MyTexasTitle.com's Blog

Who Should Define What Is Superior Customer Service? The Client or the Texas Title Company?

2009-12-03T12:03:00.003-06:00

99.9% of every Texas title company makes the declaration “customer service is what we are best at!” And maybe that particular title company is good at what they define as customer service in the world of Texas title insurance and real estate closing services. But if the title company’s definition of customer service does not match your definition of customer service, more than likely, you will disagree with their statement of superior customer service and think the opposite. A Texas title company’s definition of customer service may not be the customer service you are looking for. Superior customer service is not a universal standard, but based on each customer’s expectations.

Here’s the challenge: The Texas title company that you have selected defines “superior customer service” as making sure your loan closes and funds on time. The title company has all of the information and is in contact with the lender. The escrow officer knows she has enough information to close and fund this loan. In the escrow officer’s mind, she is thinking, “Snap, I’m good!” BUT your definition of “superior customer service” from a Texas title company is different: You also want constant communication with all parties, making sure everyone is on the same page, confirmation of deadlines, etc. Your mind is filled with, “Is this going to close? Has anyone contacted MY client to confirm the closing time and location? Why can I not reach my escrow officer?” And you want someone to allay those fears.

In the above example, is it an untrue statement that the Texas title company has performed with “superior customer service”? No, not necessarily. It simply reveals you or your team’s customer service needs require a different type of customer service to provide a level of confidence and comfort you and your team are looking for. That’s why Griffin Law Firm knows and believes the importance of communicating with our clients from the very beginning. Knowing and organizing a client’s future expectations makes for a fruitful and lasting relationship for both Griffin Law Firm and you, our client.

At Griffin Law Firm, we don’t claim to our clients we have “superior customer service.” However, we do provide a service based on you and your team’s needs. We recognize there is not a cookie-cutter solution for all clients. Thus, we provide a customized, organized, customer service defined by your standards.

What Is The Ideal Texas Title Company?

2009-11-25T11:44:00.008-06:00

The following story reminds me of a “priest, rabbi and a minister” joke, but it is a true story about Texas title companies and how they differentiate their very commoditized products and services nonetheless. However, it shed new light on what the ideal Texas title company does or should be doing for its clients within the highly regulated framework created by the Texas Department of Insurance.

A mortgage company is having their weekly meeting in which they invite current and prospective vendors in to solicit the mortgage company’s business. On this occasion, three Texas title company representatives are there to try to earn the mortgage company’s business for their respective title company. When the first Texas title company representative has the opportunity to give his spiel, he states, “The price of Texas title insurance is fixed by the Department of Insurance, so the bulk of the fees charged by all Texas title companies is the same generally, so the way we differentiate our title company is in our customer service”. The second Texas title company representative has his chance next, and asserts, “The first Texas title company representative is correct in what he says that there are very little differences in what Texas title companies charge, and so customer service is what sets us apart. And that is why our title company’s customer service is second to none”. It was now the third Texas title company representative’s turn to give his pitch. The loan officers are waiting for him to say something—anything—interesting and different from what the first two said. Instead, the third Texas title company representative says, “The first two Texas title company representatives have said it best. I have nothing further to add”.

In my head, this story is comical, but the reality. I actually agree with all three Texas title company representatives that it all comes down to customer service: they are all correct. But how are mortgage and real estate professionals supposed to see the difference between Texas title companies and their varying degrees of “good customer service”? I ask myself this question constantly because differentiation is always important when clients have a choice in who they use.

At Griffin Law Firm, which is a fee office for a major Texas title company, we know we haven’t thought of everything and every tool we can be providing for our clients. There will always be more ideas to come. We also know that the ability to fulfill the needs of our clients comes from engaging with them and building strong relationships with them in order to know what voids could be filled. That being said, we have some very clear ideas of what sets us apart from other Texas title companies that goes beyond the usual dog and pony show. This may not be the silver bullet that meets all your needs, but I believe it gives us a good foundation from which to start. We are always willing to listen and always asking why. We want to be the Texas title company that is on your team.

A2XYUWT4CBY6

Happy Thanksgiving from Your Texas Title Company!

2009-11-19T17:54:00.006-06:00

I know that with all the hustle and bustle of the new RESPA rules, end of month, end of year coming things can be rushed and everyone seems to focus on the subject at hand, which is to get as many loans closed as possible by the end of the month; be prepared for the New Year RESPA Rules (so you can continue without slowing your closing pace); and somewhere in between try to make a few bucks.

Okay, now it’s time to breathe. All of the matters at hand are important, and I realize there are dead lines in all situations, but there is something even more important coming your way—and that is Thanksgiving. I know we are all thankful for our jobs, especially in this market. But how about that son or daughter that tugs on your pants while he or she looks up to you? Or how about the wife that waits patiently while you work the long hours to make sure they are cared for adequately? Or how about the brothers, sisters, mom and dads that you haven’t really had time to see because of all the time restraints and challenges with your career?

I would like to challenge you to set aside some time, maybe a day or two to reflect on what REALLY matters in life. Then once you have decided, tell someone how much you love them, why you are thankful and how thankful you are that they are part of your life.

