rain, she answered the door and said she didn't know I was coming then she said that she forgot I was coming - she was in the middle of dinner with some of her friends and family. She invited me in, we sat down and she looked at the first page and said that was not what she wanted. We called the L/O and they talked about five minutes then she stated again she wasn't going to sign."; and
then answer this question for me:
Does Ohio have a licensing law for mortgage lenders? Is this it?
"A person wishing to register under the Ohio Mortgage Loan Act must submit an application, a fingerprint card, a registration fee and a nonrefundable investigation fee. The Division must investigate the financial condition, responsibility, experience character and general fitness of the applicant, including requesting a criminal background check. The applicant must have assets of at least fifty thousand dollars per branch office readily available for use in the business and a net worth of fifty thousand dollars."
How, pray tell, does an unlicensed notary public fit into the mortgage origination scenario?
Shouldn't this citizen of Ohio be protected against having their home invaded unannounced by an unlicensed individual attempting to take their very personal information and perhaps attempting to coerce them into signing mortgage application documents?
I just don't get it. Am I missing something here?
Oh, the lender is in Ohio but the property is in Florida. OK.
Doesn't Florida have a licensing law to protect its citizens? Is this it?
An individual person who acts as an associate for either a licensed mortgage broker business or any lender licensed under Chapter 494, F.S. A licensed mortgage broker is authorized to solicit mortgage loans on behalf of a borrower, to accept an application, and to negotiate terms and conditions of a mortgage loan on behalf of a lender.
I just don't get it. Am I missing something here?
Where does a notary fit into the licensing structure for originating mortgage loans in Florida?
"I did a loan app for them the first of October and the lady wouldn't sign the docs. They told me NOT under any circumstances, to contact the borrower but to just show up. That should have been a red flag then - but since it was just a loan app I didn't think too much about it. When I arrived, in pouring down rain, she answered the door and said she didn't know I was coming then she said that she forgot I was coming - she was in the middle of dinner with some of her friends and family. She invited me in, we sat down and she looked at the first page and said that was not what she wanted. We called the L/O and they talked about five minutes then she stated again she wasn't going to sign."; and
then answer this question for me:
Does Ohio have a licensing law for mortgage lenders? Is this it?
"A person wishing to register under the Ohio Mortgage Loan Act must submit an application, a fingerprint card, a registration fee and a nonrefundable investigation fee. The Division must investigate the financial condition, responsibility, experience character and general fitness of the applicant, including requesting a criminal background check. The applicant must have assets of at least fifty thousand dollars per branch office readily available for use in the business and a net worth of fifty thousand dollars."
How, pray tell, does an unlicensed notary public fit into the mortgage origination scenario?
Shouldn't this citizen of Ohio be protected against having their home invaded unannounced by an unlicensed individual attempting to take their very personal information and perhaps attempting to coerce them into signing mortgage application documents?
I just don't get it. Am I missing something here?
Oh, the lender is in Ohio but the property is in Florida. OK.
Doesn't Florida have a licensing law to protect its citizens? Is this it?
An individual person who acts as an associate for either a licensed mortgage broker business or any lender licensed under Chapter 494, F.S. A licensed mortgage broker is authorized to solicit mortgage loans on behalf of a borrower, to accept an application, and to negotiate terms and conditions of a mortgage loan on behalf of a lender.
I just don't get it. Am I missing something here?
Where does a notary fit into the licensing structure for originating mortgage loans in Florida?
query: do I need title insurance to buy land in Pennsylania
It's not a state specific question, really. In every real property purchase, title insurance is all about the land anyway. It's just a matter of value. A house is an improvement on the land that adds value so the amount of the title insurance should be high enough to cover that extra value.
Title to the land is what you are insuring - whether or not it has improvements, so you just need to decide if you want to protect your investment or not.
I suggest buying the title insurance from a competent provider. It's a one time premium. You can use the calculator link here on our blog to figure out the cost. I assure you it's worth it.
