Closing Services Letter and defalcations

Let's fix the problem instead of charging consumers a higher fee for coverage.

When a consumer or a lending institution hands money over to a PA licensed title agent, they do so under the perceived umbrella of regulatory oversight. You may be surprised, however, to know the our insurance regulations contain no guidelines for the management of the title agent's escrow account. In fact, it's the PA Dept. of Banking that seems to have jurisdiction over these escrows and that seems like a HUGE disconnect to me.

If the title insurance underwriters can't get it together to set up rules, train and monitor agents, then I say it's time we amend our title insurance law to pull title insurance escrows under the umbrella of the PA Dept. of Insurance and set up guidelines, then police the industry.

We ought not to be putting multiple millions of dollars into the hands of people who are untrained and unqualified to manage it .

There's a filing for a title insurance rate increase pending in PA.

I, for one, hope the PA Department of Insurance will hold public hearings on the issue. I'd sure like to testify. Here are two questions to ponder:

1. Why should PA consumers pay title underwriters an increased fee for a Closing Services Letter to cover all the defalcations when defalcations are largely caused by poor selection, training, and monitoring of agents, all of which title underwriters control, not consumers?

2. Why get rid of the TIRBOP rate discount options just because agents can't seem to follow the TIRBOP guidelines and consumers are mad enough to file class action suits when title underwriters could easily teach and test agents, then monitor compliance?

I have sat through so many continuing education training sessions in which the title underwriters allow agents to read the newspaper and talk on their phones rather then listen. The so-called trainers often get the TIRBOP material wrong. They have never had a TIRBOP manual on site to refer to and once when I asked a specific question, the trainer admitted to not having read the manual.

Why, tell me, WHY should consumers in PA pay higher rates for title insurance and reward this abrogation of responsibility?

restrictions...for heavens sake, get a copy and read them!

I've had a nice e-mail exchange this week with a reader who wondered why her title insurance agent had never told her about the restrictive covenants for the housing plan in which she lived.

The lots in this plan are large and were meant to be used for residential purposes only. A neighbor, unaware of the restrictive covenants, started farming on their lot and added livestock. Our reader, also unaware of the restrictive covenants, has suffered for years battling with the neighbor over noise, smell, and general degradation of their use and enjoyment of their real estate. Only recently did our reader discover the restrictions and realize that the homeowners in the plan had legal standing all along to deal with the farm problem.

Read this, please, so you can understand how very important it is to select a title insurance provider who will give you a copy of the title commitment prior to closing along with copies of restrictions. Ask for these copies when shopping for services and then follow up to make certain you are getting a full and complete report BEFORE you close.

We found out last year that there are legally filed deed restrictions on our property that can be enforced by the property owners at the county building (we have a defunct Association) the restrictions effect all the other properties where we live (39/10 acre parcels) the deed restrictions run with the land and keep going every 10 years unless the majority of land owners vote them out etc which has not happened so people owning the land can enforce them. We were not given any of this info. when we bought our property by either the title company, the realtor nor the people we bought from - we bought it in 1998 and started building our house.

