All posts tagged: title company

MORTGAGE COMPETENTLY

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“Confidence” and “competence” are not the same. Just because you can click a button to get a mortgage doesn’t mean it’s a good deal. You can be completely confident in absolute incompetence. If you use an online company for your closing and your loan, chances are you’ll pay an astronomical amount for lack of ground control when it comes closing cost and other concerns.

Online mortgage companies offer one-stop shopping, in that you get your mortgage loan and your closing from the same source. However, one-stop shopping isn’t so convenient when it comes with an extra pricey payload.

First of all there’s closing cost. Real Estate is a location-specific commodity, and different regions have different customs regarding fees charged at closing. Online lenders aren’t familiar with local customs. They may tag on a fee standard for their area which does not apply for the location in which you’re buying. However, a local closing company will only apply fees specific to the area—you won’t have superfluous expenses. Also, online lenders may add fees for working long distance, fees that would not be charged when using a local title company.

And secondly, there’s oversight cost. A title company owned by the lender and run by the lender does not have the oversight that an independent, locally owned title company does. “Houston, we have a problem.” Lack of oversight can be costly!! A lender-owned title company is only really concerned about the deals that they get audited on. A local title company is concerned about EVERY deal.

Conclusion

You don’t have to be a rocket scientist or be in a rock band to get a good mortgage. If you pay, you choose—you don’t have to use the lender’s title company. Even with an online lender, you can choose a local title company for a smart financial decision.

Mortgage competently with a local title company.

Land Title of AmericaMORTGAGE COMPETENTLY
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OUT OF THE BALLPARK

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When a batter hits a ball, everyone can see where the ball lands…unless he hits it out of the ballpark. Similarly, a real estate title search only reveals deeds recorded in the public record. The deed in the back of Uncle Ernie’s sock drawer may have a legitimate claim on your newly purchased home, but you’re not going to learn that with only a title search, no matter how good the title company is. That’s where Title Insurance can change the score in your financial favor.

If only baseball teams could take out insurance against homeruns hit by their opponent! Well, you wouldn’t have much of a game if that could happen. When it comes to homeownership, though, you don’t want to play games.

Homeowners can buy Title Insurance. For a low, one-time fee homeowners can level the playing field should someone make an ownership claim to their real estate—could be something like a well on the wrong side of the property line or an inheritance misunderstanding (who knew Uncle Ernie had an illegitimate son who he loved dearly enough to leave him his entire estate?). Title Insurance provides and pays for the legal defense of your ownership title.

A title challenge is no walk in the park, but Title Insurance reduces the risk of you losing your house and your out-of-pocket money for an attorney and court fees. Title Insurance gives you the home field advantage.

Land Title of AmericaOUT OF THE BALLPARK
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Attorney Mistake in Writing Title

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Attention Attorneys who represent their clients in a real estate transaction AND write title insurance for them in the same transaction:  I want to talk about CONFLICT OF INTEREST.

How can an attorney objectively write a Title Insurance Policy and represent a client in a real estate closing?  Who does the attorney really represent?  Answer:  The Title Underwriter.*  That attorney has a contractual agreement to represent the title insurance company first—the homeowner’s interest is subordinate.  How is that for proper legal representation of the homeowner?

An attorney who writes title insurance AND represents a client IN THE SAME CLOSING doesn’t really care about the client, and violates the mutual trust of an attorney-client relationship.  

An attorney who writes title insurance and practices law is fine, as long as that person doesn’t represent a client in the same transaction.  A title insurance company owned and operated by an attorney?  No problem—I’ll compete with you all day long.  But if you try to represent a client in the same transaction in which you write the title insurance policy, then I take issue with you—CEASE AND DESIST IMMEDIATELY for the sake of your customers!

Let me tell you a little story about a lady named Sheila.  Her attorney/closing agent never recorded the deed and mortgage.  After paying nearly $70,000 into the loan, Sheila goes to refinance only to find out she doesn’t actually own the house she’s been living in for almost four years.

Problem 1:  The attorney who supposedly represented Shelia has a contractual relationship with the title company who now has a title problem.

Problem 2:  That attorney was suspended for three years.

Problem 3:  The title policy was never issued.

Problem 4: The title company where the attorney/closing agent worked refused to pay for the title error.

Problem 5:  Sheila’s going to have to pay new closing costs to have her deed filed.

How could this have worked differently?  

Sheila could have hired an attorney whose interests were only aligned with hers.  Her attorney could have made sure all documents were properly recorded and a valid title policy issued, insuring her against any title questions.  (But instead Sheila had a selfish attorney who tried to represent her and the underwriter, and when the doggie doo-doo hit the fan, Sheila was left without representation and without insurance.)

Any questions?

This is a true story that happened in Pennsylvania—how many stories don’t we hear about?  In how many cases is the result of dual representation so devastating the homeowner victim can no more afford to fight than they can afford to live in the house they thought they owned?

“This case is a perfect example of why people have to hire their own attorney when dealing with this much money,” said Pennsylvania real estate lawyer, William Mackrides, about Sheila’s situation.

There’s no way this woman’s problem would have gotten this far if her attorney hadn’t also been her title agent.  Sheila’s story shows why you cannot just rely on the attorney who writes your title insurance to also represent you.

Everybody’s human.  Everybody makes mistakes.  The separation of representation—the homebuyer’s attorney and the title company—adds an objective checkpoint so that each party’s interest is fully represented without bias.  

There are a lot of fine attorney/title agents out there, and when they play title agent only, that’s great.  But if you think your attorney/title agent has your best interest in mind first, then you could be $70,000 wrong.

 

* If financing is involved, then the attorney has a contractual obligation to represent the title underwriter first, then the lender, and finally the homeowner.  Thus the homeowner would be third in line for legal representation.

 

Stephen CollinsAttorney Mistake in Writing Title
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