HUD's new settlement cost booklet is now available.

HERE'S A LINK.

ha-ha

I wondered how long it would take before the marketing - JV stuff started back up again.  YOI Here's a blurb from a solicitation:

"Marketing agreements certainly have their place in the real estate industry. They are one way to test whether or not you want to enter into a deeper business relationship with another company. They are also a way to generate leads to possible customers. However, it is often difficult to get these agreements established in a compliant, yet profitable manner."

My question:  why can't people just engage in the title business and market to the consumer?

well, playing with RESPA

We've been running comparisons of GFEs done the old way and our prelim HUD as we do title.  We're just playing to see if loan officers are adjusting as they get closer and how close are people anyway?

Most are within 10%.  Some aren't.

Shouldn't be too darn hard to make the adjustment though.  I'm relieved.

what about lien letters?

I posed the question to an attorney following his presentation on RESPA and here's what he says:

"As to your question, it seems like the lien letters would be something like the title search.  It seems like it would be a necessary component to rendering title and settlement services.  If that is true, then the amount of your reimbursement should be included in the lump sum included on line 1101.  But since this would be a reimbursment as you describe it, then it would be payable to the settlement agent; consequently, it would not be itemized out on line 1109 or thereafter.

Whether or not it is subject to the 10% tolerance or subject to no tolerance at all depends entirely on whether the consumer picked the settlement provider recommended by the loan originator on "the list" accompanying the GFE.  If the consumer picked the settlement provider from the list, then all fees charged by that settlement provider, including the reimbursement you describe, would be--in the aggregate--subject to the 10% tolerance.  If, however, the consumer selected a settlement provider not on "the list", then those fees are subject to no tolerance at all--sky's the limit."

I have to say I agree and I am VERY concerned that lien letters are OFF THE RADAR of mortgage lenders.

In PA local custom dictates who pays for the municipal lien letters.  In the metro Pittsburgh area, Allegheny County and contiguous counties, it's not a problem because the seller pays for lien letters.  Mortgage lenders doing business in the outlying counties may be super surprised when lien letter charges show up in the title services tally.  If it's only $5 for a tax claim certificate, no problem but what if it's $200 bucks including a dye test? That'll knock some out of tolerance.

I'll be chatting with our regular lenders to make certain we're all on the same page.  Frankly, I think this is a good time to start having the sellers cover the cost in all counties.

Good morning, title world.

Just wanted to take a moment to give thanks.  We're still living, eh?  Even if you aren't in the business, you're still living and that means everything.  Breathe in and breathe out.

For those of us in the biz, get ready to rock and roll on RESPA.  We're gearing up and working to get our arms around all the issues.

I'm glad to have taken a mental break from the RESPA discussion.  I'm thankful HUD stayed the course.  I absolutely believe the new GFE will be a good tool for shopping consumers, which was the original intent of the form in the first place.

HUD has successfully and ruthlessly [in a good way, though scary] cut out all the freaking BS.  It's apples to apples, baby and that's the way to shop.

Yes, lenders will have to create an extra form or two and yes that means more paperwork.  You'll need a separate CASH TO CLOSE summary.  Hope you make it real easy for the consumer to find that figure and I do hope folks use similar language.  Having a uniform GFE puts everyone on the same page but we'll still have to coach consumers about finding that "other" form and the magic "cash to close" figure.

So, I'll be back.  We're putting the final touches on a new service tying into the new GFE.  I want to get a techie vet on it before giving you the details, but I like to share ideas and the give and take and group problem solving is a good thing, eh?

Have a Happy Thanksgiving everyone.  See you on the other side of the stuffing.  ;)

HEY LOAN OFFICER.......

COMING SOON.............










