County Recorder Education

E-Mortgage filing in North Carolina

Industry News, Technology update
Thursday, August 10, 2017
North Carolina has been at the forefront of eMortgage and eClosing transactions, and Thursday saw the state at the center of another milestone.

The state’s first eMortgage purchase transaction was completed Thursday, with North State Bank; Brady & Kosofsky, PA; DocMagic; Simplifile and World Wide Notary working together to close the deal. The entire process took 46 minutes.

The loan was originated by North State Bank, and closed by the Matthews, N.C.- based law firm of Brady & Kosofsky, the company said in an exclusive announcement to October Research, LLC. Technology used in the transaction was supplied by DocMagic, Inc., World Wide Notary, LLC., Ramquest, LLC and USPROSERV, LLC, while eRecording was provided by Simplifile.

“The closing itself represented the future of the industry,” partner Jaime Kosofsky said.

The closing came in conjunction with a special event hosted by the North Carolina Department of Secretary of State. The event introduced a newly formed North Carolina Electronic Mortgage Closing Advisory Committee, and four of those members participated in the closing Thursday.

The buyer and seller each executed the closing instruments and financing documents with a biometric signature pad, Kosofky said, which helps protect parties from fraud and forgery. The use of electronic signature and notary technology, coupled with the robust legal framework provided by North Carolina state law, makes it possible for lenders to make safe loans within the guidelines of the new TRID guidelines.

The homebuyer was at the Keller Williams office in Mooresville, N.C., and the eSigning agent – who is an eNotary – was present, along with the real estate broker. The closing attorney, who was at the Matthews office 45 miles south, was present via video to preside over the transaction. The register of deeds office is 55 miles away from the Matthews office in Statesville, N.C.

The seller signed the closing materials via signature last week before leaving town.

Among the principal individuals involved in the transaction were:

Ken Sykes, Kelly Arrington and Jamie Harrington from North State Bank. Harrington was the loan officer, and she completed her second eMortgage transaction Thursday.
Jeff Bode of Mid America Mortgage, whose company acted as the investor for the purchase.
Mona Mohajerani, who acted as the closing attorney, and Brady & Kosofsky Executive Operations Director Esther Fernandes, along with eSigning agent Patricia Paxton.
Secretary of State Elaine Marshall and Director, Electronic Notarization and Notary Enforcement Ozie Stallworth, who founded the eClosing pilot program in North Carolina.
Jason Streit, president at World Wide Notary, along with the rest of the technology providers involved.

Ever Heard of a PACE Assessment?

PACE (Property Assessed Clean Energy) is a new way to finance energy efficiency and water conservation upgrades to buildings. PACE pays for new heating and cooling systems, lighting improvements, solar panels, water pumps, insulation, and more for almost any property – homes, commercial, industrial, non-profit, and agricultural.  The idea is great – who doesn’t want more energy efficiency? Lower Energy Bills? Better Environmental Health?

But real estate agents, closers, abstractors and title companies, BEWARE. We may have a problem.

The PACE advertisement reads:

“Property owners across the US are using PACE because it saves them money and makes their buildings more valuable. PACE pays for 100% of a project’s costs and is repaid for up to 20 years with an assessment added to the property’s tax bill. PACE financing stays with the building upon sale…”

While that is a true statement,  PACE financing does stay with the building upon sale, it’s not quite that simple. Once PACE is added as an assessment, it becomes part of the real estate taxes. And, as we all know, real estate TAXES are a FIRST LIEN.

So, let’s say Home Owner Holly uses PACE to install $30,000 worth of PACE-energy efficient fixtures (with a 5% interest rate on the 20 year PACE Assessment) and enjoys low energy bills.  Two years later, Holly is offered a new job out of town.  She lists the home with Realtor Rick.  Rick is excited because he is an energy efficiency advocate and lists all of the energy upgrades for this fine home, selling for only $249,900.  Bobby Buyer comes along and makes an offer of $240,000.  Holly agrees.  She is thinking the buyer will just take over the house and taxes.

Bobby Buyer applies for a loan of $192,00.  They order title work. The title company and abstractor know that the $28,000 is a first lien along with the taxes.  Holly has not thought to use any of the money saved from her lower electric bills to pay the PACE lien. She thought PACE told her the PACE financing would “stay with the building.”  She never thought she might have to cough up the money at closing.  . Bobby’s lender does not want to be in Second position behind a $28,000 PACE lien, so now the conundrum. Where does that extra $28,000 in PACE money come from at closing?

