Ticor Title Fact Sheet – Q3 2011

On November 29, 2011   /   Blog, Title Insurance  

The financial strength and claims paying ability of a title insurance company is very important in these times of change in our industry. With Ticor Title in the Pacific Northwest you can rest assured that our commitment to you is established on a rock solid financial foundation. The fact sheet below will give you a sense of how we did in Q3 2011.

Ticor Title Seattle - Q3 2011 fact sheetTicor Title is a member of the Fidelity National Financial family of companies (“FNF”); the leading provider of title insurance through its title insurance underwriters – Fidelity National Title Insurance Company, Chicago Title Insurance Company, Commonwealth Land Title Insurance Company and Alamo Title Insurance. FNF underwriters issue more title insurance policies than any other title company in the United States.

As a company, we produced another strong quarter despite the continued difficult real estate market. This achievement can be attributed to our local employees’ ability to manage challenging market conditions and take advantage of opportunities as they arise. One such opportunity came with the meaningful decline in residential mortgage rates beginning in August.

This decline led to a significant increase in refinance order volumes. Total refinance open orders per day in August increased nearly 30% over July, and September totals remained nearly equal with August levels. As a result of the decline in mortgage rates, the quarter’s mix of business favored refinance transactions. Overall, during the quarter our direct operations opened 596,000 total orders and closed 378,800 orders.

Our commercial title business was strong again during the third quarter and generated over $99.1 million in revenue, which accounted for more than 26% of total direct title premiums in the quarter compared with 19% in the same quarter of 2010.

Collectively, the FNF title brands remain the largest and the most profitable in the industry. As always, we remain committed to managing our business with discipline, providing the best possible customer service, and remaining the financially strongest title insurance provider for our policyholders, clients, and partners.

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Which Title Insurance Policy Should I Choose?

On November 22, 2011   /   Blog, Title Insurance  

Standard, Extended, and ALTA Homeowner's Title Insurance Comparison

What is the difference between the various types of owner’s title insurance policies?

We hear this question often. There are three types of owner’s policies; Standard, Extended, and ALTA Homeowner’s. It’s important to note that the ALTA Homeowner’s Policy is specified by default on the NWMLS (Northwest Multiple Listing Service) Form 22.

Title Insurance Choices

Why would the ALTA Homeowner’s policy be the top choice? The ALTA Homeowner’s policy offers the highest level of protection for homeowners that exceeds the coverage of the Standard or Extended policies. Some home buyers may not be aware of the risks to title that exist and thus not understand the explicit value of broader coverage. Nonetheless, buyers should know that they always have a choice.

What makes the ALTA Homeowner’s policy unique?

We’ve written an article specifically about the ALTA Homeowner’s policy that explains the benefits to the homeowner, the deductibles, post closing coverage, and the cost.  For further information, please click the following link:

ALTA Homeowner’s Policy in Plain English

Standard, Extended, and ALTA Homeowner’s comparison

In comparing the three policies, it’s easier to make an informed decision if you can see the risks covered in a list or tabular format. The side-by-side title policy comparison below will make it clear what makes each policy unique.

Please keep in mind that if you have questions regarding your title insurance policy or level of coverage, we are here to help.

Policy Protection Against the Risks of:

 ALTA Homeowner’s Standard Extended
Record defects, liens, encumbrances, adverse claims or other matters not known or disclosed to the new owner that attach before date of policy ✔ ✔ ✔
Forgery or Fraud in connection with the execution of documents ✔ ✔ ✔
Undue influence on Grantor or mental incompetence of Grantor ✔ ✔ ✔
Undisclosed or missing heirs ✔ ✔ ✔
Wills not properly probated, mistaken interpretation of Wills and Trusts ✔ ✔ ✔
Conveyance by minor(s), Conveyances by Corporation or Partnership without proper legal authority ✔ ✔ ✔
Incorrect legal descriptions, non-delivery of deeds ✔ ✔ ✔
Delivery of Deed after Death of Grantor ✔ ✔ ✔
Clerical errors in recorded legal documents ✔ ✔ ✔
Unmarketability of title as insured or lack of legal access ✔ ✔ ✔
Unrecorded liens ✔ ✔
Survey and Boundary questions ✔ ✔
Claims of parties in possession not disclosed by the public records ✔ ✔
Easements or claims to easements not disclosed by public records ✔ ✔
An existing violation of a subdivision law or regulation affecting the Land: 

  • You’re unable to obtain a building permit
  • You are forced to correct or remove the violation; or
  • Someone else has a legal right to, and does refuse to perform a contract to purchase the Land, lease it or make a Mortgage on it.