BTW - I also suggest you have the land surveyed, especially if you intend to build. A surveyor will map out the location of easements and building setback lines so that you can visualize the location of planned improvements before you break ground. It's also a good idea to have the surveyor set flags at the location of the proposed foundation so the builder sets it in its proper place. You sure don't want to be forced to move the house once its built. Hey, it happens. ;)
Title to the land is what you are insuring - whether or not it has improvements, so you just need to decide if you want to protect your investment or not.
I suggest buying the title insurance from a competent provider. It's a one time premium. You can use the calculator link here on our blog to figure out the cost. I assure you it's worth it.
BTW - I also suggest you have the land surveyed, especially if you intend to build. A surveyor will map out the location of easements and building setback lines so that you can visualize the location of planned improvements before you break ground. It's also a good idea to have the surveyor set flags at the location of the proposed foundation so the builder sets it in its proper place. You sure don't want to be forced to move the house once its built. Hey, it happens. ;)
query: can a title company sue a seller after closing of property
Yes. Suing the seller is a routine part of claims management.
When you sell real property you give a warranty to the buyer. You also sign certain legally binding affidavits for the title company. The warranties and affirmations made by affidavit give the title company a legal pathway right back to you.
There is nothing wrong with that - after all you have personal knowledge of the property and an obligation to tell the truth. If you cause damage, you should expect the title company to seek recompense from you.
When you sell real property you give a warranty to the buyer. You also sign certain legally binding affidavits for the title company. The warranties and affirmations made by affidavit give the title company a legal pathway right back to you.
There is nothing wrong with that - after all you have personal knowledge of the property and an obligation to tell the truth. If you cause damage, you should expect the title company to seek recompense from you.
Friday, October 19, 2007
query: does a quiet title always give a clear title
No. The words "quiet title" refer to a legal procedure for removing certain rights or claims that might threaten the title to real estate. The court action is specific. A successful quiet title action will only clear that specific item. There may be other clouds on title unrelated to that which was the concern of the action to quiet title.
Always have a FULL title examination performed by a competent title insurer. Always buy an owner policy in case someone makes a mistake.
This is the only thorough way to protect the title of you real estate.
Always have a FULL title examination performed by a competent title insurer. Always buy an owner policy in case someone makes a mistake.
This is the only thorough way to protect the title of you real estate.
Thursday, October 18, 2007
query: when not to buy title insurance
You should always buy title insurance. I would prefer that you be selective about the provider because competence in the examination phase means you are likely to not have to suffer through a claim process, BUT suffering through a claim process is far better than defending title completely on your own and with your dime.
Here's an example. I stumbled onto this case today through a Google alert. [Love those things.]
It's a lawsuit filed by First American Title Insurance Company seeking recompense for a title claim. It's a case in which the buyers had to suffer through a claim process but in the end they got to keep their house and their legal fees were covered. Kudos to First American for protecting the insured.
This case is in Tennessee. Each state has its own customs but reviewing the case the only I found odd was that the seller selected the title examiner. See if you can follow this....
Merrill is the buyer.
Harris is the seller and I have reason to believe also the builder.
It's a cash purchase at $345,000.00.
The seller selected or arranged for Paramount to perform title examination and closing.
Paramount order an abstract from Atkins.
Harris has TWO mortgages against the subject property. One for $200,000 and the other is a blanket mortgage which means it covers more than one property. The blanket mortgage is $248,000.
Atkins misses the blanket mortgage in the search.
Paramount proceeds to close the transaction apparently blind to the fact that there is another substantial mortgage lien against the property.
Merrill buys an owner policy. Merrill - YOU ARE SO SMART! This is a cash buyer who was smart enough to protect his $345,000 investment by paying a one-time premium of $815.00 for title insurance.
Bottom line, FATIC paid close to $300,000 to protect the title. Merrill made a wise purchase.
Here's an example. I stumbled onto this case today through a Google alert. [Love those things.]
It's a lawsuit filed by First American Title Insurance Company seeking recompense for a title claim. It's a case in which the buyers had to suffer through a claim process but in the end they got to keep their house and their legal fees were covered. Kudos to First American for protecting the insured.
