Land Title Blog & Radio Show

THE BIRDS & THE BEES OF TITLE CLAIMS

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Where do Title Claims come from? Do they fly in from outer space? Does the man on the moon make them? Does the stork bring them?

Nobody really knows where title claims come from-just kidding. They come from the person suing you because they feel they have rights that you’re infringing upon. The issue is you don’t know they’re coming.

Often the birds and the bees of title claims are human error-honest mistakes made at the courthouse, or an omission in public records. Sometimes there’s a disgruntled heir who comes forward after being written out of the will of a previous owner, or a disgruntled step-son who feels in the divorce mom didn’t get what was hers. And every now and then there’s a case of fraud or forgery. Many title claims come from a simple property line dispute-not the whole parcel, but a matter of a few feet. Regardless of where title claims come from, you never know if one’s going to land on you.

Title Insurance is like a nest egg. For a nominal one-time feem you can buy Title Insurance at closing, then no matter where a title claim come from, you have that policy to pay for the legal defense of your property ownership rights.

Legal costs to defend real estate ownership rights are a beehive of expenses, but if you have the nest egg of Title Insurance, you can crack the yolk over the sting of legal fees.

Next Blog Topic: “How Babies Are Made” – just kidding!

Land Title of AmericaTHE BIRDS & THE BEES OF TITLE CLAIMS
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BIG BROTHER

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When I testify in court for Rusty, he asks me my name, if we’re related, and how we’re related. I always say that Rusty is my big brother…because he is.

I recently testified at one of Rusty’s foreclosure hearings and I was surprised how many people don’t understand a Truth In Lending form, including the opposing counsel who represented the lender-he didn’t understand anything about the Truth In Lending form. It was very humbling to realize when I’m in a closing room with a customer how important my role is to make sure that buyer understands what Truth In Lending means and all the other closing documents.

The Truth-In-Lending Act (TILA) is a federal law that requires disclosure of a truth-in-lending statement for consumer credit. The statement includes a summary of the total cost of credit, such as the annual percentage rate (APR) and other specifics of the credit.

For people buying real estate, they rely on my expertise and knowledge to explain the deal they’re signing and make sure they know what they’re getting into. Rusty is my big brother, but sometimes I get to be the “big brother” for other people.

Land Title of AmericaBIG BROTHER
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BENJAMIN FRANKLIN & SALMON P CHASE

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Neither Benjamin Franklin nor Salmon P. Chase were President, yet both appear on US money; however, there’s a hundred-fold difference between them.

Benjamin Franklin-everybody knows him! He was an inventor, a statesman, and public leader. His face is printed on the hundred dollar bill, a handsome portrait to have in your wallet!

Salmon P. Chase-doesn’t tend to ride in people’s hip pockets so often (even when buying gas!). He served as Secretary of The Treasury and he’s on the ten thousand dollar bill.

The cost difference between having Owner’s Title Insurance on your real estate could be as great as the difference between these two men.

Owner’s Title Insurance typically costs a handful of Franklins (The base rate is $5.75 per thousand up to $100,000, and then $5.00 per thousand thereafter. The minimum charge for an Owner’s Title Insurance Policy is $100). It’s a one-time fee, and then those Franklins are ready to go to work should a property dispute arise.

Without Owner’s Title Insurance, a property dispute could cost the homeowner a lot more. The homeowner has to pay out-of-pocket for attorney’s fees and court costs to defend his ownership rights. Legal defense is expensive regardless of the property value of your home. The Salmon P. Chase bill is rare and hard to come by, yet title defense could cost $10,000 or more, and in the end, you could still lose your house.

When you spend a Woodrow Wilson (hundred thousand dollar bill) on the home of your dreams, it’s worth some Franklins to insure your title to it. Use correct denominations to get the maximum value. It’s a lot easier to reach into your walle for a Franklin
than for a Chase!

Land Title of AmericaBENJAMIN FRANKLIN & SALMON P CHASE
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BANK-OWNED EYESORES & TITLE TRAUMA

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The Florida Times Union recently ran a story on the problems of Bank-Owned Properties-unkempt, dilapidating properties that stand vacant for months driving down real estate value around them. They’re not just eyesores-they’re title traumas as well!

Bank-Owned Properties (also known as Real Estate Owned or REO’s) occur when a homeowner goes into default on their loan and the bank forecloses on the home. Unfortunately this process often brings problems for subsequent buyers of the property, problems including: No Accountability, Over-Charging, “Bad” Title Product, and No Survey.

No Accountability – The attorney who did the foreclosure normally owns the title company. They play a game of “catch me if you can,” leaving accountability as the “monkey in the middle”.

Over-Charging – The banks’ attorneys charge a “cheap” fee for the foreclosure, then make up for it by over-charging the buyer in closing fees. Their loss is their gain, and the buyer gets the bill. Over-charging shows up on Settlement Statements on items that customarily not as high or charged to the seller.

