Closer

ALTA Comments on CFPB Report on Consumer Experiences at Closing

Press Release

Our members strongly support efforts to identify and alleviate the pain points consumers have experienced during the home closing process,” said Michelle Korsmo, ALTA’s chief executive officer. “While we are focused on technology and the ability for us to receive, sign and return, and retain electronic documents, we cannot lose sight of the importance of personal interaction during the closing process. At the end of the day, consumers are not buying a home from a computer.”The American Land Title Association (ALTA), the national trade association of the land title industry, released the following statement today from CEO Michelle Korsmo in response to the Consumer Financial Protection Bureau’s report on consumer experience during the mortgage closing process:

“Improving the closing the process through technology by providing electronic documents to the homebuyer will help give the consumer more to time to digest the information about their purchase prior to the closing. We agree with the CFPB that any implementation of new technology in the home closing process should not reduce opportunities for consumers to ask information or replace the ceremony of the closing process which indicates the importance of the transaction. Based on our members’ unique vantage point working with all the parties at the closing table, the Bureau should not only focus on technological innovations but also on improving consumer education about the closing process. The new integrated mortgage disclosure forms that the CFPB developed and will be implemented in August 2015 will help ensure the personal interaction and explanation remains part of the closing experience for consumers.”

“We look forward to continuing to work on this important initiative with Director Cordray and staff at the CFPB on this important consumer initiative.”

Closer Prelicense Course Scheduled for June 8th

An 8 hour MN Closer Prelicense class is scheduled for Tuesday, June 8th in St Paul, MN. The Seminar is a major step in obtaining a MN Closer License. See here for more details.
(Dept of Commerce Approval Pending)

MN Dept Commerce Takes Action against Embezzeling Closer

Used with Permission of Robert Franco, Source of Title
The Minnesota Department of Commerce has summarily suspended the real estate closing license, resident insurance producer license and Notary Public commission of Kuntee Singramdoo and charged her with embezzling over $230,000 in real estate closing proceeds and using the money to pay off her own creditors or her family members’ creditors.

Singramdoo, a resident of Lakeville, was an independent closer hired by Walsh Title & Real Estate Services, where she provided real estate closing services, sold title insurance policies and notarized real estate documents. The Commerce Department complaint alleges that Singramdoo engaged in a pattern of misappropriating, converting and/or embezzling settlement proceeds by issuing Walsh Title checks for her own benefit or for the benefit of her family members.

The alleged embezzlement includes at least 184 checks issued between February 2004 and June 2007 to 24 different creditors including $68,109 to U.S. Bank, $48,863 to Wells Fargo, $800 to JC Penney, $4,764 to Macy’s, $6,286 to Goodman Jewelers, $800 to Bloomingdale’s, $6,866 to Honda, $2,734 to American Express and $2,323 to Discover.

Singramdoo admitted under questioning from Commerce Department investigators that she embezzled the funds but at this time has only paid back $10,000 to Walsh Title.

Singramdoo accomplished the embezzlement by entering her own creditors on the HUD-1 mortgage loan form as if the debts belonged to the buyer or seller and subsequently issued checks directly to the creditors in her name. She also changed HUD-1 mortgage loan documents after closings to reflect the fraudulent payments.

“This brazen embezzlement scheme is a warning to everyone to pay close attention to the loan documents you are signing during the closing of a mortgage,” said Glenn Wilson, the commissioner of Minnesota’s Department of Commerce.

Real Estate Titles US – Inexpensive Title Education

A new online education company, RealEstateTitles.us (RETUS) has been formed specifically for title professionals. Its purpose is to provide high quality, inexpensive education for those involved with real estate titles. That includes: Closers, Abstractors and Title Searchers, County Recorders, Real Property Attorneys, Title Examiners, Title Agencies and Title Insurance Underwriters. The company offers primarily Professional Development courses for its customers, as most states have no education requirements for these professionals, but also offers some continuing education classes for those states that require CE. Additional License and Pre-license courses are planned for the future.

