This concludes our "12 Days of RESPA" series. For a recap of all topics between December 20th and today, check here. As always, if you have any questions, please reach out to any of us or comment below. Thanks for reading!
Thursday, December 31, 2009
This concludes our "12 Days of RESPA" series. For a recap of all topics between December 20th and today, check here. As always, if you have any questions, please reach out to any of us or comment below. Thanks for reading!
Wednesday, December 30, 2009
The revised RESPA rules that have not already gone into effect will become effective on January 1, 2010. As we announced here, however, HUD has agreed to "exercise restraint in enforcing" these provisions for the first 120-days of 2010.
What is the impact of this delay on use of the new Good Faith Estimate and HUD-1 Settlement Statement?
As of today, there should be no delay in implementation of the new forms or practices, but where there is a failure by a lender to adhere to these changes during this 120-day period, there may be some leniency in enforcement. There are still some practical considerations to be worked out, and provided a lender is exercising good faith in becoming compliant, HUD may elect not to enforce with a heavy hand.
Tuesday, December 29, 2009
As discussed here, owner's title insurance premium is subject to a 10% fee tolerance if charged by a title company identified or selected by the lender. To provide this figure (and all other title-related charges) on the Good Faith Estimate (GFE), it is assumed that the lender has already reached out and received that settlement providers' fees.
Which owner's policy is being issued?
Over the past 10 years, many title agents have made available the enhanced coverage policy. Title insurance companies like First American and Chicago Title will, for additional premium, protect the buyer from claims that the traditional ALTA policy did not (such as post-policy forgeries, neighbor encroachments, lack of actual, physical access, etc.). The additional premium charged varies from underwriter to underwriter.
So which type of policy will the lender be quoting? The point of the new RESPA change is to give the borrower an apples-to-apples comparison of fees. Will borrowers be comparing multiple GFE's with different types of coverages quoted? How will they know which coverage - standard or enhanced - is being quoted?
This from page 26 of the New RESPA Rule FAQs (Hat tip to the anonymous commenter below):
Q: If a borrower was quoted a basic owner‘s title insurance policy, but
requests an enhanced owner‘s title insurance policy or an endorsement to the owner‘s title insurance policy, should the loan originator issue a revised GFE?
A: If the borrower requests an enhanced owner‘s title insurance policy or an endorsement to an owner‘s title insurance policy after the loan originator issues the GFE, the loan originator may choose to treat such
a request by the borrower as a changed circumstance. The loan originator may then choose to provide a revised GFE to the borrower to disclose the increased charges. If the increased charges do not exceed tolerances, the loan originator may opt not to issue a revised GFE.
Q: Should the loan originator quote the charge for a basic owner‘s title insurance policy or an enhanced owner‘s title insurance policy on the GFE?
A: The GFE is a disclosure of charges the borrower is likely to incur in connection with the settlement. The loan originator should quote the rate for a basic owner‘s title insurance policy. If the borrower chooses an enhanced owner‘s title insurance policy before the loan originator issues the GFE, the loan originator should quote the rate for an enhanced owner‘s title insurance policy.
There are a lot of "may's" and "should's" in the answers above, so we will be monitoring the situation once the new changes kick in. Will the lenders be quoting standard premiums? How will the type of policy quoted be communicated? As we work through these logistics, agents are well-advised to understand that there are two types of owner's title insurance policies with different costs, and to make sure the buyers are asking which policy is being quoted on the GFE before selecting a provider.
(Revised 12/29 at 3:45 PM to incorporate comments made below)
Tomorrow's brief post will be on the enforcement of the new changes.
Monday, December 28, 2009
The purpose of this blog series was to break down the new RESPA changes into small, digestable pieces. Changes like this can be overwhelming - we wanted to make it just plain "whelming." ;)
If you want to dig deeper, and likely you do, here are some good places to go:
1. The HUD RESPA page is likely the best for detailed explanations of the new changes. More specifically...
a) Settlement Cost Booklet for borrowers
b) RESPA in plain English (Powerpoint)
c) RESPA Rule FAQ document
d) The new Good Faith Estimate (GFE)
e) The new HUD-1 Settlement Statement (HUD-1)
2. REALTOR Magazine / REALTOR.org published a breakdown of the changes in April, 2009 here.
3. Housingwire.com published this over a year ago when the changes were announced.
Do you have any other sources you've been using to stay abreast of the new rules? Let us know, we'll add it here!
Tomorrow: Standard v. Enhanced Coverage Title Insurance
Sunday, December 27, 2009
Saturday, December 26, 2009
As we discussed yesterday, loan costs are divided into one of three categories: (1) those that cannot change from initial GFE disclosure, (2) those subject to a 10% tolerance, and (3) those that can change. For title fees, whether the cost belongs in bucket #2 or #3 will depend on whether the lender "identified" the settlement service provide on a written list. In short, where the lender identified the particular settlement service provider, they are subject to the 10% fee tolerance.
Some more points regarding the "identifying" of the settlement service providers:
- If a loan originator is to allow borrowers to shop for third-party settlement services, he is to do so via a written list of providers.
- A borrower does not need to select a company from this list, but if she does the tolerance applies.
- If a borrower selects a company not on the the written list, the tolerance does not apply.
- A loan originator may include an affiliated business on the written list of providers, but must also provide the "affiliated business arrangement disclosure."
Source: HUD.gov's "New RESPA Rule FAQs"
Tomorrow's topic will be "The Shopping Cart"....
Friday, December 25, 2009
The first group (the no tolerance group) are mainly made up of origination charges - those fees that the lender imposes to provide the loan.
The second group (the 10% group) are mainly settlement fees, provided the borrower uses the title company the lender identifies.
The third group (the "fees can change" group) are primarily fees charged by companies that the borrowers have chosen on their own which the lender has not identified (plus some other fees the lender either has little control over or cannot estimate at time of origination).