In this day and time, love can be lost in translation.

Make this Thanksgiving true and sincere.

Happy Thanksgiving from all of us at Griffin Law Firm!

RESPA's Changed Circumstances: A Texas Title Company That Can Help Get You Through It

2009-11-16T10:28:00.004-06:00

Effective January 1, 2010 RESPA states that once the Good Faith Estimate has been disclosed to your client, it’s pretty much written in stone. But what if something does need to be changed? There are certain circumstances that you may change the numbers on your GFE.

If the following occurs, you may change your GFE:

1. Acts of God, war, disaster, or other emergency.
2. Info particular to the borrower or transaction that was relied on in providing the GFE and that changes or is found to be inaccurate after the GFE has been provided, which information may include information about the credit quality of the borrower, the amount of loan, the estimated value of the property, or any other information that was used in providing the GFE.
3. New information particular to the borrower or transaction that was not relied on in providing the GFE.
4. Other circumstances that are particular to the borrower or transaction, including boundary disputes, the need for flood insurance, or environmental problems.

In addition to these rules, RESPA goes further to say:

None of the information collected by the loan originator prior to issuing the GFE may later become the basis for a “changed circumstance” upon which a loan originator may offer a revised GFE unless the loan originator can demonstrate that there was a change in the particular information or that it was inaccurate, or that the loan originator did not rely on that particular information in issuing the GFE.

In addition, the loan originator is presumed to have relied on the borrower’s name, the borrower’s monthly income, the property address, an estimate of the value of the property, the mortgage loan amount sought, and any information contained in any credit report obtained by the loan originator before providing the GFE. The loan originator cannot base a revision of the GFE on this information unless it changed or is later found to be inaccurate.

GOOD RULE OF THUMB: GET IT RIGHT THE FIRST TIME!!

We are a Texas title company that will help you get it right the first time. Use our Texas Title Insurance Premium Calculator to determine your title fees to the penny. So many times, mortgage lenders and mortgage brokers leave money on the table when filling out their GFE because they did not include the credit the Texas title company has to deduct from the basic Texas title insurance premium. Check it out!

How to Avoid Loan Closing Delays Because Of Inaccurate GFE Charges Under the New RESPA

2009-11-10T12:59:00.005-06:00

If you are worried that getting your borrower’s Good Faith Estimate may be a near impossibility when first starting the loan process and when you don’t know all the third-party service provider’s fees, HUD allows loan originators another method that may relieve some of the guessing. Loan originators may use average charges for those third party service charges that are not based on your borrower’s property value or loan amount. HUD cites the following list of nonexclusive service charges as permissible: appraisals, credit reports, flood certificates, tax service, and recording documents. However, HUD specifically states the average charge method cannot be used for transfer taxes, interest charges, escrow reserves and insurances (including your Texas title company’s title insurance).

However, if you are going to use the average charge method, HUD requires the loan originator to document how you arrived at such average charge. A loan originator must keep documentation showing how it calculated an average charge for at least three years after any settlement for which that average charge was used.

In order to calculate an average charge, the loan originator must "define a specific class of transactions for a specific time period (not less than 30 calendar days, nor more than 6 months), for a specific geographical area, and for a specific loan type. The average charge is based on a calculation of the average amount paid for the settlement service for the particular class of transaction. HUD does not prescribe a particular method for calculating the average charge, but it must be determined in such a way that the total amounts paid by borrowers and sellers through use of an average charge will not exceed the total amounts paid to the applicable settlement service providers in the particular class of transactions." See New RESPA Rule FAQs at http://bit.ly/msSSY, p. 28-29.

What if the loan originator overcharges the borrower or seller too much when using the average charge method? Does the loan originator have to refund the borrower or seller the excess amount? The answer is no, but…the loan originator cannot retain the excess. Instead, the excess should be applied to the next average charge period, so that the next class of borrowers or sellers receive a discount on their charges that use the average charge method.

So the loan originator can use the average charge method to alleviate the guesswork in knowing the third-party service provider’s charges, so the loan originator may avoid hang-ups that would delay a closing. However, if the loan originator uses the average charge method, it best be ready to substantiate the average costs determined to their regulators.

Does your Texas Title Commitment Insure Mineral Rights?

2009-11-05T09:43:00.002-06:00

As of this year, a rule was passed allowing Texas title insurance companies to insure mineral rights on a residential property. The insurance comes in the form of a blanket policy and certain criteria must be met before issuing the T-19.2 aka Minerals and Surface Damage Endorsement.

Note that this is not an endorsement that will be automatically issued. In order for the owner or lender of the property to be insured, the endorsement will need to be requested directly with the Texas title company insuring the transaction.

There is still some uncertainty as to the pricing of the T-19.2 and if credits such as the R-8 refinance credit, apply, but the Texas Department of Insurance presumably will clear this up in the next few weeks.

