Eagle Land Title Agency

Has the American Land Title Association lost all it's marbles?

2010-12-13T15:06:00.013-05:00

As you know, I'm a firm believer that the economic mortgage crisis was caused from the removal of the "checks and balances" and from the increase of affiliated business arrangements so strongly now supported by ALTA. The American Land Title Association (ALTA) has apparently given up listening, supporting or otherwise giving a rats patootee about the independent title agent and the real estate consumer in America. They might as well take the word American out of their name since they no longer advocate for any of the real values and ethics that this industry was originally built on. This lack of stewardship has sunk the boat and their board of directors are a huge disappointment.

As highlighted in a recent blog post by Slade Smith at the Source of Title. (see below the entire Blog post with permission to reprint below)

Controlled Business Arrangements: From the Outhouse to the Penthouse at ALTA (subscription required)

Once upon a time, The American Land Title Association, otherwise known as ALTA, the primary national advocate for the title insurance business, actually actively and vociferously fought controlled business arrangements.

Back in these times long ago, title insurance business were often pressured to pay kickbacks to other real estate related business that referred them title work. Owners of title businesses generally did not like these kickback arrangements-- they were the ones who were pressured to pay them to just to get business, and they were the ones that lost out when they did not play ball. Plus, these payments were giving the title industry a black eye-- for instance, in the early 1970s, the title industry was the subject of some not so friendly scrutiny by Congress that cast the title business in an unfavorable light. It was probably not much fun to be pressured to unethically pay out part of your profits to compete for business and be considered sleazy by association even if you held the line.

ALTA, as the professional association speaking for these businesses, therefore had advocated for provisions in The Real Estate Settlement Procedures Act (RESPA), passed in 1974, which outlawed kickbacks from title companies to the businesses that referred business to them.

A controlled business-- a business engaged in a line of work where the work flow came from other businesses, not consumers, and which got some or all of its business from referrals from its own owner-- was seen as a highly suspect arrangement by most in the title insurance industry back in those times. The thought was that if realtors, lenders, and builders were allowed to own their own title companies, they could lock up most of the business, since they, not consumers, typically decided where title business went. Independent title agencies without a ownership tie-in with a source of business would be shut out of the market, the thought went.

Moreover, it was easy to see how a controlled business arrangement could be set up to deliver a payment to a referrer of title business that looked an awful lot like a kickback. For instance, a realtor or a lender would take a partial ownership interest in a title agency, basically do nothing for that agency except refer it business, yet just take what amounted to a kickback from the agency's coffers.

With kickbacks now explicitly illegal, the issue of controlled businesses became much more important in the title industry. The players in the real estate business who had been used to receiving the money were now facing stiff new penalties under RESPA if they accepted kickbacks the old fashioned way. They'd be looking for a way to get around that.

in 1976, Coldwell Banker, a real estate brokerage, attempted to license a wholly owned title insurance business in California. The insurance commissioner nixed the idea, saying that the arrangement was anticompetitive. Coldwell Banker appealed, but the commissioner's ruling was upheld. A controlled business had been put out of business on competitive grounds. Did this mean that controlled business arrangements were illegal under RESPA? It was enough of a threat to controlled business arrangements that efforts arose to amend RESPA to explicitly legalize them.

Not surprisingly then, in the late 1970s and early 1980s, the fight over against legalizing controlled business in the title insurance industry was a primary and sustained focus of ALTA's lobbying efforts. They were, after all, fighting for the interests of their members.

ALTA pounded the table on controlled business arrangements year after year. ALTA's President in 1979, Robert C. Bates, said that the financial inducements inherent in controlled business arrangements were "as harmful as the payment of outright kickbacks." In 1981, another ALTA President, James L. Boren, Jr., testified before a Congressional committee and described the evils of controlled business arrangements. In 1982, when President Reagan himself proposed that rules prohibiting realtors from selling title insurance should be lifted, Boren's successor as ALTA President, Fred B. Fromhold, wrote a letter to the President on behalf of ALTA's membership, expressing "shock and dismay." If such restrictions were lifted, title business would have to be bought rather than earned, Fromhold said.

But President Reagan had run on a platform of deregulation, and so despite this advocacy, RESPA was amended in 1983, with explicit language that legalized "affiliated" businesses arrangements in the title insurance industry if certain conditions were met.

Still, there was considerable uncertainty over what separated a legal controlled business arrangement from an illegal one. So HUD issued a series of opinions, outlining what kind of ownership arrangements would be considered tantamount to an illegal kickback arrangement. But these opinions really did not resolve the issue definitively, and the issue remained confused and contentious, and there were various ongoing efforts to change or clarify the rules.

ALTA remained involved. When legislative attempts were made to further weaken regulations regarding controlled business arrangements, ALTA continued to advocate against these attempts. For example, in a 1993 Congressional hearing on RESPA reform which concentrated on the controlled business issue, another past ALTA president, Roger N. Bell, appearing on behalf of ALTA, argued strongly against new HUD rules which allowed a business to pay bonuses to its employees for referrals to controlled businesses. "it is already difficult to compete with the controlled business company," Bell told the committee. "Now, the regulations could be the last nail in the coffin for many independent small businesses such as mine."

It's hard to avoid the implication of Bell's statement-- that several nails had already been driven into the coffin of the independent small businesses by the emergence of controlled businesses in the title industry.

Who had been hammering in those nails?

Ironically, as it turns out, more than a few metaphorical nails had been driven in by none other than current ALTA President, Anne Anastasi, according to some independent title agents.

Anastasi is president of Troon Management Corp., "the only independent management team in the country, dedicated to the creation and facilitation of title Affiliated Business Arrangements," according to its website. Catering to builders, realtors, banks, and attorneys, Troon has helped set up controlled title business arrangements in thirty major cities in sixteen states, it says.

Anastasi personally established her first title industry controlled business arrangement in 1984, before the ink was dry on the legislation legalizing them-- one of the first controlled business arrangements in the country, according to the Troon website.

Troon's consulting service promises a "plan of action" to set up an controlled business from a two day consulting session. During this session, the correct, compliant answers will be provided for the questions your would-be business partners are likely to have, Troon says. From only two unspecified numbers provided by your potential partners in the arrangement, Troon promises to calculate financial projections and scenarios for the venture.

Troon's mottoes imply the urgency of setting up controlled business arrangements for title businesses. "If you wait you may not have enough partners or the right partners left," the site says. Another motto stresses that those setting up a controlled business arrangement should not be too "piggish," or "your competition will easily steal your clients."

Anastiasi's role in promoting controlled business arrangements has not escaped the wrath of certain independent title agents. "[T]he title insurance industry is now led by someone who makes a living destroying competition in the title insurance industry," according to a November post on the Ohio Association of Independent Title Agent's blog.

Foreclosure mess highlights value of title insurance

2010-10-18T11:10:00.000-04:00

Foreclosure mess highlights value of title insurance

Ohio Hardest-Hit Fund (Ohio HHF)

2010-09-14T10:46:00.002-04:00

Directly from the Ohio Housing Finance Agency (OHFA) website:

President Obama established the Housing Finance Agency Innovation Fund for the Hardest-Hit Markets in February 2010 to provide financial assistance to families in the states most impacted by the downturn of the housing market. On August 4, the U.S. Department of Treasury (U.S. Treasury) announced the approval of the Ohio Hardest-Hit Fund (Ohio HHF) plan for $172 million. Subsequently on August 11, U.S. Treasury announced another round of funding which allocated $148 million to help unemployed and underemployed homeowners pay their mortgage. The Ohio Housing Finance Agency (OHFA) will administer the program and use the total allocation of $320 million in federal foreclosure prevention funding to help families who have fallen behind on their mortgage loans, or are having trouble making monthly payments. Homeowners experiencing a financial hardship may begin submitting applications online or over the phone on September 27, 2010.