This provision is probably the biggest change of them all, and the one that will require the most explanation during loan origination and settlement. It is highly recommended that agents review the new GFE before it is rolled out in January, and read this FAQ document provided by HUD.
Tomorrow we will dig deeper into the distinction between "lender-identified" providers and those the borrower chooses on their own.
Thursday, December 24, 2009
The New HUD-1' Settlement Statements "Bundled-Cost" Structure
As we discussed yesterday, the new HUD-1 Settlement Statement is going to tie into the Good Faith Estimate (GFE) rather explicitly by referencing on what line of the GFE the cost will appear. Another very important (and related) feature of the new HUD-1 is a bundling or aggregating of closing costs.
Here is a comparison of how the 1100 fees are laid out today, and how they will be after 1/1/10, for an approximately $1M purchase in Northern Virginia:
Settlement Fee: $230
Title Binder: $95
Title Insurance $5,080
Title Services and lender's title insurance: $2,760
Owner's title insurance: $2,880
The theory behind the change is that for borrowers to really compare apples to apples in shopping for services, they need the big picture and not be distracted by the breakdown of fees involved. This new scheme also segregates what is required for the loan (title fees and lender's title insurance) and what is optional (owner's title insurance).
Tomorrow's post will discuss the 3 "types" of charges: Those that cannot change once on the GFE, ones that can increase by no more than 10%, and those that can change.
Wednesday, December 23, 2009
One of the important components of the new HUD-1 Settlement Statement is a "tie-in" to the lender-issued Good Faith Estimate (GFE).
The vision: A borrower sitting at the closing table with the GFE on the left and the HUD-1 on the right, going from one to the other making sure they line up. The new HUD-1 even has the appropriate GFE column number (see figure above) to help with this. Ideally, all figures match identically. More likely the HUD-1 figures will be equal to or less than those on the GFE, and must be unless they fall within a set tolerance or the vendor was selected by the borrower (more on both in a subsequent post).
Time will tell whether this does in fact create a better, more transparent experience for the borrower, or whether this just adds more time to an already lengthy, document-intensive process.
Tuesday, December 22, 2009
From everyone at Mid-Atlantic Settlement Services, we wish you Happy Holidays!
We appreciate the support, friendship and business from all of our brokers, agents, loan officers, buyers and sellers.
Please note that we will be closed on December 24th, and will reopen on Monday, December 28th. Should you need any help during this time, please send an email to info[at]MASettlement[dot]com and we will respond as soon as possible.
Flickr photo by di_the_huntress
The new GFE doesn't tell us WHAT?
Succinctly asked by one of our readers via Twitter DM, "Why the [expletive deleted] doesn't the new GFE have a PITI # on it?"
We can't really address the "why," but we'll clarify the "what" and offer what we think will be a workaround by lenders.
Traditionally, lenders have used the GFE for multiple purposes. The spirit of the first still survives: Provide borrowers with an estimate of costs inherent in getting the loan. But many lenders amended their own form to include an estimated "Funds Needed to Close" figure, as well as the total Principal, Interest, Taxes and Insurance (or, "PITI") monthly payment line itemization. For a borrower, these are *crucial* figures - maybe the two most important numbers in the entire transaction. Yet, they don't appear on the GFE.
At least three lenders we work with will be providing their own "Closing Cost Worksheet" or something similar. It will include the GFE figures for closing costs, but will also spell out precisely how much money the borrower will need to bring to closing, and what their total monthly payments will be (including the all important interest and taxes).
As an agent, what does this mean to you?
When working with buyers, make sure they are asking their lenders about this. Don't expect that the GFE will contain this info. Know exactly what information the GFE conveys (look here), and what it doesn't convey, and make sure your client gets the answers in some other format!
(Revised 12/22/09 at 5:19PM)
Tomorrow we will discuss the HUD-1 as a "tie-in" to the GFE.
Monday, December 21, 2009
Lenders used to provide the GFE at various times in the process, and on various GFE forms (each had their own). While all loan officers and mortgage brokers endeavored to thoroughly and accurately reflect all fees (and the good ones typically did) on the GFE, they were not bound by it. This changes the first of the year.
Effective 1/1/2010, the GFE:
- Will be a common form, regardless of lender. All will use this form.
- Will not be issued until the borrowers have identified a property, but will be issued within 3 days of the borrower having done so.
- Will, subject to some tolerances and changes in circumstance (to be discussed later), tie to the final HUD-1 Settlement Statement and be an accurate reflection of costs inherent in getting the loan.
- Will encourage shopping and comparison of various vendors and loan programs.
This is a shift in policy and practice. The devil - as always - is in the details, and we will monitor closely how this new change in philosophy converts to change in practice. Stay tuned!
Sunday, December 20, 2009
The blog post topics are planned as follows (subject to change):
2. Nature of GFE as an "estimate"
3. Need for a "cash needed to close" document from lender
4. HUD-1 as a "tie-in" to GFE
5. HUD-1's "bundled-pricing" as a better cost comparison
6. The 3 types of costs
7. Identified/Recommended vendors v. Buyer-selected vendors
8. The Shopping Cart
9. Online Resources: Helpful links we've found for the new RESPA rule
10. Title Insurance: Standard v. Enhanced Coverage
11. Enforcement of Rule Changes
12. Commissions as a dollar amount rather than a percentage
We hope this is helpful! If you don't want to check back every day, feel free to subscribe via RSS or email on the front page.
Friday, December 18, 2009
Friday, December 11, 2009
Wednesday, December 9, 2009
HAPPY HOLIDAYS FROM ALL OF US TO ALL OF YOU!