“Bad” Title Product – Ever heard of David Stern? Banks’ attorneys and and Bank-Owned Title Companies are notorious for throwing caution into a hurricane. In their velocity and volume, they don’t do the careful documentation to support a clear, clean foreclosure, thereby opening not a front door, but an airplane hangar door of liability.

Survey – Bank-Owned Properties come “As-Is”-they don’t come with a little gift basket and they don’t come with a survey. Without a survey there are title exceptions. How do you know that your neighbor won’t dispute the boundary lines? Remember it’s expensive to be right.

Bank-Owned Properties are popular for their cheap price, despite steep problems. However, they can be worth the risk if you get Title Insurance. Cheap real estate can cost you a fortune in legal fees if you don’t have your ownership title insured. What was a good investment can become a financial black hole if someone else makes a claim to the title, especially when it involves bad foreclosing.

There are financial risks inherent to the process in purchasing an REO. Insulate yourself from those risks with Title Insurance, which covers all the problems of the past.

Title Insurance is trauma treatment for title problems.

Land Title of AmericaBANK-OWNED EYESORES & TITLE TRAUMA
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“AMBIGUILTY” ATTORNEYS

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The Washington Post published a list of useful words you won’t find in the dictionary, including:

Cashtration” (cash-tray-shun) – the act of buying a house, which renders the subject financially impotent
Reintarnation” (re-in-tar-nay-shun) – coming back to life as a hillbilly
Dopeler effect” (dope-lur) – tendency of stupid ideas to seem smarter when they come at you rapidly

I’ve got a word to add to the list: “Ambiguilty” (am-bi-gil-tee) – the state of being at fault for filing a totally bogus title claim against a rightful property owner. This is a term that applies to attorneys.

Real estate could be unfamiliar territory, but that doesn’t stop some attorneys who think they’re jack-of-all-trades-master-of-none from trying to knock down your door with a ridiculous challenge to your ownership.

Regardless of how bogus that claim is, the homeowner is responsible to defend himself in a court of law. And that’s costly. Have you priced a legal defense lately? Have you taken out a second mortgage lately?

Some attorneys are ambiguilty of imaginary title clouds that could cost the homeowner big bucks. The attorneys don’t know any better so they file a claim that they’re not going to win because they don’t know any better- a circular situation that can leave you spinning.

Don’t let lawyers charge you out of house and home when a title insurance policy provides a legal defense for your ownership rights (or pays out the policy amount if needed). Protect yourself from ambiguilty attorneys-get title insurance.

Land Title of America“AMBIGUILTY” ATTORNEYS
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ALL FOR THE BEST

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Some men are born to live at ease, doing what they please, richer than the bees are in honey… the rest of us have to work for a living!

Buying a home is for many of us the largest purchase we’ll ever make. It takes a lot of hard work to afford to live where we live, but we get the benefit of shelter-a place to gather, a place to rest and play, and a safe place to raise our children. A home is a very costly part of our lives, and a very beneficial part.

Hard earned homes can be compromised if a title claim is made against the property. Even if that claim is illegitimate, the homeowner has to defend his title in a court of law. Litigation expense can exceed the property value, making a legal defense cost prohibitive.

However, title insurance can help a homeowner protect his purchase. At a fraction of the cost to hire an attorney, a title insurance policy pays court costs to defend the homeowner’s ownership.

Protect your purchase with title insurance, then all is not lost in the event of a claim or challenge. A title insurance policy is something I hope you’ll never use, but if you need it, it is all for the best.

Land Title of AmericaALL FOR THE BEST
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ALTERNATIVE ENDING

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Owner’s Title Insurance is like a pre-written alternative ending to avoid misfortune. The happily-ever-after of home ownership should be hassle-free. You should be able to own your home and sell your home without any question of your entitlement. You paid for the house-heck, it’s your home-and you should have the right to live there and sell “there”… but life doesn’t always have a fairytale ending.

Sometimes the wicked stepchild of the previous owner comes back to claim her inheritance…and sometimes the next-door-ogre snatches a yard of your yard for his compost heap…and sometimes a courthouse clerk misfiles an earlier deed to your property…and then there’s fraud.

Court costs to defend your property rights can pile up higher than your neighbor’s compost. And they stink if you have to pay them yourself. However, for a one-time fee for owner’s title insurance, you can have an all-time alternative ending should someone make a claim against your land.

A title insurance policy cannot prevent a property dispute, but it can provide financial protection should an ownership challenge arise. Owner’s title insurance pays for the legal defense of your title-it pays for attorney’s billable hours and filing fees and other court costs associated with the matter… If that doesn’t work, then title insurance pays the amount insured.

Title insurance is a two-for-one deal-you get two endings for the price of a one-time fee at closing. If someone should challenge your ownership rights to your property, you either get your legal defense and you get to keep your house, or you get your legal defense and you get the policy amount so you can buy a new home (hey, not what we want, but sometimes we have Mr. Grimm writing the fairytale).