OHFA has worked with Governor Ted Strickland, the Department of Commerce and the Save the Dream Ohio partners to develop a comprehensive, statewide strategy. The plan aims to assist 26,000 unemployed and underemployed homeowners who are experiencing financial hardship and are at-risk of mortgage loan default or foreclosure. Ohio HHF program options will assist homeowners with financial hardships who have been unable to qualify for existing loan modification and foreclosure prevention programs. Available programs will include:

• Rescue Payment Assistance will provide a payment to a participating homeowner's servicer to help bring the homeowner current on his or her delinquent mortgage. The payment could cover principal, interest, fees, delinquent taxes or escrow shortage and homeowners insurance.

• Partial Mortgage Payment Assistance will support unemployed homeowners by providing partial mortgage payments while they search for a job or participate in job training.

• Modification Assistance with Principal Reduction will provide a payment incentive to servicers to reduce a participating homeowner's mortgage principal to the level necessary to achieve a loan modification with a target of a 115 percent loan-to–value ratio or less. This program should increase the number of loan modifications that are approved and available to both Home Affordable Modification Program (HAMP) eligible and non-HAMP eligible borrowers.

• Transitional Assistance will offer an incentive to servicers to complete short sales and deed-in-lieu agreements to help homeowners exit their homes gracefully. This will allow homeowners who cannot sustain homeownership to pursue alternatives to foreclosure, reducing the negative impact on their credit rating and losses to the servicer.

If a homeowner uses Ohio HHF to stay in their home and then sells or refinances their home within five years, the assistance would be repayable from the net proceeds.

The Ohio HHF plan will launch September 27, 2010, but borrowers who are in need of immediate assistance should visit the Save the Dream Ohio website at www.savethedream.ohio.gov or call the hotline at (888) 404-4674 to get free assistance and speak directly with a housing counselor.

Changes to Homeowners Association Bylaws - SB 187

2010-08-20T10:49:00.005-04:00

Directly from the Ohio Legislative Service Commission website:

The bill creates new procedures in state law for the establishment and governance of planned communities similar to those for condominium associations. The bill sets out definitions for planned communities and homeowners' associations, provides for the establishment of boards of directors, establishes the rights of these boards and individual homeowners in associations, and lays out the powers and duties of the boards in governing the associations. Overall, these provisions will increase the number of legal instruments processed by county recorders. The bill is most likely to have a greater effect on urban and suburban counties, where most of these planned communities are situated, than on rural counties.

The bill identifies three instances in which an individual or association would be required to file with the county recorder's office: (1) the initial declaration and bylaws for the establishment of a planned community, (2) any subsequent amendments made to the declaration or bylaws, and (3) any lien placed on an individual lot by the association for payment of assessments, charges, and other fees and costs. The bill also applies to existing non-condominium developments that wish to have the status of a planned community. In all these cases, county recorders would process the required instruments and collect the filing fees.

While it is difficult to predict how many existing communities might declare as planned communities or how many new communities may be developed as a result of the bill, a majority of these planned communities are likely to be in predominantly urban or suburban counties. Recorders' offices in these counties would thus incur some new costs for processing the necessary legal instruments, most if not all of which would be offset by recordation fees. Both new expenses and revenues would depend upon the number of (1) newly formed planned communities, (2) amendments to declarations and bylaws, and (3) liens placed on property owners in a community.

Additionally, the bill provides for civil actions by owners and associations concerning disputes over liens and other violations of association policy or law. This is unlikely to create any significant new costs for county municipal courts and courts of common pleas.

Click here for more information.

FHA MIP Delayed

2010-08-18T08:39:00.001-04:00

The Federal Housing Administration (FHA) has decided to delay instituting the planned adjustments to its insurance premium structure by one month, after the industry expressed concerns about being ready for the upcoming changes in time.

According to a statement from HUD Deputy Assistant Secretary Vicki Bott, FHA will make the premium fee changes on all new case numbers effective October 4, 2010. “Over this past week, the industry responded with support of the new fee structure, but voiced strong concern about having system changes ready in time to meet the original September 7, 2010 deadline,” Bott said. “Since these system changes impact regulatory disclosures, lenders expressed they must have the additional time to implement and test systems. FHA took this feedback seriously and has accommodated the need for additional time.”

FHA received congressional approval on August 5th to raise borrowers’ annual premiums for single family mortgage insurance. Lawmakers gave the federal mortgage insurer enough leeway to increase the annual fee it charges borrowers three-fold, up to 1.55 percent. However, according to Bott, the annual premium is not going to go that high. The annual mortgage insurance premium will increase from 0.55 percent to between 0.85 percent and 0.90 percent of the loan amount. At the same time, though, FHA will lower the upfront premium charged on the amount borrowed by 100 basis points from the current 2.25 percent.

The new premium structure gives FHA a means of increasing its capital reserve funds, which as a result of rising mortgage defaults had deteriorated to its lowest level in the agency’s 75-year history at the end of fiscal year 2009.

FHA Mortgages - Seller concessions gone gone gone

2010-07-22T11:56:00.000-04:00

One of the key attractions of FHA home mortgage financing might be gone very soon. Sometime this summer, the Federal Housing Administration plans to slash maximum “seller concessions” from 6 percent of the home price to 3 percent. However, sellers and buyers who move fast can still make the most of it.

Homebuyer Tax Credit Closing Deadline Extended

2010-07-01T11:47:00.000-04:00

Congress has passed an extension of the closing deadline for the Homebuyer Tax Credit, the Homebuyer Assistance and Improvement Act (H.R. 5623). The extension applies only to transactions that have ratified contracts in place as of April 30, 2010, that have not yet closed. The legislation is designed to create a seamless extension; the new closing deadline for eligible transactions is now September 30, 2010. There will be no gap between June 30 and the date the President signs the bill into law.

HUD Asks for Public Comment on RESPA Rules Regarding Affiliated Business Arrangements

2010-06-18T15:42:00.002-04:00

As recently stated on the OAITA blog,

HUD has just announced that it is now seeking public comment until September 1, 2010 concerning the "required use" of controlled business arrangements by way of the Advance Notice of Proposed Rulemaking (ANPR).

You can make comments here. Click on the Public Submissions to see the comments from others.

The purpose of the ANPR is to solicit information that can be used to inform any future revision or clarification of the regulatory definition of the "required use" of affiliated settlement service providers in residential mortgage transactions.

While that sounds broad, the ANPR is principally directed at homebuilders. The ANPR was launched once before and tabled in 2008. The latest ANPR is in response to the complaints that homebuyers have sent to HUD concerning the practice of homebuilders forcing their customers to use a builder's affiliated mortgage lender in exchange for construction discounts, etc.

The specific requests HUD provided within the latest ANPR suggest a sole focus on the homebuilder question, not realtor-owned or bank-owned CBAs. With the weakened state of the homebuilder lobby and the desire on the part of real estate and bank lobbies to squeeze more business out of the settlement service market, look for the homebuilders to get creamed with this rule.

Further driving a pessimistic view of the ANPR is the fact that the former guru of the CBA program for Long & Foster Realty is now the Director of FHA within RESPA and has heavy influence over the Interstate Land Sales office from which RESPA compliance activities are launched.

Closing Date and Possession Date the Same! Really?

2010-06-10T14:19:00.003-04:00

In the past within the central Ohio real estate market place, it was more common that the closing date was different than the possession date. The closing date is the day title legally changes hands. When the buyer gets possession of the property is always negotiable.