Photo by Muffet on Flickr
Friday, December 4, 2009
Friday, November 20, 2009
Photo by Derek Massey on Posterous
Thursday, November 19, 2009
As we discussed here, the First Time Homebuyer Tax Credit was extended and expanded on November 6th. Of the many questions posed by passage of this bill, the one that we have been asked the most is, "Does a taxpayer need to sell his existing house to be eligible for the $6,500 'step-up' tax credit?"
It appears the IRS just recently added the following Q&A item to their FAQ document, and the answer is: NO.
"Q: I’m already a homeowner. If I buy a replacement home after Nov. 6, 2009, to
use as my principal residence, do I have to sell my home to qualify for the homebuyer tax credit?
A: If you meet all of the requirements for the credit, the law does not require you to sell or otherwise dispose of your current principal residence to qualify for a credit of up to $6,500 when you buy a replacement home after Nov. 6, 2009, to use as your principal residence. The requirements are that you must buy, or enter into a binding contract to buy, the replacement principal residence on or before April 30, 2010, and close on the home by June 30, 2010. Additionally, you must have lived in the same principal residence for any five-consecutive-year period during the eight-year period that ended on the date the replacement home is purchased. For example, if you bought a home on Nov. 30, 2009, the eight-year period would run from Dec. 1, 2001, through Nov. 30, 2009."
You should still have your clients seek the advice of a trusted tax professional before making such a decision if the tax credit weighs heavily on her list of reasons to buy or not to buy. Have the buyer provide the CPA with the exact situation, and ask them to research before making the decision!
Thank you to James Carroll and Marney Kirk for the information you provided to help with this post.
Wednesday, November 18, 2009
What we have questioned is the effect of this decision: Does delay of enforcement mean a delay in implementation, or are lenders still going to go live with the new forms on January 1st?
We have received strong indication from industry resources such as First American and the American Land Title Association (ALTA) that this decision is not a delay in implementation, but merely a delay in enforcement. There are still some practical considerations in some jurisdictions which make full compliance with the new rules impractical or impossible, and HUD does not want to be imposing financial obligations against companies who cannot possibly follow the new regulations.
We will continue to monitor this closely so agents and brokers know what to expect as of the first of the year. Stay tuned...
Monday, November 16, 2009
Friday, November 13, 2009
The likely impact is that for the first 4 months of 2010 borrowers could see either the current or the revised GFE and HUD-1 form, depending on whether the lender has implemented the changes.
We will provide more updates as we get them.
This post was scheduled earlier this week. In ironic fashion, it shows sunny skies and beautiful weather. Below, however, is actual video footage from Monica McNamara yesterday.
Thursday, November 12, 2009
Tuesday, November 10, 2009
Q: The buyer is a single taxpayer making $130,000 a year, $10,000 of which is his employer's contribution to the buyer's 401(k). Assuming he qualifies in all other respects and has no other income than mentioned above, does he qualify for the tax credit?
A: Yes. The new income limit is $125,000 for a single taxpayer (increased from $75,000). The definition of "income" for the purposes of this tax credit is Modified Adjusted Gross Income. While the $10,000 in employer contributions is technically income, it is not included in the IRS definition of Modified Adjusted Gross Income and therefore the buyer qualifies with $120,000 in "income."
Tomorrow we'll discuss whether a buyer must sell their current house to be eligible for the $6,500 existing homeowner tax credit. Stay tuned!
Sources: here and here
Note: Please consult with a CPA before making any decisions. These posts are meant to provide the real estate community with a broad understanding of real estate topics and are not to be relied upon as legal or accounting advice.
Monday, November 9, 2009
For more history on Veterans Day, check the wikipedia.org line here.
THANK YOU to those of you who have served on our behalf, or are currently serving!
Photo Credit: respres on Flickr
EDITOR'S NOTE: The writer (Derek Massey) scheduled this post for a Wednesday release. The Editor (Derek Massey) inadvertently published it today. As President of the company (Derek Massey) hereby apologizes for the Writer's and Editor's lack of communication.
Saturday, November 7, 2009
From the REALTOR Action Center Blog "Frequently Asked Questions" document we shared earlier:
Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a new home. I have lived in my current home for more than 5 consecutive years and am within the new income limits. I will go to settlement on November 20. If President Obama has signed the bill by the time I go to settlement, will I qualify for the new $6500 tax credit?
Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.
As always, your buyers should seek the advice of a CPA to determine eligibility for any tax credit, but this is helpful information.
Friday, November 6, 2009
As a real estate agent, how do I explain this to my client or determine whether her transaction qualifies?
Perhaps the best description we've see so far is the NAR Frequently Asked Questions: Homebuyer Tax Credit Changes document. Check it out, become familiar with the hypothetical scenarios, and share with your clients.
Thursday, October 29, 2009
Here are just a few reasons why this simple step could prove so valuable:
- If a prior-owner unreleased lien surfaces during the title search, you'll know exactly which title insurance company to contact, and they should expedite the clearing of the issue.
- The policy should disclose any matters that a prior survey or location drawing has revealed.
- The policy should disclose if the property is subject to ground rent.
- The buyers may be eligible for a "reissue rate" of title insurance premium. While benefitting the buyer, this cost savings can be an inducement thereby aiding the seller.
- Asking at time of listing rather than several days before settlement could be the difference between the seller having it available and it being packed away in a moving truck.
Some sellers won't be able to find it. In that case, a copy of the HUD-1 from their purchase can also be very helpful as it tells which title insurance company the policy was written on so a copy can be obtained directly from them.
Tuesday, October 20, 2009
Why should you stop by our booth (#63)? Besides getting to meet and talk with some of the most established and experienced settlement officers in the region, we will have Nintendo Wii set up for your playing pleasure. You can bowl, play tennis, box, or challenge our own guitar god Dan Coleman to a game of Guitar Hero.
What: GBBR REALTOR® Fair
When: Thursday, October 22nd
Where: Martin's West, 6817 Dogwood Road, Baltimore, MD (We're at Booth 63)
How: Register with this link
Photo credit: Clemson
Sunday, October 18, 2009
www.Posterous.com is a great place to start!
