robo forger is facing 20 years

In addition to the criminal charge brought against Brown, Schuette reached a$2.5 million civil settlement with Lender Processing Services, the parent company of the now defunct DocX, on Jan. 31 to settle claims of unlawful foreclosure practices.

Brown is facing 20-years in prison when she is sentenced in May.

http://www.mortgageservicingnews.com/dailybriefing/former-docx-mortgage-processor-pleads-guilty-to-racketeering-1034505-1.html

what is a qualified written request?

For the first time, the federal Court of Appeals for the Ninth Circuit recently opined on what constitutes a “qualified written request” under the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. Section 2605(e), in Medrano et al. v. Flagstar Bank, FSB et al., 2012 U.S. App. LEXIS 25274 (9th Cir. Dec. 11, 2012). While the Court held that there are no “magic” words in order for a written request to be deemed a Qualified Written Request (QWR) under RESPA, which would trigger a mortgage servicer’s obligation to respond, in Medrano, the Court sided with the mortgage servicer nonetheless because the borrower’s letters did not raise the appropriate issues necessary for the letters to become QWRs.

http://www.jdsupra.com/legalnews/qualified-written-request-under-respa-87090/

good article on surveys

"The original surveyor did an incomplete recording the topography of the site. The house was built and the driveway as designed was found to be much steeper than the code allowed.  In addition, the surveyor neglected to include space for a 4% maximum grade at the garage to prevent cars from “bottoming out.”  Since the house was already constructed, the owner had no choice but to install a serpentine driveway that took up a large and unsightly portion of the front yard.  Could the owner have sued the surveyor?  Yes, but the original surveyor had no insurance.  The owner’s chances of recouping anything were slim and he was left with an unattractive and devalued property."   

In another example Hoffman cites, an inaccurate survey was used to build a house.  It was later found that the property lines were placed incorrectly and a corner of the site was located in the middle of a public roadway.  The owner wanted to take out a mortgage on his property but no bank would accept him as a result.  The owner had the option to wait for 3 years for the boundary lines to qualify as “pre-existing non-conforming” (something usually applicable to older properties), but the long wait wouldn’t guarantee he could still obtain favorable mortgage rates.  

http://www.godfreyhoffman.com/Civil-Engineering-Blog/bid/261316/?utm_campaign=Engineering&utm_source=linkedin&utm_medium=social&utm_content=49f37f2b-a7de-4a4f-8e16-82dabe9f481e

We all have storied we can share about issues discovered by consumers when they have a survey done.  I wouldn't buy property without one and I would be careful when choosing a surveyor. Make certain you set expectations for the job before getting a price quote.  

For instance, in our region we have two competing surveyors.  One gives the consumer a full report including rights of way, setback lines, and even draws shrubs and trees.  The other does the outside boundary and locates the building but draws nothing else unless you ask him to and HE charges more than the thorough surveyor.

d

interesting case on several levels

http://www.ca11.uscourts.gov/opinions/ops/201210495.pdf

owner versus loan policy
legal right of access
assumed risk and a title insurer's need to document that for the file, just in case.....etc.

and speaking of being snookered....

Lisa Gerideau-Williams, 46, New Kensington, Pennsylvania, an attorney, pleaded guilty in federal court to charges of wire fraud, filing false income tax returns, and failing to file income tax returns.

The defendant pleaded guilty on Jan. 25, 2013, to sixteen counts before Chief United States District Judge Gary L. Lancaster.

In connection with the guilty plea, the court was advised thatGerideau-Williams was an attorney who operated a mortgage broker business called Genesis Home Solutions, and two companies specializing in closing real estate transactions calledMillennium Settlement Services and Professional Settlement Solutions. Through these companies Gerideau-Williamsoperated a complex and multi-faceted fraud scheme.

http://mortgagefraudblog.com/perp-walk/item/21288-attorney-pleads-guilty-to-mortgage-scam

don't get snookered

That 6-inch stack of documents you sign when you buy a house or refinance your mortgage? Well, here's something to keep you awake at night: It could contain fraud or errors that would expose you to hundreds of thousands of dollars in costs or even criminal charges.

