MASettlement Blog

Listing and Seller Contract Checklist

noreply@blogger.com (Derek Massey / MASettlement) — Thu, 10 Feb 2011 12:00:00 +0000

So, you're taking a listing or preparing your sellers for signing a contract. Although you could be months away from settlement, here are some items you can address right away to help ensure a smooth transaction.

o Pull and examine the seller's deed. Make sure the name matches what you're putting on your listing agreement. Has there been death or divorce since the sellers took title?

o Is the property leasehold or fee simple?

o If leasehold, ground rent amount, ground rent owner and contact information, when was ground rent last paid?

o Does the owner have an Owner’s Title Insurance Policy? Ask this question and get a copy of the policy, or at least a copy of their settlement statement from when they bought the property. This can help later with any title issues or to give the buyers a break on title insurance costs.

o How many loans is the seller paying, and what type of loans are they (FHA, VA, conventional, HELOC, etc.)?

o Obtain at least the last 4 digits of the seller(s) social security numbers. This is often required to order a payoff.

o If the sellers have an FHA loan, try to avoid closing the last two days of the month. If the loan isn't paid off by the last day of the month, the seller will owe an additional month's interest.

o Will all parties attend settlement? If not, will a power of attorney be used? Will we be sending docs to the seller? Note that we always prefer the sellers to be in attendance at settlement.

o Is the seller a resident in the state where the property sits? In Maryland, there is a nonresident witholding tax.

o Instruct seller not to pack documentation. There may be some important documents in their possession which help us clear some issues.

Being proactive and obtaining as much information in advance can help avoid some of these common closing delays. As always, feel free to reach out to one of our professional settlement officers, or email us at info[at]MASettlement[dot]com!

Fraud in Title: An Example

noreply@blogger.com (Derek Massey / MASettlement) — Wed, 09 Feb 2011 12:00:00 +0000

Ever wonder what fraud looks like in a title search?

This is *not* a release

The document above looks like a release of a deed of trust. The recorder indexed it like a release of a deed of trust. The title searcher regarded it as a release of deed of trust, and showed the lien as satisfied.

Fortunately, the title examiner carefully reviewed the document, and noted that the language was neither consistent with a typical release, nor was it executed by the lender or trustee. After questioning the owner, it was discovered that the reconveyance was indeed a fraud.

While the value of title insurance is often measured in claims paid, the above represents a "shadow benefit" that the claims numbers do not reflect: a claim avoided.

Facebook for Real Estate? Check out Roost Social Media Toolkit

noreply@blogger.com (Derek Massey / MASettlement) — Tue, 08 Feb 2011 12:00:00 +0000

Looking for new ways to connect with folks in your community? You've probably heard of this thing called Facebook. They even made a movie about it.

But did you know there is a firm in the real estate space that offers not only free webinars but also a free "social media toolkit" for your use?

If you're interested in using Facebook for your real estate business, check out all that Roost has to offer. Starting today and running through the month of February, Roost is offering 20 FREE webinars, conducted by those who really know real estate. For a list of webinar offerings, click here. You'll notice they're very targeted in terms of topic and audience, so regardless of your breadth or depth of Facebook knowledge, you'll likely find something that interests you. And did I mention they're FREE?

Note: We are not affiliated with Roost, nor do we get paid for promoting them. We just like what they do.

Common title issues that delay settlement

noreply@blogger.com (Derek Massey / MASettlement) — Mon, 07 Feb 2011 12:00:00 +0000

As we all know, settlements do not always happen on time. The delay can be for a variety of reasons and with varying degrees of severity. In this post, we'll explore common title issues that may delay settlement - matters that are revealed by a title search or survey that must be addressed before title insurance can be issued. In no particular order:

Unreleased liens: Whether against the prior or current owner, it's not uncommon for the record to reveal a deed of trust which was actually paid off but show as unreleased at the courthouse. Before we can settle, we need to know that all liens we're not paying off are released of record.

Lack of clarity of ownership: Here is a simple formula: [Sellers on Contract = Record Owners = Grantor on new deed]. This means we can't have individuals signing the contract when the property is in a trust. Nor can only one spouse sign a deed when both are currently in title.

Improper legal description: Some deeds have wrong lot or unit descriptions, or just do not reflect the property being conveyed. Sellers can only convey what they have and what the contract states will convey.

