just another day processing REO transactions....

notes for file

The lender's attorney agreed that the 2nd POA she submitted does not cover our transaction.  Our underlying mortgage is NOT part of that servicing agreement.

She wants to make an argument that the first POA she submitted can be used even though it does not specify power to sign a deed.  I disagree but said she can put her argument in writing and I will submit it to our underwriting attorney for a decision.

She expressed frustration that we were requiring an original or court certified POA because they will take time to get.  I think she is in some kind of meltdown because these are normal procedures and she's being illogical.  She may just be having a bad day.

If the buyer asks about delays, just let them know we are taking steps to make certain their title is good and marketable.

Fidelity sends more jobs out of the USA

BANGALORE: The world's largest property title insurance company Fidelity National Financial (FNF) will increase its headcount in India this year as it transfers more work from the US to its captive centre in Bangalore.

Read more on The Times of India.

subdivisions, outsales and foreclosure

TWO....TWO cases in one week with the same situation, well almost.

I've had two transactions cross my desk in one week that involve subdivision, sale of a portion of a mortgaged parcel which later went into foreclosure.  In both cases, the attorneys who handled the subdivisions and conveyance out of the mortgaged parcel overlooked getting a release from the mortgagee.  What were they thinking!

In one case, the foreclosure is over.  The foreclosing attorney didn't notice the outsale and so no notice was given to the owner of the outsale parcel.  I discussed it with my underwriter who raised three issues.  He wanted the outsale to have its own tax assessment identification.  It does.  He wanted the new mortgage lender to have given the outsale no value in the appraisal.  It's a cash deal, so no lender.  He wanted us to make certain our proposed insured buyer was fully aware and agreed to an exception for the outsale.  We provided maps and surveys found on record.  The buyer visited the property one more time, no problem.  Now all I have to do is make certain an exception shows in the deed so our insured doesn't have complications moving forward.

In the other case, the foreclosure process has just begun and our transaction is a short sale.  If the short sale goes through and our buyer is fully aware of the outsale, I see no problem.  On the other hand if the short sale does not go through and the property does go to sheriff's sale, if the foreclosing attorney does their job correctly and gives notice to the outsale owner, they would have to go and outbid the lender at the sale in order to preserve their ownership in the parcel they acquired without having gotten a release from the mortgage lender.  I'll bet that'll be a big surprise.  The listing agent and I chatted about this today.  There's no sense telling the neighbor to go for a release now.  I can't see any motivation for the mortgage lender to consider it when the property is in foreclosure.

Remember folks, if you buy a piece of property, even is it's just a sliver from a neighbor, you had better insist upon full title examination by a competent provider.  In both of these cases, consumers relied upon attorneys who took shortcuts.  It is possible that they advised their clients of the risk of buying without a title examination, or perhaps not.

Be a smart consumer.  

attention all PA title insurers...time to escheat!

April 15 is the deadline to report and deliver unclaimed property to the Pennsylvania Treasury.  Here are a few things to keep in mind as you prepare your company’s report:

• All owner accounts with a last known address in Pennsylvania should be reported to the Pennsylvania Treasury.  Companies incorporated in Pennsylvania should report all “unknown” owner accounts to the Pennsylvania Treasury.
• Reports can be filed prior to or on April 15; reports filed after April 15 may be subject to penalties.
• The Pennsylvania Treasury requires holders to file electronically reports containing 10 or more owners – including reports for tangible property.  Visit www.patreasury.org for links to free reporting software tools.
• Companies in possession of unclaimed property belonging to Pennsylvania residents must file an unclaimed property report.  It’s not an option, it’s the law!
• Failure or refusal to file a report can result in an audit, penalties, or interest.

Treasury’s Web site, www.patreasury.org, contains a wealth of information about filing an unclaimed property report, including:  detailed instructions, free electronic reporting software, a copy of the Disposition of Abandoned and Unclaimed Property Law, and a list of frequently asked questions.
Treasury’s Unclaimed Property Compliance Team is available to assist you with any questions regarding your annual report.  Call 1-800-379-3999, Monday – Friday, 8:00 a.m. – 5:00 p.m. EST or email unclaimedpropertyreporting@patreasury.org.

"political junkie"

The New York head of nationwide title insurance company First American Financial Corp. has left under a cloud of suspicion over his conduct as an executive.

Steven Napolitano, the president, chairman and CEO of First American Title Insurance Company of New York, the wholly owned New York City office, left his postFeb. 15 after speaking with companyhonchos who flew in from Santa Ana, Calif., headquarters.