Borrowers sometimes blithely sign papers at their mortgage closing without comprehending them. It's understandable. You're eager to get the business wrapped up. But even though the end is in sight, don't relax yet. The closing conference, where you sign contracts and disclosure papers, is a crucial moment, and one that could expose you to serious risks.

http://realestate.msn.com/11-ways-to-keep-from-getting-snookered-at-the-closing-table

a restrictive covenant situation... always read the restrictions before buying real estate

An online advertisement described the 10-acre, four-bedroom Mount Abu mansion in Ligonier Township as the ideal weekend getaway.

A group of seven neighbors on Wicklow Lane thinks otherwise.

They have filed a lawsuit seeking to prevent John and Paragi Stewart from renting out their home to vacationers.

Attorney Jim Fox, representing the neighbors, wants a county judge to step in and enforce a restrictive-use covenant, signed by the Stewarts in 2009 when they purchased their home, that bars its use for rental purposes.

Read more: http://triblive.com/news/westmoreland/3384718-74/neighbors-ligonier-rental#ixzz2JTAWKNHj 
Follow us: @triblive on Twitter | triblive on Facebook

interesting discussion..Don does a good job helping this homeowner.

http://www.biggerpockets.com/forums/95/topics/81560-title-insurance-admits-they-are-wrong-but-i-have-some-questions-on-what-to-expect-next

employment changed before closing...what to do?

My refinance went through in November, but I lost my job in October. The refinance closed, but as a routine post-close audit they now want proof of income, either where I am working now or where I was working between October and November, in their words " In order to make the loan compliant with standard underwriting guidelines we need to obtain her current Employer details and supporting income documents (paystubs) for borrower". I've worked one 2 week job and now have another small part time job, and am still looking for full-time employment. What does this mean? Can they change my refinance, even though I've started payments? Can I be penalized, and what should I say or give to them?  I'm worried this will affect my loan. Thank you so much, I sure hope to hear from you!!

S

Hi, S:   At the time of closing the loan application would have been presented for you to confirm the accuracy of the information.  Did you disclose to anyone at the closing or prior to closing that your employment had changed?  If you did and the person you told did not stop the transaction, then they may have put you in a bad position.  Contact your mortgage lender and explain what happened and whether you did tell someone or you didn't understand that you should have done so. Be honest and hope for the best.  Good luck.

Diane

I want to add some thoughts for readers who may be facing a similar situation.  Failure to notify your mortgage lender that you have had a change to your financial profile - including but not limited to income or liabilities - is MORTGAGE FRAUD.  Yes, that's right.  You have to take seriously that the mortgage lender is agreeing to loan this money to you based upon the financial status you disclosed and they verified.  If your employment changes before you close and your lender does not discover this new information, you have an obligation to tell them.  Yes, this will stop your closing but you do not have the right to take the lender's money under false circumstances.

Unfortunately we do have loan personnel or real estate agents or settlement officers who may suggest to the consumer that they NOT tell the mortgage lender. These folks don't want to risk losing the income on the transaction but what they are doing is colluding to defraud the mortgage lender. If their participation in such a fraud is discovered, they too may be subjected to criminal charges or face some other penalty which may impact their employment or licensure.

It is entirely possible that S will be subjected to a demand for full payment of the mortgage balance.  It is even possible that S may be subjected to criminal charges.  That's very scary but depending on the loan program and the lender's policy for circumstances such as this, the remedy, harsh or less severe, is not going to be a joy for S.

Each consumer must take seriously their legal obligations when disclosing information to the mortgage lender.  Don't fool around with mortgage fraud.

NREIS to close?

The company, also known as NREIS, offers title, settlement and appraisal services to the real estate industry. The Dec. 17 notice required by the Federal Worker Adjustment and Retraining Notification Act said that the layoffs would be "as a result of the dissolution and windup" of NREIS.

http://www.housingwire.com/fastnews/2013/01/02/pittsburgh-real-estate-services-firm-shut-down

We are fairly exhausted in our office and recovering

from a brisk end of the year rush. I am taking a quick moment to post this hello to you.