“RETUS Online courses provide quality education at lower costs for the consumer, as they don’t have to spend money for hotels, meals or travel, and they have the flexibility of working on their own timeframe. Even 15-20 minutes can be very worthwhile in studying important title concepts- and they can enter and exit courses as time allows.” 

The online courses have all been prepared by subject matter experts in the land title field, some being written or edited by Jeanine W. (Jeanne) Johnson. Courses coming soon include

  •  “A Settlement Agents Guide to Closing,” which will cover the full spectum of closing, including the newest changes to the HUD-1 Settlement Statement;
  •   “Introduction to Title Insurance and Land Titles,” that gives a history of title insurance and is a primer of key concepts in the title industry;
  •  “Real Property Ownership and Land Title Use,” which covers legal descriptions, platting, land use controls, rights of the government in planning. Especially helpful in dealing with new construction, land development and commercial properties.

Take a free test drive of the new title education courses for your state by clicking on your state, then the information button on the US MAP.

Definition of Marriage Changed in Dictionary

I caught a Closer Licensing Course last week.  Among the many issues that we discussed in drafting legal documents, was a conversation about marital status.  We talked about the fact that in Minnesota, you are either married or not.  If you are separated, you are still married.  If you are divorced, you are not married.  We also talked about the fact that marriage is recognized anywhere within the United States.  If you are married in Pennsylvania, we accept that marriage in Florida.  But the question came up as to whether or not we recognize marriage between two men or two women?  My response was that I had not run across that issue.  I suggested that they may want to talk to their underwriter.  Rule of thumb however it is that we accept marriages created anywhere within United States.

Interestingly enough, I saw a blog articles today in the Adjunct Law Prof that Marriage is no longer limited to opposite-sex unions, according to Merriam-Webster’s Collegiate Dictionary, which defined marriage as “the state of being united to a person of the same sex in a relationship like that of a traditional marriage,” in a post.

Any thoughts from title insurance underwriters or title agents?  Has anyone come across this issue? What was the response? And how does that affect title searches? We always searched Mrs. John Smith if we knew Mary Smith was married to John Smith. How do we search Jim Jones, married to Tom Brown?

 

What Kind of Bones do You Have?

Someone once said that there are 4 kinds of bones in every organization.

• There are the “wishbones,” those who spend their time wishing someone else would do all the work.

• There are the “jawbones,” who do all the talking but very little else.

• There are the “knucklebones.” They knock everything anyone ever tries to do.

• And finally, there are the “backbones” who carry the load and quietly do the work.

In an environment where many title insurance abstractors, closers and title examiners are out of a job, it is easy to guess who will be kept on.

Who Has to Sign the Mortgage Documents?

One of the most common sources of confusion at closing seems to be who must sign the mortgage docs. It seems to befuddle even experienced closers of title companies and title agencies. Does the Deed have to match the Mortgage and does the Mortgage have to match the Note? Many are sure that when there is a husband and wife, the closer should prepare the Warranty Deed in both names in joint tenancy, and then prepare the mortgage to exactly match the names on the Warranty Deed. They are not quite sure about signatures on the Mortgage Note, however, because lenders sometimes require others to sign the Note as well.

Truth is, in Minnesota (not necessarily all states) it takes “one to buy and all to sell,” meaning a person can buy real estate without their spouse going into title. There may be good reason for that. Say one spouse has significant financial exposure due to the business she owns. The husband may want to go into title in his name alone, so that should a bad business climate come along and the wife has judgments filed against her, the judgments will not attach to the property.

Also, far as joint tenancy – that may not be the best solution for all spouses. For example, Harry and Mabel, both elderly, have lost their spouses. A winter romance comes along and they decide to be married. They pool their funds and buy a home together. Both wish for their children to inherit their respective halves upon their death. They want to take title not as joint tenants, but as tenants in common.

However, Minnesota, as many states do, has an automatic interest of the spouse in the homestead. Now how do we know if they are living in the property as their homestead? Answer is: we don’t. Therefore, to be prudent, we ask spouses to subordinate any interest they might have, by signing the mortgage. They don’t have to be in title to sign the mortgage. But by signing the mortgage, we have cleared the potential interest.