For timing’s sake, it will be important to notify your Texas title company if this endorsement is going to be requested as soon as possible. Mineral right researches require more work than a normal title search and, thus, much more time. Some mineral right researches can take weeks depending on issues such as how far back the deed was taken out, were the minerals ever severed from the surface, were there any deaths, were the rights transferred, etc.? And once the research is completed, the information gathered concerning the mineral rights being insured by your Texas title policy will need to be reviewed by the appropriate underwriter or attorney. Only upon their approval will the endorsement be issued.

The point I’m trying to drill into your rock is there will be many steps to obtaining this endorsement and may require time. If you need this endorsement or you think you may need it, request it up front from your Texas title company to save your closing from being prolonged.

This new endorsement may not be a big deal in the Houston area where typically, residential owners do not own the minerals to their property. However, in areas like the Dallas-Forth Worth metroplex, it is quite common for residential owners to still retain the minerals to their property. It is worth taking the time to ask your borrower if they would like this endorsement to show them you are the smartest mortgage specialist in the room.

Need a Texas Real Estate Contract?

2009-11-03T14:37:00.002-06:00

It’s 5:00 pm…30 minutes until you leave your work life behind—if you are that disciplined….and some of us aren’t. The phone rings, and it is your FSBO borrower wondering if you know how to set up a seller lease-back or have some sort of “Seller’s Temporary Residential Lease” form. Not a very common request for most, and I know your first thought is, “I will call the title company and see if they have one.”

Did you know the Texas Real Estate Commission publishes all the forms they give to real estate agents? If you or your client really need a real estate contract, go to:

http://www.trec.state.tx.us/formslawscontracts/forms/forms-contracts.asp

Cut the middle man out! Save time! Now, go home!

‘Til Death Do Us Part

2009-10-28T10:42:00.002-05:00

A goal for some marriages, a strong commitment for others, or maybe just words for some: “‘Til Death Do us Part.” Everyone that has ever been married remembers the day they were married or decided they wanted to be married. Everything coming up roses, the warmth of the sunshine, love in the air,…but then a few months roll by and things become a little complicated.

Unfortunately, marriage can become complicated in real estate transactions as well, but the good news is: you won’t need marriage counseling to resolve the issues. I know you are wondering how marriage can be complicated to the Texas title insurance industry. If the couple is married and a property is purchased, they each have a vested interest in the property. Where’s the problem? Well, there may not be a problem in that scenario, but what if the couple is common law married? Does that create a problem? Is the property purchased as two individuals or is the property purchased as a married couple?

In the State of Texas there are two types of marriages recognized: (1) Formal marriage—where a marriage license is obtained and (2) Informal—also known as common law marriage. Common law marriage has been recognized in Texas since 1847. Tarpley v. Poage’s Adm’r, 2 Tex. 139, 149 (Tex. 1847). Common law marriage is an unavoidable issue that needs to be reviewed when issuing a Texas title insurance policy.

For example, in a refinance transaction, the borrower is asked to complete a marital status affidavit, and he marks himself as “single.” However, the warranty deed or conveyance document shows he purchased the house as “a married man.” After investigating the situation, the Texas title company finds that he had a common law marriage to Betty Sue, but she left him 2 years ago. This matters!! Betty Sue, as his common law wife, has a marital interest in the house. At this point, the file would need to go to the Texas title insurance underwriter to be reviewed for further instruction.

If you think your client may have been in a common law marriage, and they decided to X the “til death do us part” all together, be sure and contact your Texas title company with any questions—and definitely let your Texas title company know in advance so any possible issues can be dealt with before closing.

How To Handle Proper Disclosure of the Texas Title Insurance Premium and Other Title Fees on the New Good Faith Estimate

2009-10-26T10:09:00.005-05:00

The lender‘s Texas title insurance premium is part of the new GFE’s Block 4—Title services and lender‘s title insurance. The difference between the new and old GFE is that the new GFE requires the mortgage originator to lump in the Texas title insurance premium along with any fees for title searches, examinations, endorsements and all charges associated with the title services and settlement (closing) agent services as one single cost, whereas the old GFE required an itemization of all of these fees.

Within this lump sum cost, a mortgage originator should include the Texas title company’s delivery fees, notary fees and settlement fees since these fees are included in the definition of title services. The term “title services” is defined to include any service involved in the preparation and issuance of the title insurance policies. See 24 C.F.R. § 3500.2.

It is common practice for the title company to charge both the borrower and seller a fee for conducting the settlement. Only the charge to the borrower must be included in the total for Block 4 of the GFE. Charges that the seller pays as a matter of common practice and experience are not disclosed on the GFE.

However, the owner’s Texas title insurance and recording fees to the county will still be listed separately from the “Title services and lender‘s title insurance” lump sum cost.

Is this simpler for the borrower to understand than the way in which the old GFE addressed title fees? There is an argument that it makes Texas title insurance fees more opaque to the borrower. Come January 2010, these arguments will not necessarily matter anymore because the new GFE will be the mandated method of disclosure.