We expected it to be busy but we didn't think it would be crazy busy!  LOL

We are certainly grateful for the business and don't mind being too busy because it sure beats the alternative, eh?

Happy New Year to YOU.

PITTSBURGH DAD: TWAS THE NIGHT BEFORE CHRISTMAS

interesting twist on a claim

Not long ago I posted about a new owner wanting to make a claim on the policy of the person who sold her the property.

Our insured did call us and we opened a claim for him but informed the new owner that we wouldn't be communicating with her.

The claims attorney noticed that the new owner is the same person who had been foreclosed upon by the lender who sold the property to our insured.

Guess what?  Shortly after our closing he deeded the property to her for a buck.

Well, isn't that interesting.  The claim was denied.

Working with an elderly seller whose attorney is semi-retired and a nice fellow....

who just won't let us do our job.  This transaction made me realize just how hard it might be for me one day to continue to do business when the methods morph beyond my ability or willingness to comply.

While the buyer, lender, and real estate agents were all wanting to move forward, we had to adjust the workflow to the timing of another era.

It wasn't unpleasant and certainly not laziness or procrastination.  These fellows worked at the polite speed of days gone by.

In addition, when we found a problem - an unsatisfied line of credit with a bank no longer in business - the seller's attorney would not give us the information we could have used to resolve the matter in a few days.  He decided to handle it himself and visit the bank that he thought had taken over the branch files.  They couldn't help him at the branch level and so when time ran out, our options were to postpone closing or set up an escrow and let him work it out post closing. He opted for an escrow and so closed.

The whole experience made me think of my bosses and mentors of days gone by.  It also made me think about how well I will deal with the changing nature of business as time marches on.

making claim on a prior owner's owner policy

No can do.

If you have a title problem and you do not have an owner title insurance policy, you cannot make a claim on the title policy of a prior owner.  You have to take action against the prior owner and the prior owner, if they choose to file a claim, may contact their title insurance company.

A couple of weeks ago I was contacted by a consumer who we insured back in 2006.  At issue were unpaid delinquent taxes from 2005.  I asked him to send me a copy of the statement he had received showing taxes outstanding.

I always want to see the correspondence a consumer has received.  Sometimes there is a misunderstanding that can be resolved simply by reading the statement.

In this case, he had the current owner send me the statement and the new owner of the property contacted me.  I explained that all of my communications would be with our insured, even though he didn't own the property anymore.  She would have to deal directly with the prior owner, our insured.

I did some preliminary work and found that the 2005 delinquency statement we had obtained did not include 2005 school tax.  Apparently during 2005 the school district was in the process of changing collection services and though both the municipality and the local tax collector directed us in writing to the company we contacted, the 2005 school tax data was not yet in their hands.

I opened a claim in the name of our insured and the matter is under review by a claims attorney.

interesting article...never heard of a lender buying an owner policy following foreclosure

Should a Lender Obtain an Owner’s Title Insurance Policy after Foreclosure? - Spilman Thomas and Battle

How can we educate our Realtors and loan officers to understand "off HUD" is a big deal and not an option?

There is a BIG disconnect in our business.  The disconnect is that folks just don't get that the INVESTORS in the mortgage backed securities market and the rating companies are depending on an agreed set of underwriting criteria for the underlying mortgage loans.

Anytime a Realtor or loan officer or any lending personnel decide to move "OFF HUD" to avoid the agreed set of underwriting criteria, they are committing MORTGAGE FRAUD.  Period. End of story.

UPDATE:  I was asked to elaborate on this.  I think we need a secondary market primer given to Realtors and loan officers so that they can understand how program guidelines play a part in the assessment of risk when pools of mortgages are priced for sale in the secondary market.

Say for instance that a program allows for a seller assist of 3%.  The risk analysis is based then upon the buyer/borrower having a minimum down payment plus cash reserve, and a portion of their closing costs.  They have something to lose and therefore are less likely to walk away if they fall on hard times.  If, unknown to the mortgage underwriter, the seller gives the buyer/borrower a sum of $3000 under the table presumably to cover repairs or what not, the buyer/borrower may net have NO investment in the transaction and the risk on this mortgage is then substantially higher.