Best Practice: ALL parties who show in title must sign all mortgages, and rule of thumb is to get their spouses to sign as well. Yes, I recognize that some real estate is unlikely to be homestead, but to be safe, get your underwriter to sign off on not getting the spouse’s signature. After all, that apartment building could also contain the apartment that your client claims as home.

As far as the Mortgage Note, it is simply a personal pledge to repay the full amount of the debt. So if son and daughter-in law, for example, need a little assistance in buying their first home, Mom and Dad may help it happen by, in effect, guaranteeing the loan. Mom and Dad sign the Mortgage Note but do not have to go into title (unless the lender demands it.)

As a disclaimer, this is NOT intended as legal advice, and those who prepare legal documents should be careful to seek legal advise to fulfill the intentions of the title holders. This is merely information from a seasoned closer and title examiner who has seen problems crop up due to misunderstanding how it the documentation works.

Closer Class available March 19,2009

A one-day closer licensing course will be held on March 19th the Twin Cities. If you are looking for this course, please contact us through the “contact us” form on this site. Space is limited.  If course fills, another will be scheduled this spring.

Has Florida Real Estate Finally Made a Turn for the Good

Source of Title comments that there may be some light at the end of the proverbial tunnel in Florida. While home prices have taken a hit, possibly a much needed correction, prices are down and sales have had a serious uptick over the last months. Is it a sign that the bottom prices have been met?  Let us hope so, and let those who have an interest in a very affordable second home consider it now. (Printed with permission from SourceofTitle.com)

Florida’s existing-home sales rose in January, making it the fifth month in a row that sales activity showed increases in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors (FAR). Existing-home sales rose 24 percent last month with a total of 8,450 homes sold statewide compared to 6,810 homes sold in January 2008, according to FL Assoc of Realtors(r).

“Many people are looking at today’s market and seeing opportunities to find the home or business they’ve always wanted,” said Cynthia Shelton, FAR’s president. “With a range of available housing options, historically low mortgage interest rates and affordable prices, buyers who may have been hesitant before should take a closer look at the current opportunities for homeownership.”

Thirteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in January while 11 MSAs also showed gains in condo sales; it marks the seventh consecutive month that a number of markets have reported increased sales.

Florida’s median sales price for existing homes last month was $139,500; a year ago, it was $206,900 for a 33 percent decrease.

What are Title Companies doing about the FACT Act

Lenders needing to comply with the Fair and Accurate Credit Transactions Act (FACT Act) have been given a six-month reprieve, until May 1, 2009.  What does that mean to title companies and closers?

While lenders are directly responsible for compliance with the FACT Act, title companies are also affected, because the FTC requires that lenders use “appropriate and effective” review of companies they use as service providers, such as title companies who have private information given to them by the lender. The Lender is responsible to see that title companies and and closers due diligence in handling that private information. Therefore title companies and closers who virtually always and have access to private information such as social security numbers, and other loan information provided by the lender, will likely be requested to sign a statement that they have the ability to detect specific red flags relevant to their closing activity and handling of private information.  They may also have to sign off that they will report those red flag items to the lender and to take steps to prevent or lessen the likelihood of identity theft.  So don’t be surprised if you are contacted by a lender asking for proof of compliance. 

While mortgage companies are required to have a specific identity theft prevention program in place under the FACT Act, compliance by the companies they use as service providers (i.e. title companies) are the responsibility of the lender providing the information.  The red flag guidelines suggest that the lender may “require the service provider by contract to have policies and procedures to detect relevant red flags that may arise in the performance of the service providers activities; and either report the red flags to the financial institution or creditor, or to take appropriate steps to prevent or mitigate identity theft.”

So what should title companies and closers be prepared to do?  If you are performing services for lenders and handling private information, educate your staff.  Know the red flags.  If you haven’t received a request yet, designate a person to be in charge of that area to review incoming FACT Act Service Agreements, and use due diligence by having staff who handle private information take classes about the FACT Act and the red flags set forth under the act. More detailed information can be found HERE at the FTC SITE

Info On Home Closing

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