Again, it used to be customary in our area to give the seller an extra 3 to 4 days to move out completely. Ideally, in a perfect world the buyer gets possession on the day the deal closes, however, in today’s crazy last minute world, I’m not so sure that possession date and closing date should ever be the same. For both the buyer and seller, this can wreak havoc on their personal and financial lives.

Within the last year, we have seen closing after closing where the seller has moved out of the house only to find that the buyer does not get approved until the very last minute or not at all.

We have even had deals where the buyer's loan was still in underwriting and "not approved" until they walked into the closing room. I could write a chapter or two on "bomb outs". This does not make good sense for either side when they have their moving trucks in our parking lots and it doesn’t close that day or worse off doesn’t close the next day or even weeks later. You can only imagine the ramifications.

2010 Multi-Chamber Business After Hours & Expo

2010-06-10T10:18:00.000-04:00

PLEASE STOP BY OUR BOOTH!

The Dublin Chamber, in conjunction with the Westerville, Worthington and Powell Chambers of Commerce, will host the 2010 Chamber Business Expo. One of the best business development events of the year, the Expo brings together more than 100 vendors and 600 area business representatives!

The 2010 Chamber Business Expo takes place from 4:30 to 7 p.m. June 17 at the Bridgewater Banquet & Conference Center, 10561 Sawmill Pkwy., Powell.

Admission is free to this great networking event. Complimentary hors d’oeuvres and a cash bar are available. In addition, you will have the opportunity to enter to win one of many great door prizes.

To RSVP to attend as a guest, please submit the form below.

https://www.dublinchamber.org/_register.cfm?eventID=515&CFID=6040135&CFTOKEN=35493414

Why a Survey?

2010-02-24T14:50:00.000-05:00

For most Americans, their home is their major investment. People protect their investment by insuring it, making needed repairs, etc. It is also vitally important that they know the boundary lines of the property they own and to determine if other such encroachments such as a neighboring fences exist. A survey will also tell you whether the legal description of your property is accurate.

When purchasing a home or a parcel of land, people need the services of a Professional Land Surveyor, licensed in the State of Ohio.

Surveys are also done to determine utility easements, accessibility to the property, joint driveways, encroachments, overhangs or projections. It is not uncommon for a utility company to have the right to access and use part of your property for the maintenance of underground or above ground utility lines such as gas, electric, phone and cable.

“Also, before making any improvements such as home additions, new garages, driveways, fences, or even landscaping, you need to know that you are making the improvements on the land you own rather than on your neighbor’s land”, says AJ Myers of Myers Surveying Company.

Surveyors can also certify that you are not in a Flood Plain and help you avoid costly insurance. Surveyors are needed if you are dividing your land, if you are having a boundary dispute with your neighbor, if you have a deed that you may believe is incorrect.

Protect your major investment, contact AJ Myers of Myers Surveying Company, a highly reputable Professional Land Surveyor.

Ohio Abolishes Use of Transfer on Death Deed

2010-02-12T10:01:00.001-05:00

Effective January 2, 2010, a new bill known as S.B. 124 became law in Ohio which effectively abolishes the use of transfer upon death deeds in Ohio and replaces them with transfer upon death affidavits. The new affidavit requires a description of the property, the specific interest to be transferred if it is to be less than the entire interest, a statement by the individual executing the affidavit that he is the record owner of the property, and if the owner is married the affidavit must include a statement by the owner's spouse subordinating the spouse's dower interest. The bill also allows a person to designate less than his/her entire interest as transferable on death.

The IndyMac slap in our face

2010-02-11T14:24:00.001-05:00

You won't believe the sweetheart deal that the Indymac boys were given by the FDIC. Check it out at http://www.thinkbigworksmall.com/mypage/player/tbws/23088/1556674

Columbus!!! - Best Places To Get Ahead 2010

2010-02-03T16:25:00.004-05:00

What is Registered Land?

2010-01-07T09:37:00.000-05:00

I'm asked this question several times a year so here is a clip from the Hamiliton County Recorder website:

The concept of Registered Land was conceived in the 19th century with the establishment of private title insurance companies. These companies guaranteed a clear title to prospective buyers of real estate. This guarantee, of course, protected lending institutions and their investors as well.

This concept evolved into law with the Torrens Act in 1913 that was adopted by the State of Ohio. Under this Act, any property owner can voluntarily petition to have his land "registered".

Registered Land is surveyed, and the boundaries are guaranteed correct by the state. It is also subject to specific codes set by law. The title is guaranteed by a state insurance fund against loss to the property owner from land examiner and/or Recorder errors. Adverse possession cannot be claimed against Registered Land, and property owners must be notified of any involuntary liens within a specified time. All parcels that have been registered under the provisions of this law have a document known as a Certificate of Title that shows ownership. A Registered Land Examiner approved by the court must handle most of the paper work involved with a Certificate of Title. Changes to Registered Land must be approved by the Court.

There is presently more Registered Land in Hamilton County than any other county in the State of Ohio.

New HUD-1 / GFE

2009-12-09T09:36:00.005-05:00

In case you haven't seen the new HUD-1/GFE:
Example - New HUD 1

Example - New GFE

Are the "Junk" fees really going to go?

2009-11-06T10:12:00.004-05:00

You know how I feel about "junk" fees and frivolous charges appearing at the last moment on a settlement statement.

An excellent article from Ken Harney at the Daily Herald regarding the new HUD 1/GFE scheduled for January 1, 2010.

Click here for the article

Take the OAITA online survey!

2009-11-06T07:24:00.003-05:00

If you are a homeowner and/or borrower and recently closed a real estate purchase or refinance transaction in the last year, please complete the online survey put together by the Ohio Association of Independent Title Agents (OAITA).

Click Here to take survey

RESPA reform receives mixed reviews

2009-10-28T09:47:00.008-04:00

The Real Estate Settlement Procedures Act (RESPA) underwent a facelift one year ago, with changes expected to take effect on January 1, 2010. The Department of Housing and Urban Development’s (HUD) regulation, designed to control costs and prevent deception in home closing procedures, will now go one step further in protecting consumer rights. It will require a three-page Good Faith Estimate (GFE) form presented to buyers up front, disclosing key loan terms and estimated closing costs.

The GFE format will be easy to read and compare with the HUD-1 Settlement Statement, where actual costs are outlined. Corresponding lines on the GFE and HUD-1 will be labeled for comparison purposes. This ease of use is one of the major differences between the new GFE and old GFE form. Additionally, the form is now standardized, fees are grouped together, and there are fewer leniencies for variations in the numbers presented on the GFE at the beginning of the process and the HUD-1 at the end.

This marks the first major change to home closing policies and procedures in nearly 17 years. Government officials say such changes were necessary due to the recent mortgage crisis, which many link to complicated terminology and financial surprises that befuddle would-be homeowners.

“The whole idea of RESPA reform, expressed by then-President Bush and the principals at HUD who were there at the time, was a desire to get consumers a more transparent, clearer and more accurate settlement transaction,” said Phil Schulman, D.C.-based K&L Gates firm partner, in the May edition of RESPA News Monthly.

“The whole idea was to try to create a system that would simplify the process, provide greater transparency and most important, try to get the consumer more accurate figures about what this transaction was going to cost them three days into the process, rather than at the closing table.”

Schulman added, however, that the costs of training staff to follow the new regulations and how to fill out the new GFE form could strain mortgage lenders who are already strapped for cash. President Barack Obama has decided to keep the RESPA reforms in place, with the exception of one provision. He overturned the “required use” clause, which forbade home builders from offering buyers incentives in exchange for the use of certain partnering mortgage and title companies.