Here are some of the great benefits of using Posterous either as your first blog platform, or (if you're already blogging) another place to collect your thoughts, photos and videos in one place:
- To start, all you have to do is send an email to email@example.com. THAT'S IT!
- Easily add text posts by emailing your blog posts to firstname.lastname@example.org.
- Easily add photos via email.
- Take videos with your Blackberry, iPhone (or other smartphone) and send straight to Posterous for easy processing and posting.
- Link to your Twitter or Facebook account.
- Very quickly host "discussions" where you can post a question and allow your readers to "discuss" the question via the comments.
Feel free to check out my Posterous account if you want to see how I use it. I keep it light (for the most part) and typically post photos. I have it linked to my Twitter account so each time I post to Posterous, a "tweet" gets sent out notifying my Twitter followers of the new post.
Call or email if I can help you set up your Posterous account today!
Wednesday, October 14, 2009
Friday, October 2, 2009
Week of October 5th
10/8 (8AM - 4PM): Real Estate BarCamp: Lynchburg - We will be sponsoring and attending this "un-conference" in historic Lynchburg, VA where a lucky attendee will win an Amazon Kindle e-reader (courtesy of Mid-Atlantic Settlement Services).
10/8 (10:30AM - 1:30PM): Short Sale Strategies Class in Crofton, MD. Providing 3 MD continuing education credits.
Week of October 12th
10/12 (3PM - 4:30PM): "To Tweet or Not to Tweet" Webinar hosted by Derek Massey. Details to follow, but this will be an interactive webinar where Mid-Atlantic Settlement Services President Derek Massey will discuss Twitter, how to use it, how not to use it, and offer some strategies for meeting and staying connected with new people.
10/13 (7:30AM - 6PM): Northern Virginia Association of REALTORs (NVAR) Convention and Trade Show. Several Mid-Atlantic Settlement Services team players will be in attendance to meet and network with Northern Virginia real estate professionals and learn what's new.
10/15 (10AM - 1PM): Title Insurance Class in Westminster, MD. Providing 3 MD continuing education credits.
Week of October 19th
10/22 (7AM - 7PM): Greater Baltimore Board of REALTORS (GBBR) REALTOR Fair. We will be exhibiting at this, GBBR's biggest networking event of the year. Stop by the booth, say hello, and get your Nintendo Wii fix!
10/22 (10:30AM - 1PM): Contracts to Closing Class in Crofton, MD. Providing 2.5 MD continuing education credits.
10/22 (12PM - 1PM): Short Sale Update Lunch and Learn in Leesburg, VA.
Week of October 26th
10/27 (9AM - 4PM): Real Estate BarCamp: DC. We will be attending and sponsoring this "un-conference" which will be taking place in Herndon, VA at the NVAR building.
10/29 (10AM - 12PM): Contract Review Class in Westminster, MD. Providing 2 MD continuing education credits.
If you have any questions or want additional information on any of these events, shoot us an email at info
Monday, September 28, 2009
Without analyzing or debating the merits of whether to extend, broaden or let lapse the current credit, here is a practical checklist that I hope each buyer's agent refers to when scheduling settlements for the latter half of November:
1. Read this blog post from Dan Green. Think about scheduling the week of November 16th.
2. Check your own schedule. What are your Thanksgiving plans? Do you have an agent who can back you up?
3. Sit down with your buyer(s) and open a calendar. Start with Monday, November 30th, and work backwards, explaining the significance of each day. Are they going away for Thanksgiving? What are their plans? What days are they absolutely not available?
4. Talk to the listing agent. Make sure they are going through this exercise with the seller.
5. Talk to the lender. Are they open on Friday, November 27th? Will a loan processor or underwriter be available to answer questions?
6. Talk to the title company. Are they open that Friday? If you are planning a Wednesday (before Thanksgiving) closing that gets pushed off, can they do it Friday, or will it get pushed to Monday?
Not everyone has answers to these questions right now, and if the credit gets extended we're not facing such a hard deadline. But as hope is seldom the best strategy, I would advise that all of us real estate professionals start asking the questions and giving thought to this now rather than later.
Friday, September 4, 2009
Our corporate headquarters (and production center) are located in Hunt Valley, MD, but this position can sit in our Vienna, VA office as well. We want the best candidate regardless of location.
Interested? Know someone who may be interested? Please contact Meredith Bloom at Meredith[dot]Bloom[at]TRGC[dot]com.
Monday, August 3, 2009
Part 3: Pick up the phone when it rings!
We had a team that was struggling. Our title officer had done such a great job getting new contracts in that the processing team couldn't take all the incoming phone calls AND get the HUDs out. I was getting some *ahem* direct calls from agents and brokers. And deservedly so. All the agents wanted was someone to either pass along poignant file information or to request something from us.
We set up ring groups, whereby those phone calls rang to two other phones if not picked up on the first ring. One phone was manned by one of our sales managers. The other by me. It was an enlightening experience. The first day was a little rocky while we worked through our answer scripts and gameplan. Hey, we weren't familiar with the files or the particular agents, buyers and sellers who were calling. But by Day 2, we had the system down pretty good.
What we learned?
Earth will not shatter with this statement, but it bears stating: Customers just want to speak with a live, helpful body. Even if they don't have all the answers. Many of the calls were just to relay information ("We are looking to close on the 31st at 2pm in McLean"), to confirm receipt of a deliverable ("Did you get the seller information form I sent?") or to check on the status of something ("Did the loan package arrive yet?"). And yes, we heard that last one a lot.
The shining moment?
