Internet Archive Wayback Machine.....cool!

Wayback when I killed my old Radical Title Talk blog.  I did not keep a copy.  Every once in while I did wish that I could take a peek.  I stumbled across this Wayback site and here for your enjoyment are some good ole Radical posts.  LOL


Enter the Radical era of days gone by.

let me put it this way.........as a tiny mustard seed of a title agent who looked up into the guts of Full Spectrum from below, I'd say this suit sheds light on truth......

Allstate said that starting in 2003, Countrywide quietly decided to boost market share and ignore its own underwriting standards by approving any mortgage product that a competitor was willing to offer, in a "proverbial race to the bottom."

Countrywide then passed on the added risks to investors who bought debt backed by the mortgages, Allstate said.

Read more in Reuters.

humans prevail over automatons...thanks, we win one ;)

New rules from the five federal bank regulatory agencies no longer accept technological tools like automated valuation models alone as a substitute for an appraisal, forcing vendors to upgrade these products with the required on-the-ground inspection and other data.

Automated valuation models provide property values using mathematical modeling and a database of comparable properties. The Financial Institutions Examination Council, which is made up of the Office of the Comptroller of the Currency, the Federal Reserve Board, the Federal Deposit Insurance Corp., the National Credit Union Administration and the Office of Thrift Supervision, released new guidelines on Dec. 2 that are impacting lenders that rely on AVMs.

Read more on Housing Wire.

bait and switch? query via email from K

I have an unusual situation regarding a recent refinancing on my home that I would appreciate your advice on.

 

I refinanced to a lower interest rate.  This was a no-cost refinancing and there was no dispersion of cash to me.

 

I closed on November 20th.  I signed the appropriate paperwork and HUD statements electronically with a notary present.  As part of the final transaction I wired $400 to the title/escrow company (line 303 on HUD statement).

 

The HUD that I signed had a broker credit for NRCCs (non-reoccuring closing costs) of $6000 (lines 204 to 206).  My closing costs/settlement charges (line 103) were $8000.  The breakdown of the settlement charges included $4200 for an initial escrow account deposit, $1000 in daily interest charges, $800 origination fees, $1100 for title and title insurance, and $900 in misc charges (appraisal, recording fees, ...etc).

 

Here's where it gets weird.  Today I was contacted by my title company and my mortgage broker that the NRCCs credit that they placed on my HUD was incorrect and the actual amount should have only been $2800 -- enough to cover closing costs not including my initial escrow deposit and daily interest charges.  They sent me a "revised" HUD that basically had two changes, the new NRCCs credit and a new balance (line 303) on HUD that shows I now owe them an additional $3000.  This is all now happening approximately 1 month after I closed.

 

My questions are

1) Does this sound suspect to you? And what are the legal ramifications for me refusing to pay the additional $3000?

2) Does this give me right to void my contract and go back to my old mortgage? (Im weary of dealing with this title company and my mortgage broker anymore)

3) Can I apply the old NRCCs broker credits to my initial escrow deposit? or ask for the old NRCC broker credits in cash?

Thank you in advance for your responses.  

 

K

 

Two things come to mind when I read this.

1. What did the Good Faith Estimate say? 
2. Is the lender giving you another right to cancel period?

Considering both of those questions should help you decide which of the two HUDs most closely resembles the transaction you bargained for.  If based upon your review you think the lender is engaging in bait and switch, then contact HUD and report them.  You can also report them to state authorities.  Your rights under the cancellation rules would terminate the refinance and return your money to you.  If the lender gives you any grief about that, again seek assistance from HUD or state regulators or hire an attorney.

If after consideration you determine that the corrected HUD is essentially the deal you originally bargained for and not a bait and switch, then this is really a matter of human error.  You should still be entitled to your right to cancel, so either way, if you don't like the deal, in my opinion as a non-attorney title agent blogger you can get out of it.  [Seek the advice of a competent attorney.]

I hope this helps and thank for reading!

Diane

Americans marked off property, courts recognized that property, and the people got deeds that meant everyone knew their property was theirs. They could then buy and sell and borrow against it as they saw fit.