This case is in Tennessee. Each state has its own customs but reviewing the case the only I found odd was that the seller selected the title examiner. See if you can follow this....
Merrill is the buyer.
Harris is the seller and I have reason to believe also the builder.
It's a cash purchase at $345,000.00.
The seller selected or arranged for Paramount to perform title examination and closing.
Paramount order an abstract from Atkins.
Harris has TWO mortgages against the subject property. One for $200,000 and the other is a blanket mortgage which means it covers more than one property. The blanket mortgage is $248,000.
Atkins misses the blanket mortgage in the search.
Paramount proceeds to close the transaction apparently blind to the fact that there is another substantial mortgage lien against the property.
Merrill buys an owner policy. Merrill - YOU ARE SO SMART! This is a cash buyer who was smart enough to protect his $345,000 investment by paying a one-time premium of $815.00 for title insurance.
Bottom line, FATIC paid close to $300,000 to protect the title. Merrill made a wise purchase.
query: what happens to lender insurance in a foreclosure
The lender who successfully bids at sheriff sale and takes title to the property becomes the owner. At that point the loan policy in a way converts to an owner policy for the benefit of the lender, now owner.
Up until that point the function of the loan policy is to protect the lender's lien viability and position.
I have a good example on my desk. Yesterday I spoke with a mortgage lender who has a $90,000 mortgage against the property I am hoping to insure. Here's the weird thing about this transaction. The parties have informed us that a short sale is pending. When I examined title, I noticed that the sale price is only $5000.00 and I thought "What the hey?" Then I noticed that the $90,000 mortgage is in second position. YOI.....
So when I spoke with this lender, she confirmed that yes they were agreeing to a $5000 short sale - all proceeds to them - and I asked if she had an agreement with the lender in first position.
After a long pause, she said NO, they are in first. To which I replied, well your foreclosure attorney agrees that they have a valid lien because they were served in the now forestalled foreclosure action.
She immedately recognized a "title problem" and said she'll get back to me.
It's hard to say whether they really knew about the first mortgage or not. That might be why they agreed to such a small amount in the short sale. If they had gone to foreclosure they'd have to pay the first mortgage holder off and maybe the property isn't worth so much.
They might have been hoping that the buyer - being a cash buyer -would forego professional title work and not find the first mortgage at all. It wouldn't have been this lender's problem. All they are doing is negotiating a reduced payoff. If the buyer had proceeded to close without finding the first mortgage, he's have been stuck with it or at least with a claim against the seller and lots of luck there....
I think I've kinda wondered off the subject but you can see how title issues work their way through a foreclosure or short sale process.
Be smart. Buy title insurance from a competent provider.
Hmmmm I wonder if that lender would have a claim against their loan policy that would net them a whole lot more than the short sale.....afterall I bet they are insured in first position.
Up until that point the function of the loan policy is to protect the lender's lien viability and position.
I have a good example on my desk. Yesterday I spoke with a mortgage lender who has a $90,000 mortgage against the property I am hoping to insure. Here's the weird thing about this transaction. The parties have informed us that a short sale is pending. When I examined title, I noticed that the sale price is only $5000.00 and I thought "What the hey?" Then I noticed that the $90,000 mortgage is in second position. YOI.....
So when I spoke with this lender, she confirmed that yes they were agreeing to a $5000 short sale - all proceeds to them - and I asked if she had an agreement with the lender in first position.
After a long pause, she said NO, they are in first. To which I replied, well your foreclosure attorney agrees that they have a valid lien because they were served in the now forestalled foreclosure action.
She immedately recognized a "title problem" and said she'll get back to me.
It's hard to say whether they really knew about the first mortgage or not. That might be why they agreed to such a small amount in the short sale. If they had gone to foreclosure they'd have to pay the first mortgage holder off and maybe the property isn't worth so much.