The new changes, effective January 1, are widely considered very positive for consumers, with upfront language on details that have previously stumped home buyers. It clearly presents any “gotcha” terms and conditions previously buried in the fine print or vaguely stated with confusing industry lingo. The following are some of the key changes expected to benefit home buyers:

Home buyers will now know up front the term, type and interest rate of their loan, whether the rate is adjustable or fixed, whether there is a prepayment penalty, and exactly how much money is required for closing costs.
The GFE must be presented to home buyers within three days after receipt of all necessary, relevant information.
The new GFE form is more concise, only three pages with one additional page of instructions on how to read and understand the form.
Because fees are grouped into clear categories, “junk fees” will be harder to sneak in. Total estimated closing costs will appear clearly on the front page, for easier comparison of various loan offers.
At closing, HUD will very closely control which fees can or cannot vary from the amount presented on the GFE in the beginning of the process. If allowing a fee to change, HUD will control how much the fee can change.
Overall, total closing costs are expected to drop by nearly $700 on average per transaction.

At this time, the rule contains many requirements and limitations pertaining to it. For example, the loan originator must provide a GFE within three business days of the borrower's application and cannnot charge more for the GFE than the cost of the credit report. Generally, a revised GFE cannot be issued unless there are "changed circumstances". Change circumstances include the acts of God, war, disaster, other emergencies and situations where information particular to the borrower or the transaction either changes or is later found to be different from what was known at the time the GFE was provided.

Of particular interest, the GFE sets forth three categories of settlement charges and states what changes will be tolerated on the HUD-1.

Cannot Increase (Zero Tolerance). The following cannot increase at settlement:

Loan origination charge or adjusted origination charges (after the interest rate is locked)
Borrower's credit or charge (points) for the interest rate chosen (after the interest rate locked)
Transfer taxes

Can Increase up to 10% at Settlement. The aggregate total of the following charges can increase up to 10% at settlement:

Required services that the lender selects
Title services and lender's title insurance (if the lender selects them or the borrower uses companies that the lender identifies)
Owner's title insurance and required services that the borrower can shop for (if the borrower uses companies which the lender identifies)
Government recording fees

Can Change. The following can change at settlement:

Required services that the borrower can shop for, title services and title insurance (if the borrower does not use companies that the lender identifies)
Initial deposit for escrow account
Daily interest charges
Homeowner's insurance

HUD has also determined that a loan originator may cure a violation of the tolerances simply by reimbursing the borrower the amount by which the tolerances were exceeded. :)

Mortgage broker vs. bank

2009-10-28T09:42:00.001-04:00

Shopping for a home loan? You’ll have a different experience depending on where you go – a bank or a mortgage broker. Is either one better than the other? Not necessarily, but there are pros and cons to each and it’s important for consumers to understand the differences before proceeding.

Banks
Loan officers at a bank or credit union can offer access to a wide variety of loans, all originating from the same financial institution. Working with local banks can mean faster loan processing because there are fewer questions about the specifics of local property, the local real estate market, and local standard operating procedures.

Mortgage broker
A mortgage broker scouts out the best deals for clients, whether local or long-distance. They work on a fee per transaction and may be able to offer more options. Because they act as the liaison between the home buyer and the lender, mortgage brokers may be able to secure better loan terms or interest rates. They may also be able to help those purchasing unique or commercial property, or those with poor credit whose loans may not have been approved by other lenders. Mortgage brokers may be able to provide a more specialized loan that best suits your need.

Always choose the mortgage loan that offers the best interest rate, terms and conditions. Although they are working for an additional upfront fee that you must pay, brokers can prove well worthwhile in the long run for the money they might save you in lower interest fees.

Pros and cons of reverse mortgages

2009-10-28T09:39:00.000-04:00

Reverse mortgages are receiving a lot of attention lately. Not only are they seeing increased popularity among cash-strapped elderly homeowners, but they are currently undergoing congressional scrutiny for their feasibility, practicality and, in some cases, their legitimacy. Reverse mortgages are, by and large, legitimate deals although there are some concerns about their possible use as a tool to prey on the elderly poor who have much-needed money tied up in home equity. While Congress sorts out the matter and identifies any necessary regulatory tweaking, consumers are left to fend for themselves. So before jumping on the reverse mortgage bandwagon, it’s important to know the pros and cons.

Pros
Reverse mortgages offer flexible payout options, including lump sum, equity line or monthly payments. A person can choose the best option to fit their financial picture, or a mixed combination of the three options.
Anyone at least 62 years of age may be approved for a reverse mortgage, dependent upon factors like the applicant’s age, current interest rates, and the amount of home equity. Access to home equity can supplement social security income or help pay for costly medical expenses.

Cons
Fees, interest rates and closing costs are often higher with reverse mortgage loans. Many people view their estate as their legend, a parting gift they can leave for loved ones, so borrowing against their home has emotional repercussions as well. Furthermore, assuming the debt is not paid off before the homeowner’s death, surviving family members will have a more complicated time settling the estate. If the home stalls on the real estate market or is “underwater,” meaning more is owed on the home than it is worth, surviving family members may choose to let it go into foreclosure.

Options
Senior citizens may consider a simple refinance of all or a portion of their home. This allows access to cash with lower upfront fees, but does require mortgage repayment with interest, taxes and insurance. Seniors may prefer to avoid the burden of a monthly payment, even if it will be relatively low. Either way, professional consultation from an independent financial advisor should be sought first before making a decision.

IRS plans to monitor mortgage payments more closely

2009-09-17T09:58:00.002-04:00

The Internal Revenue Service (IRS) already monitors mortgage-interest payment information to identify people who likely should have filed a tax return, but failed to do so. In the future, this data provided by banks will also help identify taxpayers who may be underreporting their income.

The IRS program could lead to audits for those who don’t file tax returns at all, or who report less income than was paid in mortgage interest, according to a recent announcement by the U.S. Department of Treasury.

Experts point out potential problems with the plan. It doesn’t account for unemployed individuals who use cash savings or credit cards to continue making mortgage payments, even while their income source is gone. On paper, these individuals could be categorized as tax evaders, whereas reality paints a starkly different picture.

“We shouldn’t presume that these struggling families are tax cheats just because they continue to make their mortgage payments despite losing their income,” Rep. Charles Boustany (R-La.) told the Wall Street Journal. (1)

The Treasury, however, says that there could be as much as $1.4 billion in unreported or underreported income taxes, penalties and interest. At the very least, there are enough non-filers who paid over $20,000 in mortgage interest to cause concern. Federal officials are especially mindful of the new plan as a best effort to monitor any small business owners who operate primarily with cash, as is often the case in the construction industry. The IRS program expansion is expected to take effect by 2011.

footnote: 1. Vaughan, Martin. “IRS to mine payment data on mortgages.” Sept. 1, 2009.

Builders Should Not Own Title Companies

2009-08-14T10:52:00.005-04:00

Another hat tip to our friends at http://www.caare.org/ for another article explaining the lack of transparency with builders and their customers.

Builders want to continue to force consumers to use their in-house title companies. Allowing a builder to own a title company is little different than allowing a builder to determine if his own title is any good. Builders recently pummeled HUD with a mountain of letters and a lawsuit to protect this anti-competitive, anti-consumer and manipulative arrangement.

New construction closings are likely the most complex and risky transactions a consumer or lender will ever do. The title issues are enormously complex, fraud abounds and the potential for coercion and bait and switch is huge. And it is the title company that must sort through the complex purchase agreements to properly represent them on the settlement agreement. It is the title company that must uncover title defects created by the builder, mechanics liens that the builder hasn't paid and handle situations where the buyer and builder disagree. Of course builders want to own the title companies that make these decisions. What better way to protect their investment.

It doesn't take long to imagine a routine real life scenerio where a builder might abuse his ownership of a title company. Here are a few:

Sub-contractors have filed mechanics liens on the property and the builder disputes them.