This idea of a deed protecting property seems simple, but it's powerful. Commerce between total strangers wouldn't happen otherwise. It applies to more than just skyscrapers and factories. It applies to stock markets, which only work because of deed-like paperwork that we trust because we have the rule of law.

Read more on Reason.

An attorney involved in several local mortgage fraud cases, including some involving Beechview developer Bernardo Katz, was sentenced in federal court today to 57 months in prison.

John Chaffo Jr. of Murrysville was the lawyer involved in 57 fraudulent property sale closings from 2000 through 2007, Assistant U.S. Attorney Brendan Conway told Senior U.S. District Judge Donetta W. Ambrose, who oversaw the July trial at which he was found guilty of 11 of 13 counts. "He obviously committed this massive mortgage fraud and he violated his fiduciary obligations to the bank," Mr. Conway said. "He violated every ethics rule in the book."


Read more: http://www.post-gazette.com/pg/10341/1108953-100.stm#ixzz17YlLzxTS

Why would an underwriter have strict credit standards for agents?

I thank reader, David, for his inquiry today concerning becoming a title agent and having some trouble because his credit history is not good.

I suggested that he consider a different profession.

Title insurance agents have access to and control loads of cash.  What is the primary attribute you as a consumer wish to see in a person who manages money?  How about trustworthiness?

What is a credit history but a report card on the trustworthiness of an individual?

Yes, we understand that people make mistakes and get into trouble and then later recover. The point I am driving at is that the standard for being the person who holds in their hands lots of money on behalf of others is and should be a higher standard than standards for other types of work.

Title underwriters and consumers should expect and demand excellent money management skills in their title insurance agents.

here's a few hmmms.... for ya ;)

hmmmm........ A lender requires a private road maintenance agreement.  Instead of hiring a competent attorney to draft a document, the buyer drafts his own and in the process creates a separate individual document for each person on the street to sign.  The whole project ended up costing close to $350 in recording fees when an attorney would likely have charged $150 for creating a document that might have costs $55 to record.  So, he paid WAY too much money and has a crappy, probably unusable agreement on record which will likely get lost in an indexing black hole.



hmmmmm......At two recent title insurance CE classes at least one attorney instructor recommended to attendees that they overlook the regulation in TIRBOP which compels a title insurer to accept as evidence an unsatisfied mortgage to establish a basis for discounted premiums.  What is it that these two attorneys do not understand about the word SHALL and do they really want to play footsie with class action suits and our new governor who has all eyes on title insurance?  I for one follow the rules and give the discounts.  When in doubt err on the side of the consumer.



hmmmmm.......Stand your ground sellers - most of the attorneys in the CE class yesterday said they pass on to sellers any cost which cannot be charged to the buyer.  Who compels a seller to pay the buyer's attorney anything?  No one.

Fannie Mae will no longer accept back a mortgage that was repurchased by a secondary market investor, government-sponsored enterprise or private institutional investor — even if the lender cured the defect in the loan.

Read more on Housing Wire.

query: what kind of experience leads to a job in mortgage underwriting

In my opinion, a good underwriter can be taught the mortgage rules IF they have the basic smarts and analytical talents.  It's not an entry level position and most often underwriters move up out of mortgage processing.  I have to say, however, that most of the underwriters I hired and trained when I was in mortgage banking did not.  Most were simply excellent performers in a related department.

I look for and test for the same qualities in my title insurance agency staff now.  I want a person who can read and comprehend instructions and guidelines, analyze and resolve problems, maintain quality of product and service, work efficiently and has a good attitude.

Any position in the mortgage or title insurance business requires long training at the side of an expert.  So my advice is to find a good underwriter under which to learn your craft and then demonstrate your abilities by doing an excellent job.  You will be noticed.  Once you have achieved credibility with management based upon your quality of work, let them know you'd like to move into underwriting.

In the meantime, read and study all available resources - there are lots of good web sites - to learn MORE than you are taught in your office.   You will be noticed.  ;)

A 'barn-find' Bugatti amounting to little more than a loose collection of bits has sold at auction for more than seven times its estimate.