A lender remarked to us on Friday, "You guys are the only title company answering the phone today!" :)
Monday, July 27, 2009
It is with mixed emotion that I announce that Harry Yazbek will be leaving Mid-Atlantic Settlement Services at the end of this week. Harry has decided to pursue another opportunity with a foreclosure law firm (one that does not compete with Mid-Atlantic Settlement Services). While his presence will be missed, this is an exciting opportunity for Harry to build a foreclosure team. Please join me in wishing Harry much success in his future endeavors!
Effective Monday, August 3rd, all Northern Virginia TSRs will report into Daniel Coleman. Dan has been the Regional Vice President / Sales Manager for the Greater Baltimore Region for almost two years, and has led his TSR team to higher levels of customer service and market share. I know Dan will be a welcomed addition to the Virginia team. Dan’s contact information is Daniel[dot]Coleman[at]MASettlement[dot]com and 410-382-7491. You may also find him on Twitter and Facebook.
I am also pleased to announce that Sarah Tyndall Bodsford will be transitioning to the role of Virginia Marketing Manager over the next few months. Sarah’s focus will be in traditional and social media marketing, training and customer service. Together, Dan, Sarah, Virginia Operations Manager Penny Ross and the Virginia TSR Team will ensure that our Northern VA brokers, agents and lenders receive world class customer service.
We will be looking to hire two Title Service Reps (TSRs) for the Lake Ridge / Dale City and Springfield / Alexandria / Arlington regions. Should you have a candidate in mind who you think would be a good addition to the team, please let Dan or myself know. We will provide posting information soon.
I am excited about this new sales alignment in the Northern Virginia marketplace, and look forward to moving ahead!
Wednesday, July 22, 2009
1. The lender must provide or mail an initial TIL disclosure within 3 days after receiving the customer's application.
2. The lender must deliver or mail a TIL disclosure at least 7 business days before closing.
3. A final, accurate TIL must always be provided at closing.
4. If the annual percentage rate (APR) increases more than 0.125%, the borrower must receive a revised TIL at least 3 business days before closing.
Why might the APR increase?
- Interest rate changes
- Loan amount increases
- Type of loan changes
- Fees charged increases
- Loan-to-value (LTV) increases
Things to consider:
When writing a purchase contract, remember that the earliest possible day that closing can occur is 7 business days after the lender issues the initial TIL.
Set customer expectations about closing timelines and, whenever possible, plan for a closing date that provides enough time to accommodate the additional waiting period required if the APR increases by more than 0.125%.
8/3/09: Application taken
8/4/09: Initial TIL delivered
8/12/09: EARLIEST POSSIBLE CLOSING DATE
8/3/09: Application take
8/4/09: Initial TIL delivered
8/10/09: Customer locks rate, which increases the APR by more than .125%; revised TIL sent to customer.
8/13/09: Customer receives new TIL
8/17/09: EARLIEST POSSIBLE CLOSING DATE
Note: These examples are assuming Coldwell Banker Home Loans/PHH is the lender. It is entirely possible that other lenders will interpret the MDIA language differently.
Wednesday, July 1, 2009
Existing files already opened will be processed and disbursed from the Bank of America account we are currently utilizing. Nothing will change for those files. This change will only effect files opened today or later.
This move should be seamless for our customers through the transition. Should a wire mistakenly be sent to the wrong account during this transition period, we have internal mechanisms in place to get the funds into the proper account. Our customers need not do anything differently, except that lenders will need to pay close attention to the wiring instructions that accompany each commitment.
Should any questions arise, please feel free to call your TSR or send an email to info[at]MASettlement[dot]com.
Thursday, June 25, 2009
Location Drawings: A Location Drawing serves one primary purpose: To allow the title agent to remove the survey exception from the loan policy. A lender wants a clean title policy. A title policy has an exception for matters that a survey would reveal. Solution? Get a Location Drawing done which allows us as the title company to remove that exception. A Location Drawing simply shows the outline of the property along with the approximate location of the house and improvements. It does not show the actual boundary lines or show corner markers or monuments. It typically costs anywhere from $150 to $500 depending on the region and vendor. A Location Drawing is typically required for all residential purchases of real estate in MD and VA with a few notable exceptions (including condominiums, unimproved lots, and where the lender agrees to a "no-survey" program).
Boundary Surveys: The more mature, sophisticated cousin of the Location Drawing is the Boundary Survey. The Boundary Survey locates the exact boundaries as well as corner markers and monuments. These can cost $750 up to and exceeding $2,000 because of the field research required. So why order one? If the buyer or owner of the property is contemplating an improvement or subdivision, or has reason to believe some issue exists that such a survey would reveal, they may choose to get a Boundary Survey. Once the Boundary Survey is done, the surveyor can very easily create a Location Drawing from that which could then be used to remove the survey exception from the loan policy.
ALTA/ACSM Survey: The residential real estate agent will rarely see an ALTA/ACSM Survey. These are reserved for commercial properties, and are the most sophisticated and detailed (not to mention expensive) of the survey types. An ALTA/ACSM surveyor will likely do several "versions" of the survey, and will often depend on research done by the title examiner to locate (or eliminate) easements, reservations, etc.
I'm a real estate agent. What do I do with this info?
1. Let your buyers know they will likely be required to purchase a Location Drawing costing $150-$500, which the title company will order for them.
2. Ask your title company for a copy of the survey as soon as they receive it so you have the opportunity to review. An issue may not be fatal to the passing of clean title, but may need to be excepted on the title policies.
3. If you believe there is an issue on the property, or if your buyer is planning on adding fences, garages, barns, driveways, etc., talk to your title company or attorney about the benefits of a Boundary Survey.
Wednesday, June 17, 2009
Should you need to get a hold of us for a pending file, please call your TSR, Dan Coleman (410-382-7491) or Harry Yazbek (703-946-4470).
I will continue to update people here as to service recovery.
Tuesday, May 26, 2009
Agree in part, dissent in part.
What if - instead of saying no - we propose a scenario or option that works?