There is a blanket underlying mortgage on the entire development and the builder doesn't want to payoff the part due to release the subject property.

The builder is in financial difficulty and the title company is a perfect bank to "borrow" money.

Residential new construction is already a problem for consumers in that the purchase agreements are best described as contracts of adhesion and offer consumers no meaningful protection whatsoever. The forms are typically custom forms in excess of 20 pages that would cost a fortune to even have an attorney review. Consumers are already at a severe disadvantage.

In addition, title companies are responsible to collect and disburse funds in an unbiased manner that follows the instructions in the purchase agreement. Is there any possible way to call a builder's title company unbiased?

And if the builder is trying to cover up title defects such as unpaid mechanics liens or unpaid mortgages, what better way to do that than by owning your own title company?

The other problem is that builders coerce buyers to use their biased title companies by offering fake discounts that exceed the price of the title work often by a factor of 5 or more. Free rooms, $10,000 in discounts, free granite counter tops are all things that we have seen. When the title fees are only $1200 or so, the so called "incentive" to use their title company becomes more of a demand than a choice.

And if the builder is capturing all of the buyers' title work that comes through the door, what does that do to competition? Competing title companies that offer title work for less won't be considered because they would essentially have to pay the buyer $8,000 to match the benefit the consumer is getting from the builder. The discount is nothing more than a stick to whack the buyer with if the buyer refuses to subject himself to the risky proposition of allowing the builder to examine his own title.

Allowing builders to own a title company allows the builder to neutralize the safeguards that the title company is there to provide. If you're going to allow that to happen, it is CAARE's position that you would be better off not even examining title at all.

How much is your property really worth?

2009-08-11T16:41:00.007-04:00

Knowing the value of your home is critical to making key financial or family planning decisions. The real estate market is on the rebound and some areas are recovering faster than others, so it’s important that your property analysis be local. There are several ways to research your home’s true value.

Check with local real estate experts

Check with an agent or broker who is familiar with comparable properties in the local area. They’ll know what you can expect for a home with similar features, age and location as yours. They’ll also know which property features are hot in the current real estate market, and you might even consider updating your home with those features to enhance its appeal. Local real estate experts might also have a good idea of when the market will be in even better shape than it is now, thus bringing a better price for your property.

Professional appraisal

A professional property appraisal will cost at least a few hundred dollars, but this detailed analysis could prove worthwhile if home value will play a part in making a major life decision. The appraisal is based on a combination of comparables and an in-person inspection. Known as “appraised value,” this estimated value of your property may be more or less than the “market value,” which is the dollar amount suggested by local real estate experts you’ve consulted. Unlike the appraised value, the market value takes into consideration such variables as buyers’ incentives and how quickly the seller needs to sell the home.

Network

Get out and visit open houses. This will be a great way for you to see first-hand the style and features of comparable properties. You will also be able to research the asking prices of these properties, and also meet realtors or brokers to help you sell your own property. Getting outside the “bubble” of your own home is a great way to figure out whether you can get more from the sale of your property – or in some cases, whether you’re expecting too much.

Research online

The Internet is full of resources to help you figure out your home’s value. Check the multiple listing service to see the values of comparable properties, if a realtor or broker isn’t already researching that information for you. There are also fee-based sites with software to provide property comparisons and home valuations.

When pricing your property and deciding whether to sell or wait, knowledge is power. Fortunately, a variety of tools are at your disposal to help ensure you get what your property is really worth.

CFPA proposal launches congressional tug-of-war

2009-07-28T12:17:00.001-04:00

In the midst of the healthcare reform battle, another war is raging between President Barack Obama and Congressional Democrats. Consumer finance took center stage in early July with the Consumer Financial Protection Agency Act of 2009, a scaled-back version of Obama’s previous proposal.

The House Financial Services Committee proposal is structured very similarly, with a few key differences. Like Obama’s proposal, it will grant the new CFPA power to create and monitor regulations for products offered by the financial industry. Unlike Obama’s proposal, congress proposes to leave enforcement of the Community Reinvestment Act in the hands of offices like the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS), as opposed to the newly formed CFPA. Furthermore, congress does not propose a merger of OTS and OCC into a new regulatory agency called the National Bank Supervisory, as Obama proposed.

The congressional CFPA proposal is not without some internal squabbling among Democrats. Those serving on the House Energy and Commerce Committee protest that the Federal Trade Commission, which falls under that committee’s oversight, should retain regulatory power over non-bank financial products. Losing control over mortgage brokers and finance companies will significantly restrict the role of the FTC and thus the Energy and Commerce Committee, argued former committee Chairman Frank Dingell (D-MI).

Supporters of CFPA counter-argued that one agency with one mission to oversee the financial industry will repair some of the past damage done by the FTC’s historic lack of oversight. The bill, HR 3126, is currently under review by the committees of finance and energy and commerce.

I Believe (reprinted from Mike Pryor at ALTA)

2009-07-06T15:12:00.010-04:00

(Reprinted with permission from Mike Pryor at ALTA - http://www.mikepryor.net/)

I was recently asked why I am so adamant about the need for a good title search.

Because…..

I believe the cornerstone of property rights in the United States is based on a transparent and reliable method of providing constructive notice regarding those precious rights.
I believe a good title search brings attention to areas of the public record that need correction, satisfaction or curative action.
I believe that without the scrutiny and curative action resulting from a good title search, critical public real estate records in our country will fall into disarray.
I believe that failure of confidence in the public records will inevitably lead to increased fraud and false claims against legitimate property rights.
I believe corrupted public records will result in a reluctance or refusal of credit.
I believe once the public records are damaged beyond any ability to prove unimpaired ownership, title insurance will become unaffordable for most consumers.
I believe when a loan is conditioned on an unaffordable title insurance product or an unattainable proof of lien priority, economic prosperity is threatened.

Do you still wonder why I am so adamant about the need for a good title search?

Because….

I believe the quality of a title search should be more than an “occasional” requirement for issuing title insurance.
I believe consumers are entitled to disclosure of all title impairments of record, regardless of the insuring decisions.
I believe a title policy issued on a poor (or non-existent) title search provides an illusory near term savings at a catastrophic long term price…both for consumers and title insurers.
I believe our individual and corporate responsibility to the economic future of our children and grandchildren is violated every time we forego a good search in favor of a quick profit.
I believe, as an industry, we should be protectors of good standards, not just servants to the avarice of mortgage markets that require “quick” at the expense of “good”.
I believe those in the title business should learn from current business examples that the consequences of short cuts, regulatory failure and improper attention to risk are devastating.

Finally, I believe a good title search of good public records unleashes the power of asset leveraging and securitization in a way that, with restored diligence, can keep the American dream of home ownership alive for future generations.

That’s why I am so adamant about the need for a good title search.

Thanks for asking!

Mike Pryor
www.mikepryor.net

"Making Home Affordable" offers a solution for homeowners in distress

2009-06-05T13:39:00.004-04:00

Homeowners who are struggling with their mortgage payments may soon find an affordable solution, thanks to a new initiative by the Obama administration. Making Home Affordable is a plan to help such homeowners refinance, even if they are "upside down" in their mortgage, owing more than the home is worth. It is expected to help between 4 to 5 million homeowners refinance, who would otherwise have great difficulty doing so.

Mortgage refinance criteria

To be eligible for a mortgage refinance through the Making Home Affordable plan, homeowners must meet certain qualifying criteria. Over the previous 12 months, they must have paid all mortgage payments no later than 30 days past the due date.

Furthermore, their mortgage loan must be owned or guaranteed through Fannie Mae or Freddie Mac. Homeowners can determine whether they meet this requirement by calling their lender or by contacting Fannie Mae at (800) 7FANNIE or www.fanniemae.com/homeaffordable, and Freddie Mac at (800) FREDDIE or www.freddiemac.com/corporate.