Does that make sense?  Can you see now how moving items "OFF HUD" and outside of the program guidelines defrauds the mortgage lender who makes representations and warranties concerning the loans contained in a pool and how it ultimately defrauds the investor who buys the securities backed by such a pool of mortgages?

It was not the system of pooling mortgage and making securities that caused the Great Recession.  It was the failure to adhere to program guidelines that were in place to protect investors and keep the system honest.

I just ordered this book.

Will report back with a review after reading.

R's tax proration discussion continued

Hello Diane

Thanks for the info.  I looked at the sales contract from this past summer...here's what I found about prorated taxes:

"PRORATIONS: Taxes for the current year, maintenance fees, assessments, dues and rents will be prorated through the closing date (Jun 26, 2012).  The tax proration may be calculated taking into consideration any change in exemptions that will effect the current year's taxes.  If taxes for the current year vary from the amount prorated at closing, the parties shall adjust the prorations when tax statements for the current year are available (in this case they were available Oct 1).  If taxes are not paid at or prior to closing, Buyer will be obligated to pay taxes for the current year."

So in this case, taxes were not paid at or prior to closing.  But I didn't take ownership of the property until Jun 26, yet I could still be liable for taxes owed during a period when I didn't even own the property?  My other frustration is that this stipulation in the contract is buried in the fine print...and if I don't happen to find this phrase on closing day, I'm stuck with all taxes?  I'm no expert on closing contracts.  If I was, why would I pay the closing agent to do anything?  I guess my other question...who should have made me aware of this?  My realtor/agent, the title company representative, or the building/owner?

And knowing this verbiage from the contract now, how would you proceed?

Thanks

R

Hi, R:  This is not unusual.  We all as consumers sometimes ignore the boilerplate in contracts but that doesn't mean that those words have no meaning.  As a buyer you are on your own unless you hire an attorney specifically representing you or you have a true buyer's agent.  The title agent, even if they are an attorney, is not acting the capacity of buyer counsel.  In fact, typically the sales contract is already negotiated before the title agent enters the transaction.  Buyers need to read their sales contracts and if they aren't sure, they need to hire an attorney to advise them.

You might still at least contact the title agent by email or phone to ask them how or why they calculated the prorations.  See if their explanation makes sense now that you have read that portion of the sales contract. If they clearly demonstrate that they were following the instructions contained in the contract, you have your answer. 

You might also want to talk with your real estate agent to see how they interpret this language in the sales contract.  Perhaps the agent can shed light on local custom or may even agree with you that there was an error.

I hope this information is helpful and I thank you for sharing your experience as I am posting it on the blog because I think it will help other home purchasers.

D

R wants to know if a tax proration error is covered by title insurance

So I bought a house on Jun 26, that was the day we closed.  I just got the property tax bill from our county and it was rather high, and I don't remember any credits coming my way at closing from the Jan 1-Jun 25 timeframe.  I went back to look and still don't see anything.

My question for you -- since I didn't take ownership until Jun 26, I assume I'm not liable for property taxes from Jan 1-Jun 25, right?  Should those have been prorated and charged to the seller at closing?  Even if they were estimated at the time since final property tax bills aren't issued until Oct 1?

And if this was a human error of some sort, who's responsible for the screw up?  The title company?  And how would I go about getting reimbursed so I'm not stuck with the entire 2012 calendar year tax bill?  Can I invoke title insurance for human error?  I assume these are the types of things title insurance is used for?

Your thoughts?

Thanks

R

Hi, R:  The method of prorations for taxes and whether or not prorations take place is set out in the sales contract.  The title agent would look at the contract and set up prorations or not based on what buyer and seller agreed to.  In the absence of such instruction from a contract, a title agent would typically do whatever is the custom for that area.  The responsibility of the buyer and seller, then, is to review these figures and then by signing the settlement statement, acknowledge acceptance.

If the county tax bill is based on a calendar year, and the bill doesn't come out until October for this calendar year, then it would make sense that the seller would have given you a credit for January 1 thru June 26.  This credit would be on page one of the HUD-1 on the bottom half of the page.