Deceased Persons on Title: When Death Seems to Haunt You

2009-10-20T15:31:00.005-05:00

You may think it is coincidence that it is October, the wind is chilled, and as you get ready to purchase a house, the current owner’s dead Uncle Albert from five generations ago holds up your closing. Yes, October is the haunting season, but it’s really not a coincidence. Dead ancestors regularly hold up closings.

Apparently, no one dealt with Uncle Albert’s death because the house you are buying has been gifted and kept in the family for the last 100 years. Of course, many people in Texas did not use wills and probate proceedings in Uncle Albert’s day, and the only information the family has is that he was hanged for running with Jesse James.

Cool that he ran with Jesse James, but limited information is no good. How can you ever get title to the property? How could you ever have a title company issue a Texas title insurance policy on it? In this instance, an attorney or title company is called in to determine who the heirs of Uncle Albert are. Yes, the family tree has to be compiled from five generations ago and brought forward to the present. More than likely, there will be more dead ancestors than just Uncle Albert whose estates the house has passed through, and this will slow your closing even more. The more deaths without wills, the more affidavits of heirship have to be prepared. This can be an extremely lengthy process, and you may find the title of your dream home haunted by more ghosts than just Uncle Albert, lingering until dealt with accordingly.

But don’t fear because the ghosts can be put to rest! We have an attorney on our staff and an experienced escrow officer to stop the haunting. If you have an Uncle Albert haunting you, just call us. We can help you get title to the property and have a Texas title insurance policy issued to protect you from any other “haunting.”

Hey Mortgage Lenders and Mortgage Brokers! Do You Know When You Are No Longer Bound To Your Good Faith Estimate?

2009-10-19T11:31:00.003-05:00

Under the new RESPA regulations, the loan originator is bound, within the tolerances, to the settlement charges and terms listed on the GFE provided to the borrower unless a new GFE is provided prior to settlement. If a loan originator provides a revised GFE consistent with the new regulations, the loan originator must document the reason that a new GFE was provided. Loan originators must retain documentation of any reasons for providing a new GFE for no less than three years after settlement. See 24 C.F.R. § 3500.7(f) at http://bit.ly/QRYSY. But when can you provide a new GFE?

According to the new RESPA FAQs updated October 7, 2009 (pgs. 13–14) at http://bit.ly/msSSY, HUD lays out the following scenarios indicating when a loan originator is no longer bound by the GFE provided to the borrower:

i) A mortgage broker issues a GFE that a lender does not accept and the lender does not receive the application within three days of the date the broker received the application.
A: This does not constitute a changed circumstance.

ii) If a GFE is issued without a property address, the later identification of a property address.
A: If a loan originator issues a GFE without identifying a property address, the subsequent identification of the property address is not considered a changed circumstance.

iii) The borrower does not proceed to closing quickly upon final approval or does not act diligently in providing information to the lender.
A: The particular facts of each situation must be examined to determine if the facts constitute a changed circumstance.

iv) GSE, FHA or Mortgage Insurance program changes.
A: This could constitute a changed circumstance if the loan originator did not have notice of the GSE, FHA or other mortgage insurance program change prior to the issuance of the GFE.

v) The property address provided by the applicant, turns out to not be the correct, legal address.
A: This could constitute a changed circumstance.

vi) After the GFE is issued, parties are added to or removed from title or the property is moved into or out of trust.
A: These situations could be considered changed circumstances.

vii) During or as part of the transaction, it is determined that the property use may change, such as from owner-occupied to rental property.
A: This could constitute a changed circumstance. It should be noted that business purpose loans are not covered by RESPA. See 24 C.F.R. §3500.5.

viii) After the GFE is issued, it is determined that a party will be using a POA to sign, which may require additional work and additional fees.
A: This could be considered a changed circumstance.

ix) Credit policy is required to change after the GFE is issued due to regulatory changes such as fees charged by government agencies for recording fees or taxes change after the GFE is issued.
A: This could constitute a changed circumstance if the loan originator did not have notice of the regulatory change prior to the issuance of the GFE.

x) The loan does not close by the close date in the original Purchase Agreement or Construction Agreement provided to the lender.
A: The particular facts of each situation must be examined to determine if the facts constitute a changed circumstance.

xi) The vendor originally selected to perform a settlement service goes out of business or stops offering the service.
A: The particular facts of each situation must be examined to determine if the facts constitute a changed circumstance.

xii) AVMs are commonly used for the property type and loan amount requested, but the AVM request comes back with a ―no hit, necessitating the use of a more expensive valuation method.
A: This could constitute a changed circumstance.

xiii) After the GFE is issued, it is determined that an additional service such as an additional pest, structural or other inspection, upgraded appraisal, certification, survey or other requirement is required by the loan originator in connection with the transaction.
A: This could constitute a changed circumstance.

xiv) The borrower‘s credit score changes.
A: This could constitute a changed circumstance.

xv) A mortgage broker issues a GFE based on one lender‘s loan products and origination fees, but places the loan with a different lender.
A: No, this would not constitute a changed circumstance.