Benefits of MHA mortgage refinance

There are several reasons homeowners should consider a mortgage refinance through the Making Home Affordable plan. Most significantly, Fannie Mae and Freddie Mac offer considerable flexibility with applicants' credit scores and histories. The traditional lending market, on the other hand, is still relatively rigid as the housing market slowly recovers.

Many Homeowners have been forced to move due to economic reasons or career relocation, and need help meeting payments on the home they left behind. The Making Home Affordable plan would benefit them because it applies to residential properties other than the applicant's current primary residence, like rental or vacation properties.

"Ensuring that responsible homeowners can afford to stay in their homes is critical to stabilizing the housing market, which is in turn critical to stabilizing our financial system overall," said Treasury Secretary Tim Geithner. "Every step we take forward is done with the imperative in mind."

How to sell your home fast

2009-05-08T14:27:00.005-04:00

Whether you’re facing a job transfer, impending foreclosure, or an escalating adjustable rate mortgage, there are many reasons you may need to sell your home quick. Unfortunately, selling a home can be a discouraging process, although taking the right steps can speed the process along. Even in a slow housing market, you can sell your home faster with a few basic strategies.

Take quality photos

A vast percentage of modern-day home searches start on the Internet, so high-quality photos are essential. Rent a wide angle photo lens to make rooms appear larger. Open curtains on a sunny day to let in plenty of natural light and show off your home’s best features. You may even recruit a professional photographer to capture your home’s best side.

Market your home

Marketing is critical. The personal connections and resources of realtors can help, but homeowners can even market and sell their own home with the help of web sites like FSBO.com or ByOwner.com. Yard signage and a listing on the multiple listing service is available through such sites. Other avenues include social media like Twitter, Facebook, and You Tube videos.

Price it correctly

Look at comparables, get an inspection, and consult an appraiser and realtor before setting the price on your home. However, when the housing market is in a slump, you are much less likely to get full value for your home, so get ready to compromise. If your home stalls on the market, act fast and slash the price by 10 percent. Incremental decreases are not drastic enough to catch attention. Lower the price and sell it faster.

Remove all clutter and personal effects

Family photos, kids’ artwork, knick-knacks, pet bowls, general clutter, and anything else that speaks about your personal life should be removed. Enable visitors to envision your home as their own. Consider hiring a professional home stager for an objective eye to help make your home more appealing.

Buyer Incentives

Offer to pay closing costs, or one year’s worth of property taxes or homeowner’s association fees. More creatively, you could spring for a maid or landscaping service. Incentives can increase the number of looks you’ll get, thus increasing the odds of getting an offer and selling your home fast.

Tax benefits for first-time home buyers

2009-05-08T14:24:00.002-04:00

If you have been waiting for the right time to buy your first home, 2009 is your year. There have always been many tax benefits to home ownership, but recently passed legislation makes the deal even sweeter for first-time home buyers. In response to the housing market decline, the federal government is offering first-time purchasers a tax credit of up to $8,000 that does not have to be repaid if the home is owned for at least three years.

The tax credit is equivalent to 10 percent of the home’s purchase price, capped at $8,000. Eligible taxpayers must purchase their first home before December 1, 2009 and their adjusted gross income must not exceed $75,000 per person, or $150,000 per married couple.

In addition to the new tax credit, first-time home buyers may be quite surprised at how many other tax benefits await. The interest on a first-home or second-home mortgage is fully deductible up to $1 million. The interest on up to $100,000 of home equity debt is also tax-deductible, regardless of what the loan is used for. This is a tremendous benefit because interest payments consume the vast majority of payments over the first several years.

Loan discount points and origination fees, commonly grouped into closing costs, are tax-deductible for home buyers – even if the seller pays closing costs. In terms of loan origination fees, for example, this typically means you could deduct 1% or more of the home’s purchase price.

Best of all, profit of up to $250,000 per individual ($500,000 per married couple) off the sale of a home is non-taxable income. Any profit beyond that is subject to capital gains tax. The caveat is the taxpayer must have lived in the home at least 24 months out of the previous five years, but the 24 months do not need to be consecutive. Add to this the fact that homeownership-related tax deductions often allow taxpayers to reach a point where they can itemize other smaller deductions like charitable giving, and homeownership begins to look quite profitable. When handled correctly and within your financial means, buying a home can truly be a winning deal.

OAITA and ELTA file lawsuit against ODI

2009-05-08T14:21:00.003-04:00

TO: Press, TV and Radio stations in Cleveland, Columbus, Cincinnati, Dayton, Akron, and Toledo.

Contact person: Robert B. Holman, Esq.
OAITA (440) 232-9911

SUBJECT: INDEPENDENT TITLE AGENTS FILE NEW LAWSUIT AGAINST OHIO DEPARTMENT OF INSURANCE.

FOR IMMEDIATE RELEASE

The Ohio Association of Independent Title Agents (OAITA) (http://www.oaita.org/) and Eagle Land Title Agency, Inc. have filed a new lawsuit in the Franklin County Court of Common Pleas against Mary Jo Hudson, Director of the Ohio Department of Insurance. OAITA, an association of independent title insurance agents in Ohio, and Eagle Land Title Agency, Inc., an independent title insurance agency licensed by the Ohio Department of Insurance seek to prevent the spread of kickbacks and referral schemes in the real estate industry by asking the Franklin County Court of Common Pleas to declare that the Director of the Ohio Department of Insurance must enforce currently existing rules prohibiting banks, real estate companies and mortgage brokers and their subsidiaries from engaging in the business of title insurance pursuant to Ohio law.

OAITA and Eagle are represented in the newly-filed lawsuit by E. Bruce Hadden, Gregory W. Happ and Robert B. Holman. The lawsuit alleges that Director Hudson failed to enforce current administrative rules based on long-standing Ohio statutes that prohibit banks, real estate companies or mortgage brokers, or any of their subsidiaries, from unlawfully steering Ohio homeowners and their real estate transactions to title insurance agencies owned all or in part by those same banks, real estate companies or mortgage brokers. The suit alleges that ownership of title insurance agencies by banks, real estate companies or mortgage brokers, known as controlled business arrangements, creates dangerous conflicts of interest by allowing those banks, real estate companies and mortgage brokers to obtain kickbacks and referral fees for steering Ohio homeowners to their own controlled title agencies. The lawsuit alleges that such conflicts of interest violate Ohio statutes and that Director Hudson has failed to construe newly enacted rules in accordance with the long-standing law.

The suit is an important step towards reducing the overreaching power and influence a bank, real estate company and mortgage broker have over a homeowner’s real estate transaction and, in particular, a homeowner’s statutorily protected choice of title insurance provider. The lawsuit is important since many homeowners do not even realize such a choice exists. By permitting banks, mortgage brokers and real estate companies to move into the title insurance business, the lawsuit alleges that the ODI’s inaction has helped to feed the pervasive greed that has overwhelmed the real estate industry in recent years. Considering the well-known impacts of the mortgage industry meltdown and the rise in foreclosures across the country, homeowners across Ohio are well-served by the filed action.

Independent title insurance agents serve as important checks and balances on the power of banks, real estate companies and mortgage brokers to unlawfully steer homeowners’ real estate transactions to controlled entities. Members of OAITA and Eagle Land Title Agency, Inc. are independent title insurance agents and independent real estate settlement service providers who refuse to give kickbacks or referral fees to banks, real estate companies and mortgage brokers for the real estate transactions they close. Instead, independent title agents: (1) help to reduce the cost of title insurance by not engaging in elaborate schemes to reward referral parties at the homeowners’ expense; (2) help to lessen the likelihood of real estate related litigation involving homeowners by not allowing referral party pressure to dictate closing requirements; and, (3) help restore trust and integrity in the fiduciary relationship that exists between homeowners and their settlement providers by insuring that only disinterested title agents provide title insurance services, not their referral parties.