If the county tax is based on a fiscal year, the dates may be different and it is possible that the October bill is for a fiscal year that started after June 26 but in that case you would have given the seller a credit for the county tax to adjust for what they had paid beyond closing to the end of the fiscal year.

Tax prorations are typically not covered by title insurance.  However, they may be covered by a Closing Services Letter if you are in an area where such letters cover consumers.  In PA the letters DO cover buyers.  The basis of a claim under the letter is that the title agent did not follow the written instructions.  In that case you would have to show that you gave written instructions for prorations and as I mentioned before, these are typically in the sales contract.

If there is no basis for a title insurance claim you could speak with an attorney and consider suing the title agent for negligence. Again, though, I think you'd have to show that they were given instructions and did not follow them.

Prorations of taxes are not mandatory as part of a real estate transaction.  They are negotiated by agreement between buyer and seller.

Hope this helps. ;)

Diane

tip for preparing your Power of Attorney

First, if you are an adult with children and/or property, please take the time to have two documents prepared by an attorney - a Last Will and Testament and a Power of Attorney. People become disabled or die unexpectedly so please do not wait until you are old to make important decisions and codify them in writing.  You probably also want to add a Living Will or Healthcare Directive.

Second, if you already have these documents, remember to look at them every few years and make changes as needed with your attorney's assistance.

I am not an attorney but as a title insurance agent I read a lot of wills and power of attorney documents.  After reading so many I've given thought to my own documents and made some changes.   The one big change I'd like to talk about in this post concerns powers given to another person to manage your affairs.

This is on my mind today as a loved one is in the hospital and we just reviewed important documents.

When you ask your attorney to prepare a Power of Attorney document, it will likely be a General Power of Attorney which gives broad powers to your agent/attorney in fact to pretty much do just about anything with your property.  Presumably this person will act in your best interest and I think you might presume that they will do so only when you have given permission, right?

What if you are perfectly capable of making decisions but your family or this person decides that they want to make a decision for you without your knowledge?

We had a case in our office recently in which an elderly lady living in an assisted care facility owned a country cottage, one that she loved according to her family.  She had no children.  She had executed a General Power of Attorney document giving power to her nephew. The nephew listed the cottage for sale and signed a sales contract without ever discussing it with his aunt. His aunt is lucid, just too old to live alone, has no children with whom she might reside. Had she considered that he might make major decisions on her behalf without discussing them with her?  Probably not.

When we received the title order and saw a the Power of Attorney document we asked if his aunt was capable of signing the deed. That's when he revealed that she was unaware of the sale but that she was capable. He said she really loved the cottage and thought that selling it would upset her. We insisted that he get her permission for the sale and that she sign the deed herself.  She consented and we closed the transaction.  I have no idea how that conversation went, but she might have felt compelled to complete it since the transaction had moved so far along.  What if she had been contemplating one last stay in the cottage or just looked forward to maybe spending an afternoon or two there?  I can imagine that, can't you?

At any rate, this could be avoided by creating a Power of Attorney which only goes into effect after one or two [you choose the number] doctors write a letter stating that you are mentally incapable of making decisions.  This way you have a document in place in case you are still alive but incapable of managing your affairs but while you are alive and still capable you are not giving broad powers to another person to act in your stead. You have given power but limited it to the time when you are incapable to manage things yourself.

Again, I raise this as something for you to consider when you work with your attorney in creating these very important documents.  I have noticed over time that very few Power of Attorney documents contain this limitation.  I'm not sure why, but I think it's a good idea and so my personal document does contain such a limitation.

eAppraiseIT ..... "BADddd"

The settlement is based on 10,000 appraisals for WaMu in 2006 and 2007, and related communications with employees. Emails show a pattern of favoritism that created a "proven appraiser list" for Washington Mutual.

One email produced during trial stated: "The appraisal list that eAppraiseIT ... is using has been totally scrubbed. But instead of keeping good appraisers, they went for the BADddd ones." 

http://www.housingwire.com/news/new-york-ag-settles-wamu-appraisal-case

Ask your title insurance agent how they guard your private data.