This covered risk is subject to:

  • A customer deductible amount of either 1% of Policy Amount or $2,500.00. (whichever is less)
  • Title Company’s Maximum Liability is $10,000.00
 ✔
Certain zoning issues that force you to remove or make modifications to your existing structure. 

This covered risk is subject to:

  • A customer deductible amount of either 1% of Policy Amount or $5,000.00. (whichever is less)
  • Title Company’s Maximum Liability is $25,000.00
 ✔
You are forced to remove your existing structure (s) because it (they) encroaches onto your neighbor’s land. 

This covered risk is subject to:

  • A customer deductible amount of either 1% of Policy Amount or $2,500.00. (whichever is less)
  • Title Company’s Maximum Liability is $25,000.00
 ✔

Post Closing Coverage:
Another party owns an interest in your title ✔
Another party has rights affecting your title resulting from leases, contracts or options ✔
Another party has rights affecting your title resulting from leases, contracts or options ✔
Another party has an easement on the property ✔
Your title is defective ✔
Another party has the right to limit the use of your land ✔
Your neighbor builds any structures, after the policy date, other than boundary walls or fences, which encroach onto the land ✔

 

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Condo or Co-op, What’s the Difference?

On November 14, 2011   /   Blog, Title Insurance  

Seattle Condo or Co-op

Washington has a lot of condominiums, but also its share of cooperatives, especially in the Seattle metro area. On the surface they may seem similar. So what exactly is the difference between a Condo and a Co-op?

What’s a Condo in plain english?

A Type of Subdivision

Both condo and co-op units are a type of land subdivision but neither requires city or county review or approval as is done with a platted lot.

A condo unit is created by a state statute (RCW 64.34) which requires a complex and expensive survey to locate each unit as a “parcel” of land. The unit occupies airspace within the main parcel. The unit’s boundaries are in simplest terms a “box” with six sides (typically the walls, floors and ceilings of what looks like an apartment in a building). Everything within the box is the unit, owned 100% by the unit owner. Title to the unit automatically includes a percentage interest (as tenant in common with all owners) in the common elements – everything outside the box. The common elements are not a separately owned or taxed parcel. While a homeowners’ association manages the property pursuant to the recorded declaration, it owns no real property.

Each unit is taxed independently, and can be sold and mortgaged just like a platted lot. A failure to pay taxes or the mortgage on a unit has no bearing on the title to any of the other units, and thus no lien can arise solely on the common elements such that it would affect the title to any unit or the project if foreclosed.

What’s a Co-op in plain english?

A co-op unit is similar to a condo unit one respect: the space occupied by the unit owner is usually also a “box.” But, there is no survey defining the location of the boundaries, so there is no “legal” description of the unit that meets the standard of a condo unit or a platted lot. Also, all of the property, including the units and the common elements, is owned by a cooperative corporation, which also acts as the homeowners’ association. A co-op buyer gets stock in the cooperative corporation (only unit owners can own the stock) and what’s called a proprietary lease to the unit that allows exclusive possession. This unrecorded lease is often for a nominal monthly amount, although assessments can be significant.

“This means, of course, that if assessment collections fall short all unit owners risk losing title to their units in a foreclosure.”

The entire co-op property is a single tax parcel and especially in newer projects is often encumbered by a mortgage. It’s up to the association to pay the taxes and the mortgage, with a significant monthly homeowner assessment to cover those expenses. This means, of course, that if assessment collections fall short all unit owners risk losing title to their units in a foreclosure.

Co-op Membership

The documents creating a cooperative, unlike a condominium declaration, are not recorded, and in many cases the association does not want them to be. Most co-op boards also have stringent membership requirements, including significant financial assets that make it harder for first time buyers to qualify. And, in addition to pre-approval of buyers by the board, it often has first refusal rights when a co-op unit owner wants to sell. One advantage of all this is that co-op projects tend to be more stable in an otherwise changing real estate market. At the same time, it can be more difficult and time consuming to sell a unit even when market conditions are good because the pool of qualified buyers is smaller.