- Instead of saying no to a listing, agree to take it but only with a more reasonable price and and agreement to repair or stage?
- Instead of saying no to a settlement because of title issues, spend some time creating good commitment requirements that put the ball in the seller's court to clear?
- Instead of saying no to closing after hours in another jurisdiction, agree to handle it for an increased fee. (Assuming licensing requirements are met, of course!)
There may come a time to outright say 'no', but is it worth giving the deal a chance first?
Monday, May 25, 2009
For a detailed reminder on what Memorial Day is all about, click here. (I always find it helpful to read the history on holidays such as this -- a good reminder that it's more than merely a day off to enjoy the beach!)
Sunday, May 24, 2009
Our Web page --> www.MASettlement.com
Our Facebook page --> www.facebook.com/pages/Hunt-Valley-MD/Mid-Atlantic-Settlement-Services/54250543277
Our LinkedIn page --> www.linkedin.com/companies/206283
Our Twitter page --> www.Twitter.com/MASettlement
Saturday, May 23, 2009
These procedure changes call us to:
1. More closely scrutinize satisfactions/releases recorded 24-months prior to the search;
2. Red flag any releases not recorded immediately with or shortly after documents evidencing a sale or new mortgage;
3. Verify MERS certificates of satisfaction at www.mers-servicerid.org/sis/;
4. More closely scrutinize assignments prior to a questionable certificate of satisfaction; and
5. Place questionable satisfactions on the Schedule B-2 on the commitment with a corresponding Schedule B-1 requirement for verification of the validity of the satisfaction.
Why am I telling you this, and how does this affect you as the real estate agent, broker or loan officer?
Your title company will likely be taking these extra precautions, and questioning satisfactions/releases more closely. Should there be a delay because of this issue, or should the title company be seeking additional confirmation from a lender, now you will have an explanation as to why.
Friday, May 22, 2009
“You’ve gotta see this, it’s really a slick operation.”
“This is what he does – comes in, does a few boats, is done before noon.”
It’s clear all have respect for what he does, and if anyone needs a vessel moved, R.H. Bryan is who they call. He doesn’t do anything but move vessels. Doesn’t try to transport motor homes, or freight, or cars. Just vessels.
As an agent, are you trying to be all things to all people, or are you the one person people in your community turn to as the “go to” guy or gal for their particular real estate needs?
Thursday, May 21, 2009
Some great discussion going on out there on the interwebs. Are you reading? Thinking? Commenting? Three highlights, by topic:
Agency: Jim Duncan’s Real Central VA blog and Ardell DellaLoggia’s Rain City Guide blog.
Technology: (IDX Scraping v. Indexing discussion): Agent Genius (where story broke) and Realtor.org’s Speaking of Real Estate blog.
Ethics: VARBuzz.com discussion on blog comments and liability.
Wednesday, May 20, 2009
- While not a completely novel issue, you should know that jumbo money (loans in excess of $417,000 in most places) is not as cheap, and will typically come with a larger interest rate than "conforming" loans backed by Fannie Mae and Freddie Mac.
- Ideally, you have at least 20-25% equity in your home. If you don't, however, you may still be eligible to refinance at a lower rate through the Making Home Affordable program. Clink here for details.
- How a lender obtains an appraisal as changed effective May 1st as a result of the Home Evaluation Code of Conduct. Here is a nice breakdown from another blog on the real life impact of this change.
- Second mortgage and home equity loan holders may be less likely to stay in second position than in previous refinance booms. If you have a second, you may want to check with that lender before commencing the refinance.
- Condominiums are becoming more difficult to finance, as the lender underwriters are looking more closely at the condo project as a whole (not just your unit).
Tuesday, May 19, 2009
After almost 2 years in Maryland, I finally opened a local checking account. I was dreading it, fearing endless paperwork, signatures and bureaucracy. Plus, my old bank in New Hampshire was still getting the job done – they gave me no reason to switch. For various reasons, however, I had to make a switch.
It was painless.
I walked in to a local branch and within 15 minutes had a new account. I didn’t even need to give them money. Had an ATM card in a matter of days, and was ready to roll.
But here’s the best part.
I get a call maybe once every other week, just asking if everything is OK. With a new bank there is a transition period. Is the ATM card working? Is online banking and bill pay set up? Is direct deposit working? Is the mortgage payment getting pulled automatically every month? While I go through this “transition”, the bank isn’t waiting for me to call with a problem – they are asking in advance.
I don’t think we do enough of this in the title business.
If I ran a title company (*sheepishly looks around the room*), here’s what I’d do:
- Start every opened transaction with an easy to read one page letter showing who the players with contact info. Signed by me with my contact details.
- Make at least one phone call to the real estate or loan officer during the process for no reason but to make sure all is going well.
- Offer email updates for transaction touch points (title ordered, commitment sent to lender, prelim HUD prepared, etc.)
- Offer to communicate via text message, and provide quick status updates.
- Call – in advance – with any outlier: title is not back yet, HOA info has not been sent, lender figures haven’t arrived, etc.
- When a particular issue arises, choose a time interval (daily, twice a day, hourly) where you agree to communicate the status of the issue, and religiously adhere to it!
Between asking the occasional “Hey, how are we doing?” and systematically keeping parties in the loop on all important touch points, we could all raise the bar in the title industry.
Monday, May 18, 2009
This was a revolutionary change when Southwest introduced it years ago. They claim it allows them to get planes boarded and in the air quicker. Given their success in avoiding delays, I would say they are right.
But that is old news.
What I saw today on Twitter is what we mean we talk about New Marketing, Social Media, Web 2.0 (or whatever you want to call it) to handle customer service.
Follow this exchange just this morning.
At about 7:00 AM, Chris Brogan (@ChrisBrogan) asked the following question via Twitter:
Dear @southwestair - I don't find the open seating all that useful. Is that going to change eventually?