Additionally, a female executive is currently on "administrative leave," sources said. She declined comment to a Post reporter.

Read more: http://www.nypost.com/p/news/business/cloud_of_suspicion_FRYyERal9p6OhytRrHxm3I#ixzz1EzEdQecv

the conversation sure has changed

Every once in awhile I notice that the conversation has changed and I am so thankful.  For the last two decades every trade publication for the title insurance industry was all about joint ventures.  Every course offered was another way to beat RESPA and form some sort of affiliation.

I must say I don't miss looking at all that stuff.

At least if it's happening, it's happening in the dark where it should be because from a consumer's perspective, at least in my opinion it's mostly part of the dark side of this business.

"During this period we request that members do not commence foreclosures in MERS' name. If a member determines that it will commence a foreclosure in MERS’ name during this 90-day period, two weeks advance notice must be given to MERS to permit verification of the appointment and current status of the certifying officer proposed to participate in the foreclosure. No foreclosure may be processed in MERS’ name without first obtaining this verification."

Read more on Housing Wire.

just deactivated my free Closing.com listing

I thought Closing.com was a nice platform for folks to find title agents until they put together a program to auto-fill Good Faith Estimates for mortgage lenders.

As I expressed to Dan, the nice fellow who called today from Closing.com, they are giving lenders a false sense of security and basically creating a platform which is about as reliable as ROBO-signing foreclosure plants.

Why is it that my beloved mortgage industry has given up on using human brain power?  Why must everything be automated and robo-processed?

It's okay if you never expect the consumer to use the company whose fees you robotically quote, but what if they do and the fees are wrong?  The lender eats the fee and Closing.com goes after the title agent who hasn't really had a chance to give a quote because Closing.com has robotically quoted figures on their behalf.

I guess I'll never really get that.

one of the soldiers of disaster apologizes

I was 22 years old when I decided to go into mortgage sales. I was finishing an undergraduate degree in criminal justice and had decided that I didn't want to go to law school as I had originally intended. I didn't have rich parents, and had never made any significant money, so I set out to find the highest-paying job someone with my limited qualifications could find.

At the time, my girlfriend's best friend was dating a guy who worked in mortgages. He drove a BMW, had nice clothes and carried himself well. Over drinks one night, I kept quizzing him on his success, and he told me all I needed to do was read a book or two and have some sort of people skills and I could be making six figures. Hearing those words was like a dog whistle to a middle-class immigrant who had only worked restaurant and construction jobs until that point. As it turned out, the bar for entry into the mortgage world was even lower than reading a book or two.

Read more on Salon.

Tell that to my husband and all the other honest mortgage persons whose careers you destroyed.  Punk.

We just finished our annual CPA audit and in the process heard an interesting title insurance claim story.

Yes, we pay to have our books audited annually by an independent CPA.  I wish it was a mandatory audit, but it's not.  I'm not a big government fan, in fact I'm an advocate for limited government - highly bent in the libertarian direction, BUT when a licensed entity has access to millions of dollars of other people's money, I think there ought to be some sort of formal audit standards which include 3rd party oversight.  That's not the purpose of this post, though, so let me switch gears.


The auditor sent out by our accountant this year is a nice young man who while asking some questions, mentioned that he was near the end of a multi-year title insurance claim.  I asked him to tell me the story because I always want to know how a consumer feels when faced with a title insurance claim and whether or not they are happy with the results.

In this case, he and his wife hired an attorney to handle the purchase of 20 acres of vacant land.  They SMARTLY decided to buy an owner title insurance policy.

This young couple bought the land with plans to build their dream home.  They are both accountants and so they are good planners.  When they purchased the land, they were childless and living in a small two bedroom house.  The plan was to build a four car garage with an apartment on top.  Eventually, when they started a family they would build a large addition which would become the main house.

The whole plan fell apart when they applied for a mortgage to do the first part of construction.  The bank used a different title agent to do the title examination for their loan title insurance policy.  This second title examination revealed that there was no legal recorded right of way to the land.  Though there was an old dirt road that looked like a right of way, it went over the land of the neighbor who when approached, refused to grant an easement.

They filed a claim with their title insurance company who then offered a nice chunk of change to the neighbor and met with another refusal.  Soooo....they went into arbitration and years later finally were set to go to court and on the eve of the trial, the neighbor finally agreed and accepted a paltry sum - much lower than the first offer and settled the matter.