Condo vs. Co-op Seattle(Photo credit: Jeff Croft via Flickr)

Unit financing can be had, but it’s usually not a real estate loan. Rather, a bank might offer a personal loan secured primarily by the unit owner’s shares of ownership in the co-op corporation. Some banks do offer financing similar to real property loans, including some secondary market backing. But even with a good loan-to-value ratio (say 80%) the amount of any blanket co-op mortgage must be subtracted from the value of the land. A co-op owner cannot pay off a portion of the mortgage allocable to that unit, so the “equity” that is actually available for a real property mortgage on a single unit can be quite small. Title insurance, which may be available if the unit lease is recorded, is often not utilized or of limited value to a buyer or lender.

Co-op transactions involve specialized paperwork because of the transfer of the stock interest and lease (or a new lease from the association) and requires a Realtor® experienced in helping pull it all together.

Questions or comments? Please share below!

Download a copy of this article - click here.

Click the image to download a printable version of this article.

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20 Reasons for Title Insurance

On November 8, 2011   /   Blog, Title Insurance  

20 Reasons for title insurance - insuring the home ownership dream We Hope You Never Have A Title Claim.

Americans have the future in mind when they buy a house, and they purchase homeowners insurance to help protect that future. But with homeownership comes the need to protect the property against the past, as well as the future.

Title insurance protects a policyholder against challenges to rightful ownership of real property, challenges that arise from circumstances of past ownerships. Each successive owner brings the possibility of title challenges to the property.  So to illustrate how title insurance protects the home ownership dream, we present 20 reasons for title insurance:

20 Reasons for Title Insurance

  1. A deed or mortgage in the chain of title may be a forgery.
  2. A deed or a mortgage may have been signed by a person under age.
  3. A deed or a mortgage may have been made by an insane person or one otherwise incompetent.
  4. A deed or a mortgage may have been made under a power of attorney after its termination and would, therefore, be void.
  5. A deed or a mortgage may have been made by a person other than the owner, but with the same name as the owner.
  6. The testator of a will might have had a child born after the execution of the will, a fact that would entitle the child to claim his or her share of the property.
  7. A deed or mortgage may have been procured by fraud or duress.
  8. Title transferred by an heir may be subject to a federal estate tax lien.
  9. An heir or other person presumed dead may appear and recover the property or an interest therein.
  10. A judgment or levy upon which the title is dependent may be void or voidable on account of some defect in the proceeding.
  11. Title insurance covers attorneys’ fees and court costs.
  12. Title insurance helps speed negotiations when you’re ready to sell or obtain a loan.
  13. By insuring the title, you can eliminate delays and technicalities when passing your title on to someone else.
  14. Title insurance reimburses you for the amount of your covered losses.
  15. A deed or mortgage may be voidable because it was signed while the grantor was in bankruptcy.
  16. Each title insurance policy we write is paid up, in full, by the first premium for as long as you or your heirs own the property.
  17. There may be a defect in the recording of a document upon which your title is dependent.
  18. Claims constantly arise due to marital status and validity of divorces. Only title insurance protects against claims made by non-existent or divorced “wives” or “husbands.”
  19. Many lawyers, in giving an opinion on a title, protect their clients as well as themselves, by procuring title insurance.
  20. Over the last 24 years, claims have risen dramatically.

Rely On Ticor Title To Protect Your Investment

20 Reasons for Title Insurance

Click the image above to download a printable version of this article.

Every owner, purchaser and beneficiary, whether by a deed or contract, should have an insured title. The entire investment depends upon the quality of title. If you are buying real estate mortgages, you are paying for a good title and you should see that you have one. If either fire insurance or title insurance is omitted, your security is not complete.

When you purchase real property, rely on Ticor Title to protect your interests. You’ll be insured by a company backed by a long history of successful title operations.

Our title policy protects you against unforeseen defects in title.   And whether this is your first or fiftieth real estate investment, ask your real estate agent or broker to specify Ticor Title during your transaction.  Thank you!