I’m not saying PACE’s a bad idea, I love energy efficiency! But let’s make sure everyone understands PACE and how it works.

 

 

Education Key for Abstracting Success says Thomas Pryde

Here are some excerpts from Thomas Pryde’s new Blog pertaining to abstractors.  To read the entire article click: Thomas Pryde Blog

I couldn’t agree more.

Independent Abstractors: Well Trained Specialists (Part Three)

There are certainly opportunities to succeed in this market. If independent service providers are going to take advantage of them, they must differentiate themselves from the rest of the market, and nothing sets the independent apart from the crowd better than the fact that they know abstracting, in the context of their local areas, better than anyone.

However, while this is a distinct advantage, there are two critical obstacles to getting that message out to clients and convincing them to use your services. Once the obstacles are understood, the opportunities and challenges become clearer.

Educate

This is really the point of this article. The message that local expertise results in superior results is not making it to the clients. This may be partially due to a lack of marketing and communication from the independent providers, and/or it may be partially due to the fact that the ultimate clients (consumers and lenders) are frequently insulated from the independent provider that is performing the search.

Even where this is understood there is no way to verify or validate genuine expertise, and therein can be found the biggest challenge. Until there is a broadly accepted education and certification process, there is not likely to be any significant traction gained in regards to the one market value that independent providers can best deliver.

Gains can be made in the other two values, and that will be important. However, very few things would positively impact the market for independent providers better than a robust certification program. Such a program would be good for the market as a whole; it would especially benefit consumers, and independent service providers would have the means to communicate the difference between a discount provider and one with genuine local expertise.

What can be done?

  1. Recognize that you are part of a large group of providers that can significantly impact the market, if there is unity.
  2. Participate in SOT and other social media venues (Linkdin has several communities as well)
  3. Contribute to best practices discussions, in particular, and strive to educate your clients as to why commodity searches are inferior.
  4. Join NALTEA or other professional organizations that can provide the structure for increased cooperation and unity.
  5. Speak up on behalf of better education practices for training abstractors, and join efforts to codify that effort in a certification process.

There is much work to be done, but without a unified commitment to these things, the opportunities will be eaten away slowly, until the idea of independent search services is a thing of the past.

 

Independent Abstractors: Dying Breed or Valued Specialists?

 A post from Thomas Pryde’s Blog, re-printed with his permission.

The prevailing view among some industry leaders seems to be that the independent abstractor is a dying breed, the last vestige of an ancient way of doing business. This is attributed to the rapidly expanding digitization of title documents and new technology solutions that are being designed to quickly and efficiently obtain and deliver those documents to their clients. This is one example where technology has made promises well beyond what it can actually provide.

Thomas Pryde’s Blog ::

While it is true that the need for independent title abstractors might actually be eliminated if the idealized descriptions of a technology provider’s capabilities proved realistic, proclamations of the imminent demise of their business may be premature. In fact, the independent abstractor has a real opportunity that seems to have been largely overlooked, but in order to understand and take advantage of this opportunity, we have to first examine the promised market of full digitization and automation.

In this oft-prophesied and idealized market, all archived public documents will be available both remotely and digitally, and the client who needs these documents would be able to simply and efficiently obtain them, removing the need for someone to go to the courthouse, manually obtain documents, scan them, and then deliver them back to the client.

All search-related activities could be performed remotely, and there would be no need for any local expertise. This is the essence of what is promised on the back of technology.

However, if digital availability was ubiquitous, if the digitized documents were perfect, and if all the related data was flawless, such technology might indeed eliminate the need for a skilled abstractor. However, achieving such perfection in the document chain would also virtually eliminate the need for the title insurance industry as a whole.

Of course, the reality is (and will continue to be) far from this ideal, and title insurance companies will continue to thrive on the potential existence of problems that might be found in any given document chain. As long as this is true, local expertise and timely results can work together to offer a value proposition that will ultimately trump a mindless search service offered at rock bottom prices.

 

Legal Description Online Course Sale

biting nails confused childNot quite sure about that legal description?