Owelty Liens: An Impediment to Closings & Issuing Texas Title Insurance

2009-10-14T15:21:00.003-05:00

Since it is October and all the ghouls are out, why not talk about owelty liens? For many, the word is chilling and, at the least, a nuisance to most people in the real estate and mortgage industries that can prevent your closing. The most common use for an owelty lien is in the instance of a divorce. I know in a perfect world, we would like to think that a divorce decree is the final say on the division of the property, but in fact, it does not. It gives us direction and an idea of how the property should be divided, but in most cases, there are several steps to be taken to clear an owelty lien before we at the title company can close your loan and issue a Texas title insurance policy. For example, a divorce court has no authority to divest a party of title to separate real estate. Eggemeyer v. Eggemeyer, 554 S.W.2d 137 (Tex. 1977). Regardless of the judge’s order awarding the property, if a conveyance document has not been filed, the property will still show vested in both parties. However, the judge may award the person divested from title an amount of money for their interest/equity in the property. Such award would allow the divested individual to file an owelty lien in the land records.

Unfortunately, such recorded owelty lien is often looked over when winding up a divorce and obtaining a release is forgotten. This is the reason owelty liens are so scary. The owelty lien resurfaces only when the divorce decree is reviewed by the title company when preparing to issue a Texas title insurance policy. At that point, there are several options to take in clearing the issue—oftentimes involving contact with the divorced spouse. Hence, clearing an owelty lien can slow down the closing process.

If your client mentions a divorce at the time the loan application is taken, a good habit to start would be asking for a copy of the complete divorce decree upfront. Once you receive the divorce decree, send it to the title company for review so they can make sure there will be no delays in closing and issuing a Texas title insurance policy. A little digging upfront will save a lot of time in the end.

Is your Power of Attorney Powerless?

2009-10-06T12:53:00.003-05:00

It’s down to the wire and your loan is ready to close. Your title is ready, your underwriting conditions are met, and the appraisal and survey have been approved. This is it! You are finally going to close this transaction. You call your borrower to schedule the closing only to find that one of the borrowers decided to take a two month vacation to Zimbabwe! Of course, the lock expires in three days….what do you do? The light bulb goes off in your head. I will use a Power of Attorney!

As brilliant as a Power of Attorney sounds as your silver bullet solution at this point, there is still a lot that goes into the use of one. The mortgage underwriter has to review the POA, but also the title company has to review and approve the POA as well. It seems the latter part is overlooked 99.9% of the time, so please keep in mind that surprising an escrow officer with the use of a POA will stop your closing!

Today title insurance company underwriters examine everything a little closer, and it makes the rules for approval a little tighter on a POA. For example, a medical power of attorney may negate a letter from a medical doctor stating that the patient is competent enough to execute the POA. Or a military POA may require a notary by a commissioned officer and a letter stating the principal is alive and well. If a Power of Attorney is used in a home equity transaction, it has to be specific to the transaction detailing lender, loan amount, etc.

If you are using a power of attorney, have the title company review it IN ADVANCE and BEFORE closing to avoid delays; otherwise your Power of Attorney may be deemed powerless!

The Best Texas Escrow Services? Really?

2009-09-24T11:33:00.005-05:00

If you Google the words “Texas escrow services,” many links of title company information will pop up for your viewing. Of course, every title company from large to smallest promises their company’s service is the best. In all reality, if you do your homework, you will find that several of these companies have been penalized or fined for various errors by the Department of Insurance, or the reviews from consumers are not up to par. With the internet being a plethora of information, how do you know who you can trust?

When scouting a title company with which to place your order, you may want to consider several items. For example: size of the title agency, number of escrow officers, how many departments, how long has your escrow officer been licensed, what is their knowledge level, how easy can you contact their attorneys or higher-ups for those tough files, etc. Depending on your company’s needs, these questions may be answered differently; however, they should definitely be considered.

At Griffin Law Firm, we go as far as to invite our customers into our office for a visit. If you do not know who you are working with personally, then you are working with a file number and possibly an email address. We believe in relationships. By building a rapport with our clients, we have found the process and transaction is smoother and expectations are met quickly. Our goal is not only to have the best “Texas Escrow Services” but to service our clients by meeting their individual needs.

If you are looking for a different experience, please stop by or give us a call at 817.520.6000. We look forward to hearing from you.

MyTexasTitle.com: Order Your Title Commitment Online!

2009-09-21T13:45:00.004-05:00

“Sense” you asked—

Yes, you can order title commitments on line at www.mytexastitle.com 24 hours a day, 7 days a week from the comfort of your desk. Actually, this is the preferred method of ordering title commitments by most of our clients. When this webpage was designed, it was designed and tested for the benefit of not our company, but our clients—you!

Our webpage was designed to be informative and user-friendly. Here are some features to consider about MyTexasTitle.com before you manually complete your order request for your next title commitment:

Personal login and password provided
Stores all of your order information so you personally can see your pipeline
Update Schedule A
Clear Schedule C
Texas Title Insurance Premium Calculator (calculate your own R-8 credit for your Good Faith Estimates)
Check the status of your order
And much more!

