05.21.07
Posted in Land Title Technical Stuff, Money and Finance, Mortgage Problems at 1:58 am by Jeanne
I know it’s not a sexy topic, mortgages. But everyday, I see mortgages with almost impossible terms. Fifty years -?, “bad credit okay,” “adjustable rate, “negative am,” “low initial rate,” and WE all know what that means… But do the borrowers on these sub-prime mortgages, aka loser loans, (and I mean loser in more ways than one) know what they are getting into? I believe Closers have responsibility to cover the mortgage note and mortgage deed or deed of trust in detail so that the borrower will get the picture.
I once closed a first mortgage loan at 23%. Yes, 23%. In the early eighties, a gentleman needed to refinance a land contract, or lose his house. With bad credit, he went to the local “Credit and Thrift Company.”
He had no choice, and I had no choice but to explain the terms to him, as a good closer does. It was a terrible closing. He even pulled my phone off the desk and threw it at me. He wanted to kill the messenger. I did what was required and explained it all in a professional manner, but I sure felt sorry for him. He was doomed to lose that house.
That was an isolated insident for me, Thank heaven! But now, I am not so sure it doesn’t happen to you all every day. The news is bad. But I hope you have the integrity to completetly and professionally explain to the consumer What they are signing.
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05.18.07
Posted in Land Title Technical Stuff, Money and Finance at 12:04 am by Edward
Jeanne: Sometimes under residental financing only the husband (or wife) will sign the note (per bank instructions) although both are in title. However, the standard residential mortgage usually assumes that the “mortgagors” are one and the same as the “borrowers, who signed a note of even date” and since under this scenario that is not technically true , could the bank have trouble triggering a foreclosure against both without a proper reference in the mortgage (nexus) reflecting that it is securing a “note signed only by ________(husband) ? I believe that unless all owners sign the note you should use a Guarantors Mortgage. Would title insurance protect a lenders decision to have less than all sign the note? Is it escrow’s responsibility to advise a lender on this?There are many other possibilities : Mary Smith Trustee in title but only Mary Smith individually signs the note? Thanks, Edward
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05.17.07
Posted in Judgment Searches at 6:04 pm by Jeanne
Jeanne - Do you recommend that we still have the sellers/buyers give a ten year history of their residences on their affidavits? We are still requiring our closers to do this. I, however, do not see the need to ask for this information. Just curious on what you are instructing your students to do on this form.
Arne R. Skatrud
Key Title, Inc.
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Posted in Money and Finance, Mortgage Problems at 5:49 pm by Jeanne
The NAR said in April that it no longer expects the median price of an existing home to rise this year, predicting instead a 0.7% decline. The slower recovery, it said, is a result of “tighter lending criteria and fallout from the subprime loan debacle.”
read story
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Posted in Regulation of Insurers and Banks at 5:42 pm by Jeanne
For decades, both government and industry have been calling for updated and simplified rules governing the home-loan process. But they have been unable to agree on anything that would modernize two key consumer-protection laws.
Read Details
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05.13.07
Posted in Industry News, Regulation of Insurers and Banks at 8:40 pm by Jeanne
I was recently asked to give my opinion on regulatory or market challenges I expect to face in 2007 . It really set my mind to thinking…
The first thought, of course, was the Crackdown by HUD and so many States on unearned fees, sham title operations, and violations of RESPA. How could anyone in the industry NOT think about these violations, with the forced closing of hundreds of title companies across the US this past year.
My second thought was the focus on affliated business practices in the recent Government Accountability Office (GAO)report. It certainly had a lot of valid points about being a legitimate producer of title products, and the potential pitfalls for consumers, who ultimately might be paying way too much.
Third, I thought of my own situation. I will have many fewer customers because of a poor sale market and because so many people are getting out of the real estate, mortgage banking and title businesses. Being in the industry for so many years, though, I know this is a normal cycle, and in the long run we will weed out the weak and somehow be better for it.
But, I an disappointed, because fewer customers are willing to spend $ on education. Many companies are willing to “cut corners” to save money, rather than doing things the right way - e.g. they are not doing a full title search, but just looking at the last deed and mortgage. Or, they do a “No Document” loan and don’t really see if a buyer can afford the mortgage. To me, this is scary, and it is definately NOT in the best interests of the buyers, who, I believe not only deserves, but NEEDS TO KNOW the status of title. Where are the easements? What restrictions are there on the property, etc. And NEED to know they will not be foreclosed upon, because they were put in a loan way over their head.
The industries are changing from risk prevention and disclosure to just plain underwriting the risk, in hopes problem titles will not be uncovered. Right now 1 in 3 titles have title problems, because of the poor quality of work being done, according to the American Land Title Association. But with less work being done to uncover title problems, more affiliated businesses seem to be flooding into industry…? And title premiums are going more and more to the affiliated businesses, presumably because they do the bulk of the work. But premiums aren’t going down. Does that mean the underwriter is expecting more claims! If so, why aren’t they cracking down on the quality of their Agent’s work! Something doesn’t seem right.
I hope the industries will start to wake up and voluntarily clean up our acts and take responsibility. Otherwise, although I AM NOT an advocate of bigger Government, I think the Feds will have to step in (again) to save us.
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