They might have been hoping that the buyer - being a cash buyer -would forego professional title work and not find the first mortgage at all. It wouldn't have been this lender's problem. All they are doing is negotiating a reduced payoff. If the buyer had proceeded to close without finding the first mortgage, he's have been stuck with it or at least with a claim against the seller and lots of luck there....
I think I've kinda wondered off the subject but you can see how title issues work their way through a foreclosure or short sale process.
Be smart. Buy title insurance from a competent provider.
Hmmmm I wonder if that lender would have a claim against their loan policy that would net them a whole lot more than the short sale.....afterall I bet they are insured in first position.
query: are referrals ever ok under RESPA
You can make referrals. You just can't give or take referral fees.
Wednesday, October 17, 2007
Builders and Realtors CANNOT force you to use their affiliated company!
You can say that again, Ken Harney. This is a great article. Here's a blurb:
Under the federal Real Estate Settlement Procedures Act (RESPA), builders and realty brokers are prohibited from requiring customers to use their own affiliates or subsidiaries for mortgage, title or other settlement-related services. They can recommend affiliates -- provided they also disclose the relationship -- but they cannot force consumers to use them.
Consumers should not allow themselves to be bullied by builders, lenders, or Realtors who own affiliated companies. Make your own decisions. The law is on YOUR side.
Tuesday, October 16, 2007
query: sue title company for giving clear title when it wasn't - didn't catch unreleased lien
Real property transactions are fraught with risk. This is why it's so very important that we in the industry maintain our tradition of expert title search and examination.
You know, it might surprise you but there has been a trend in this business to hire abstractors with very little experience or even to rely upon computer generated searches. Then these less than adequate searches may or may not be reviewed by an experienced title examiner.
Title insurance companies think this is acceptable because you are insured and you can make a claim. What they are not considering is the trouble you are experiencing and that really makes me angry.
It takes time to file a claim. Transactions and lives are put on hold while facts are sorted through. Sometimes you might reach a settlement but not like the outcome. For instance, what if you are faced with having to take a monetary settlement instead of keeping the beautiful home you put so much love into?
Land and the homes we make are so much more important to us than economic rationality. I'm not saying that you shouldn't be smart. In fact, I AM saying you SHOULD be very careful who does your title work.
Consumers who really care must consider price AND quality when selecting their title insurer.
So, to answer your query, make a claim on your title insurance policy. Let your title insurer go to bat for you and if they made a mistake that's covered as an unreleased lien would normally be covered, they'll fix it for you.
You know, it might surprise you but there has been a trend in this business to hire abstractors with very little experience or even to rely upon computer generated searches. Then these less than adequate searches may or may not be reviewed by an experienced title examiner.
Title insurance companies think this is acceptable because you are insured and you can make a claim. What they are not considering is the trouble you are experiencing and that really makes me angry.
It takes time to file a claim. Transactions and lives are put on hold while facts are sorted through. Sometimes you might reach a settlement but not like the outcome. For instance, what if you are faced with having to take a monetary settlement instead of keeping the beautiful home you put so much love into?
Land and the homes we make are so much more important to us than economic rationality. I'm not saying that you shouldn't be smart. In fact, I AM saying you SHOULD be very careful who does your title work.
Consumers who really care must consider price AND quality when selecting their title insurer.
So, to answer your query, make a claim on your title insurance policy. Let your title insurer go to bat for you and if they made a mistake that's covered as an unreleased lien would normally be covered, they'll fix it for you.
query: who is responsible for preparing a mortgage payoff statement
The mortgagee [lender] prepares the payoff statement. It's not a rule, just custom based on the logic of who sets the terms for the release of the security underlying the note.
query: what can I do if an attorney's title opinion is found to be incorrect
Well, if you opted not to buy an owner title insurance policy, you're at the mercy of the attorney.
Let's hope the attorney is still alive, willing to make good and able to make good. You might have to hire another attorney to press the issue. I guess it all depends how much money is at stake whether or not you choose to pursue the matter.
Let's hope the attorney is still alive, willing to make good and able to make good. You might have to hire another attorney to press the issue. I guess it all depends how much money is at stake whether or not you choose to pursue the matter.
query: incorrect payoff on the HUD-1
I hear ya, but I'm not sure what the question really is.