These are just a few of the benefits of ordering online. If you think about the calls you make to a title company, they are usually in regards to one of the items listed above, right? Now you don’t even have to make a call! Just go online, make your request and save time. It’s that simple.

New Texas Title Insurance Rates: Rate Hearing in Progress

2009-09-17T09:32:00.003-05:00

Texas title insurance rates are subject to change soon. The Biennial Rate Hearing began September 14th and is underway. In such hearing, various industry witnesses and government agencies, such as the Texas Department of Insurance, provide testimony regarding what is the appropriate price for title insurance in Texas.

In February of this year, TLTA (Texas Land Title Association), a trade association for the Texas title insurance industry, called for an increase of the current basic premium rate level by 13.55%. TLTA bases its recommendation on the fact that, despite Texas’s economy being more robust, the outlook for housing activity in Texas is still weak. The Texas Department of Insurance recommends no change in the Texas basic title premium rate. Meanwhile, the Office of Public Insurance Counsel recommends that the current basic premium rate is excessive and should be reduced by 11%.

The one fact I have not read much discussion on yet is the increase in the number of claims and how that might affect title insurance rates (and perhaps I just have not come across it yet). However, when talking to underwriting attorneys, who are charged with the decision whether or not to remove questionable liens from a title commitment, they have a heightened fear of litigation than they have in the past. Additionally, when reading the annual reports of the major title insurance companies, they report claims increasing. An increase in claims would surely put upward pressure on title insurance rates. However, whether or not it countervails the downturn in the real estate markets we have experienced during the last few years is another question.

RESPA Changes: Are You Ready For Some RESPA?

2009-09-11T10:02:00.002-05:00

At this point, I am sure you have at least heard new rules regarding Good Faith Estimates and HUD Settlement Statements are on the way. If you are like most people, you are probably waiting for your company superiors to funnel the information to you or your team, which you will probably receive right before the Christmas holiday—which means you will retain maybe 1% of what your training covers.

In a perfect world, everyone at your company would jump on board, read the rules and inculcate them into their brain. I mean, what’s the worst that could happen if you don’t learn the new rules??? Well, how about a “tolerance violation”? Let’s face it: Anything with the word “violation” can’t be good for you. However, as usual in life there are consequences for not following the rules; and just as usual, many companies do not take the time to train up their employees to avoid such costly mistakes. Honestly, it is worth the time to read and understand what challenges you, your team or your company might be facing if you do not follow the new RESPA guidelines.

For example, did you know a loan originator will no longer be able to charge any fees prior to issuing a Good Faith Estimate except a credit report? Only after the applicant receives the Good Faith Estimate and acknowledges an intention of proceeding with the loan indicated in that particular Good Faith Estimate can you, as lender or mortgage broker, collect fees beyond the cost of a credit report for origination-related services.

How about the fact that the lender is responsible for ascertaining if the Good Faith Estimate has been provided by its mortgage broker? If the Good Faith Estimate is not provided in 3 business days, then the lender is in violation of Section 5 of RESPA, not just the mortgage broker.

Being that I am a settlement agent and familiar with the following scenario, this is one of my favorites. If a loan originator pressures a settlement agent into lowering their fees to reduce the charges, or otherwise “cover the difference,” as a condition of receiving future referrals of business, it may be considered a potential violation of RESPA Section 8(a). A complaint can be filed at RESPA and ILS if this is violated.

I realize not everyone wants to read a litany of rules, but you should check out the Q & A page, which gives a good overview of the new rules effective January 1, 2010 at http://bit.ly/19W3d3.

May 2010 be your best yet!

Legislative Changes to Texas Title Insurance: Title Insurance Companies Can Now Charge for Electronic Filing Fees

2009-09-08T22:09:00.002-05:00

H.B. 3073 alleviates a statutory uncertainty, allowing title insurance companies to charge for the actual, or reasonably estimated, cost of electronic filing fees by changing Tex. Ins. Code § 2501.008.

There has been some debate within the title insurance community whether or not electronic filing fees could be passed down to the consumer as a separate charge from the title insurance premium. Because of the potential inability to pass the cost on to the consumer, many title companies have been reluctant to adopt electronic filing of real estate documents.

Electronic filing of real estate documents provides a benefit to all parties involved: the county clerks, the consumer and the title companies. The county clerks, should they have an electronic filing system, benefit from “more immediate filing, better notice, and reduced labor and recording costs.” See Bill Analysis at http://bit.ly/enj6R. The consumer benefits from “immediate filing.” Id. The title company benefits from “reduced losses due to gaps in filing.” Id. Clearly, an electronic system provides a more seamless system with less room for errors or problems than a system that relies upon certified or overnight mail and bureaucrats shuffling unending stacks of paper.

To read H.B. 3073, go to http://bit.ly/31Zg38.