Shortly after 8:00 AM, Southwest, via its Twitter account, answered with the following:
@chrisbrogan probably not, we tested assigned seats before, and found we can turn the plane quicker with open seating. Sorry!
(Let’s forget for a second that Chris Brogan is a well-known blogger and is very influential, because that point doesn’t fit well in my argument. Agreed?)
In terms of corporate response, this is lightning fast. It is not pandering, patronizing, or condescending. It is not canned or filled with jargon. And most remarkably, it’s public. The entire world can watch this exchange.
If you had been wondering whether Southwest was going to change its seating policy anytime soon, now you know.
Is your communication free to move about the country?
Sunday, May 17, 2009
As I’ve mentioned a few times in past posts, we have become involved in the Real Estate Bar Camp movement. As defined by its website, RE Bar Camp is “an ad-hoc gathering born from the desire for people to share and learn in an open environment. It is an intense event with discussions, demos, and interaction from attendees.”
Having attended one and signed up for another (Philly, May 27th), here is my stab at the Top 10 Reasons to attend an RE Bar Camp in your area:
1. You will witness real estate experts sharing the secrets of their success. To everyone. For free.
2. You will definitely learn about one new social media site you didn’t know before.
3. You will probably get to meet Jeff Turner.
4. If you are brand new to this social media thing, you will be embraced (Caveat: just bring an open mind with you).
5. If you are a super tech geek black-belt ninja, you will still learn something new.
6. If you have been following people on Twitter who are also attending, you will find 99% of them to be just as great face to face.
7. The pre-event happy hour (sometimes called Beer for Bloggers) is where the real networking and discussion happens.
8. You will learn what whuffie and YEO are. And why both will help your business.
9. You will interact with people. Not brands, speakers, companies, sales pitches, awards or agendas. Real ideas, real people.
10. You will meet real estate agents who love what they do and are proud to be agents.
Saturday, May 16, 2009
The terms loan, mortgage, deed of trust and note are sometimes used interchangeably by parties to a real estate transaction. Only when you get to settlement (when you see the huge stack of papers on the closing table) do you realize there is a difference. So let’s cover the note, the mortgage/deed of trust, and the differences between them.
A note (or promissory note) is – very simply – a contract whereby a party makes a promise to pay a sum of money to another party under specific terms. In real estate, it is typically a borrower agreeing to make monthly payments of principal and interest over 30 years to a lender. The note has virtually nothing to do with the property itself, and can technically exist without any collateral at all. If the borrower doesn’t pay, the lender can sue “under the note” and obtain remedies for breaching that contract.
The Mortgage or Deed of Trust
While there are differences between a mortgage and a deed of trust, let’s ignore them for a moment, and use the term mortgage (because it’s only 1 word). If it's killing you to know the difference, click here.
A mortgage is actually a transfer of an interest in property. While a mortgage is tied to the underlying debt created by the note, it is not a promise to pay the debt. It really isn’t a “promise” to do anything. Instead, it contains “granting” language – like a deed – which gives the lender the right to take the property if the borrower goes into default and doesn't pay under the terms of the note.
- A note is signed by the people who agree to pay the debt. A mortgage is signed by those who own the property being mortgaged. In a typical residential setting, signers of the note and the mortgage are the same, but they do not have to be. In a commercial context, you will often see the corporate entity which holds the property sign the mortgage, while the principals of the entity sign the note.
- A mortgage needs to be recorded in the county or town recording office, the note does not. Instead, the note goes directly to the lender.
- A mortgage kills more trees than a note (approximately 35 pages v. 6). But don't hold that against the mortgage, it doesn't know any better.
Friday, May 15, 2009
Click here to see company president Derek Massey describe the open positions.
Click here for instructions on how to apply for Title Service Representative (Settlement Officer) position.
Click here for instructions on how to apply for Settlement Coordinator (Processor) position.
Thursday, May 14, 2009
1. Set better expectations up front
Last night I had the pleasure of spending some time with some folks in the RE.net crowd. In particular, Jim Duncan (@JimDuncan) and Matt Case (@MattCase) were discussing pictures that accompany listings. Being a non-agent, I always assumed you put up the very best pictures you could find. You made that front lawn look huge. Made the living room spacious and spotless, and hid the ugly wood paneling in the guest bedroom.
I couldn't have been more wrong.
It seems so obvious to me now. If you do that – post only pictures in the most favorable light – what happens when buyers show up? “Huh, that lawn doesn’t look as big as I recall from the picture.” “Spacious living room? This is a little den!” “How many fake trees were killed to panel that wall?” The buyers instant reaction is negative.
Compare and contrast.
The pictures are a true representation of the property. Maybe even a little on the flat side. Because it’s priced right (you are, of course a GREAT listing agent), the buyers still want to see it. Now what happens? The first physical reaction to the property is a positive one. Same property, same price, better results.
How does this apply on the title side?
Here are but a few things title companies could do to set better expectations up front:
1. Provide a quote for all the services (title, closing, title insurance, recording, transfer tax, etc.) up front.
2. Explain the different between standard ALTA policies and Enhanced Coverage.
3. Tell all parties that the short sale will NOT close in 2 weeks.
4. Tell all parties that the REO will NOT close in 2 weeks.
5. Send out a title commitment to the agent/buyer in advance, showing the exceptions to title.
6. Explain to the seller from the beginning why their current mortgage information is so critically important.
7. Tell everyone up front what you require for funding (Wire? Certified check?)
8. Explain up front that a HUD is not final/complete until the title company gets instructions from the lender as well as their approval.
There are likely many more, but even if every title company adopted a handful of these, we’d probably see a little more positive feedback.
The next post on this subject, scheduled for later this week will be on over-communicating.
Wednesday, May 13, 2009
It can be. There were several months where only 2 files were brought up, yet we still spent an hour plus dissecting how we could have been better. I would imagine this month there will be a few more given the increase in volume and the complexity of the transactions.