Completely dismantled, incomplete and lacking its engine and body, the 1926 Bugatti Type 38 was expected to fetch only around £9,000 when it went under the hammer at a Bonhams sale in Australia.

Read more in the Daily Telegraph.

The firing prompted Mike Huckabee and Sarah Palin, among others, to call for NPR to be stripped of federal funding.

Ailes later semi-apologized for his comment in a letter to the Anti Defamation League.
"I was of course ad-libbing and should not have chosen that word, but I was angry at the time because of NPR's willingness to censor Juan Williams for not being liberal enough," he wrote, as TV Newser reports.

"I'm writing this just to let you know some background but also to apologize for using 'Nazi' when in my now considered opinion, 'nasty, inflexible bigot' would have worked better," he added.

Read more on CBSnews.

query: what if property taxes change after closing, does that impact prorations?

Hi Diane,

I didn't see on your blog where I could post my question, so hope you don't mind me writing to you.

I'm about to close (Nov 30) on a home for the first time, so I've been studying everything I can to try to be prepared at closing, and avoid any surprises, especially financial ones.  I'm wondering about the settlement of pre-payed property taxes.  The seller bought at the height of the market, so the current taxes are probably close to what they will be for me based on the recorded sale price.  If I have to reimburse the seller for three months of prop taxes at $700/month, but my property tax bill is only going to be $350/month for those same three months, does this get adjusted in the HUD-1?  Or do I lose out and should be thankful that my property taxes will be lower than the seller's were?

Thanks,

Dan

Hi, Dan:

Thanks for sending me the email and I'll post your question so it will be there to help others.

If what we are talking about is pre-paid taxes, meaning the taxes that the seller has already paid, then we're really just reimbursing the seller dollar for dollar for a lienable item that they paid beyond the date of their ownership of the real estate.  We call this proration and it will be listed on the first page of your HUD-1 settlement statement near the beginning, just after the sales price.

Most title agents will include in the papers you sign at closing, some sort of agreement that prorations will be based upon the best available figures at closing, meaning the current bills.  There may even be an exception in your title insurance commitment that refers to bills currently due and payable.  This is to avoid controversy in the event the tax assessment is altered after closing that creates an increase or decrease in the tax bills which is retroactive.

You should plan to reimburse the seller based upon the bills as they exist now unless you and the seller negotiate otherwise.

Does this help?  If I have misunderstood the question, just post a response on the blog or shoot me another email. Take care and may I applaud your careful research as a savvy buyer.  We need more consumers like you!   ;)

Diane

Thanks to new federal rules covering closing costs on mortgages, home buyers are experiencing a new type of surprise at closing.

Instead of being faced with higher-than-expected costs -- as homebuyers often were shocked to find prior to this year -- the amount needed to close on a mortgage loan is generally the same or lower than the original estimate, experts say.

That's because lenders and brokers, faced for the first time with new penalties if they lowball estimates of upfront mortgage costs, are giving borrowers more realistic cost estimates.

Read more in the Tribune Review.

the day title insurance and Marilyn Monroe met in a Google Alert

"suggests that she not only cooked, but cooked confidently and with flair": Scrawled on stationery with a letterhead from a title insurance company, ...

Read all about it in the NYT.

haven't had a taste of mortgage fraud for awhile.....

So, the exercise of yesterday afternoon was like time travel back to the days of sub-prime.


We received a frantic call from a listing real estate broker concerned that the HUD-1 did not accurately reflect the movement of the money.  Huh?

Turns out that after our closer left the table, the seller had confronted her and demanded that she pay him $800 to cover his loss.  He had been forced to pay $800 because the closing was delayed.  This real estate broker could not figure out what he was talking about and since he was too angry to be coherent, she left leaving hanging in the air his threat to complain to the real estate commission.

She had no idea what $800 fee he was referring to and pondered the HUD-1 for two days before calling the buyer's loan officer to see if he knew anything about it.  He did.  He gave her the complete story which I later heard from the buyer and seller when I called them yesterday.