Last summer we had more continued issues with our neighbors who have livestock and poultry and started their farm after they moved out - about a year after us (improper disposal of manure is what they did last year), when they first moved out in 1999 we had issues too with them letting their sheep run all over the place and on our property (they have 30 acres we have 10) we found out about the deed restrictions by a friend who told us about such a thing when I was complaining about their farm. We had no idea there even was such a thing as we had never owned like this before. Well, I did the research and within one day I found the documents filed legally at the county building and they have been there since the 70's -our neighbors should never have put a farm in and had we known we could have stopped it right at the beginning and not be in this horrible situation where we have to smell manure, listen to roosters and cows and sheep and see their cows and barns (that they shouldn't have either) from our living room window. We do not know if they were told about the deed restrictions. Others who bought property way before we did received the deed restrictions when they bought their land. I've been told we could have a suit against our title company for not giving those to us and that we could get them to pay for all the harassment and loss of enjoyment of our property, the decreased value we now face due to the farm practically in our back yard and the cost of making our neighbors abide by those restrictions and remove the farm they shouldn't have. (we should not have to pay thousands to do this!) We have had a huge hassle to endure due to this, we were even told that we may have a suit against our neighbors title company if they didn't tell them.. our neighbors tried to file a harassment suit on us because we called the MDA on their improper disposal of manure, (yea they considered us calling the MDA harassing them of course the sheriffs dept told them they had no grounds for their attempted charges the MDA found them in violation and made them clean up the manure) they were putting bob cats buckets full of cow, horse, sheep manure right next to the property line in view of our back deck. (they were mad cause we and another neighbor filed a complaint with the health dept due to their garbage bags ripped open and garbage all over the place, which is also a violation of the deed restrictions) there's more to tell here if you find this a case your interested in. They are not nice people and retaliate if you turn them in for any violations. If we had known about these deed restrictions we would have stopped them years ago when they got their first cow!! I even called the title company and asked if they look for deed restrictions and they told me no.

Bottom line, I suggested they hire a good real estate attorney to sort the mess out. She found her owner policy and has hired an attorney. It will be interesting to see how the case is resolved and I do hope we hear the end of the story. ;)

working on a mystery, a title agent mystery that is

We're working with a consumer buying a commercial property who also planned to use their residence as collateral for a line of credit to make improvements on the new building. Routine process, their bank asked for a copy of the deed to their house and they can't find it. They called their mortgage lender who starting acting kinda weird and would only provide an unexecuted copy of a mortgage, so they asked me to look into the situation.

Guess, what? There is no deed on record for their residence or a mortgage.

Long story short, they were working with an out of state title agent who I'm not even sure was licensed in PA, who has since gone out of business and nobody, not even the seller has copies of a signed HUD-1 or any other documents from closing.

Thankfully, and for what reason I don't know, the seller's attorney had a copy of the signed title insurance commitment so this consumer has some basis for a title insurance claim.

Oddly, though this out of state title agent handled the entire transaction, including receipt of lender funds and disbursement, the unsigned HUD-1 has the name of a different company as settlement/title agent, supposedly a PA company that I can't find anywhere either.

In retrospect, these folks are kicking themselves for not being more diligent about getting copies and knowing who they were working with. They sort of went on automatic pilot and just trusted that they were working with professionals.

Please, folks, choose your title agent wisely. Know who they are and where they are and make certain you get a title insurance commitment to review prior to close, make certain you get a signed HUD-1 at closing, and then follow-up after closing to confirm receipt of the recorded deed and issuance of your title insurance policy.

PA escheat deadline coming up.

Just a reminder to PA title agents that our deadline for filing unclaimed property reports with the Pennsylvania Treasury Department is April 15th. A copy of the Unclaimed Property Act is available at www.patreasury.org.

We are being reminded by the Department that a compliance report is to be filed, even if we have no unclaimed property.

I'm kinda blown away.....I had no idea Tanta died.

A few months ago I stopped following all the title blogs and all the mortgage blogs. I just couldn't take it anymore. So, this is a belated.....

RIP Tanta.

You really knew your stuff and you knew how to teach. I see a guitar in your hands and that makes me smile.

just thought I'd post that there's a whole lot of normalcy going on

Most mortgage lenders have lots of money to lend and rates are fabulous.

Most homeowners are not in foreclosure and are making their mortgage payments on time.

Most of the lack of business is due to normal fear mongering by the media, BUT

...surprise, surprise, life goes on and we the people eventually just go about our business living life and in the process the recovery is happening with or without the government and the media.

message to Ken or Kent

You asked me to call you to help answer a question you couldn't find on the blog.

I'm the person you hung up on.

If you still need help, please shoot an e-mail to dianecipa@gmail.com.

How to write a “Qualified Written Letter” to your Lender

Follow this link. These folks did a good job of it and I like their easy to use sample.