Missing heirs / estate issues: Every state's probate laws are a little different, but generally speaking upon death a person's property passes to her heirs per a duly executed will, or in the absence of one through operation of law (intestacy). If an heir cannot be found or does not consent to the sale, there can be problems.

Unrecorded documents: Put plainly, there may be documents missing of record which complete a chain of title (such as a deed) which can delay settlement.

Survey issues: As we discussed here, there are different types of surveys performed in conjunction with many resale transactions. Sometimes, the survey reveals issues, the most common of which are buildings which sit outside of boundary lines or setbacks.

Easements: Typical utility easements are often acceptable for a new buyer and her lender, but sometimes an easement can interfere with the use of a property (think of a powerline easement crossing where the buyers want to add a garage).

Improper execution of documents: Documents need to be property signed, dated and acknowledged before recording. Sometimes they're not. If a title search reveals these errors, we need to address them before settling.

These things happen. How can you mitigate the risk of this affecting your settlement date? Make sure your title company is ordering the title search as soon as you give them the contract!

Photo by Ambro

Federal Estate Taxes: The "Secret Lien"

noreply@blogger.com (Derek Massey / MASettlement) — Fri, 04 Feb 2011 12:00:00 +0000

Here is another guest post from Maryland attorney Elisa Kerr, a member of our Title Review team...

***

By law enacted by President Obama on December 17, 2010, Congress extended and amended some of the tax laws that would have expired December 31, 2010, through December 31, 2012. When you have a property listed or under contract that involves an estate or assets in probate, you should understand that the possibility exists that the property is subject to federal “estate” taxes.

The federal estate tax is a “secret lien” in favor of the IRS, on all real and personal property of the decedent, and it is not necessary for the IRS to take any specific action or to record any document to give notice of or to enforce that lien. The lien will attach to real property as of the date of the decedent’s death, and will normally last for ten years from that date. However, federal estate taxes are generally not due and will not become a lien on real property if the value of the decedent’s gross estate does not exceed a specified amount. That amount may vary from year to year.

For estates of decedents who died in the year stated in the chart below, no estate tax would be due (and thus no “secret lien” would arise) if the gross value of the estate did not exceed the stated exemption:

In order to close or settle on a property that may be subject to federal estate taxes, one of several things must occur:

1. The estate must have filed its federal estate tax return and paid all federal estate taxes due; or

2. The estate must have obtained a Certificate of Discharge of Property Subject to Estate Tax Lien from the IRS. The process of obtaining this Certificate can be lengthy and time-consuming, and must be done by the Estate’s attorney, accountant, or Personal Representative; or

3. In the absence of 1 or 2 above, a title company or attorney or their underwriter may be willing to escrow all the net proceeds from a sale pending their receipt.

We always recommend you seek out the advice of an independent legal or tax professional with any questions specific to your situation, but hopefully this post arms you with the basic information so you know what questions to ask.

Source: the “Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010” (H.R. 4853).

***

Have a specific question you want to run by us? Shoot us an email at info[at]MASettlement[dot]com!

The Life of a Settlement File

noreply@blogger.com (Derek Massey / MASettlement) — Thu, 03 Feb 2011 12:00:00 +0000

Earlier this week, we shared with you who does what at a title company. Loyal reader Ken Montville commented that it may also be helpful to provide a timeline of what happens from the day we receive the contract straight through to settlement and document recording. We liked that idea, so here goes...

Order Entry: This happens immediately upon receipt of the contract. The case-specific data (party names, property address, sales price, etc.) is entered into the title software, and letters are emailed out to agents, buyers and sellers introducing ourselves and soliciting some important transaction-related information.

Title Search and Examination: Immediately upon receipt of the contract, a title search is ordered from a title abstractor. Within 5-10 days (on average - that number can change depending on the complexity of the search), a search is performed and reviewed by one of our title examiners. Issues are communicated, and where possible cured. A title commitment is sent to the lender. If major issues are found, they are communicated to all parties (buyers, sellers, real estate agents and the lender).

Taxes and Payoffs: Tax, water, and sewer departments are called and current figures are added to a preliminary HUD-1 Settlement Statement (HUD-1) . Payoff figures for any seller mortgages or liens are requested, received, and entered on HUD-1. Taxes can typically be ordered right away, but for payoffs we want to wait until the closing is scheduled. Why? Because payoffs expire - they're only good through a certain date.

