Terrific news for jumbo VA homebuyers

Housing Wire is reporting that GNMA - Ginnie Mae - has raised their pooling limits for VA loans.

GOOD MOVE GUYS!!

Well, I have to give them credit for doing a full search.

While grumbling over a make work project, I decided to smile instead......

Just got a call from a very nice lady who works for an attorney who is insuring title for a property WE insured last year.

Their title search revealed an unsatisfied mortgage from 1935.

ERgggghhhhh, hmmmm..........

Well, I said I'd have passed on a mortgage that old and she put me on hold.......

Nah, her boss thinks he'll have trouble getting title insurance with that unsatisfied mortgage.

So, instead of arguing that IT WAS 72 YEARS AGO and full searches in these parts only go back 60 years, I decided to be grateful that he had done a full search and was taking the title seriously.

I offered to process an indemnification letter for them and they were happy, so I am enjoying my coffee and pondering a new found appreciation for the attorneys who are learning to be title agents and are at least taking the high road. ;)

What is a title plant?

A title plant, in the traditional definition, is a database of old title policies backed by good title examination. Use of a title plant is part of the normal search and examination process. Why recreate the wheel on every transaction?

We've got our own little title plant. We've got the files for every transaction we've insured back to 1991. Most of them are scanned and accessible on our network while processing a new title order. So, if we find the property in our title plant, we ask our human abstractor aka title searcher to search back to the date of our last title policy. If we have no prior file, we order a full search.

Some title companies have changed their title plants to include data gleaned from courthouse indices and other internet accessible real property related sites. I call these title plants garbage.

Why do I call them garbage? Well, there are no qualified human eyes reviewing the data before it's considered usable. I would not want to rely on a title search using this type of title plant. I take the ownership of real estate too seriously. I want a professional title search because we talking about the roof over a person's head and we're talking about the largest investment in the lives of most families.

query: does a non-borrowing spouse have to come off title on a FHA deal

Apparently. It stinks, doesn't it? I am hoping the FHA might come up with a new rule on this issue while they are rewriting programs in response to the subprime refinance wave.

query: can I buy a house without using a title company except for title insurance

Yes, but a reliable professional must perform and control the closing and disbursement. Each state has its own rules. In Pennsylvania you could use the services of an approved attorney for closing. The attorney would arrange for title insurance through a licensed title insurance agent.

Are you trying to refinance out of a bad mortgage?

If you are in our service area, check out our Choose and Save Program. With the mortgage loan discounts available for refinancing AND the waiver of optional fees, it's a great deal.

query: how does a realtor protect themselves in a joint venture

Read all of RESPA thoroughly yourself and believe the words you are reading.

The joint venture [aka affiliated company aka ABA aka CBA aka AfBA] must be a real company. Most are not.

Consider your fiduciary duty to your customers and keep that in mind while making referrals.

If you refer a customer to your affiliated company provide the correct RESPA disclosure before you make the referral.

query: if you have title insurance on your land house debt free do you need additional title insurance

Make sure you have an owner policy. You only need the one policy and it will protect you for long as you have an interest to defend. If the value of the property has appreciated beyond the amount of the policy and you wish to increase the coverage, your title insurer can do that for you.

query: can you get title insurance on foreclosed properties in pa

Yes. You can get title insurance on foreclosed properties in any state. A title insurer will examine title and indicate any exceptions or liens that can't be insured. This procedure and method is no different than that used for properties that have not gone through foreclosure.

Problems, if found, will be offered up for solution. If you are getting a mortgage to buy the property, problems must be corrected. If you are buying cash, you will decide if you want to take title with problems in place.

Normally the mortgage lender selling the foreclosed property is willing to fix the problems.

It's definitely a buyer beware situation so be sure you have a true professional vetting title for you.

query: mortgage lenders who accept IRS liens

Mortgage lenders who want first position will NOT accept an IRS lien that takes priority over their lien position.

We consider IRS liens as valid for 10 years and 30 days. IRS liens penetrate tenancy by the entireties and they attach to after acquired property.