Proof of Loss.....the Owner Policy lingo

In the event the Company is unable to determine the amount of loss or damage, the Company may, at its option, require as a condition of payment that the Insured Claimant furnish a signed proof of loss. The proof of loss must described the defect, lien, encumbrance, or other matter insured against by the policy that constitutes the basis of loss or damage and shall state, to the extent possible, the basis of calculating the amount of the loss or damage.

Notice of Claim to be given by Insured Claimant .....the Owner Policy lingo

The Insured shall notify the Company promptly in writing (i) in case of any litigation as set forth in Section 5(a) of these Conditions, (ii) in case Knowledge shall come to an Insured hereunder of any claim of title or interest that is adverse to the Title, as insured, and that might cause loss or damage for which the Company may be liable by virtue of this policy, or (iii) if the Title, as insured, is rejected as Unmarketable Title. If the Company is prejudiced by the failure of the Insured Claimant to provide prompt notice, the Company's liability to the Insured Claimant under the policy shall be reduced to the extent of the prejudice.

Next Ace marches on as an automaton of title

ORANGE, Calif.–(BUSINESS WIRE)–NextAce, a title automation and business process optimization Inc. 500 company, today announced the completion of its one millionth title order through its automated title system, TitleEDGE.

Title companies and underwriters servicing 253 counties in 23 states currently use TitleEDGE, and in doing so, NextAce estimates it has saved the title industry over $37 million through staff reductions and decreased production costs. Read more...

replace expert humans with a cheap automation substitute....watch Idiocracy evolving.... dc

query: what if the title commitment isn't received on time

You'll need to postpone your transaction to await the title commitment.

This is yet another reason to shop carefully for title insurance services. Ask how long it normally takes to produce a title commitment and then make certain you allow enough time.

When a consumer calls my office and asks that question, I tell them it will take 7 to 10 days to produce a title commitment. I don't bend on that because I know that's reality. I know lots of title agents who will bend on the initial promise and when they can't bend reality later, the consumer will be forced to face it and be disappointed.

Why does it take 7 to 10 days to produce a title commitment? We have a professional abstractor do a full search, we have to get lien letters from numerous municipal agencies who want a check in hand as payment for creating these letters. We have other customers who we are are serving and we treat all customers with equal care and consideration.

So, when you come across a title agent who says they can produce a title commitment in hours, you must ask yourself whether this person is doing a full search and examination, are they promising more than they can deliver, do they have no other customers or have they decided to place your interest before others and will they do that to you if a bigger deal walks through the door?

With interest rates fluctuating, we keep in mind that you have serious deadlines and we work with you to get where you have to be and with realistic expectations.

I think it's fair to say PA notary laws need work.

Our investigation also demonstrated that the lack of requirements and laws governing Notaries Public, and the ease with which Notaries, and ring leaders, Carlos Quiles, Ivan Delgado, and accomplices and co-conspirators, Lenora Irene Jackson (Evans) and Rebecca A. Robinson had in committing these crimes because no one seriously enforces State laws requiring the person who sells a property to appear in person before the Notary Public. Moreover, State Law does not mandate that the Notary keep a thumbprint or photo identification presented to them with the paperwork they are required to keep should an investigation be commenced. This allows the Notary “not to remember” the person who appeared before them due to the heavy volume of people needing a Notary’s services. In this case, some of the Notaries didn’t keep required logs, and, of course, didn’t care if the signatures were known forgeries. Read more....

PA title agent indicted

In the following press release [pages 8 & 9] Mary Beth Buchanan, United States Attorney for the Western District of Pennsylvania announced thay a grand jury returned an indictment charging Kenneth Fox, age 42, of 110 Penn Manor Road, Irwin, Pennsylvania 15642, with participating in a Wire Fraud Conspiracy and a Money Laundering Conspiracy.

The indictment alleges that Fox and another individual operated a closing company called Southwest Settlement Services. As a closing company, Fox and Southwest Settlement Services was charged with paying off liabilities associated with the collateral underlying the loans, like mortgages, in accordance with the lender’s instructions. The indictment alleges that Fox and his co-conspirators did not pay off the mortgages as instructed, but used the money for their own benefit. The indictment further alleges that to conceal their fraud, Fox and his co-conspirators used money from subsequent closings to make mortgage payments and pay off mortgages that should have been paid off through earlier transactions.