HUD-1 Completion: This occurs as early as a week before settlement, but more likely the day before. Once the lender’s figures are received, they are entered on the HUD-1, which is finalized and sent to the lender for approval. Once approved, it’s on to settlement.

Settlement: The big event! An attorney or licensed settlement agent conducts the closing, facilitating the execution of all documents.

Recording and Post-closing: Several documents (typically the deed and mortgage/deed of trust) go to the county for recording. The remainder of the documents are bundled and sent to the lender. Finally, the file is disbursed and all funds that have come in are disbursed out in accordance with the HUD-1.

The entire process from contract to closing typically happens in 30-45 days. Naturally, any number of factors can affect that timeframe. We've closed some cash transactions in 2 business days, and we still have some REO files that were opened in 2009. The key - as always - is to get complete what is in our control in a timely fashion, and communicate with the parties early and often!

Flickr photo by net_efekt, as modified by me.

Online research for the Maryland real estate professional

noreply@blogger.com (Derek Massey / MASettlement) — Wed, 02 Feb 2011 12:00:00 +0000

The following is a guest post from our Title Searcher / Educational Coordinator Michelle Fine.

***

There was a time in the not too distant past when obtaining any information regarding a property required going to the Land Records Department at the Circuit Courthouse and doing research. This often entailed looking through books and pulling oversized plats out of cabinets.

Today in Maryland (and several other states), we have a much more modern option. Most documents regarding real estate properties are now available online, and in just a few moments and with a few clicks, you can do what formerly took hours.

Your first stop when trying to glean information about a property is State Department of Assessments and Taxation (SDAT): On this site, you can look up your property by address, or Tax ID #. It’s simple to use, and requires no use of a password or user name. Here you can locate:

1. the property;
2. who owns it;
3. whether it's owner occupied;
4. the seller's mailing address;
5. the dimensions of both the land and the dwelling ;
6. whether it appears on a plat (and if so, a plat reference);
7. approximate age of the dwelling;
8. assessed value and how that assessment is being phased in; and
9. a history of recent transactions.

Your second stop is Maryland Land Records. This site does require a user name and password to access, but you can easily request one and usually receive confirmation within an hour. With the Liber and Folio that you have gleaned from SDAT you can look up the current title Deed, and with the seller's names, you can research Deeds of Trust, Mortgages, and other liens that have occurred while they have been in title. This is an invaluable tool both for listing and selling agents to make sure that they are aware of precisely who is in title, the description of the property including whether it is Leasehold or Fee Simple and whether it is on a plat or has a metes and bounds description, and an idea of what is owed on the property, including any Condominium or HOA liens.

Your third stop (assuming that the deed reflects that the property is located on a subdivision plat) is the Maryland Plat site. The site requires a usernameand password, but contact us if you need one and we can help you out. Here you can locate your particular lot and see its shape and relation to the community as a whole. The plat customarily provides any building restriction lines, and some easements that impact the property.

There are also a few other sites that we as title professionals use to fully research a property and the parties.

Maryland Judiciary website: Search for docket entries in most state Circuit and District Courts for liens and judgments filed against the parties.

Maryland State Department Database – Corporations and other entities: This is used to check to make sure that an entity selling or buying a property exists to do business in the State of Maryland, and that they are in good standing.

Pacer access to MD Bankruptcy Courts: (this site does require a fee for use): This site is used to check for bankruptcies against the parties involved in the transaction.

***

Too much information? Send us an email at info[at]MASettlement[dot]com and we'll do the research for you!

We're moving!

noreply@blogger.com (Derek Massey / MASettlement) — Tue, 01 Feb 2011 12:00:00 +0000

Mid-Atlantic Settlement Services, currently located at 11350 McCormick Road, Executive Plaza III, Suite 200, Hunt Valley, MD, is relocating its corporate headquarters to:

10 North Park Drive
Suite 100
Hunt Valley, MD 21030

This move is effective Saturday, February 19th, 2011. We look forward to doing business with you at our new and improved home office location, which is approximately one mile away from the old spot. Our email, phone and fax numbers will remain the same. Directions from our old location to new location are copied below for your convenience, or you can click here.