-END-

OAITA Complaint - Declaratory Judgment

Department Assures Third-Party Title Escrow Accounts Are Safe for Ohio Consumers

2009-03-20T09:18:00.003-04:00

COLUMBUS – Ohio Department of Insurance Director Mary Jo Hudson announced, today, that Ohio consumers can feel protected because of a recent interpretation of federal law by the Federal Deposit Insurance Corporation (FDIC).

The FDIC has granted account guarantee program coverage to Ohio Interest on Trust Accounts (IOTA) by determining that IOTA accounts had the same status as Ohio Interest on Lawyers’ Trust Accounts (IOLTA). This positively impacts consumers because title agents routinely deposit client funds into their IOTA accounts on a temporary basis during real estate transactions. Those funds will now be protected while in the bank or depository institution in the same way that the consumer’s checking, savings, and certificate of deposit funds are protected, but will not be subject to the $250,000 maximum limitation.

This result may or may not apply to accounts maintained by title insurance companies in other states.

Anyone with questions about their insurance should call the Department’s consumer hotline at 1-800-686-1526 and visit www.insurance.ohio.gov for information.

Ohio Department of Insurance Contacts:

Robert Denhard, Public Information Officer (614) 644-3366
Jarrett Dunbar, Public Information Officer (614) 644-2475

MORTGAGE MELTDOWN Was Caused by Elimination of Safeguards

2009-03-19T16:01:00.004-04:00

A hat tip to our friends at http://www.caare.org/ for writing the simple truth of the meltdown below (I wonder why you won't find this on 20/20 or 60 minutes?):

There are multiple real estate related industries that provide a safety net to real estate transactions. It is their job to uncover problems and disclose them to all interested parties. You could even say that it is their job to provide information that might “kill a deal” when the transaction is a bad one. If their ability to independently determine problems becomes compromised, then the entire infrastructure of residential real estate becomes compromised. Welcome to the Mortgage Meltdown of 2008.
Most consumers rely heavily upon Realtors in the selection process of services that provide safeguards to the integrity of the transaction. But does it make sense to have Realtors involved in that selection process? Should any professional who has a large financial stake in the outcome of a residential transaction be permitted to provide or select inspection, appraisal, mortgage, title or legal services?
If a Realtor has a $30,000 commission riding on a transaction, is he going to select a law firm or home inspection, mortgage or title company that is going to protect the integrity of the transaction or is that Realtor more likely to pick a service that is going to protect their commission by making sure that the transaction closes? How many bad loans never would have funded had the lender not been in a position to select the appraiser? How many bad loans are funding today because lenders who own foreclosed properties are insisting that buyers use their title company for the closing?
The fact that lenders can sell their mortgages, like commodities, to distant and detached investors contributed to the crisis because no one cared about the integrity of the loan that was being sold. However, is it really a bad thing to sell those mortgages? What if there were safeguards in place in the form of independent and unbiased determination makers who are untroubled by threats of boycotts or firing?
It was the removal of important safeguards that enabled the mortgage crisis. If those safeguards had not been intentionally nullified by a real estate industry accelerating out of control in a race for more and more unfair profits, those safeguards would have more than likely have uncovered the problem loans and killed them before they ever could have damaged anyone. We must get the real estate industry out of the supporting industries.
One stop shopping does not belong in a marketplace where some “shops” are supposed to be scrutinizing the other “shops.”
Our theory is that commissioned service providers should never have been allowed to have ANY involvement in the selection of the service providers whose job it was to find and disclose problems with the transaction. And by all means, they should NEVER have been permitted to have an ownership interest in those safeguard industries. Yet, that is exactly what happened and what is happening today.
Most supporting safeguard indus
There is really nothing complicated about this concept: It is even worse than the proverbial fox guarding the hen house because the are no consequences if the Realtor gets caught steering their clients into their hen-house (sp) title company. Even worse, the Realtors who are most successful in betraying their clients’ chickens (sorry, I meant trust) are portrayed as heroes and will have no worries when it comes time to negotiate their commission split with their broker.
The real estate industry vigorously protects and deceptively promotes the ownership of these safeguard industries as something that somehow benefits consumers and society. They have even gone so far as to provide tainted data to highly compensated research firms for “studies” that are then disseminated to governmental authorities in support of their conspiracy. They have taken this fox/chicken coop concept and spun it with appealing names like One Stop Shopping, Bundled Services and Affiliated Business Arrangements. They even got Congress to change the old term of Controlled Business Arrangements because it had “negative connotations.” Their persistence should come as no surprise once it is pointed out that ownership of these safeguard industries practically guarantees that almost all transactions will close and that they can charge whatever they want on these services that are largely misunderstood by consumers.
Unfortunately, their persistence in preserving their controlled business arrangements has also resulted in the near destruction of our economy. Home inspectors, appraisers, lenders, title companies and even lawyers have all been compromised. If they do their job and find problems with a transaction, they are never hired again. Replacing unbiased independent decision makers with chumps who rubber stamp transactions under the threat of being fired or boycott is today’s real estate mantra.

What to look for in a title agency?

2009-02-20T15:50:00.008-05:00

Here are some quick points to remember when looking for a title agency to close your real estate transaction. I'm not trying to be self-serving here but think it is a basic checklist for anyone looking to safely close their transaction at any title agency.

Length of business; How long have they been in business? Experience level is priceless. We at Eagle have been serving central Ohio for over 30 years with professional, ethical and friendly service.
Value; Look for a title company that looks for ways to save you money! Compare prices - No Closing Fees, No Junk fees, No Padding; we at Eagle save customers between $400-$800 dollars on most of our closings!
Independent Agent? - Are they affiliated with their lender, real estate agent or builder? Beware of affiliated business arrangements. They drive cost up and present many "conflicts of interest". Title Agent must be a neutral third party.
Get it in Writing; Make sure they put estimate of title closing costs in writing. Have them prepare you a preliminary HUD settlement statement. Also, get a good faith estimate in writing from your lender.
Closing Protection Coverage; It is now Ohio law that you should be offered Closing Protection Coverage. This protects you against possible title agent theft, misappropriation, fraud and any other failure of Licensed Title Agent; get the actual letter sent ahead of time before you close. It should be presented to you on initial contact.
Survey; Make sure they offer you a survey if purchasing a new property before you close. You should review with your legal counsel before the closing takes place!
Title Commitment; Make sure they provide the Title Commitment before you close. This is the results of the title examination. It has extremely valuable information regarding the propery that again should be review with your legal counsel before the closing!
Valid Title Agents License; Check with the Ohio Department of Insurance (ODI) using their agent lookup feature to verify they have a valid Title Insurance Agents license and in good standing with their underwriter.
Valid Underwriter; Check with their underwriter and make sure they are a valid agent. Make sure underwriter is a highly rated and reputable company.
E & O Insurance Coverage; Check that they have E & O insurance coverage and make sure you get proof of the current policy.
Other Important items; Ask about their cutting edge technology; CD-imaging of signed closing papers, website services such as online ordering and consumer information.