GFE SOS

PA recording fees going up

ADD $13.50 per document.  Click here for a copy of the new law.

looks like that was bogus

I haven't seen any other news that there is a delay.  We're still moving forward to should be fully operational in the new system in November.

breaking news - not confirmed by any other source as of yet RESPA to be delayed

The Real Estate Settlement Procedures Act "RESPA" regulations set to take place on January 1, 2010 has been delayed by HUD for six months. We are now waiting for an official announcement to take place by HUD to officially confirm the six month delay which should make the new implementation date on or around July 1, 2010.

Read more on RESPA Lawyer Blog.

CFPA

A bill that would create a Consumer Financial Protection Agency (CFPA) has emerged from a key committee vote without an amendment that would have delayed implementation of new loan mortgage disclosure forms and closing procedures scheduled to go into effect Jan. 1 under the Real Estate Settlement Procedures Act (RESPA).  Read more on Inman News.

CFPA

WASHINGTON BUREAU -- A House committee has voted to exempt insurance companies and their products from oversight by a proposed Consumer Finance Protection Agency.
Members of the House Financial Services Committee approved the exemption amendment Wednesday by a voice vote.
The committee is marking up H.R. 3126, the bill that would create the CFPA. When the Obama administration proposed creation of the CFPA in August, it proposed that the CFPA might regulate insurance products typically sold in connection with banking services, such as credit life insurance.
The original draft of H.R. 3126, drafted by the Obama administration and House Financial Services Committee Chairman Barney Frank, D-Mass., would have given the CFPA the authority to regulate credit insurance, title insurance and mortgage insurance products.

Read more on National Underwriter.

going dormant

Hey, just a heads up.  I'm letting this blog go dormant for a bit as I concentrate on other things.  I'll leave it up here though because I know lots of you read it for reference. Take care!

real estate agent covers seller's bum

A vigilant real estate agent in New York state has concluded what seemed like a never ending quest to make certain her seller could not be accused of colluding to defraud a lender in a FHA mortgage transaction. Facts...the seller assist in the contract exceeded FHA guidelines. This was not noticed until underwriting and the parties were never notified except via the closing instructions which arrived - as usual - at the last moment prior to closing.

The lender CAPPED the seller assist.

When this happens a GOOD title agent will contact all parties and explain prior to closing. This gives parties a chance to decide if they want to close or postpone and renegotiate the contract.

In this case the parties were not working with a GOOD title agent. They were working with a BAD title agent who chose instead to make the HUD-1 meet the lender and FHA instructions but to adjust the actual checks to reflect the terms of the sales contract.

DOESN'T ANYBODY READ? THIS IS A CRIMINIAL ACT. THE HUD-1 ADDENDUM THAT EVERYONE SIGNED CLEARLY COVERS MONIES MOVING OFF THE HUD-1.

The seller had not attended closing and neither had the real estate agent. The seller was represented by an attorney who saw no problem with this arrangement. Once the real estate agent realized what had happened, she recognized the fraud and the potential for criminal penalties and called everyone including the attorney, lender and title agent and everyone thought she was a nut. So, she called me.

It took her some doing but she has fully documented her efforts to rectify the transaction and it was the mortgage lender who - though they will not acknowledge the wrong doing of anybody - decided to send the seller the balance of proceeds so that the seller has in hand the full amounts reflected on the HUD. So, she covered her client and she is stopping there.

What bugs me about this case is that none of the professionals except this vigilant agent can see the fraud. Geez, how can they be so out to lunch?

A forensic audit of this file would have held all parties accountable for the fraud. I commend this agent. She was spot on with her assessment of the wrong doing and as for the other so-called professionals in the transaction, the seller's attorney, the title agent, the mortgage broker, the mortgage lender AND the layman, the buyer - all of whom should be capable of reading the HUD-1 Addendum..........brainless or willful frauds all.

