Joelwilliamslaw "The Law and You'

New Georgia Title Insurance Rates – Make sure you stay LEGAL

joelwilliamslaw — Mon, 06 Apr 2009 19:24:30 +0000

No More Negotiated Title Insurance Rates in Georgia – Violation of the Law

Georgia becomes FILE AND USE STATE for Title Insurance
Some of you may have used negotiated title insurance rates on some of your files in the past on Georgia loans. Under an agreement between the title insurance underwriters and Georgia Insurance Commissioner, John Oxendine, Georgia is now becoming a “file and use” state.

As a “file and use” state, each underwriter is required to file it’s published rates with the insurance commissioner. Agents ARE NOT allowed to quote any rate OTHER THAN THE PUBLISHED RATE. (See the following Georgia Code sections for further information: O.C.G.A. §§ 33-6-5(5)(6)(B); 33-8-2; 33-8-4).

O.C.G.A. § 33-6-5(5)(6)(B) states:

No person shall knowingly collect as premium or charge for insurance any sum in excess of or less than the premium or charge applicable to such insurance, which sum is specified in the policy in accordance with the applicable classifications and rates as filed with and approved by the Commissioner. …. (emphasis added).

What this means to Lenders, Loan Officers, Realtors, Consumers, and Title Attorneys:
If you had a negotiated title insurance rate, for example, $1.95 per $1,000 of loan amount, once the title insurance underwriter FILES it’s rates with the insurance commissioner, you MUST follow published rates. It is my understanding, IF the TITLE ORDER and TITLE INSURANCE RATE were quoted BEFORE the FILING, you will be allowed to use the negotiated rate on the specific Title Order. ANY TITLE ORDERS and TITLE INSURANCE RATES AFTER THE EFFECTIVE DATE OF FILING MUST BE AT FILED (known as “book”) RATES.

WHEN DOES “FILE AND USE” GO INTO EFFECT?
The effective date is essentially the date the title insurance underwriter files it’s rates with the insurance commissioner, in any event, it is my understanding all rates MUST BE FILED this spring.

My understanding is the following underwriters’ have an effective date as follows:

Chicago owned companies – Effective March 1, 2009
Fidelity owned companies – Effective March 1, 2009

Old Republic and all owned companies – Effective April 1, 2009
Security Union and all owned companies – Effective April 1, 2009

Stewart and all owned companies – Effective May 1, 2009

First American and all owned companies – Have not filed (to my knowledge), EXPECTED to file and be effective in April, 2009.

WHAT WILL “FILED” RATES BE?
I have NOT seen any of the filed rates EXCEPT Fidelity as of yet. I would expect the filed rates to be competitive with each other, but again, have not yet seen all the “filed” rates.

Ticor (a Fidelity owned company), Chicago and Security Union have published the following rates for Georgia loans:
________________________________________________________
Loan Policies – Premium per $1,000 of insurance amount:
$0 to $100,000 $2.50
$100,001 to $500,000 add $2.00
$500,001 to above add $1.75
Minimum Premium $100.00
________________________________________________________
Owner’s Policies – Premium per $1,000 of insurance amount:
$0 to $100,000 $3.50
$100,001 to $500,000 add $3.00
$500,001 to above add $2.50
Minimum Premium $150.00
_________________________________________________________
Enhanced Policies – Premium per $1,000 of insurance amount:
$0 to $100,000 $4.20
$100,001 to $500,000 add $3.60
$500,001 to above add $3.00
Minimum Premium $150.00

IF your are quoting a PURCHASE where Owner’s and Lender’s policies are issued simultaneously, you would use the Owner’s Rate (so long as the loan amount does not exceed the Owner’s Coverage) and add $100.00 for the loan policy.

Example 1 PURCHASE: Purchase Amount = $250,000.00, Loan Amount = $200,000.00.
Owner’s Policy:
$0 – $100,000 @ $3.50/$1,000 = $350.00
$100,001 – $250,000 @ $3.00/$1,000 = $450.00
Total Premium for Owner’s Policy of $250,000 = $800.00

Lender’s Policy:
Since it is less than the owner’s coverage = $100.00

Total Title Insurance Premium for Owner’s and Lender’s = $900.00

Example 2 REFINANCE: Loan Amount = $200,000.00.
Lender’s Policy:
$0 – $100,000 @ $2.50/$1,000 = $250.00
$100,001 – $250,000 @ $2.00/$1,000 = $200.00
Total Title Insurance for Lender’s Policy = $450.00

While the calculation of title insurance premiums may be a little more complicated under the new system, all lenders, mortgage officers, consumers and title attorneys should now be on the same, even playing field. That SHOULD make the costs of borrowing more predictable and more uniform.

How do you keep your GFE accurate? I suggest contacting your title attorney BEFORE you quote your GFE to insure greatest accuracy. In my office, we will provide you with a preliminary HUD showing exact title fees, title insurance, and recording taxes. UNLESS your loan amount changes, those fees should be EXACT. Recording fees will vary with the number of pages in the security deed, but, will always be (in Georgia) $10 for the first page and $2 for each additional page.

If you have further questions, do not hesitate to contact me at joel@joelwilliamslaw.com.

Title Insurability Issues with Short Sales — potential

joelwilliamslaw — Tue, 24 Mar 2009 15:13:53 +0000

We received an ALERT from one of our title insurance underwriters yesterday regarding potential title insurability issues with some Short Sales.