There was a well issue which delayed the closing just enough to push it into the next month.  A buyer who had been planning on less than $100 to close now needed $800 because of interim interest.  Mind you, this was one of those cliff hanger HUD-1s.  Instructions and HUD approval all came the day of closing.  Here's what happened based on what I was able to piece together yesterday.

The buyer called the seller on his cell phone.  The seller, who was on his way to closing - it was a two hour drive - was faced with a threat from the buyer that the seller had caused the problem and he better pay up or the buyer was walking away from the deal.  The seller felt penned in and furious.  He could not reach the listing agent on the phone and so conferred with the selling agent and mortgage broker who both agreed that he should get a cashiers check payable to my office and give it to the buyer before closing.  The seller agreed to do this so he could move forward with his closing and expected to extract the money from his listing agent.

Now, let's pause for a moment in this story to discuss what honest real estate agents and mortgage brokers should do in this kind of a situation.  Professionals are trained.  Real estate agents, mortgage loan officers and brokers along with title insurance agents are trained to recognize and guard against illegal acts.  WHAT DOES A TRAINED PROFESSIONAL SAY
WHEN A CONSUMER - A LAYMAN WHO MAY NOT KNOW BETTER - SUGGESTS AN ILLEGAL ACT?   Let's all say it together........

NO.

Well, in this case, these two professionals, now known as scofflaws, said great idea and colluded to defraud the mortgage lender.  They knew better than to tell my office, so they hid the act.  When asked for funds at closing, the buyer pulled a cashiers check from his pocket.   The closer reviewed it, found nothing out of order.  Though the check did not show a remitter - not all do - the buyer's name was printed on the check by the bank in the memo line.  The seller had taken the extra step to make it look good.

Once the full set of facts were known to us, you can imagine how disappointed we were.  It's hard to find out that people with whom you have had a working relationship are liars.  As the listing real estate agent explained yesterday when she called our office, the only people at the closing table who did not know what was going on were our closer and her. 

We wrote a letter to the mortgage lender which was delivered by fax along with a copy of the check and HUD.  Original sent to the address on the HUD.  All parties in the transaction were copied including our title underwriter.

JC had chatted with the selling agent and mortgage broker before I spoke with the buyer and seller.  They both insisted that knew nothing about it.  I spoke with the seller and buyer and explained that what happened was mortgage fraud and illegal.  The buyer insisted it was his idea and that he had not discussed it with anyone.  The seller inferred that he had discussed it with either the selling agent or the mortgage broker, he couldn't remember.  These conversations took place before the listing agent filled in the blanks and we knew that both the selling agent and mortgage broker were involved.

The letter prompted a call from the lender who asked plainly why folks didn't just do a work out and revise the HUD?  That's exactly what the listing agent had asked.  If the buyer didn't have or didn't want to pay the money, she would have liked the opportunity to consider a reduction in the commission.  In this case, the mortgage broker made thousands of dollars.  He could have knocked down his fee a bit.  The seller had a two hour drive.  We could have worked all this out with the lender and got an approved HUD without skipping a beat.  But no, they had to go under the table and take the illegal route -pulling their consumers in with them.

The lender pulled the loan from their pipeline - it hadn't been pooled yet - and will get back to us on Monday with a suggested fix.  They said they will contact the mortgage broker.  It will likely be a modified HUD - showing basically the fix that SHOULD have taken place on the day of closing.  I don't know that anything else will happen.  We're waiting to see.

This is a good example of what was so common during the sub-prime fiasco.  I am truly surprised that there are still players in the business acting out retro-mortgage foolishness.

this still blows my mind....ROBO-GFEs...don't they get it yet?

"Several important new features in ClosingCorp’s SmartGFE service just went live in order to improve the GFE data process — including an automatic notification of changed circumstances"  source


ClosingCorp's SmartGFE is nothing more than a ROBO-GFE in my mind.  It's only a matter of time before the lack of human decision making is exposed yet again as a bad idea.  Culture of brainlessness..."we" can't seem to value human beings.

Well, that's an angle I hadn't consider. Hmmm.

"We are not an equity owner in any law firm," he said.

Read the article in Housing Wire.