Kindly update your records accordingly. Please do not hesitate to contact us with questions at info[at]MASettlement[dot]com.

Team Title: Who does what?

noreply@blogger.com (Derek Massey / MASettlement) — Mon, 31 Jan 2011 12:00:00 +0000

Ever wonder what your friendly title people do? Here's a breakdown of the four primary positions in a title company, and what each does.

Settlement Officer: Also called a Closer, Settlement Attorney, or Title Service Representative (TSR), the Settlement Officer conducts the settlement. She presents the documents to the buyers and sellers, and witnesses the execution of them. She is often the face of the title company for the real estate agents.

Processor: We call them Settlement Coordinators, and this team is the heart and soul of what we do. The Processor is the artist whose masterpiece is a final HUD-1 settlement statement. He compiles taxes, payoffs, HOA fees and other figures required for settlement, and presents a HUD-1 to the lender for final approval. The Processor and Settlement Officer work as a team to get the closing from contract to settlement.

Post-closer: Post-closing is an important function that has two primary purposes: (1) prepare the documents for recording, and (2) send the lender their documents. In a company like ours that handles closings in three different jurisdictions and with hundreds of different lenders, this is an extremely important task.

Title Reviewer: Often (but not always) an attorney, the Title Reviewer carefully reviews the chain of title for the property in question, and determines insurability. If there were never issues, their jobs might be easy. But alas, issues abound. Whether it's an unreleased deed of trust, a problematic easement or a survey issue, the title reviewer not only identifies problem files, but also helps to cure them.

We are always looking for the best people to build our teams. While we don't always have immediate openings, we never know when we may need to add a position or two. If you want to work with the best title team around, send us a resume at careers[at]MASettlement[dot]com today!

Image by renjith krishnan

Rick DeLuca's "Avoid the 20 Biggest Agent Mistakes"

noreply@blogger.com (Derek Massey / MASettlement) — Fri, 28 Jan 2011 12:00:00 +0000

National speaker Rick DeLuca spoke to a group of about 100 real estate yesterday in Ocean Pines, MD. The subject was "Avoid the 20 Biggest Agent Mistakes." Thought-provoking yet simple in nature, Rick's 3-hour talk gave each agent a handful of takeaways to produce more business in 2011. Rather than list the 20 mistakes (Rick would probably prefer that he do that), here is the CliffsNotes version:

Accountability/Partnership: Treat your real estate practice like a business. Set hours, deadlines, etc., and partner with someone on goals. Some agents come and go as they please with no one to report to. Change that. Go outside of real estate to find people to partner with. Great quote: "a hot market creates horrible work habits." Be disciplined about what you're doing every day.

Be "student of the industry." Know your market like the back of your hand. Know the actual numbers! You'll have much more credibility when you can recite the average sales price is, days on market, etc. for your town, neighborhood or project.

Don't have unrealistic expectations. Do fewer things, but do those things well and consistently. Right now agents do lots and lots of different things. Narrow that down and nail a few things.

Understand your contacts are not all created equal. You have some that bear more fruit than others - treat them specially. Rick copied his father's "shoe box" approach. Go through your old contacts - those who have given you business - and call them. Regularly. Who is your target? Is it the entire community? It shouldn't be. Target less. Aim for the "bulls eye" people, not the whole target. A waitress at Denny's referred 4-5 deals per year to Rick, including a$7.2M commercial deal. "Bulls eye" people are very special. Rick only had 17 of them.

Write handwritten notes!

Listen to your clients. "Don't be the answer to a person's prayers until you know what they're praying for!" While being interviewed for a listing, ask, "What are the 3 or 4 most important things you want from your listing agent?" Don't just give them what you think they want to know.

Understand social networking and technology are not fads. If you make a conscious decision not to do it, know you're going to miss on a certain segment. There does, however, need to be a balance. There are many new sites and programs out there to make your life easier. Even if you're not going to use them, maybe the folks in your database would be interested? Send an email with links to them.

Interested in more? Check out www.RickDeLuca.com.

Happy Valentines Day! You may now file your taxes.

noreply@blogger.com (Derek Massey / MASettlement) — Thu, 27 Jan 2011 12:00:00 +0000

Historically, homeowners seeking to take advantage of the mortgage interest deduction could file their taxes immediately to get that refund.