This is one of those things that really bugs me about the title insurance business.  Beyond the broad federal privacy laws there are no rules that govern how we guard YOUR most private financial data.  There are no guidelines for storage or disposal.  Doesn't that bug you, too, as a consumer?

Add to that - even operating with privacy laws, your information may go to parties who are not subject to licensure and may have been subjected to little or no vetting.   That's even more disconcerting to me.

Consider this.  When you apply for a mortgage loan, you provide your full employment information, all or most of your banking accounts and your outstanding debts.  All of this information, along with your residence, marital status and social security number is typed onto a form 1003, the uniform residential loan application.

This 1003 form and often attached exhibits such as tax returns or bank or credit statements are given to the title insurance agent as part of the closing documents, usually so that you can sign these documents at the closing.

If the title insurance agents uses its own employees to conduct the closing, these documents at least do not leave their care.  If however, the title insurance agent uses notary signing agents who are not employees, these documents containing your full financial data move into the care of yet another entity who is in most states not licensed.

Even when dealing directly with one of the super large title underwriters you may experience your data moving to such an unlicensed entity or even overseas - off shore - for processing.

Now that I've explained how your most private personal financial information can move about, I'd like to tell you how our office, The Closing Specialists, handles this information.

1.  We only use on staff, fully trained and well experienced, closers.
2.  We hire a secure shredding service to routinely pick up trash that contains sensitive information.  We have shredding disposal boxes on every floor excepts the main floor which is open to the public so that employees can easily dispose of document copies or faxes which do no move into your permanent file.
3.  Your full permanent file is retained in our on-site storage until it is scanned and then it is also given to the secure shredding service.
4.  Your scanned documents may only be accessed by an employee.  Requests coming in from outside of our office are screened by a manager.  Requests must be in writing and the party making the request must meet privacy law requirements for access before a document is released.
5.  Off site backups of this data are stored in a bank safe deposit box.
6.  When we have a need for a hardware repair or upgrade to the system in which this data is stored, the work takes place on site and the old equipment is retained by us and stored in a locked room which can only be accessed by management.

We take our role as custodian and guardian of your personal data very seriously.  Frankly, I don't even think we ought to have access to this information as it isn't really a part of the title insurance transaction however, for now mortgage lenders don't see this as a security risk and so since we receive the data and we recognize ourselves that it IS a security risk, we guard your data.

So, when you are deciding between title insurance agents, think about how you guard YOUR personal information and then realize that your choice of title insurance agent is a part of that security plan.

on the evolution of our industry

Diane,
I am the branch manager of a title insurance office. I've enjoyed your blog for the last year or so and I am wondering what your thoughts are on the CFPB proposed changes to the Truth in Lending and RESPA act disclosures and their effect on our industry. I understand and applaud the goal of protecting consumers but I am concerned that these proposed changes will hurt small title offices. 
Your thoughts?

Hi, T:

Thanks for your kind words about the blog. I take a long view of this business. I've been in and around it since 1973.  It's always been in a state of constant change.  Interestingly, though, the community of people just keep playing musical chairs and manage to find places in the ever changing evolution.  So, I don't worry too much about the possibility that small agencies such as mine might be effected.  We've always tried to roll with the punches, stay honest, and serve the needs of consumers, lenders, and real estate agents.  Somehow, doing that we've been able to find niches in large and small markets that have allowed us to survive.

I have already discussed with my staff that it is possible that the evolution of the industry might eliminate or severely change the role of a title agency.  If we can't find a way to get rid ourselves of the lousy agents and maintain professional integrity, then like mortgage brokers before us, the business model may be considered too risky and the good guys will be tossed out with the bad.  I have assured my staff that they ought not to worry because no matter what, the work of moving real estate will march on.  It is a necessary function and there will always be a place for well trained people who know how it works.  We'll just move into some other position.  Some of us will use our skills to create new businesses that function within a new workplace model.

We need not to be buggy whip makers trying to protect the way we make our living.  We can evolve.  Don't be afraid.  ;)

Diane