"standing in the wind" and "the wall is red"

I've probably talked about these two techniques before but just in case, let me explain.

What we call "standing in the wind" is the purposeful listening  to another person venting while remaining calm.  Our natural instinct is to get riled and defensive. It's not that the wind is bad.  The wind is.

Real estate is a large transaction that touches some of the most important moments of life and humans express frustration, rage, fear, sadness and joy in different ways.  Sometimes something completely unexpected will cause a person to need to vent.  These moments are normal.

As noted at the top of Title Insurance Talk, we think of our office as an emergency room of life and that means our staff must be trained in bedside manner.  Remain calm and help.

The second technique, "the wall is red", is the ability of staying on target with an important point, quietly standing your ground, and saying the same thing over and over until the other party understands whatever it is that you need to communicate but they are having a hard time grasping.  The point is to not go off on tangents and to not get riled or frustrated.  We are humans with all the frailties we share, but we are the professional in the transaction and we need to keep our focus on the task and help others to move forward to a successful closing.

Mind you, we are not always successful because we, like you, are not perfect.  We use these techniques to remember to stay calm and move forward to accomplish our shared task.

Here's an example:

Insuring title for property owned by an out of state LLC, not registered as a foreign LLC in PA.  There is a mortgage with a local bank.  The seller was represented by an attorney.

We requested:

1. the operating agreement for the LLC along with any amendments
2. a statement of the nature of the business being conducted in PA so we could determine whether or not there was a corporate tax lien risk
3. authorization to obtain a payoff letter from the bank

We received a letter from the attorney stating that they had no operating agreement, since they were registered in another state, there was no corporate tax risk in PA, instructions to give him the proceeds check payable to the bank and he would secure a release.

We responded asking that he clarify who he was representing in the transaction - the LLC, the bank, or both.  We had reason to believe the LLC did have an operating agreement and would he confirm that with his client.  We respectfully disagreed with his position on PA corporate tax and asked that he provide a statement concerning the nature of the business being conducted in PA.   We also let him know that we needed to communicate directly with the bank and if the bank wanted us to give the attorney the proceeds check, they would need to give us those instructions in writing.

The response included an operating agreement with amendments, a statement that the LLC conducted no business in PA beyond the ownership of real estate and a signed release.

We had independently contacted the bank and received a letter signed by a VP stating that they wanted us to send the proceeds check directly to their office.

Fine, now we could move forward.  No, the attorney still wanted the check directed to him and produced a letter from the bank which instructed us to give the check to the attorney.  This new letter was signed for the VP by his secretary.  We said we would be happy to change the instructions but that the letter had to come from the VP, not by his secretary.  That new letter came a couple of days later, we validated it by calling the bank, and the transaction closed.

I thought the entire exchange was a bit odd.  My staff had remained calm and simply continued to reply and request what we needed over roughly a month.  We had dealt with this attorney in the past and not remembered such an unusual exchange.  Yesterday, the truth of the underlying tension was disclosed.  The attorney, who needed to vent sadness, shared with my staff that the previous manager of the LLC had recently killed himself and his wife in a murder/suicide.

We never know what might be causing another person in our transaction to be less than focused. I am proud of the folks in my office who gently worked their way to closing without getting riled.  They calmly repeated "the wall is red" until it was heard and understood and continued "standing in the wind" until the door to closing opened.

My heavens to Murgatroyd, we're busy.

Me thinks consumers have finally discovered that interest rates are LOW LOW LOW and those that aren't buying are refinancing. 

Oh, and BTW - lenders are lending!  ;)

I really do not understand this need to make transactions brainless. Do you?

The robo-signers that have blown a hole into the foreclosure process are evidence of this never ending quest for the holy grail of brainlessness.  WHY  WHY  WHY WHY is the mortgage and title insurance business so darned interested in getting rid of competent human beings?

I just got a call from a nice lady at Closing.com.  They call every so often to ask if my fees are accurate and I always say that our listing directs people to our web site and to call us to get an accurate quote.

This time she was insistent that they need accurate fees because lenders will use their automated system to populate GFE fields and that they need to guarantee the accuracy of the data.

