December, 2011 - MyTicor

5 Title Insurance Questions to Consider when Purchasing a Home

On December 26, 2011 / Blog, Title Insurance

For most people, purchasing or refinancing a home happens only a few times in a lifetime. And thus the topic of title insurance is only top of mind for a fleeting moment once every few years. So if you’re in the process of selling or buying real estate, here are a few refresher questions you may want to consider with regards to the topic of Title Insurance.

1. Are title insurance rates regulated in Washington state?

Yes. All title insurance rates and policy forms are filed with the Office of the Insurance Commissioner. If the Commissioner finds that a title insurance rate is excessive, inadequate, or unfairly discriminatory, he can order the modification of the rate on a prospective basis.

2. What type of coverage will I need?

To help real estate Buyers and Sellers make an informed decision as to the level of coverage to choose, we have created a side-by-side comparison chart that compares the risks covered by the ALTA Homeowner’s, Standard, and Extended Policies that we offer at Ticor Title. Download & view the chart by clicking the link below:
Residential Title Insurance Policy Types

3. Who Pays for the title insurance premium in Washington State?

In Washington State, the Seller customarily pays for the Buyer’s owner policy and the Buyer pays their lender policy.

4. Who determines which title company will provide the coverage?

Ticor’s Current Ratings:

Financial Strength/ Claims Paying Ability Ratings
Standard & Poor’s – A
Moody’s Investors Service – A3
Fitch Ratings – A-
A.M. Best Co. – A-

Lace Title Rating Corporation (Claims Paying Ability Rating)
Ticor Title Insurance Company – ADemotech, Inc. (Financial Stability Rating)
Ticor Title Insurance Company – A’

Typically the title insurer is already chosen by the Seller in order to examine title and flush out potential title issues on the property before an offer is made on the property. The Buyer may decline to use the title company previously specified by the Seller and use a title company of their choosing. However, if the Seller previously received a preliminary title that Buyer declines to use, the Buyer shall pay any cancellation fees owing to the original title insurance company.

5. Should I be concerned about the claims paying ability of my title insurance provider?

A title insurance provider’s claims paying ability is determined by the amount of reserves held to pay claims. Due to the state of the real estate market over the last 4 years, a title insurer’s claims paying ability has become more critical as the number of claims filed have sharply increased.

Do you have comments or thoughts regarding any of these questions?

Please share below!

Betrayed with an Uninsured Deed…

On December 20, 2011 / Blog, Escrow, Title Insurance

An escrow officer in one of our sister operations opened a purchase transaction for $347,000. She ordered the title report and the order was assigned to Casandra, a commercial title officer. Casandra issued the report reflecting two owners of record: Maysa Alhelow, a single woman and Thomas Paul Helo, a married man as his sole and separate property.

The escrow officer processed the order and once she received all signed documents and monies, shipped the documents for recording. It is normal and customary in California, where the property is located, to record prior to disbursing the escrowed funds. The escrow officer was waiting for recording confirmation.

Uninsured Deeds

Uninsured deeds in the chain of title always pose a whole new level of risk for a title insurance company. Title officers are taught to scrutinize those types of deeds for obvious signs of forgery or other misconduct on the part of the grantors and grantees. The title officer in this particular order did just that and ultimately halted a transaction that would have inevitably caused a title claim.

When the recording package arrived Casandra noticed only Alhelow signed the deed to the new buyer, and not the co–owner Thomas Paul Helo. Casandra called the escrow officer and asked why there was no deed from Thomas. The escrow officer explained that she was told the owners had recently recorded a deed, wherein Thomas conveyed his interest in the property to Alhelow.

Casandra located the recorded deed from Thomas to Alhelow.
She inspected the deed and noticed the following:

Deed was uninsured
Deed was not notarized by a Company–approved notary
The signature of Thomas Paul Helo appeared to be VERY different than his signature on other recorded documents

A New Deed was Needed

As a result, Casandra called the escrow officer and insisted Thomas sign a new deed in the presence of an employee or Company–approved notary. The escrow officer called the number she had for Thomas, but Alhelow answered the phone. The escrow officer explained the need for a new deed from Thomas. Alhelow responded Thomas could not possibly come into the office to sign the new deed as he was in Los Angeles and would not be returning anytime soon. The escrow officer informed her it was not a problem as Thomas could sign at one of our Los Angeles offices. Alhelow said she would contact Thomas.