So many interesting cases

...have crossed my desk lately that I should be blogging about but the good news is that we've been really busy and each time I think I should stop and post, I think about that next consumer waiting for their title work. So with that in mind I'm going to toss up these few notes without expanding into a larger post. Forgive me. ;)

• When building a new house or addition to an existing dwelling, hire a surveyor to come out, locate and mark the placement of the foundation BEFORE the builder breaks ground. One of our recent insured consumers had her property surveyed prior to the start of construction on a major addition. She failed to have the surveyor mark a location for the foundation. She allowed the builder to mark off and measure. Result? The addition is two inches over the lot line and the neighbor - who warned her she was close or over the line when he saw the construction - will not give an easement for less than a few thousand dollars.

skip the prostitution advice and go to 4 minutes

for the mortgage fraud coaching.....

protecting privacy

I thought we had this problem licked but just today we noticed a mortgage with a social security number on the first page. This is a government program and now we are wondering if this is a new development or just the first time it popped out to our eyes.

Why in heavens name would a mortgage lender or a government agency put a person's social security number on a document intended for public recording?

We have a call in to the lender to find out if we can remove the number prior to recordation.

Yoi.

ALTA licensing fee

If you write title insurance using an ALTA form, heads up. ALTA has decided to claim ownership of the forms and charge a licensing fee.

WASHINGTON--(Business Wire)--
In a move aimed at strengthening the land title industry by protecting the
association`s top industry product, the American Land Title Association has
launched an initiative to license the use of its uniform title insurance policy
forms.

"ALTA`s uniform policy forms have become the `gold standard` throughout the
lending and legal communities. Because land title insurance coverage is
standardized, the secondary market readily accepts mortgages that carry title
insurance. This has greatly contributed to the growth of demand for title
insurance across the country," said Mike Pryor, president of ALTA.

Read more here on Reuters.

file this under WOW

Media reports and court records reveal that on August 24, 2009 a complaint was filed in the US District Court in Orlando by the Secret Service which alleges that Victor Cedeno had stolen over $1.5 million dollars from the proceeds of short sales he managed on behalf of his former employer Taylor, Bean and Whitaker (TBW). Read more on the Mortgage and Real Estate Fraud blog.

new RESPA rule FAQs

find the revised pdf here

so who gets to fix it?

Old unsatisfied mortgages, especially those with private individuals, drive me batty. On the one hand, if lots of time has passed and no foreclosure has taken place, some underwriters will instruct agents to simply insure over it. I've done that and been burned, not because of collection efforts by the mortgagee, but because the next attorney or title agent in the chain decides they want it fixed and won't take indemnification. That leaves me holding the bag. So I made a decision moving forward that I would insure over an old unsatisfied mortgage in the loan policy only. Owners have to take the exception. Interestingly, most owners don't want to take the exception. They don't want to get stuck with a fix either, so we either postpone for a fix or escrow.


I was called today by an attorney hired by a seller whose funds we are holding pending satisfaction of an old unsatisfied mortgage. The mortgagee was an individual now deceased. The attorney is having trouble with an heir and so chatted with First American - not the underwriter on this file - and they said they'd just insure over it. He wants to know if I'll rethink my position and insure over it.

Excuse me while I laugh.



Does he really think I'll buy into that proposal?

interesting reading on Taylor Bean

SECOND EMERGENCY ORDER

this web site should be taken down

TITLE PARTNERS PLUS

It's no longer in business. Despite their claims that they were RESPA compliant, they weren't. The entire illegal operation has been shut down by the Commonwealth of Pennsylvania and the FBI.

Why is this web site still sitting up there in the cloud making unsuspecting surfers confused? Their claims are bogus but some people believe everything they read.

Let's stop the kickback cycle. It stops one step at a time. Who do we need to talk with to get this kickback promising calculator off the net?

I'm still here and they are not.

It seems like a thousand years ago when I started this blog in 2006 and the sister blog, Radical Title Talk. Part of the impetus to defend good practices in title insurance was my outrage over an outfit in State College, Pennsylvania who was soliciting mortgage lenders for a big sham operation. I couldn't believe that someone would so openly operate outside of state and federal rules.