Legislative Changes to Texas Title Insurance: Continuation of Coverage

2009-09-05T17:11:00.006-05:00

Beginning January 1, 2010, owner's title insurance policy on residential real property will provide for continuation of coverage beyond the original named insured in the following circumstances:

(1) to a person who inherits the title to the original named insured's real property on the original named insured's death;

(2) to the original named insured's spouse who receives title in a dissolution of marriage with the original named insured;

(3) to the trustee or successor trustee of a trust established by the original named insured to whom the original named insured transfers title after the date of the policy; and

(4) to the beneficiaries of the type of trust as in (3) on the death of the original named insured.

These continuations of coverage benefit the Texas residential property owners greatly, allowing Texas title insurance to adjust to the events of death and divorce--which our modern society cannot seem to avoid. Additionally, by extending the continuation of coverage to a trust created by the original named insured, Texas residential property owners have greater freedom to conduct nontestamentary planning without losing the benefits they receive under their title insurance policy.

Finally, these changes by the Texas legislature probably bring the law and title insurance coverage more in line with the Texas residential property owner's expectations for when they should be able to rely upon their title insurance policy for protection. I am willing to bet most people already think their title policy covers them in these situations and would only find out when they would file a claim and their lawyer breaks the bad news to them. The legislature made a good change.

To read the new statute, see Tex. Ins. Code § 2703.101(g).

Legislative Changes to Texas Title Insurance: Title Insurance Company Affidavit As Release of Lien

2009-09-02T21:16:00.001-05:00

The Texas Legislature passed a law allowing Texas title companies to execute an affidavit confirming that a mortgage on a one- to four- family residence has been paid in full and released. This affidavit, in effect, constitutes a release of lien. Albeit, this new power of a title company does not relieve a mortgagee (the releasing mortgage company) from any obligation it may have to execute and deliver its own release.

This new power given to title companies should allow them to speed up the lien-clearing process. In the past, as required by Procedural Rule P-11, a title company could not clear a lien unless it received the mortgage company’s release of lien or the appropriate Master Indemnity Agreement. The new law gives the Texas title company another option to use to help their customer when, say, the mortgage company no longer exists or was subsumed by a larger lender and no one knows who has authority to sign for the old mortgage company.

Do not expect all title agencies or direct operation title insurance companies to immediately begin to use this new tool. With so much power placed in the title insurance company’s hands to clear title liens, expect them to be careful using it—else open themselves up to an unnecessary liability they did not have before. Title companies probably will restrict the authority to sign such affidavits to a limited few of their officers or legal counsel—and not to any and all of their escrow officers. To read the new statute allowing this affidavit, see Tex. Prop. Code § 12.017 at http://bit.ly/viXUM.

Paying Attention to Real Estate Contract Deadlines

2009-08-29T19:17:00.006-05:00

As an attorney, I have dealt with Texas real estate purchase-sale contracts on numerous occasions—and in particular the TREC-promulgated real estate contracts. In dealing with brokers, real estate agents, buyers and sellers, I have come to the conclusion there is a need on all levels for a greater awareness of the various deadlines and responsibilities placed on each party.

Filling in the many deadline blanks in the TREC contract serves a more important function that just completing the contract. Each deadline is there to allow the buyer ample time to complete the complex due diligence of the property or show the seller that they have a firm buyer. First off, an agent should take due care to make sure the deadlines can be fulfilled realistically. Secondly, because of the busy schedules of the real estate professionals involved in the purchase and sale of real estate, it is easy to miss these deadlines, which could subject an agent to litigation risk should the transaction go bad.

A real estate contract should be read not only for the price, terms and conditions, but also for the critical dates. For example:

Declaration of Bylaws and Rules of the Association (for condos or PUDs) should be delivered to the buyer by the seller in 20 days of the execution of the contract otherwise; the buyer can cancel the contract. Once the buyer receives the bylaws and rules of the association, the buyer has 6 days to object.
The same goes for the Resale Certificate which cannot be older than three months. If the buyer objects within the timeframe given, the buyer can cancel and receive refund of earnest money.
Commitment for Title Insurance is to be delivered to the buyer no later than 20 days along with documents evidencing restrictive covenants or exceptions to policy. If the title commitment is not delivered within 20 days, the contract extends 15 days or until the time of closing, whichever is earlier. Once the commitment is delivered, the buyer has 10 days or until the date of closing, whichever is earlier to make any title objections. If any objections are made, the Seller has 15 days to respond. If the title objections are not cured within 15 days, the buyer can cancel the contract and the earnest money will be refunded.
From the time an Option Fee is paid the buyer has 10 days to review the contract and if the buyer decides to cancel, the buyer’s earnest money will be refunded, but not the option fee.
It is customary that Third Party Financing Addendum normally states the buyer must obtain financing within 20 days (although since loan underwriting can take longer, it might be advisable for the buyer to negotiate for more days). Thus, if the buyer can not secure financing in 20 days, then the buyer can cancel and have his earnest money refunded.

These are just a few of the timelines to be aware of. Of course, the parties can always alter the amount of days listed above if agreed to by all parties.

At Griffin Law Firm, because this is such an important aspect of accomplishing the close of a transaction, we assist our real estate clients in keeping up with these deadlines throughout the purchase-sale process.