Thank you THE MORTGAGE FRAUD REPORTER.

query: can judgment lien be on more than one home at the same time

Yes. A judgment is against a person and in most cases attaches to all of your assets.

goodness, gracious

There are reports out of State College, PA of a car bombing and a molotov cocktail being thrown into someone's livingroom - these acts by fellows engaged or previously as mortgage brokers and perhaps a title agent.

According to police the goons were under pressure due to regulators having had shut down their businesses.

GO STEELERS!!!

query: can a title insurer refuse to issue policy after commitment

I say yes. What do you think?

A very large real estate brokerage is burying language

in the sales agreements of transactions in which they have the listing directing the title insurance order to their affiliated title agency.  There is no simple waiver or acceptance for this paragraph, it's just sitting in the middle of a bunch of boilerplate stuff the buyer and the selling agent skip.

I ran into this the other day on a cash transaction.  I have three title transactions in process for one buyer.  This buyer likes our Choose and Save program.  It's fast.  It's easy and it's the most affordable way to buy title insurance and settlement services in PA.

The listing company backed down and didn't pursue the matter once they understood the good deal the buyer was getting and that we had already processed the transaction, though I got the impression that they normally press the issue.

Buyer beware.  Read that contract very carefully or perhaps just add a clause to the contract stating that YOU will select your title insurance and settlement provider and any language to the contrary in the agreement is null and void.  Stay in control of your transaction.

RESPA violation? What do you think?

We've got a regional law office soliciting business from mortgage lenders by offering to perform telemarketing on their existing customer base. The deal is that they solicit refinance applications for the lender in exchange for the guarantee of the title order.

Is this a RESPA violation? I think so. What do you think?


Interestingly, we had a closing the other day in which the seller had been referred to this law office by the listing agent for deed prep. This law firm charged $195 which is far higher than most law firms in the area, besides which the seller was eligible for free deed prep by our office since the buyer had opted into the Choose and Save program.

Add to that - the law firm NEVER delivered the deed to us or to the agent or to the seller. They showed up empty handed so we used the fax draft from our file. Some service, huh?

When I run across a competitor like this, I do shake my head. They are all about giving something to get something but it's never about giving the consumer a good deal.

We at The Closing Specialists made our choice long ago. We are consumer-centric in all aspects of our business. Mortgage lenders and real estate agents who care about the quality of service and the cost of settlement services direct orders to our office and I can sleep at night.

query: How can I check to see if my tax inheritance payment has been recorded for the title to my property.

If you properly file an inheritance tax return and clearly identify the real estate in the inventory of assets, that will suffice.  The title insurer will check the Register of Wills office for the return  and payment receipt records to evidence the payment and claer title.

Preparing for a Refinance

Refinancing is what you do when you put a mortgage on a piece of real estate you already own. Mortgage lenders call it a refinance even if you own the real estate free and clear. Use this handy TCS refinance guide to understand the process and avoid common pitfalls. We at TCS have had lots of experience closing refinance transactions. We’d like to help you be an educated consumer.

1. ORDER A PAYOFF LETTER

If you have an existing mortgage, the very first step is to ask your mortgage lender for a
payoff letter. All of the calculations you and your new lender figure will be based on how
much you owe. Do NOT skip this step. There may be a small fee to get the letter, but
it’s worth it.

Don’t just check your current principal balance, it’s not the same as a payoff. Why?
Well, mortgage interest is paid in arrears. That means that your September payment
actually paid the interest for August, so you are always one month behind in interest.
When you payoff your mortgage, the lender will play catch up and add the remaining
interest to bring you current. AVOID THE MOST COMMON REFINANCE PITFALL by
getting a payoff letter up front.

2. THE HIDDEN AFFECT OF PROPERTY TAXES AND HOMEOWNERS INSURANCE

Timing and pre-planning a refinance will help you AVOID THE SECOND MOST COMMON REFINANCE PITFALL – getting caught in a cash crunch because your money is tied up in an escrow account at the time of closing.