What other reasons for title insurance can you think of?  Please share below!

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Fake Short Pay Letters? True Story…

On November 1, 2011   /   Blog, Escrow  

Short sale fraud

Leading the way.

The FNF Family of Companies is the leader in the industry. Being the leader is not always easy. Many times we are the first ones who uncover the latest schemes and, as a result, issue a new policy and procedure. It is our settlement agents who are on the front lines implementing the new policy and often hear, “No other company makes us do this!”

This story illustrates just how important it is for us to follow the Company policies and procedures even if no one else requires them.

Joy Turner, senior escrow officer for one of our sister branches, opened a sale transaction. The seller was in the process of negotiating a short sale with his lender, Bank of America, through the services of a third-party short sale negotiation company. There were no real estate agents involved. The buyer was purchasing the property using a private lender and the sales price was $200,000, pending approval from the existing lender.

On June 10, 2011, Bank of America issued their short pay letter approving the sale for $200,000. Per the letter, the closing was to take place no later than June 27, 2011. As the 27th approached, it was clear the buyer and seller were not going to meet this deadline. It did appear the transaction was going to close, but they just needed an extension of a few days. Joy told the seller she would need a revised letter extending the closing deadline.

The new lender’s funds came in on June 28, 2011 and so did the extension letter from Bank of America. The new deadline for closing on the short pay letter was July 1, 2011. On the morning of June 29, 2011 Joy worked to get everything together for recordation and disbursement. Per Company policy, Joy knew she needed to contact the loss mitigator at Bank of America to confirm the terms and amount shown on the short pay letter.

Something’s Fishy
Something about the extension letter and HUD-1 approval Joy received from Bank of America didn’t look right. First, the communication did not come through www.equator.com. This was unusual since approval letters were delivered using this online system for every Bank of America short sale Joy had closed recently. Joy picked up the phone and called the person named on the HUD-1 approval. His name was Vitto Pastor. Joy found it odd his title shown on the approval letter said Senior Operations Analyst, Business Operations, since it is usually a loss mitigator who issues short pay approvals. She left him a message.

“…according to their records, the seller had never applied for a short sale”

Shortly thereafter Joy received a returned phone call but it wasn’t from Pastor. It was Kenneth Teele, senior investigator at Bank of America. Kenneth advised her Pastor did work for Bank of America – but not in their Loss Mitigation Department and Pastor did not issue the HUD-1 approval letter. Kenneth went on to explain the HUD-1 approval and short pay letter she received were fraudulent and, according to their records, the seller had never applied for a short sale. He also revealed the outstanding loan balance for this loan exceeded one million dollars.

Joy left a message for the seller to call her, stating there was a problem with the short pay approval. Instead of returning her call, the seller e-mailed Joy asking her to send him copies of everything he signed, including the short pay letter. Joy again asked him to call her, but he responded by saying he was in a meeting and would call later. He never did.

The Buyer’s Perspective…
The buyer called to find out if his file had closed. Joy was in another closing so she asked one of her colleagues to tell him we would not be closing as the short pay letters were invalid. The buyer’s only response was, “Oh really?” Joy also attempted to contact the third-party negotiation company who never answered the phone or responded to her calls or e-mails.

The buyer’s lender contacted Joy on July 1, 2011, asking her to return the loan funds to them. Joy verified with her Operational Accounting Department the funds were being sent back to the same account they came from and reported the incident to her manager, Lisa.

Lisa shared the details with all the escrow officers in her operation and notified National Escrow Administration. Turns out, this was the 15th time our Company had been the target of this scheme. The bad news is, 14 of these closed and our claims department is currently working on them. The good news is Joy Turner prevented us from falling prey a 15th time.

Moral Of The Story
Joy’s transaction involved a $200,000 short sale on a loan with a balance of more than one million dollars. Had Joy accepted the short pay letter and closed, Bank of America would have rejected the nearly $200,000 short pay. The Company would have had to either unwind the deal or face a potential loss of more than $800,000 to obtain a lien release, and deliver both free and clear title to the insured buyer, and a first lien position to their new lender.

Following Company policy can seem cumbersome, but this story proves it is well worth the extra effort.

Questions or comments? Please share below!

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