Did you read the HUD-1 before you signed it?
Do you mean that it's the wrong lender being paid off or the wrong figure or the wrong mortgage?
The title professional in charge of the transaction is obligated to correct any errors, but the mortgagor whose mortgage is being paid off has obligations, too. You have personal knowledge of your own business and so you must read documents and verify that the mortgage being paid on the HUD is correct.
If title insurance is being issued as part of the transaction, you likely signed an owner/seller affidavit in which you affirmed that you had reviewed the HUD-1 and that there were no mortgage obligations not being paid on the HUD. This document ties you to the HUD-1 and legally binds you to responsible review and correction as needed.
Mistakes do happen. Human beings make mistakes. People must watch each other's back to avoid mistakes. The owner/seller affidavit formalizes that concept and binds the owner/seller to the process of looking for errors on the HUD-1 before the transaction is completed.
Did you read the HUD-1 before you signed it?
Do you mean that it's the wrong lender being paid off or the wrong figure or the wrong mortgage?
The title professional in charge of the transaction is obligated to correct any errors, but the mortgagor whose mortgage is being paid off has obligations, too. You have personal knowledge of your own business and so you must read documents and verify that the mortgage being paid on the HUD is correct.
If title insurance is being issued as part of the transaction, you likely signed an owner/seller affidavit in which you affirmed that you had reviewed the HUD-1 and that there were no mortgage obligations not being paid on the HUD. This document ties you to the HUD-1 and legally binds you to responsible review and correction as needed.
Mistakes do happen. Human beings make mistakes. People must watch each other's back to avoid mistakes. The owner/seller affidavit formalizes that concept and binds the owner/seller to the process of looking for errors on the HUD-1 before the transaction is completed.
buyer beware when hiring a notary public
Be explicit. Are you buying notarial services OR are you buying "signing agent" services?
You see, things are very confused in the notary business these days. Let me take a moment to explain.
Each state has its own set of laws concerning the closing of a real property transaction - purchase or refinance.
In all states, attorneys may perform the transaction.
In many states, attorneys ONLY may perform the transaction.
Many states license title insurance agents and/or producers. In those states these licensed title professionals may perform all or part of the transaction.
Here's where it gets confused. A few documents in a real property transaction require the seal of a notary public, therefore most attorneys and title professionals must by necessity also be notaries. Got that?
Enter the National Notary Association [NNA] and other notary groups who got the idea somewhere - probably from a big subprime lender - that notaries could perform real property transactions. They decided to "pretend" that the closing wasn't a closing at all so they could "pretend" that they weren't breaking any laws. They decided to call these notaries "signing agents" and started recruiting and offering advertising and marketing plans and "certification" courses - none of which had any basis in law or licensure.
This mass marketing and recruitment of notaries started about 15 years ago and has mushroomed to the point where it's not about teaching existing notaries, they actually recruit people to BECOME notaries just because they think there is big money in the real estate business.
So, if you need a notary seal on a few documents, you must be VERY careful that the notary you hire is only charging you to seal the documents and isn't adding "signing agent" fees because many don't know the difference.
Here's an example I found on the notary forum, Notary Rotary:
"What would you charge for signing a set of 1st docs on an out of state land purchase? The signing will be here and the client has all the docs. Travel would only be about a mile."
Now, I'm going to guess that the "client has the docs" means that the homebuyer is already working with an attorney or title professional in the state where they are purchasing the real estate. They are already paying the attorney or title professional to perform the real property transaction.
The homebuyer is simply involved in a remote closing, which means that they are signing documents and returning them to their attorney or title professional to complete the transaction. There are a few documents in the package that require a notary seal. This means that those few documents must be signed before a notary - just those few documents.
States regulate the fees a notary may charge per seal. The fee is usually $2 or $5. So, let's say this homebuyer has 5 documents that require notarization. If the homebuyer drives to the notary's office, the total cost for notarization will likely be $25.