Why do we do this?
1. Every individual who sells our service to others deserves input as to how to make our offering better;
2. Every individual who utilizes our services deserves the ear of leadership; and
3. That which gets measured against gets done or improved.
Tiger Woods reinvented his swing when he was the #1 ranked golfer in the world. Is there any question the drive for improvement never ends?
Tuesday, May 12, 2009
Click here for a link to the video.
The audio is a little choppy, and for that we apologize. Our studio is being renovated.
Monday, May 11, 2009
Monday, May 11th
11:00 AM: Short Sales with Harry Yazbek (3 credit hours) at Coldwell Banker Residential Brokerage in Bethesda, MD.
Tuesday, May 12th
10:00 AM: Maryland Ethics with Harry Yazbek (3 credit hours) at Coldwell Banker Residential Brokerage in McLean, VA.
10: 00AM: Web 2.0 for Real Estate with Dan Coleman (non-credit) at Coldwell Banker Residential Brokerage in Crofton, MD.
Wednesday, May 13th
10:00 AM: Title Insurance with Stacy McKone (3 credit hours) at Coldwell Banker Residential Brokerage in Reston, VA.
1:00 PM: Short Sales with Harry Yazbek (3 credit hours) at the Greater Baltimore Board of REALTORS ®
Thursday, May 14th
10:00 AM: Contracts with Harry Yazbek (3 credit hours) at Coldwell Banker Residential Brokerage in McLean, VA
10:00 AM: Contract to Closing with Stacy McKone (2 credit hours) at Coldwell Banker Residential Brokerage in Leesburg, VA.
Friday, May 15th
Remember that you can always check for future classes on the Events tab of our Facebook Fan Page.
Sunday, May 10, 2009
This week, On The Record caught up with me (Derek Massey) to discuss how I use social media for business. Clink this link for the interview.
Saturday, May 9, 2009
"long day. Hate fighting with title companies for a HUD"
"What's worse - Title Companies or Home Owner Associations??? Two of the same, I'm beginning to think so these days . . . . IRRITATED!!!"
"keep plugging away, keep farming. Just keep costs down. You can't even depend on title companies to help that much as before."
"i hate having to extend contracts because title companies wait till the last mnute to clear title. whats worse, having to extend mult times"
"okay, definitely hating title companies. wont close til tuesday f'sure.. and guess i have to pay closing costs now!??! hello 3k. goodbye 3k."
"Title companies suck. No urgency. Mostly in thiseconomy. Aren't they trying to keep business and a job?"
"tired of title companies that can't prepare a HUD correctly. Is it really surprising a REO has delinquent water bill buried in prop taxes?"
"Hate title companies. Hate this. Ughhhh"
So I set up a search in www.Search.Twitter.Com to tell me when the phrase “Title Companies” is mentioned in Twitter. These results feed into my Google Reader. The notes above are actual tweets I copied and pasted from that search. The timeline is between April 22nd and May 7th. While I did not copy all of them over, rest assured the others were “neutral” at best. Example: “Looking at local title companies to contact for some lead lists.” None were glowing recommendations.
Let’s get the obvious out of the way first: It is (unfortunately) not human nature to express those things we are happy about, especially on the internet. It’s the “Evening News” mentality. People are loudest when they are complaining. I didn’t expect this query to turn up “Title companies are the cog that holds society together!”
But even given that fact, it strikes me how negatively folks think of us in title. I have a little bit of insider’s knowledge having been brought up in the family title business, so I’m more than biased. I know how hard it is to own and run a title company, and also know how hard each employee in a title company works to get to closing. So why the disconnect between effort and perceived value?
The easy answer – the cop-out post – would be to ask you as a real estate agent what you think. But it’s not a real estate agent’s job to figure that out, it’s mine. So, with that, I’ll take a stab at where I believe we (as an industry) need to do a better job:
1. Set better expectations up front
3. Pick up the phone when it rings
4. Pretend the only file we have is the one you are calling about
5. Reinforce – every day – that our internal employees have clients
I will hit each one of these in separate posts in the future to give more detail, but I believe this little 5-point “program” could help restore some faith in title companies. Like good real estate agents and lending professionals, there are some seriously great people who perform miracles every day to get deals to closing – we just need to get those stories to the forefront and make them commonplace.
So........What are your thoughts?
Friday, May 8, 2009
For more information and to apply, please clink this link.
Thursday, May 7, 2009
I have now seen Terry Watson speak on 3 different occasions, While nothing can replace seeing him live, I always come away with some notes and takeaways. I thought this would make for a great blog entry. If you want information on Terry, go to www.TerryWatson.com.
- Many agents leave themselves vulnerable. Example: Don't have 90% of your biz with one relo company. Ask yourself, "Where am I vulnerable?"
- Don't be the Polaroid, be the Kodak digital. Reinvent yourself.
- Cost-Benefit analyze EVERYTHING!
- Airlines have trimmed costs. Run your business like them. Cut costs wherever you can!
- Top Things to do NOW: Get a YouTube, Twitter, LinkedIn account. Reduce your debt. Market green. Tell, don't show. Use humor. CASE: Copy And Steal Everything!
- Use REALTOR.org Right Tools Right Now and ProQuest.
- Use media (articles, blog posts) to reinforce your points to buyers/sellers.
- Kill the urge to quit.
- Trademark your slogan.
- Every day, improve something just a little. Think Hyundai.
- Use video and photo extensively. No head shots, but full body shots doing stuff.
- Media's job is to shock and scare. Understand that.
- Read the book "Nuts" about Southwest airlines. It's OK to have a sense of humor.
- Show your customers where the money is going! Be transparent.
This is just a snapshot of what Terry brought to the table today. My notes could never fully capture his energy, passion and humor, but hopefully there is a nugget or two in this post that is helpful!