If your existing mortgage lender has money set aside in an escrow account, look closely
at the payoff letter to determine how they will handle these funds. Some mortgage
lenders will give you an immediate credit for the escrow balance and this reduces the
amount of the payoff. That’s great, but most lenders will simply mail you a refund check
2 to 3 weeks after the mortgage has been paid off. If it looks like you’ll be getting a
refund check, it is very likely that you will have to bridge the gap and come up with cash
at closing to set up your new escrow account for the new mortgage lender. Here’s a tip –
most mortgage loan officers don’t really understand this scenario, so YOU really need to
plan ahead yourself.

Timing again is the key to AVOIDING THE THIRD MOST COMMON REFINANCE PITFALL - a cash squeeze related to property taxes. If you are closing your refinance transaction at the same time the property taxes are due, you could get caught in a title guarantee “Catch 22”. Here’s how it works. Let’s say the county property tax is due at discount on March 31st. You are planning to close on March 20th. The tax collector is reporting the tax as unpaid. Your existing mortgage lender has debited your escrow account to pay for the tax and may or may not have actually mailed the check to the tax collector. Since the tax has NOT been officially paid, TCS has to collect the tax from you at closing to guarantee payment for your new mortgage lender. It’s a real “Catch 22” and the only way to avoid it is to plan the closing date around the payment of the tax. Closing would need to either take place before your existing lender debits your account OR closing should be delayed until the tax payment has been posted by the tax collector. This is often easier said than done because you may be up against a rate lock expiration with your new mortgage lender and can’t delay closing.

The good news is that in either case, when you have to ante up cash at closing to cover
tax or insurance related payments, you will always eventually be made whole. Refunds are processed as the payments are made and posted. If you have the cash available to ride
through the refund process, that’s okay, but if you don’t, this information will help you to
plan to avoid this kind of a last minute snag.

3. THINK ABOUT WHEN YOUR NEW MORTGAGE PAYMENTS WILL START.

Refinancing often gives you a one or two month break from having to pay a mortgage
payment. For instance, let’s say you are closing on February 5th and haven’t yet made a
mortgage payment for February. Well, your existing mortgage will be paid off before
the end of a typical 15 day grace period and it’s likely that your new mortgage payments
won’t start until April 1st. Make a note to discuss this with your new lender and keep any
possible cash flow benefit in mind just in case you need to come up with unexpected cash
to close due to tax or insurance related payments.

4. WHAT IS THE PURPOSE OF THE REFINANCE?

Your new mortgage lender will want to know. Are you just reducing the rate/term or do
you actually need to pull cash equity out of the property? Each mortgage loan program
has specific guidelines relating to the length of time you have owned the property, how
much cash you can pull out, etc. Be prepared to estimate the value of your property and
discuss why you want to refinance. This will help your new mortgage lender find a
program that’s right for you. An appraisal ordered by the new mortgage lender will
ultimately set the current market value, but you have to consider possible options should
the value come in lower or higher than expected, later on you and your lender can adjust
the loan amount accordingly.

BOTTOM LINE – DO SOME HOMEWORK TO AVOID EXTRA STRESS, THEN REAP THE BENEFITS OF REFINANCING. WE AT TCS ARE HERE TO HELP YOU DO JUST THAT.

What about title insurance and refinancing?

SHOP SHOP SHOP SHOP

Get the message?

If you are in Pennsylvania and refinancing, you'll not get a better deal than our CHOOSE AND SAVE program.

Most title companies use independent notaries and you'll end up paying a signing fee or closing fee of some kind. If you are in our market area, we'll come to you at no extra charge. We close 8 to 8 Monday thru Friday and 10 to 5 on Saturday.

So, shop for title insurance and closing services. Do not just go wherever your mortgage lender wants you to go.

Here's our easy to use title insurance premium calculator. Look at those discounts for refinancing!

good article on Mercury

LINK