In the meantime, the escrow officer did some research, found a Los Angeles number for Thomas and contacted him directly. When she explained the need for him to sign a new deed, Thomas confirmed he did not sign the first deed conveying his interest to Alhelow, and he had no knowledge the property was even being sold!

“…and he had no knowledge the property was even being sold!”

The escrow officer asked Thomas if he was even interested in selling the property and he stated, “No.” The escrow officer immediately resigned from the transaction, knowing full–well Thomas was not going to agree to the sale.

A Forgery Indeed

It was later discovered that Thomas’ brother, Kahir Tim Helo, had actually forged Thomas’ signature on the deed. And the escrow officer and Casandra discovered Kahir is Alhelow’s boyfriend! Ruth C. Escobar, who notarized the forged deed, works for a tax preparation office in Bakersfield. It is unclear as to what identification Kahir provided the notary.

Casandra’s keen observation of the uninsured deed disclosed a forgery and prevented a future claim from the real Thomas Paul Helo.

Our Title Insurance Policies Insure Against Forgery

Thomas’ brother and his brother’s girlfriend were attempting to sell the property without Thomas knowing, so they would not have to split the proceeds with him. Our title insurance policies insure 100% against forgery. Had Our Company closed and insured the transaction, and later Thomas Paul Helo made a claim to his interest in the property, we would have had to defend our policy holder – the buyer. As the insurer, we would have had to settle with Thomas in order to obtain a valid deed and cure the title defect for the new owner of the property.

Thoughts or questions? Please share below!

Zoning questions? Here’s how we can help…

On December 12, 2011 / Blog, Property Info - Customer Service

Is my property subdividable?
Can I start a home-based business here?
Are there height restrictions?

Buyers or sellers may ask questions like the ones above. The answers may often be found deep in the zoning code for a particular neighborhood or parcel.

Verify zoning jurisdiction

When questions about land use or zoning come in to our Ticor Title Customer Service team, the first thing we’ll do is verify which jurisdiction the property is in. This is important because zoning can be under the jurisdiction of a city or the entire county. There’s no point in calling Pierce County Planning and Land Services if the property is inside the city limits of Tacoma and vice versa.

To make matters more complicated, the same zoning code designation could be used by more than one city, and it could mean different things in different jurisdictions. (For example, R-4 in the city of Bellevue has a minimum lot width of 65’ while in Covington the minimum lot width is 30’. Setbacks, minimum dimensions, and height restrictions may be very different from city to city, even if they use some of the same codes.)

Your Ticor Title customer service team can help connect you with the right department where an engineer or technician will be able to answer your client’s questions with authority!

Connect with the right department

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

It’s important to get the facts. Your client may be basing important decisions on the answers to their questions. Zoning and related issues are subject to changes due to annexations and/or changing regulations. You or your client will want the most current and direct information possible. Your Ticor Title customer service team can help connect you with the right department where an engineer or technician will be able to answer your client’s questions with authority!

In some cases, the zoning classification may not be exactly what you or your client was hoping for. Fear not. There may be options. Check with the jurisdiction to see if they might allow a variance for a specific parcel. If all the neighbors in an area agree, it may also be possible to request a rezone that would affect a whole block or neighborhood. (Link to Map 1) In cases where the surrounding zoning is all like-kind, it may be harder to get a variance or rezone than if the neighborhood is a patchwork of different zoning codes.

King, Pierce, and Snohomish zoning resources

Consider CC&R’s

In addition to zoning regulations, another possible factor to consider may be CC&Rs. A change that fits within the current zoning code regulations may be prohibited by a property’s CC&Rs. For example, a property that is zoned SF 5000 in the City of Seattle may have maximum height of 30’ in the zoning code but the same property may also have a recorded view easement or plat covenants that limit homes on the lot to a single story. When the various regulations conflict, the rule of thumb would be to abide by the most restrictive among them.