A title claim is not a win-win situation, but with title insurance, you can have an ending different from lose your house, lose all your money.

The expense of title insurance is only “once upon a time” at closing, and it brings you peace of mind for your “happily-ever-after”.

Land Title of AmericaALTERNATIVE ENDING
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ATTENTION ST. AUGUSTINE SOUTH RESIDENTS

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Just because you can get a County Permit to change your property in St. Augustine South does not mean those changes are condoned on the Plat Map. Don’t compromise the resale of your land by violating Plat Map requirements.

St. Augustine South is a unique neighborhood. Each homesite has to be set on at least two lots. Not one and point nine-nine-nine lots, but two lots. Fine. That gives residents elbow room with their neighbors; however, this two-lot rule has to be maintained for insurable resale no matter how many square feet the two lots equal.

If you live in the South, don’t trip over your own square feet. The County may give you a building permit that crowds the rule, but then your homesite will be ineligible for title insurance when you go to sell it. Furthermore, this St. Augustine South two-lot requirement is filed on the Plat Map, and is not a restriction that has to be renewed every 30 years per the Marketable Record Title Act.

Always check the Covenants and Restrictions and the Recorded Plat Map before making changes to your St. Augustine South property.

For more information on setbacks and encroachments in St. Augustine South, see the April 2012 edition of Southern Comfort, the neighborhood newsletter.

Land Title of AmericaATTENTION ST. AUGUSTINE SOUTH RESIDENTS
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AVOID DOUBLE NEGATIVES

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If you can afford a house, you cannot not afford to get title insurance. Does that make any sense? What I’m trying to say is that no risk is acceptable if it is avoidable. Risk of financial devastation due to property disputes is avoidable with title insurance.

If there were a mud puddle, would you step in it? Well, if you’re my son, Sterling, you’d not only step in it-you would dive in it! But I wouldn’t step in it, not with your good shoes! Homeowners avoid obvious ownership problems by getting a title search and a survey done before they buy, then they can deal with any questions of boundary lines and ownership entitlement ahead of time.

But some problems you can’t see coming. Some title issues hide in courthouse records, some linger in deeds that never got recorded, some wait with heirs who can procrastinate in making their claims, and every now and then, you get a case of flat out fraud. You can’t see these kinds of things coming, but what you can do is minimize your financial exposure and risk to them with title insurance.

Why spend big money on a lawsuit when you could buy title insurance for a nominal one-time fee? Have you priced attorneys lately? You’re not likely to get a Groupon.

A lawsuit can range in the upwards tens of thousands of dollars… and keep in mind you could still lose your house after fighting for your ownership rights in court. Title insurance, on the other hand, generally costs a few hundred dollars, depending on the value of the property. That’s why I say if you can afford a house, you cannot not afford title insurance-it’s bad English to use a double negative, but it’s worse English if you spend all your money on your legal defense and lose anyway. That’s a double negative!

Like I said, for a few hundred dollars you can buy a title insurance policy that pays for the legal defense of your title, and will pay out the policy amount should that defense fail.

Obviously you don’t want to lose your house in a property title dispute, but you really don’t want to lose it if you’ve paid all your savings, your retirement and your kids’ college fund on the legal defense – then you’ve lost your home and all your money. Cardboard boxes are cheap, but they lack ambiance.

Instead of the double negative, let’s rephrase this issue with a double positive: if you can afford a house, you can afford the title insurance to go with it, then you’re covered in court costs and policy amount of your house, should you need it. Get title insurance and avoid double negatives.

Land Title of AmericaAVOID DOUBLE NEGATIVES
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THE ART OF WORRY

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Gladys Mae knew the art of worry. She worried about her husband’s gallbladder, the price of gasoline, and if clothes on her clothesline could be seen from her neighbor’s yard, especially when she washed her girdle. The one thing Glady’s Mae did not worry about was her property title. Glady’s knew that she and her husband, George, owned that house and had the rightful authority to live in it… or to sell it or will it or gift it as they wished.

Oh sure, property disputes could happen—Gladys didn’t deny that, but she didn’t worry about it either. She didn’t worry about her home ownership title because she and George had title insurance.

Title insurance is peace of mind, assuring your financial protection if someone claims that all or part of your property is theirs.

Gladys Mae had worry beads and stones worn smooth from handling, but she didn’t waste these on her home title. If Mr. Huckleberry next door was going to claim part of her clothesline ran across his property, why then she would just call up her title insurance company and have them deal with Mr. Huckleberry… though she might dry her girdles indoors. If some other joker came to the front door and said he owned the whole lot, then he too would have to take up his challenge with her title insurance company.

Gladys Mae didn’t worry about title claims against her ownership because she had title insurance to fight the battles for her in court, and to pay for the related legal fees. She did not waste her time worrying about title claims… she had better things to worry about!

Land Title of AmericaTHE ART OF WORRY
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