WHAT?  WHY?

Why is it so bloody hard for a lender to have trained human beings who know how to complete a loan disclosure?

Why are title insurers who participate in this program ignoring the unique nature of real estate transactions and the definitions of title services.  Is everybody just overcharging consumers to cover all possible transaction fees or are they misleading consumers then giving them a gotcha in the end?

Consumers actually take their transactions seriously and expect to deal with humans who have trained brains in gear.

WHAT THE HELL IS WRONG WITH THIS INDUSTRY?

WHY DON'T YOU WANT TO PRACTICE A PROFESSION THAT REQUIRES THOUGHT?



My brain wants to burst when I have a conversation like that.  I just don't get it.

mortgage broker advertises interest rates tied to affiliated title insurance

A friend showed me the mortgage rate section of the Tribune Review last weekend and pointed to a mortgage company listing that had asterisks next to a few interest rates.  These asterisks pointed to a note that the rates were only available if the transaction was a purchase and the borrower used a particular title provider.

Clearly the mortgage broker sought to avoid Pennsylvania's discounted refinance title premiums as part of this package deal.  Only purchases transactions are eligible so there's enough cash in the pot to subsidize the rates.  The consumer appears to be getting a deal with the package.

What do you think about this offer?  Is it a problem under RESPA or PA lending or insurance law?

I've pondered on it and I'm really not sure.  It's very much like the deals offered to buyers in construction transactions.  You get the good price if you use the affiliate.  If you don't use the affiliate, you pay higher than market.  As far as I could tell these interest rates weren't especially low.

What's also interesting is that I did some checking around and found that the mortgage broker is an attorney who is operating the title services business through the law firm and not as a title agent.  He's working under the approved attorney program.  That means that TIRBOP rates do not apply.  So what's the deal with purchase versus refinance?  This fellow can charge whatever he wants when he wants to. 

Anyway, in the days of a more compliant and aware marketplace, this was oddly red flaggie.  ;)

Hey, readers. Hello!

Hope you like the new look of Title Insurance Talk.  This is the first visual overhaul since 2006.  I've been wanting to update the picture for some time but the right shot just hadn't surfaced, then my friend Marianne sent my this photo of us playing at the local farmer's market.  I LOVE that she caught my TCS minicooper in the shot, SOOOOO, here we are.  ;)

Marianne McAuliffe plays Native American flutes and we love making music together.  She picked up those fun peace glasses at the beach and I love them!

BTW  - Here's the new addition to the TCS fleet.  We retired one of the minicoopers and bought a KIA Soul.  I think the logo looks really nice against the red, don't you?  The Soul is a nice happy looking car and that's what we want.

PS  Here's Marianne's CD.

Fidelity scales up outsourcing to India

CHENNAI: Spotting an opportunity to cut its costs by around 30 per cent with increased productivity, US-based insurer Fidelity National Title Group Inc has decided to scale up its business process outsourcing (BPO) and software development activities in India.

The company had set up its captive BPO company Fidelity National Financial India in Bangalore three years back.

The $4.6 million revenue Fidelity National Financial India has around 800 employees searching and confirming property titles in the US for its insurance parent. 


Read more in Economic Times.

if you bought a foreclosed home and are concerned about recent news

“If a new homeowner’s title is challenged because of a faulty foreclosure, the title insurer may have an obligation to defend the challenge,” said Kurt Pfotenhauer, chief executive officer of ALTA. “However, it is unlikely that a court will take property from an innocent current homeowner and return it to a previous homeowner who failed to make payments on the loan subject to the foreclosure.”
Though laws may vary on a state by state basis, in general, the buyer of a property that has been through foreclosure has numerous defenses available to assure their continued ownership.

• The alleged deficiency in the foreclosure process may not be accurate.
• The alleged deficiency in the foreclosure process may not have harmed the previous owner.
• The foreclosure judgment is a final court order. It is likely too late for a technical objection to the foreclosure process to be raised by the previous owner.
• Because the new owner purchased in good faith, they may be protected under the law. 

Read more from ALTA here.