You may want to contact lenders who are willing to take second position. Tell them about the IRS lien up front to no one wastes their time.

query: how can I take my husband's name off the deed

If your husband is deceased, there is no need to change the deed, however, if you'd like to change the deed, contact an attorney. Provide a death certificate as proof of death.

If your husband is alive, he can sign a deed conveying his interest to you alone. You'll still need the services of an attorney who will prepare the deed and review other concerns with you.

I would want to check whether you have an outstanding mortgage. The terms of most mortgages contain a "due on sale" clause. This language prohibits transferring an ownership interest without the permission of the mortgage lender.

I would also suggest discussing marital rights with your attorney. In Pennsylvania, spouses can make claims in divorce even if they are not vested on the deed. Your attorney may want to add language to the deed which eliminates the right moving forward. As an example, "John Smith now and forever releases any marital rights he may have in the herein described premises. "

Hire an experienced real estate attorney and let them take care of it for you. Don't forget to shop around just a little so you know the going rate for deed prep in your area. For instance, in our area, deed preparation over $150 would be considered excessive unless the circumstances involved lots of extra work.

Save the baby!

This little baby didn't fly out the window with the bath water. Let's hope our quality mortgage lenders and title insurers are safe, too.

query: seller listing agent refuses to work with my loan officer

I have to presume that your loan officer is acting in an ethical manner and is not asking the seller or their agent to engage in any acts of fraud, etc. So, if everything is on the up and up, I'd have to say....

Geez. How childish and unhelpful can you get? Most agents want to move the deal along and will cooperate with all parties as long as the actions are ethical and legal, BUT, they can choose not to, soooooooo...........then I have to ask why the listing agent needs to deal with your loan officer at all?

You are dealing with your loan officer. Your agent, the selling agent would be the person to deal with the listing agent, not the loan officer.

The agents have an obligation to take your offer to the seller. If the seller accepts an offer with a mortgage contingency, the seller has an obligation to allow an appraiser onto the premises. If the seller accepts an offer with contingencies for inspections, the seller has an obligation to allow inspectors onto the premises.

Frankly, I see no obligation for the seller or their listing agent to deal with your loan officer.

Who knows. Maybe the listing agent has personal reasons for not helping but I think you can move the transaction along with the help of your selling agent alone.

query: when do lenders submit 4506

The 4506 is an IRS form used by lenders to obtain a copy of a borrower's tax return. Borrowers sign these forms at closing.

Mortgage lenders have quality control programs that perform routine audits. If your file is selected for an audit they will submit the 4506.

Audit selection may be random or not. If a mortgage lender suspects fraud they may tag your file for an audit. Random auditing is typically 10% of all closed files.

Really good quality control programs randomly select not only 10% of all production but they make certain they are checking 10% of each originator's production, 10% of each appraiser's work, etc.

A really good quality control program will catch crooks. They are easy to spot if you are really looking for them.

query: what is systemic fraud - 2

Sorry it took me so long to get back to this topic. I presume we are talking about the systemic fraud I've mentioned from time to time when discussing subprime mortgage lending.

The fraud play in the subprime mortgage lending origination departments - retail and wholesale - was that from the top to the bottom, the players paid no heed to the underwriting rules.

My perspective as a title agent is from the bottom. I'm the last person in the chain. Title agents and attorneys witness the interplay between the loan originator and the borrowers. We also see the final lending underwriting conditions. Those title agents and attorneys who refused to fudge facts and tried to report bad acting to a higher level found in most cases, loan processors, underwriters and management saying "just do it". I believe this is really why the subprime lenders prefer notary signing agents. The signing agents are more likely to be ignorant and less likely to really understand what's going down at the table.

I know that due diligence suffered in subprime, but what really galls me and what I see as such a rude affair is the total disregard for the minimal standards lenders agreed to when they sold the paper.

You have mortgage lenders selling high risk paper and telling analysts that it at least meets such and such minimal guidelines then the lender's origination network takes those guidelines and throws them out the window by faking the numbers and engaging in team spirit fraud.