Not this year.

Citing tax law changes enacted in December (and a corresponding need to update their computer system), the IRS will not begin accepting returns from taxpayers claiming the mortgage interest deduction or other Schedule A itemized deductions until Feb. 14.

For those of you who send HUD-1 settlement statements to your buyers, you may want to share this information with them.

Sources: NASDAQ.com, REALTORMarney.com and TheMortgageReports.com

Blogs We Like

noreply@blogger.com (Derek Massey / MASettlement) — Wed, 26 Jan 2011 12:00:00 +0000

To write stuff, you need to read stuff (unless you're Snooki). Our goal is always to provide you with real estate information you can use in your business today, whether it's so you can provide your clients with the latest in title-impacting legislative changes, or new technology to get you in front of new clients. To bring you the best, we read the best. Here is but a sample of what we read:

1000 Watt Consulting Blog: Real estate marketing company 1000 Watt Consulting writes about the latest trends and products in real estate today.

Chris Brogan: While not real estate specific, Chris blogs daily about marketing, technology and progressive business practices.

DSNews.com: The leading source of breaking news and up-to-date information for the mortgage default servicing industry.

The Mortgage Reports: Loan officer extraordinaire Dan Green blogs daily about the latest in mortgage rates, programs and real estate trends.

naked capitalism: A compilation of articles and links about the mortgage industry.

The Notorious R.O.B. and 7DS Perspectives Blog: Real estate consultant Rob Hahn writes long, thought-provoking (and often controversial) posts on all things real estate.

The Phoenix Real Estate Guy: If you're going to read one "broker blog," read Jay Thompson's witty, informational and from-the-gut take on real estate.

Seth Godin's Blog: Best-selling author Godin writes daily quips on business, marketing and new media.

Speaking of Real Estate: Brought to you by the editors of REALTOR® magazine, this blog includes real estate stories as they’re developing and gives the reader the opportunity to provide input.

What about you? What do you read? We'd love to add to our library.

Is my First-Time Homebuyer Credit subject to repayment?

noreply@blogger.com (Derek Massey / MASettlement) — Tue, 25 Jan 2011 12:00:00 +0000

Question: Frank Firsttimer purchased a home in March, 2009 and benefited from the $8000 tax credit. He just now received a letter from IRS stating that if he rents or sells the house within three (3) years of the purchase date, he has to return entire $8000. Is this true?

Answer: Yes. From IRS.gov:

The credit must be repaid if, within three years of purchase, the home ceases to be the taxpayer’s main home. For example, a taxpayer who claims the credit based on a qualifying purchase on Sept. 1, 2009, must repay the full credit if he or she sells the home or converts it to business or rental use at any time before Sept. 1, 2012.

This is but one simple, straightforward scenario. What if the buyer bought in 2008 or 2009? There are a number of "if/then" different scenarios depending on when the person bought the property and what they're trying to do with it. Thankfully, the IRS has helped answer some of these questions with a couple of handy articles found here and here.

We always recommend you seek out the advice of a tax professional with any questions specific to your situation, but hopefully this post arms you with the basic information so you know what questions to ask.

Source: www.IRS.gov

Case Review: Maryland Appeals Court Upholds MERS-related Foreclosure

noreply@blogger.com (Derek Massey / MASettlement) — Mon, 24 Jan 2011 12:00:00 +0000

This is a guest post from Elisa Kerr, one of the six attorneys we have on staff here at Mid-Atlantic Settlement Services. In light of some recent successful challenges to foreclosures in other states, it's important to obtain an understanding of how Maryland courts will respond to the various foreclosure issues that are surfacing today, such as MERS, imperfect assigning documentation, and the inability of a foreclosing entity to provide an original note. This case should give us our first glance at how a Maryland appeals court sees things:

***

In a recent decision rendered by the Maryland Court of Special Appeals (Anderson v. Burson, et al., No. 00434, Sept. Term, 2009, full case here), the Court upheld the rights of the foreclosing bank to foreclose on a property in Howard County, Maryland, finding that the Bank was a proper successor to the holder of the mortgage note and had the same rights as the original holder to enforce collection. The borrowers under the mortgage being foreclosed had challenged the foreclosure, claiming that the Bank did not have the right to foreclosure because it was not the current holder of the note. They were able to stall the foreclosure first by filing for bankruptcy protection, and then later by filing a request with the Circuit Court for a temporary restraining order to stop the foreclosure auction. The motions that were filed may have delayed the foreclosure but ultimately did not prevent the foreclosure from occurring.

