Top 5 Reasons Banks Reject Short Sale Offers
When you are house shopping and searching the market, you might find a house with a price that just seems too good to be true No, the price isn’t listed incorrectly, but instead it is a short sale
ALTA REVISED SURVEY STANDARDS TAKE EFFECT FEB. 23, 2011
New Survey Standards have been approved by the American Land Title Association (ALTA) and the National Society of Professional Surveyors (NSPS.) The purpose of the Minimum Standards is to set nationally recognized uniform standards for land surveys and to assist title insurance companies, surveyors and lenders to use nationally recognized uniform standards to assist title insurance companies, surveyors and lenders.
The new standards discourage the drafting of new legal descriptions and also require:
• a reference to any title commitment be included on the face of the survey
• a vicinity map
• more detailed information regarding easements and right-of-way lines
• use of a standard certification.
See more at ALTA.org
Are Title Insurers Better Prepared for 2011?
In a new article from National Mortgage News, there is a discussion about the relatively immediate future of the title industry – i.e. in 2011 as compared to past years. It should be noted that a contributing author to the articles quoted is the American Land Title Association, certainly providing a skewed perspective, meaning that the ALTA lobbies to put the best spin on the industry. For example the quote
“In addition, while the title insurers could see a very slight increase in expenses in conjunction with increased legal activity involving foreclosures, we believe it will be limited in nature and have no real impact on the bottom line. With respect to actual claims arising from the enhanced scrutiny around the foreclosure process, the title insurers have been clear in their belief that any issues involving the lenders will not result in claims for the industry,” …
This is clearly a one-sided comment. It does not address the real cause of the increase in claims. From my perspective, the real cause of claims is that the quality of the product has declined significantly. Searches of simply the last-record-owner forward to write title policies is commonplace. Indeed it has become the norm, I hear from my students. Getting the product out quicker and cheaper has become much more important than the elimination of potential or even clearly outstanding title issues that used to be the norm. This means the consumer is getting a lesser quality product. Additionally the policies that ALTA has put out cover more and more potential title issues (building code issues, etc) that should cause claims. I also have concern about the quality of those doing the title searches. Sending the work overseas as a cost savings clearly has costs in quality. I am amazed at the effort it takes to stay on top of changes in the marketplace that impact real estate abstracting and examining. I am not sure the title insurers care. It seems to be more important to sign a big agent than the quality of the work the agent can do. Certainly that means claims.
I do think title companies have laid off staff to reach the demand, but as the article points out, hiring competent staff when the market turns will be a significant problem. And as the A.M.Best report says “Loss activity stemming from agent-, consumer- and bank-related fraud activity still remains a concern. Such activity typically goes up during periods of reduced cash flow and generally involves embezzlement of funds held in escrow, potentially resulting in severe losses,” … I hope that we as an industry will work to carefully educate and bring back the quality of title title work the consumer deserves.
A New PACE Lien for Abstractors
Good Catch ALTA! Another new lien has been introduced by the Federal Housing Finance Agency that could impact our title searches, abstracting, closing and title insurance policies. But what type of lien? We don’t know – perhaps a mortgage type lien, or perhaps a tax or assessment lien?
Accordingly, ALTA has sent a must read ALTA letter to the Federal Housing Finance Agency asking for clarification about the process by which a Property Assessed Clean Energy (PACE) lien is created, administered and satisfied. Without additional information regarding PACE liens, abstractors will not be able to properly identify whether or not property being searched has a PACE lien. Additionally, it is not clear the priority of such lien – upon recording, or as a form of government taxation. Read More at Business Wire and Housing Wire
ALTA Publishes Additional HUD-1 Information
July 13, 2010: The ALTA RESPA Implementation Task Force has updated its Uniform Supplemental HUD-1/1-A Instructions in an editable PDF file format that will further facilitate the transfer of information from lenders to settlement agents in order to create an accurate, compliant HUD-1/1A.
The older December 10, 2009 version of ALTA’s Uniform Supplemental HUD-1/1-A Instructions is also available online at ALTA.
Creditor’s Right Endorsement
The American Land Title Assoc. Form 21 Endorsement, commonly referred to as the “Creditors’ Rights Endorsement” was de-certified by ALTA, moving the risk back from title insurers to the insured, which may force prudent lenders to perform additional due diligence to understand the financial creditworthiness of its borrowers.
See more at Lexology (registration)
Home Closing 101: An Educational Initiative of the American Land Title Association