That's systemic fraud - whole subprime departments from top to bottom supporting each other's bad behavior in the name of volume, coaching the willing borrowers and just fudging the data of the unwilling borrowers.

These folks regularly and systematically defrauded their employers. The employers made reps and warranties to the secondary market and the rest is history. It might have been easier to stand on the corner and throw money away.

Can we avoid this moving forward? Yes, reinstate qualified human "in house" quality control with real teeth. Good quality control with regular audit selections would have caught the crap early. We know how to do due diligence, we just have to decide that it's important.

query: how can I take my husband's name off my home loan

If he's still living, refinance. If he's deceased, it doesn't matter.

stated income mortgage MUST GO

I couldn't have said this better myself so I'm just linking to Calculated Risk. Well done.

query: is a mortgage broker owner liable for the actions of their employees

I don't see why not. I see an employee as an extension of the employer so in my opinion, negligence in the performance of work done by an employee for the mortgage brokerage would create liability on the part of the company and its owners.

Actions by the employee outside of their job function is another matter entirely.

query: if my title insurance has the incorrect property description how do I fix it

First, contact your title insurer and raise the issue. Listen to what they say. There may not be a mistake but rather a different way of describing the same parcel.

If there clearly is a mistake, ask for a general endorsement correcting the description but don't stop there. Make sure all documents such as your deed and mortgage are correct.

It is entirely possible that the title insurer searched the wrong property and that's a problem. To protect your interests I always recommend that you review the title commitment PRIOR to closing. We like to give our customers copies of any maps or surveys found on record so they can look at the parcel and visually confirm we have searched the correct property.

Since we started sending the maps along with the title commitment prior to closing, we have eliminated doing at least two or three corrective deeds each year.

You might ask, well, how do these mistakes happen? Well, sometimes the sales agreement does not clearly identify the parcels being sold. This is especially an issue when the seller owns more than one parcel.

BTW- The danger of selecting the wrong property or creating a description error increases significantly if the title examiner has little or no experience. The risk of error goes through the roof when the lender or title agent relies on an automated search. Be picky and select a title company with expertise and one that assures you they are doing a FULL search performed by a human being and not a computer.

query: impact of subprime collapse on escrow and title companies

The fates of escrow and title companies are riding in tandem with the lenders they serve.

Those that expanded and built their business plans on serving subprime lenders and adopted the relaxed crappy standards the subprime culture created may find it hard to survive the collapse.

Forensic quality control reviews shouldn't find it too hard to connect vendor management style processing with inadequate due diligence.

query: how do you start a title insurance company in PA

I find it very interesting that I got this query twice in the last 24 hours. The first was from the new manager at our bank across the street and the second was a Google query that hit this blog.

WAZZUP, PEOPLE? Don't you know that there is a major correction taking place and even very experienced title people are losing their companies or jobs?

Just thought I'd ask.

Anyway, IMHO - I really dislike that phrase but it fits here - if you have to ask that question, you aren't qualified to do the work.

query: tax cushions for escrows in PA

It's not a state thingy, it's a federal thingy.

Mortgage lenders are permitted to cushion escrow accounts by up to two monthly installments. Most who escrow use the full two months.

query: does 15 day grace period affect credit

Nope, that's why they call it a grace period. Grace is the gift of time to pay.

Most mortgages have payments due on the first day of the month with a 15 day grace period. That means as long as they receive your payment by the fifteenth, it's considered on-time. Any payment received by the lender after the end of the grace period is late and will affect your credit record.

If you are not sure about the due date and grace period for your mortgage, you can find the terms in the NOTE signed at closing.

query: can a lender require hazard insurance on a tool shed in florida

Huh?

OK, well, I don't think it really matters what state the property is in, the issue is more a collateral issue. Any mortgage lender is going to want to protect the security for their loan. That means that if you have a tool shed that is really terrific - so terrific that its loss would impact the value of the collateral, well then I wouldn't blame the lender for requiring the insurance.

Grant you, it's a rarity, but that must be some tool shed.