Well, read this article. I think it's all finally over. Their operations were shut down by the state and federal government last year or perhaps the year before. Now a major player in the operation pleads guilty to embezzling 1.6 million dollars from the escrow account.

Gee, I guess scofflaws can't be trusted. Duh.

We along with other good and reputable title agents are spending our time, one transaction at a time, sweeping up the mess left behind by these and other crooks who played at the title insurance game for a few years and are now, hopefully, out on their asses.

We will slowly help consumers rectify the errors and right the wrongs as we find them. We won't be paid extra to do it. That's part of what a title insurance premium pays for, the finding and correction of title defects. It's all part of the job.

I'm glad I'm still here and they are not.


I'm glad you are still here because if you are reading this, you're probably part of the good, so hello, good guys. We're still here. ;)

oh the drama of defalcation...

"Anytime you're talking about $10 million, you're not talking about a drop in the bucket. It's a major defalcation," said Larry Saichek, the court-appointed receiver in charge of Flagler's case.

Flagler Title's underwriters already have paid about $5 million in claims. Other claims still are being investigated, while a few have been denied. These claims are from people who had deposit money held by Flagler or people who were supposed to have mortgages paid by Flagler. Also making claims are real estate agents owed commission checks on sales.

And where in the world is Roger Gamblin? "Hell if I know," Saichek said.

None of the lawyers contacted said they know where he is.

Read more in the Palm Beach Post.

mortgage underwriting????

I guess since we have standards again, folks are experiencing real mortgage underwriting - perhaps for the first time. That's good but it sure is generating questions. I've had numerous e-mails over the past few weeks and decided to post answers to a few questions here.

In my pre-title life, I was a mortgage underwriter - FHA direct endorsement, VA automatic approval and FNMA/FHLMC. I had the pleasure of managing a couple of high volume retail/wholesale underwriting departments, so when you ask "What happens in mortgage underwriting?", I'll use my experience to answer that question. I say that because the automated pre-underwriting takes place earlier in the transaction and so when your file "goes to underwriting" it's going to a human being.

The biggest question on everyone's mind is how long will it take?

The actual file review will take about an hour if your case is fairly straight forward and the underwriter has the experience to make decisions on the risks identified in your circumstance.

Most of the time lost "in underwriting" is waiting for your turn at the decision table. When I managed underwriting departments our goal was always to get a file in and out inside of 24 hours. In high volume situations we shot for 48 hours, but the reality is that sometimes the flow of files due to rate fluctuations can be overwhelming and the wait can be days.

Why? Well, human underwriters are highly trained individuals and there aren't many of them, especially these days. Mortgage lenders are recreating and retraining underwriting teams.

So, are there any tips on how to make the process work for you - maybe make your file go through a bit faster? Your job as a borrower is to first have patience. Secondly, provide as much clear concise documentation as you can to demonstrate you have assets, stable income and a credit profile that demonstrates a willingness to repay the debt.

If you fight with your loan officer and complain about having to provide information, your loan officer might be forced to send your file into underwriting without sufficient data to convince the underwriter that you are a good risk or that your circumstances meet the guidelines of the program. So, your file will wait it's turn only to go into suspense or worst yet, be rejected. If that happens, you end up having to provide the data then go back into a waiting line again.

So, be your own best friend, realize that the mortgage underwriting guidelines - while they may seem onerous - are there for a reason - one that you may not understand, however, if you need a mortgage, you've got to play the game. Be honest but be thorough. Help your mortgage lender find in your financial profile a willing and able borrower.

If you can't do that honestly, then wait until you can. Fudging the data is fraud and criminal. If you cannot yet demonstrate stability of income or a willingness to repay debt, then start now and create your new financial future by being a more conservative manager of your money. After a year or two of a new financial profile, you should be able to get through the underwriting process successfully.

Hope that helps and good luck. ;)