To see the unincorporated county zoning on a map, check out these great sites:

Often cities will provide mapped zoning information as well, often in a PDF format. Here are a few examples:

Often cities will provide mapped zoning information as well, often in a PDF format. Here is a link to a great site with links to city web sites and municipal codes: http://www.mrsc.org/codes.aspx

Be thorough in your research

As with many property issues, there’s more to than story than meets the eye. The information provided by your title company is usually just the tip of the iceberg. Buyers and sellers should always perform thorough research before making any big plans or decisions. In fact, it might be a good idea to consult with a land use attorney.

Do you have thoughts or questions? Please share by commenting below!

The Probate Path – Single at Death

On December 6, 2011 / Blog, Title Insurance

Recent blogs have discussed probate issues, or problems associated with a “lack of probate.” If a home is to be sold but the record owner is deceased it is imperative to identify who now owns the property. The transaction can then close if the proper parties execute a deed to the buyer.

We are not talking here about joint tenancy or trust property, but rather where title was vested simply in an individual.

There are three basic situations when the owner has died:

Click the image above to view a printable version of the chart.

First, the owner was single – not married or a domestic partner.
Second, the owner was married or a domestic partner, but it was separate property (not community property).
Third, the owner was married or a domestic partner and it was community property.

Of course, each of these has additional variations, mostly relating to whether the deceased had a will, and whether or not the estate (with or without a will) is being probated. If there is a probated will, devisees (those named in a will) will get the property or the proceeds from the sale if it’s sold before the probate is closed. If there is no will, then state law provides who inherits. It can get complicated to work it all out.

It may be helpful in such cases to see a chart following the path to a successful closing. In this and future blogs we will show basic diagrams applicable to each situation. This month we start a fairly simple one – a deceased owner who was single at the time of death.

Deceased Owner – Single at Death

Sam Smith, a widower, just died. The home is listed by Rolf, who tells the Realtor® that he is Sam’s nephew and only heir. The title company gets the order and finds the death certificate, but doesn’t find a probate case. Having no other information at this time, the title company vests title in “the heirs and/or devisees” of Sam, and asks Rolf for a “lack of probate” affidavit. This affidavit is designed to identify relevant facts to allow the title company to assess its risk, including whether or not there is a will or a probate (which could be any county in Washington or in another state), the size of the estate (to determine if estate taxes apply) and other valuable information. The goal is to find out who can actually convey the land (and for escrow, who will get the proceeds of the sale), so that the risk is at least minimized, if not eliminated, that an unknown heir will come forward after the title has been insured.

No Heirs?

At some point, if there are no heirs at all, the home would eventually escheat to the State of Washington. In such cases, a probate may be opened, but here there are no easy answers. Usually creditors will open a probate and attempt to sell the property, with excess proceeds going to the state after the sale of the home.

Rolf completes the affidavit, and says that Sam never had children, and that his parents are also deceased. Sam did have a sister, but she is also died. She did, however, have an only son – Rolf who in turn is Sam’s nephew.

The laws of descent (RCW 11.04.015) provide that inheritance would be in the following order:

Spouse, if any, or if none, then
Children if any, or if none, then
Parents, if alive, or if not, then
Siblings, and if none survive him, then
Grandparents, or if none, then
Children or grandchildren of the grandparents and on down the line.

So, it would appear that the nephew is the sole inheritor and can sell the house. Now, it’s only the word of the nephew on the affidavit, but it is sworn under oath. It’s a judgment call on the part of the title company to decide the veracity of the nephew – is there a hidden will? Other heirs he’s just not mentioning? It is a risk, but the sworn affidavit is something for the title company to go on.

The chart below gives a simple guide to follow with these facts. There are four “paths” to follow. The first doesn’t apply, because although there is no will, neither is there a probate. The second doesn’t apply since there is neither a will nor a probate. The third doesn’t apply, because there is no will. So, we are left with the fourth path – no will and no probate. It requires the lack of probate affidavit, and a deed only from Rolf (as the sole surviving heir of Sam Smith, deceased), the child of a sibling, because Sam left no living kids, grandkids, parents, brothers or sisters.