Okay, well that shows the value of buying an owner title insurance policy, right?  The title company paid for all the legal work and the consumers eventually got their right of way.  On the surface, it all sounds peachy keen, however, this story helps to demonstrate the VALUE OF SELECTING A COMPETENT PROVIDER.

Now, I am not saying that we human beings do not make mistakes.  Everyone does, but we EARN OUR LIVING BY AVOIDING CLAIMS.  We do a full search and examination to ferret out details BEFORE the closing in an effort to help you avoid the entire claims process.  When you place an order for title insurance, pick your provider carefully.  Make certain you are getting a full search by a competent human being.  Keep your eyes open.  Read your title insurance commitment BEFORE you go to closing.  Complete your transaction with YOUR brain engaged.

WHY?  Well, let's discuss the rest of the story.  During the years this young couple's claim moved through the system, they had two children.  They had to buy a larger home and move on with their life, abandoning their plans for the dream home on their 20 acres.  Yes, in the end, they got their right of way.  Will they ever build there?  They don't know.  Life has moved on.  She is pregnant with their third child.  They are happy they bought title insurance.  In retrospect, they do wish they had paid more attention to the title work and not just trusted that the attorney did everything right.  They knew the dirt road was private but they presumed the attorney would check on the legality of the road.  Yes, the title insurance covered access but as you see from this case, the insurance is the safety net.  What you really want to do is avoid the problem in the first place.

;)

failure to closely guard the escrow account leads to big trouble.......

The indictment alleges that beginning at least as far back as 2004, a substantial shortfall began to develop in an escrow account maintained by Troese Title and Troese/Hughes for the receipt and disbursement of funds in connection with real estate closings carried out by both title companies. This shortfall is alleged to have been partly the result of mistakes made during the closing process on several transactions that required costly pay-outs to resolve, and partly from several large and long-undetected thefts by individual employees, although these factors did not account for all of the deficit. In the spring of 2005, Lukenich, the escrow accountant for the title companies, advised others at Troese Title and Troese/Hughes that the shortfall totaled at least $2 million. The shortfalls were further aggravated in 2006 through 2008 as the real estate and refinancing boom that had started in approximately 2002 first cooled, then collapsed.

Read more on FBIBaltimore.

Pennsylvania Gov.-elect Tom Corbett nominated a partner in the Saul Ewing law firm and former lawyer in the Pennsylvania Insurance Department to become the state’s next insurance commissioner.

Michael Consedine

Consedine’s appointment awaits a confirmation hearing by the state Senate.

Read more on IFAWEB.

Wendy finds the darndest things.

Wendy's job is a critical part of our title examination process.  She receives the raw search reports from our abstractors.  She combs documents and notes just to be sure the abstractor didn't miss exceptions in their report.  She plots the metes and bounds description to see if it closes and looks anything like the map provided by the abstractor then she types our legal description.

I review Wendy's work and make some changes, then I create the title commitment along with notes to our closing coordination staff so they know what, if any, issues must be resolved before we close.

Wendy and I work together in the same office.  [Yes, when we had a larger staff and my job was almost all training and management, I stayed up on the top floor spinning plates, but now that there's only ten of us and we have a wonderfully trained staff, I don't need to spin the plates.  We all spin them together.]  Anyway, when I hear Wendy chuckling I know she has found something interesting.

Her favorite - what were they thinking? - kinda find are typos that stay in the chain.  Know what I mean?  Someone makes a mistake and all the other law offices and title agencies who continue to convey the property all type the same mistake without ever noticing.

Sometimes they glare out and you can't imagine why no one ever thought to ask why.  Like today's find.  Inexplicitly sitting in the middle of a sentence was the numeral 10.  Huh?  Wendy checked back a few deeds and found that once upon a time that odd numeral 10 was really the word is. 

Sometimes it's a missing course or two or three and since most offices don't plot, they never notice the missing piece.

So, I share this with you, dear reader.  If you are responsible for the conveyance of real property, you may want to review your process and include eyes on and brain engaged review of the legal description because you don't want the next person reviewing the chain chuckling in your general direction, eh? It could be Wendy.  ;)

court rules against banks in pivotal mortgage case

"There is no dispute that the mortgagors of the properties in question had defaulted on their obligations, and that the mortgaged properties were subject to foreclosure. Before commencing such an action, however, the holder of an assigned mortgage needs to take care to ensure that his legal paperwork is in order," Justice Cordy wrote.  Read more in WT.