For your benefit, if you or any of your clients are in any way connected to a potential short sale as a seller, buyer or borrower, be aware of these potential issues going into the transaction.

I would suggest as follows:

SELLER negotiating a short sale — make the short sale lender aware of these potential insurability issues.

BUYER/BORROWER — if your client is a buyer or borrower, BEFORE much time or reliance or dependence on a potential purchase of a short sale property, make sure you get the opportunity to see the short sale lender SHORT SALE APPROVAL and review it for the following or similar language.

This creates a difficult situation for a BUYER/BORROWER because the short sale payoffs are generally very difficult to acquire and are usually time sensitive. Given processing times in the current market, it may be difficult to process a loan within the time limitation of the short sale payoff. The mortgage officer is the expert on how long it takes to process the loan through underwriting and getting the package to the closing table. Communication with the mortgage officer and seller/short sale negotiator will be critical.

Below is the language we received in our ALERT:

Approvals and/or instructions given by a lender for a “short sale” may include unacceptable instructions that make the transaction uninsurable. The following are examples of unacceptable conditions:

°LANGUAGE: “There are to be no transfers of property within 30 days of the closing of this transaction. Escrow instructions must contain a clause that if such a transaction takes place then the title/escrow company must notify Lender.”

Problem: A title company closing a short sale would not know if the property was transferred again within 30 days after the short sale.

° LANGUAGE: “If the property was acquired by any means of fraud, Lender reserves the right to pursue any and all actions available to it to offset its losses. If it is determined that Seller(s) and/or

Buyer(s) participated in any way to the fraud, this short sale will be void, and the Note and Security Instrument will remain in full force and effect.”

Problem: This condition may make the short sale voidable.

° LANGUAGE: “Lender requires full disclosure which includes all details of the transaction on both the Seller and Buyer side of the HUD1. If Lender finds full disclosure was not made at the time of the approval, the approval becomes null and void.”

Problem: This condition may make the short sale voidable.

Underwriter instructions to title agent/closing attorney: Read short sale approvals and instructions meticulously. Do not sign or accept instructions that contain any of the above, or similar, provisions if you are issuing a Title policy, unless the instructions are revised to remove the objectionable provisions.

If you would like us to review the language in your short sale payoff, we will be happy to do so.

Loan Modifications – The next BIG SCAM?

joelwilliamslaw — Wed, 18 Mar 2009 02:47:46 +0000

“Loan Modifications” is the next great frontier for the scam artists and fraudsters who populated the sub-prime lending industry.

“Loan Modifications” is the next great frontier for the scam artists and fraudsters who populated the sub-prime lending industry.

If you search the internet, you will see many sites which claim to be “Attorney” based. CAUTION: Most of those companies ARE NOT attorney firms.

I am not saying that ALL non-attorney companies in the loan modification business are scammers.

Why might it be important to use an attorney?

(1) Transactional attorneys are well versed in real estate closing law. Youur attorney can perform a forensic analysis of your earlier closing to make sure all rules, Federal and State, were followed in your closing. If the rules were not followed, the attorney can use that information to gain leverage in your modification negotiation, and, in some instances, invalidate the earlier loan.

(2) Attorneys are required to be LICENSED BY THE STATE IN WHICH THEY PRACTICE.

Most have online sites with Member Directories where you can search to determine IF the attorney is admitted to practice AND whether the attorney is in Good Standing, Suspended or Disbarred.

This is a link to the Georgia Bar Site where you can go to the Member Directory Search and search for Joel Williams in Duluth, Georgia. You will receive a page showing my name. If you click on Joel E. Williams Jr. you will see my Joel E. Williams, Jr. Member Details showing my office location, contact information and that I am in Good Standing.

The information let’s you know you are dealing with a LICENSED ATTORNEY, IN GOOD STANDING. They are not likely to risk their attorney license by defrauding consumers. There is always a very effective complaint process with the State Bars if you feel you have been wronged by your attorney.

(3) Attorneys are required to maintain client trust accounts. This means you will know WHERE your money is and that it is subject to the law relative to attorney escrow accounts.

Consider your options:

(1) You can attempt the loan modification on your own. In fact, we will provide you on this site links to everything you might need to manage your own modification. The only problem I see with that approach is you will be required to spend a considerable amount of time getting educated on the law and the language used in real estate closings, mortgages and modifications.

(2) You can work with a non-profit service. While there are a number of good non-profit services out there, they are often overwhelmed with those seeking FREE assistance.

(3) You can hire a non-attorney company. A BIG question should be, will you be able to reach them AFTER you have given them your money? Check out a lot of these companies websites. Do you see the name of ANY person there that you can verify? That is licensed by the state?

(4) You can hire an attorney firm with LICENSED ATTORNEYS that you can verify with the State Bar. CAVEAT: Make sure the firm you hire is versed in real estate law and modifications.

As time goes by, we will provide you with more specific information in links to be contained below, including information to assist you in handling your own loan modification, if you so choose.

The Law and You with Joel Williams

joelwilliamslaw — Sun, 22 Feb 2009 04:28:56 +0000

Hello. COMING SOON The Law and You with Joel Williams will be a discussion of things of interest to everyday people.

We will discuss things which affect most people at some point in their life. The articles will concern specific subjects, some will be historical, some of immediate interest in today’s world. I suspect we will cover a good bit about housing and mortgages over the next few months as everything related to housing and mortgages seems to be changing on a very regular basis.

I will begin regular post during the last week of February, 2009.

Thank you for joining us.

Joel