This online course will show you how to read and draw legal descriptions. Even the “geographically impaired” will learn how to identify the correct parcel on a map, and draw out descriptions to look for possible gaps and overlaps.

An easy and fun course that simplifies and explicates descriptions.

Spring Promotion, Type: MetesandBounds into the Coupon code before March 31st for a $50 savings.

Testimonial for “Principles of Abstracting”Online Course

HI Jeanne,

I  have to pass on this news to you, as you are a HUGE part of my success.

I found out last week that I passed my exam and am Licensed in SD now!!!

I raved of your courses to the Board of Abstracters.  I know I wouldn’t have been successful in this quest so quickly without your help!

(even scored 100% in one of the 5 sections!!)

Thank you!  Thank you!!

For whatever reason this industry is difficult to find training on.  I wish it were required to have the standard of training you provide for all individuals to be licensed in any state!

Traci Renkly

Office Manager/Closing Agent

Brookings County Title Company

422 4th Street

Brookings, SD 57006

Notaries Beware: Courts Authorize Serious Jail Time for Notaries

Two seemingly unrelated articles caught my eye today that relate to our everyday title and closing business.   First, a CBS Investigative report shows China Flooding the US with Fraudulent Driver Licenses   that truly are authentic.

 

Meanwhile, an article in Law360 tells us that the 9th Circ. OKs Longer Sentences For Notary Seal Forgers 

The use of forged notary seals in wire fraud schemes can warrant longer prison sentences, the Ninth Circuit ruled Thursday, upholding a California man’s 10-year jail term over a $5.4 million scam. A three-judge panel found that notary seals can qualify as “authentication features” under a federal law that bars the use of fraudulent identification documents. Judges are allowed to increase the sentences of defendants whose crimes involve authentication features.

The appeals court panel upheld the 10-year sentence of Henrik Sardariani, a Glendale man who pled guilty to wire fraud conspiracy and other criminal charges. Prosecutors say he obtained $5.4 million in loans by pledging properties he didn’t own as collateral.

“In calculating the advisory guidelines range in this case, the district court correctly applied an enhancement for use of an authentication feature under [the] sentencing guidelines,” Ninth Circuit Judge Richard Clifton wrote for the unanimous panel on Thursday.

Moral of the Story:  Take a good look at those ID’s when using your Notary Seal.  It’s serious business.

Beware of Document Prep, Imperfect Mortgage May Grant a Homebuyer a Free Home

A great article “Mortgage Recording Requirements: Tiny Technical Defect Strikes Again” in Lexology this week by Vicki Harding of Pepper Hamilton LLP, reminds us how dangerous it is for a lender or settlement to make a mistake on a Mortgage Document.   While the situation of an errant mortgage is settled in some states (such as Minnesota) where a law or title standard dismisses a recording problem, in other states, a mortgage can give a consumer a “free home” by testing the technical waters in court. Think of the potential costs to those of us that prepare mortgages every day with a careless error. Think again when preparing and reviewing those common documents.

A good quote reads:

There are a surprisingly large number of cases that avoid mortgages based on technical defects.  As illustrated by this case, two points to remember:  (1) on the one hand, just because a document was recorded does not mean thathttp://landrecs.com/wp-login.php it was properly recorded so that it provides constructive notice, and (2) on the other hand, there may be remedial provisions that lead to the result that once a document is recorded specified defects are no longer relevant.

Read Article Here

Courthouses Haunted by Ghosts of the Past

 

Haunted Courthouse

Title geeks will enjoy a spooktacular visit of Haunted Courthouses in ABA Journal’s Tour of Haunted Courthouses. Each Courthouse comes with photos and creepy stories of past and present events.  Happy Haunted Halloween…

The Grimes County Courthouse, site of the trial of a Barrow Gang member who reportedly damned the building to the “infernal regions,” was examined by Houston-based ghost-hunting squad E Squared back in 2008. After examining the evidence the paranormal team collected, Judge Betty Shiflett said, “I would have to agree there were some strange things you could see on the tape.”

 

How To Enter the New Electronic Certificate of Real Estate Value

ECRV Required Oct 1 2014

ECRV Required Oct 1 2014  Click here for VIDEO

Info On Home Closing

Home Closing 101: An Educational Initiative of the American Land Title Association