Independent Title Agents Matter

2009-02-13T09:25:00.009-05:00

Top Reasons to use an Independent Title Agent

CHOICE - We empower you to make the best choices possible. We suggest you shop and compare 3 different independent title agencies for price, service and convenience. We are confident that you'll like what you see and that you will come out on top!
CONFLICTS OF INTEREST - We believe that real estate professionals have a fiduciary duty to their client and need to keep their clients best interest in mind. Self-dealing, unfair business practices, anti-competitive business practices, conspiracy to defraud, unjust enrichment and interference with a fiduciary relationship are just a few of the problems. Notwithstanding, we caution, what better way to lock-in business, destroy competition and raise prices without consequences than to incentivize fiduciaries to manipulate their clients about choosing a title company?
SAVINGS - We don't participate in Affiliated Business Arrangements (AfBAs). This is an active choice we make to better meet your needs and serve you. We do not pay referral fees, inducements or incentives to real estate or lending professionals. Instead, we pass these savings on to our customers.
AUTONOMY -With freedom of one's action, we are less pressured into doing business with any particular person or company, therefore, customer service, competitive pricing, quality of work and higher standards are always in mind for our customers.
HONESTY/DUTY- We keep our relationships honest, allowing us to focus on what we do best: looking out for your needs, providing choices and protecting you, our customer. We feel it is a duty and privilege to serve you.
ALLIANCE - Being a proud member of the Ohio Association of Independent Title Agents. We believe that truly independent title agencies make title insurance costs more competitive, help lower title insurance claims and protect the ultimate consumer from costly real estate related litigation, displacement from their home and horrible inconveniences.
REPRESENTATION - We believe that you should be represented by legal counsel throughout your transaction.
PLEDGE - We not only adhere to higher standards of professionalism and integrity but have made a pledge to the consuming public.
TRANSPARENCY - Since when does it make sense to have the real estate professional examine their own title work? Homebuyers are often completely reliant on a real estate agent for expertise and advice on all aspects of a real estate transaction , including finding a title company, but the real estate agent and lender knowingly places their client in a position of complete vulnerability and then "takes financial advantage" of them by sending them to their in-house title company. A person should never violate Trust for secret profit.
SAFEGUARDS - We are neutral third parties providing the safeguards, integrity and "checks and balance" to the transaction. It is our position that people involved in controlled business arrangements should have NO involvement with the title agent who is supposed to uncover and disclose to all parties all problems with the transaction.
TRUTH - We don't believe in the "One Stop Shopping" OSS concept. In-house title agencies are just smoke and mirrors. Even more startling is that consumers are actually told by the real estate associations like RESPRO.ORG that they want OSS and bundled services. If OSS were properly disclosed to consumers we believe that the truth would far outweigh any benefit. OSS removes all the safeguards, eliminates competition, representation and violates the consumers best interest.

New Document Recording - ORC 317.114

2009-02-11T15:02:00.002-05:00

Effective July 1, 2009, Ohio Revised Code §317.114 establishes new rules for the recordation of documents in Ohio as follows:

(A) Except as otherwise provided in division (B) of this section, an instrument or document presented for recording to the county recorder shall have been prepared in accordance with all of the following requirements:

(1) Print size not smaller than a computer font size of ten;
(2) Minimum paper size of eight and one-half inches by eleven inches;
(3) Maximum paper size of eight and one-half inches by fourteen inches;
(4) Black or blue ink only;
(5) No use of highlighting;
(6) Margins of one-inch width on each side of each page of the instrument or document;
(7) A margin of one-inch width across the bottom of each page of the instrument or document;
(8) A three-inch margin of blank space across the top of the first page of each instrument or document to accommodate any certification or indorsement of the county engineer, county auditor, or county recorder, as may be required by law, with the right half of that margin being reserved for the indorsement of the county recorder required by section 317.12 of the Revised Code; and
(9) A one and one-half-inch margin across the top of each of the remaining pages of the instrument or document.

The county recorder shall accept for recording an instrument or document that does not conform to the foregoing requirements but shall charge and collect the following additional fees for each such instrument or document: an additional base fee for the recorder's services of ten dollars and a housing trust fund fee of ten dollars, which shall be collected pursuant to section 317.36 of the Revised Code.

(B) This section does not apply to any of the following:
(1) Any document that originates with any court or taxing authority;
(2) Any document authorized to be recorded under section 317.24 of the Revised Code;
(3) Any plat, as defined in section 711.001 of the Revised Code, that is required or authorized by the Revised Code to be recorded;
(4) Any document authorized to be recorded that originates from any state or federal agency;
(5) Any document executed before the effective date of this section.

Closing Protection Coverage - what's that?

2008-11-21T20:48:00.007-05:00

Many think they don't need it but you better think twice. Many real estate agents and professionals don't even know what it does or why we as a title agent bug everyone to death to get the required notice signed by all the parties at the beginning of each transaction which is required by law.

Closing Protection Coverage (CPC) was created to protect the consumer directly from the title agent. Simply because of the many title agent defalcations and fraud that happened right here in the state of Ohio and even here locally in Columbus that crushed and financially destroyed many consumers. Unfortunately, there were title agents that forgot to pay off mortgages among other things and then went out of business.

First, let me say that CPC has always been offered to lenders and most lenders have always required it. It wasn't until recently January 1, 2007 that the Ohio legislature put into law that we have to offer it to all parties of a real estate transaction. This includes both the buyers, sellers and the lender. I know, I know, you are thinking, you just want to sale this coverage to make money. No, not at all. Actually, we as the title agent do all the logistical work of creating, collecting, reporting and remitting to our underwriter and never receive one cent.

So, your now thinking so why does he want to sell this so bad? Well, because this is probably one of the best things the lawmakers have done to protect the ultimate consumer from all the fly by night title companies and unscrupulous agents. Actually, in these times, I personally would purchase it no matter where I closed and no matter whether it was a purchase, sale or refinance. The public and the real estate professional think that because there is title insurance involved that they simple don't need it.

The official description of coverage says the following:

The Closing Protection Coverage indemnifies you against the loss of settlement funds resulting from any of the following acts of the Licensed Agent or anyone acting on behalf of the Licensed Agent, subject to certain conditions and exclusions specified in the Closing Protection Coverage Form:

1) Theft, misappropriation, fraud, or any other failure to properly disburse settlement, closing or escrow funds; and 2) Failure to comply with any applicable written closing instructions, when agreed to by the Licensed Agent.

There are just two many things that can go wrong that could effect you as the consumer that could possibly be covered with this insurance. Plus, more importantly it puts the underwriter on the hook for the agents actions.

Still, even today, we have many real estate professionals that advise their clients not to purchase it in order to save the mere $15 dollars if purchasing and $50 if selling a home. They usually say this because they have high regard for our company, maybe because we have been around for 30 years, and we appreciate that, but it won't hurt our feelings one bit if you recommend it, and that advice doesn't do the consumer any good if something happens even beyond our control.

Welcome

2008-11-15T18:24:00.004-05:00

One of the main reasons for this blog is to help educate consumers and real estate professionals here in the Columbus Central Ohio marketplace. When I say real estate professionals, I wish to include the following: Real Estate Agents, Lenders, Bankers, Mortgage Brokers, Attorneys and others.

Most consumers are fairly familiar with real estate agents and mortgage people but have little knowledge of the real estate process, title insurance issues and the costs associated with it. I believe that when you are going to make such a big investment like a house you should know everything that will go into the transaction.

Part of the reason is that they typically leave it up to the real estate professionals to take care of everything. This may work well for some but may not always be in the consumers best interest.

It is up to all real estate professionals to help consumers make the best choice when it comes to their entire transaction. Our goal as fiduciaries should be to assist the consumer in making decisions that are best for them. In return, this will lead to long term benefits for the real estate professionals in the form of referrals and repeat business. If your client trusts you they will be willing to tell their friends, family and other business associates about you.

It's time for consumers to learn more about the closing process and take control of their real estate transaction. Consumers, mortgage lenders, real estate and title professionals are invited to add comments and questions that contribute to the overall goal. Thank you for joining us.