09.08.07
Posted in Education at 9:40 am by Jeanne
I was surprised to find out HOW different title charges can be among different companies. An enterprising man has set up a web site in Colorado to compare those charges (note, I did not say costs) between different Title Agencies. See article
On one hand I think it is a great idea. If a consumer is savvy enough to compare, they may save significant dollars. On the other hand, it is not a simple task. But I have to believe, contrary to the suggestion in the news article, that most title agencies offer virtually identical services - Commitments and Policies that are the same ALTA forms and endorsements; Closings with the same services of collecting documents-explaining and signing documents- collecting and disbursing funds; recording documents; and sending out title policies.
And we all know that companies have what might be called “junk fees,” the misc. fees that add profit for services that are really part and parcel of the transaction. Call them document prep fees, delivery fees, etc. but the transaction cannot be completed without them.
With the internet so full of content, it will be interesting to watch how the “Expedia.com” of title insurers will fare with both the Public and the Title Companies
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09.03.07
Posted in Industry News at 1:18 pm by Jeanne
By Wendy Brown | The New Mexican
September 2, 2007
See article
The people at Think New Mexico have written a report that calls for the state of New Mexico to stop regulating title insurance rates and let the market set the rates.
That and other reforms could save New Mexicans $40 million a year on title insurance costs, the report says.
The report adds another voice to the chorus of people asking for title insurance reform in New Mexico. Among them are state Public Regulation Commission Chairman Ben R. Luján and Victor Marshall, an Albuquerque lawyer who has filed several lawsuits concerning title insurance on behalf of New Mexico consumers.
People buying real estate must purchase title insurance to assure lenders that the title on their property is free and clear.
Fred Nathan, executive director of Think New Mexico and an author of the report, said the organization plans to propose a bill in January’s legislative session that would call for three main reforms.
The first would be to repeal the law that allows the PRC to set title insurance rates, Nathan said. The second would encourage banks to buy title insurance policies for their clients, Nathan said. The banks would pass the cost of the policies on to their customers, but having banks buy the policies would help keep prices low because bank officials would be knowledgeable about the policies and could buy them in bulk, Nathan said.
The third would be to repeal a 1999 amendment that prevents consumers from suing title insurance companies who act negligently or fail to disclose problems with a title, Nathan said.
Marshall said he agrees with the recommendation to let the market set title insurance rates. “Absolutely,” he said. “Price regulation just means the consumer is getting ripped off. They’re setting the price too high.”
Jim Sitterly, president of the New Mexico Land Title Association, said he does not think rate deregulation would be a good idea for consumers. It would cause fly-by-night title insurance companies to come into the state when conditions were good and leave when they were bad, he said.
Most of the state’s title insurance companies are mom-and-pop operations, Sitterly said, and the people who run them care about the communities they serve. Sitterly is president of Curry County Abstract & Title in Clovis.
Currently, the PRC’s insurance superintendent sets the state’s title insurance rates after formal hearings. The price is the same for all the title insurance companies in the state, and there is no price competition among the companies.
Title insurance savings would go a long way to helping people afford houses, since title insurance is a large component of closing costs, according to the Think New Mexico report. A title insurance policy for a $300,000 home in New Mexico would cost $1,248 under this year’s rates, which became effective Saturday.
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09.01.07
Posted in Industry News at 4:31 pm by Jeanne
With a weakened market and Sub-Prime mortgages written without Mortgage Insurance, Investors are in serious trouble. I read just this past week that for every million dollars in default loans serviced, many banks are losing about $10,000 a month in servicing and foreclosure costs. That is serious Money.(American Chronicle)
The Demise of Private Mortgage Insurance (PMI) Previously, loans with higher than 80% loan to value ratios had to have Mortgage Insurance, if bought by institutional federally chartered S&L or FDIC insured bank. Mortgage Insurance was required by Lenders when the loan did not meet the normal standards for the Lender -the most common reason being a smaller than 20% down payment. The insurance protected the Lender’s Note from losses if the Borrower defaulted.
Piggy Back Loans More recently, with the push to give credit, Piggy-back loans came into style. Piggy-back loans gave buyers the option to buy with NO $ DOWN. They could take out a First Mortgage for 80% and a Second Mortgage simultaneously for the remaining 20%. Lenders encouraged the process, saying it would save the borrowers from having to pay mortgage insurance, and they could Deduct the interest! Seemed like a good solution to the borrower. Seemed like a good solution for the lender - who gets two loans instead of one.
Wall Street Holds the Bag on the Mortgage Note. The Mortgage Note is the borrowers Promise to Repay. Since these borrowers have no equity in the property and payments are too high because the house value is dwindling, they have little to lose to quit paying on the Mortgage Note. With real estate values dropping, it seems like an easy solution to just walk away and let it go into foreclosure.
Unfortunately, Piggy-back loans are not such a good solution for Wall Street, who stepped in to take over the market when traditional Mortgage Insurance guarantees went-out-the-window. Now, a trillion dollars in default loans have unworthy borrowers behind them with no back-up for losses from Mortgage Insurance and the investor’s collateral has been divided among institutional portfolio investors, making collecting on all those bad bets virtually impossible.
Wall Street Holds the Bag on the Mortgage Deeds. Not only that, Wall Street is also losing the value of the Mortgage Deed – You know, that document that pledges real estate as security for the loan. As property sales prices drop, so does the value of the Mortgage Deed, and thus a dwindling in the integrity of the market.
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Posted in Education, Money and Finance at 3:17 pm by Jeanne
This is the best site I have ever seen to help detect what we all wonder about … is that email I just got from my bank, credit card co.,… etc. for real. Check it out at Phishing
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