Sometimes Titles Mean Everything

2009-08-27T13:04:00.004-05:00

Oftentimes the title aspect of a purchase transaction can be overlooked as a mere perfunctory function after you have invested much time locating the perfect property for your pernickety client, negotiated the best deal possible for them with an emotional[i] seller, and made sure they can obtain financing in these post-TARP days. [That was a lot; take a deep breath].

However, taking notice of certain items in the title commitment that title companies issue on a property can save your client heartache. It also can save you the weeping and gnashing of teeth that naturally comes from damaged credibility or possible litigation should the client fault you for not advising properly. We all want our clients to have happy thoughts associated with their memory of us, and we work too hard to create that association in order to only lose it.

The title company will ensure, among other things, that vesting is transferred into your client’s name and that all prior liens are removed. But it is advisable that you make sure your client understands all encroachments on the property and that the encroachments do not interfere with their vision for the property.

Schedule B of the title commitment will tell you all that. It lists all deed restrictions and easements, including those created by the municipality or a utility company. And if the metes and bounds gibberish is untranslatable, a new survey based on that Schedule B will give you a graphic representation of those encroachments.

I recently heard about an incident in which a man bought a home and did not notice that the water fountain flowing into the swimming pool sat in a utility easement. Shortly after the purchase, the utility company had to utilize their easement and tore up his beautiful fountain to reach the cables underground. The utility company is under no duty to restore the fountain or compensate the homeowner: it was on their property. Needless to say, the man was more than angry and felt the need to direct that energy at someone. Had the man reviewed his Schedule B, he would have known prior to his purchase that the pool fountain was potentially in jeopardy…unless of course, the title company failed to list the easement in the commitment.

Nonetheless, taking the time to go over these encroachments with your client educates them more about the property they will buy and emboldens your role as their trusted advisor.

At Griffin Law Firm, as a fee office for a title company, we can always assist you in understanding a title commitment we have issued to you. We will be more than glad to educate you on these matters so you can be the expert your client needs when purchasing a home.

Griffin Law Firm focuses in real estate law and is a fee office for a title agency. We handle both residential and commercial transactions and realize your image often hinges on our performance. To open escrow with us, you can reach our office at 800.846.6011 or http://www.mytexastitle.com/.

[i] In your professional opinion, the seller was bipolar.

Our Arlington Location Central To All DFW Real Estate Closings

2009-08-24T07:49:00.008-05:00

Griffin Law Firm's office is located in Arlington, Texas between Dallas and Ft. Worth, placing us in a central area to conduct title insurance and escrow closing services for real estate transactions in the Dallas-Ft. Worth metroplex. Unlike many metropolitan areas, DFW is a cluster of many cities like Arlington, Irving, Hurst, Euless, Bedford, Plano, Saginaw, Frisco--and not just Dallas or Ft. Worth. Our location is even central to Weatherford, Crowley, Burleson, Joshua and Cleburne. Much of the DFW metroplex's housing and commercial growth has occurred in these smaller surrounding cities, making our office a prime location for handling title insurance and escrow closing transactions.

What Texas Title Insurance Does

2009-08-19T20:44:00.007-05:00

Texas title insurance provides the insured, i.e., the buyer or lender, legal and financial protection against risks unknown at the time a buyer purchases a property or a lender takes a mortgage against it. Any unknown risks could potentially lead to loss of title to the property and/or a significant financial loss.

In exchange for the one-time premium paid at closing, a Texas title insurance policy requires the title insurance company to defend the insured against lawsuits involving title to a property, the establishment of an interest in a property, or the enforcement of an encumbrance against a property. Further a Texas title insurance policy requires the title insurance company to indemnify the insured by either clearing up any title problems or paying the insured's losses. Even though the title insurance premium is paid only once at closing, the buyer's Texas title insurance policy remains in effect as long as the insured, or the insured's heirs, retain an interest in the property, or have any obligations under a warranty in any conveyance of it.

Examples of unknown risks that cause a loss of title or create an encumbrance of title are: forged or missing documents, mistakes in recording legal documents, and liens for unpaid estate, inheritance, income, or gift taxes.

Finally, a Texas title insurance policy insures the buyer or lender against mistakes made by the title company in the settlement of the purchase or refinance transaction. For example, should the title company fail to pay the seller's property taxes owed at the time of closing with funds collected for such purposes in the escrow account, the Texas title insurance policy will protect the buyer.

A Good Texas Title Insurance Premium Calculator

2009-08-17T08:08:00.010-05:00

With the new Truth-In-Lending regulations in effect, the more accurate you can make your Good Faith Estimate, the more time you save getting your client to closing and the more streamlined the process. The Texas title insurance premium can be a difficult calculation to get right when setting up your GFE. Lenders want various endorsements in addition to the basic title premium. Additionally, if you are facilitating a refinance transaction for a borrower, they may be eligible for the R-8 refinance credit, which could greatly decrease their cost of title insurance. Use MyTexasTitle.com's Texas title premium calculator for an accurate cost of Texas title insurance. Get your Good Faith Estimates right the first time. Go to: http://www.mytexastitle.com/index.php?p=calc.