Okay, here's my lazy, I'm not going to read the case but will opine anyway, comment.  My first reaction reading this news yesterday was that it's just another example of the absolute degradation of standards in our industry.  I'm certain there are a bunch of others like me who used to do this stuff for a living that ask out loud - "Why didn't you just file an assignment?"

Back in the old days, every time a mortgage was sold, an assignment was filed.  Even when we pooled the mortgages into securities, the servicer acted in this capacity and accepted an assignment which was filed.  

The impetus behind the creation of MERS  wasn't bad.  There was merit in the idea that mortgage servicing of security pools or even whole loans could move within the MERS system without filing assignments.  The original mortgage was either assigned to MERS or MERS was nominated as the lender within the mortgage instrument.  It was presumed, I believe, that the last man standing, the servicing lender at the time of default, would receive and file an assignment from MERS prior to foreclosure.

I believe - and perhaps you will disagree and if so, I'd like to hear from you - that this wholesale dependence the industry fostered in technology cause a dearth of actual know how.  Is there anybody left in the business who remembers how it's supposed to work?  Did the folks who still had knowledge in their human brains retire or did everyone else decide to stop listening to them?


I consider this court's reaction like a well deserved wrap on the knuckles from good old fashioned teacher.  I'm sorry that it mucks up the party and I do hope that lenders jump in and get those assignments filed pronto.  

MERS isn't a culprit.  It's a tool which if used correctly works.  The overriding problem - the REAL problem behind all of the crap that has gone down is a chosen reliance upon tools of technology as replacements for human analysis and decision making.  

Mortgage backed securities aren't culprits.  They are a phenomenal tool when issued in conjunction with a due diligence system run by capable humans.

Tools are for use by capable and trained humans, not as replacements.  Someone has to be driving the bus and that someone should know how to drive and understand the rules of the road.  The bus should be monitored and maintained by a capable mechanic who understands how the bus works.  Consumers are riding the bus and the court is the traffic cop and the mortgage business just got a whopping ticket.  The bus isn't bad.  We needn't outlaw buses.  The cop isn't bad.  The cop is doing his job by keeping the roadways safe.

PA 400 Manufactured Housing Endorsement

Sorry, I'm at home as I write this and so I don't have the ALTA number in front of me.

Has anyone had any claim experience in which this endorsement comes into play?

We issue it all the time for lenders mortgaging a manufactured home or a mobile home which has been permanently attached to the land.

The endorsement doesn't really say much.   It simply includes the manufactured home in the definition of land.

So, here's the question posed to me today by a lender.  If the house is dragged off the lot and the lender acquires the property through foreclosure, how does this endorsement play into a claim?

My answer.  I have no idea.  Here's what the endorsement says...blah blah as mentioned above.

I don't see how this language gives the lender anymore coverage than they have in a situation in which the borrower violates the mortgage warranties and demolishes the dwelling.  In either case, the house was part of the land and in either case, the house is toast.

Anyone out there have experience with this kind of claim?

If the average title search is anywhere near as flawed as the document checks of the robosigners, we're in for some wild court cases.

To make that billion-dollar question even more chilling is the fact that, in many cases, the banks have already sold said homes to new buyers -- new buyers with title insurance of their own. If the average title search is anywhere near as flawed as the document checks of the robosigners, we're in for some wild court cases.

Read more: Hot potato time for title insurers | Bankrate.com http://www.bankrate.com/financing/mortgages/hot-potato-time-for-title-insurers/#ixzz1A4rnMD4U

 

 

And now all the brainiacs of TitleSmart, Next Ace, and short search lovers of old will be tested.

Good morning and happy new year!!

We've had a good year and moving into 2011 are hopeful for another.

Much of what was good during 2010 I think is the result of the 2010 RESPA rules.  We experienced a tremendous change in the way lenders prepare for closings and also in the quality of consumer disclosure.

Gone are the days of tears and anger when consumers get their final figure of cash needed to close.  In 2010 the most comment reaction was "Is that all?, I thought it would be higher."  Imagine that!

We only had one instance in 2010 in which a lender wanted us to cross a line we wouldn't cross- ONE!  That's terrific.  We have a renewed sense of team playing and there has been a restoration of quality.  The bad guys stick out against a renewed culture of honesty.

While there still exists in some sectors a desire to go back on the pathway to faster cheaper automation, in the meantime I enjoy the pause during which we can give our consumers good old fashioned quality of service and product.  For now, we survive and prosper and our consumers have a safe haven.

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.