Want to bet this notary will attempt to charge more, and for what?
As I post this item, there are two responses on Notary Rotary. The first implies the notary should charge, the "basement" rate -whatever the means. The second response seems to indicate that the notary should charge for time while the homebuyer reads the documents.
Homebuyer - if you are already paying an attorney or title professional to perform your transaction, review your documents and have them answer your questions before you go to the notary public. Take ONLY the documents that need notary seals to the notary's office. Do not give them any excuse for thinking they are providing "signing agent" services. Really - the situation with notaries is out of control. I know it sounds ridiculous, but it's true.
Be very careful when hiring notaries in a real property transaction. Be specific about services and get a written quote before you hire.
You see, things are very confused in the notary business these days. Let me take a moment to explain.
Each state has its own set of laws concerning the closing of a real property transaction - purchase or refinance.
In all states, attorneys may perform the transaction.
In many states, attorneys ONLY may perform the transaction.
Many states license title insurance agents and/or producers. In those states these licensed title professionals may perform all or part of the transaction.
Here's where it gets confused. A few documents in a real property transaction require the seal of a notary public, therefore most attorneys and title professionals must by necessity also be notaries. Got that?
Enter the National Notary Association [NNA] and other notary groups who got the idea somewhere - probably from a big subprime lender - that notaries could perform real property transactions. They decided to "pretend" that the closing wasn't a closing at all so they could "pretend" that they weren't breaking any laws. They decided to call these notaries "signing agents" and started recruiting and offering advertising and marketing plans and "certification" courses - none of which had any basis in law or licensure.
This mass marketing and recruitment of notaries started about 15 years ago and has mushroomed to the point where it's not about teaching existing notaries, they actually recruit people to BECOME notaries just because they think there is big money in the real estate business.
So, if you need a notary seal on a few documents, you must be VERY careful that the notary you hire is only charging you to seal the documents and isn't adding "signing agent" fees because many don't know the difference.
Here's an example I found on the notary forum, Notary Rotary:
"What would you charge for signing a set of 1st docs on an out of state land purchase? The signing will be here and the client has all the docs. Travel would only be about a mile."
Now, I'm going to guess that the "client has the docs" means that the homebuyer is already working with an attorney or title professional in the state where they are purchasing the real estate. They are already paying the attorney or title professional to perform the real property transaction.
The homebuyer is simply involved in a remote closing, which means that they are signing documents and returning them to their attorney or title professional to complete the transaction. There are a few documents in the package that require a notary seal. This means that those few documents must be signed before a notary - just those few documents.
States regulate the fees a notary may charge per seal. The fee is usually $2 or $5. So, let's say this homebuyer has 5 documents that require notarization. If the homebuyer drives to the notary's office, the total cost for notarization will likely be $25.
Want to bet this notary will attempt to charge more, and for what?
As I post this item, there are two responses on Notary Rotary. The first implies the notary should charge, the "basement" rate -whatever the means. The second response seems to indicate that the notary should charge for time while the homebuyer reads the documents.
Homebuyer - if you are already paying an attorney or title professional to perform your transaction, review your documents and have them answer your questions before you go to the notary public. Take ONLY the documents that need notary seals to the notary's office. Do not give them any excuse for thinking they are providing "signing agent" services. Really - the situation with notaries is out of control. I know it sounds ridiculous, but it's true.
Be very careful when hiring notaries in a real property transaction. Be specific about services and get a written quote before you hire.
Monday, October 15, 2007
Thanks for the feedback CM!
Hello Diane.
What a wonderful crew you have there!
We just put on a “rush” closing for today (due to an unexpected family situation for our borrower). Diane H., John Conway, the borrower and me have all been working together all morning to get this to happen. Everyone has been so courteous, patient and accommodating.
I needed to let you know how great it is to be able to count on that skilled, professional and pleasant group of employees you have.
Thank you.
[P. S. Readers who know my philosophy on rushes need no reminder that we already have title done on this transaction. They are just giving a last minute jump onto the calendar. CM is a lender.]
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