What does this mean?

This case is noteworthy because it is one of the first cases to be decided since Maryland foreclosure proceedings have been put under microscopic scrutiny by our courts. In this case, the Court had been asked to review the chain of title to the promissory note under which the foreclosure lawsuit was filed. Despite the fact that the promissory note had been transferred or “assigned” a number of times, and also that the original note had been misplaced, the Court still found that the Substitute Trustees and Bank had produced ample evidence that the Bank foreclosing was, indeed, the holder of the note and had the right to foreclose.

Why is this important?

It is an indication that the Court was not interested in upsetting the status quo – that is to say, that the way in which assignments of mortgages and deeds of trust have been handled in Maryland in the past remains acceptable to the Court. Further, it is an indication that the Court has no plans to “upset the apple cart” by imposing additional recording requirements on banks that might slow or stop the sale of properties that are or have been recently in foreclosure. We have seen hiccups on foreclosure sales in other states so this decision is refreshing in that the courts are presenting a favorable opinion on how foreclosures are and have been completed in MD.

***

To read the case in its entirety, click here. We'll continue to keep you apprised of what's new with respect to foreclosures in this region.

My buyer wants to offer on a short sale. Now what?

noreply@blogger.com (Derek Massey / MASettlement) — Fri, 14 Jan 2011 20:34:00 +0000

Our attorneys and settlement officers have been busy providing training to agents on the nuances of short sales, and we recently launched our Short Trac Short Sale Coordination Program. We've closed hundreds of short sales over the past two years, so we have more than a cursory understanding of them and the lenders who approve them.

One question that we've heard a lot recently is, "OK, I have no interest in listing a short sale, but my buyers are interested in buying one. How do I avoid the black hole of 'offer and non-response'?"

Greg Doherty, an agent in Coldwell Banker Residential Brokerage's Alexandria office, has created a very simple yet thorough questionnaire which he presents to listing agents BEFORE he'll submit an offer. With his permission, I'm reproducing the body of the letter here.

-------------------------------------------------------------------------------------

Dear [Listing Agent]:

Can you share any information about this Short Sale?

Is the property fully available?
Do you have any offers at the moment?
If so, how many?
If you do have current offers, were any of them written by you or someone on your team?
How many lenders are involved?
Who are the lenders?
Have you submitted the “Package” to the Lender(s) ?
Has the BPO been done?
Do you have a time frame from the lenders?
Are the sellers cooperating?
Do you have a clear line of communication with the lenders?
Are the lenders participating in the new government sponsored programs?
Have you been notified by the bank regarding foreclosure status?
Is there any additional info that you can share that would be helpful?

I appreciate your help. I look forward to working with you to reach a successful conclusion.

Thank you.

Regards,

Greg Doherty, Realtor®

-------------------------------------------------------------------------------------

The answers to these questions - or sometimes the lack of answers - may provide some good insight as to how this deal may go for your buyer. Wouldn't you rather know before you submit the offer, and not six months later?

BONUS TIP: Ask your title company if they'll provide a "current owner search" of the property to determine how many deeds of trust are of record and what the approximate amount of indebtedness is. This will tell you just how much of a short sale it really is!

As always, our team is here and willing to help you should you need help with a short sale!

Introducing "Short Trac" Short Sale Coordination Program

noreply@blogger.com (Derek Massey / MASettlement) — Thu, 13 Jan 2011 12:30:00 +0000

In conjunction with Title Resource Group, our parent company, we are proud to offer Short Trac Short Sale Coordination Program! What is Short Trac? The Short Trac Short Sale Coordination Program is designed to help the seller coordinate and facilitate communications between the listing agent, the lender and the title company through the short sale process. This Program is offered in an effort to assist your clients through what can be a difficult process. What are the folks at Short Trac responsible for?

The process of coordinating the short sale transaction;

Reviewing the completed short sale packet;

Delivering the seller’s authorization to the short sale lender;

Reviewing all preliminary HUD-1s before being sent to short sale lender;

Submitting the short sale packet to short sale lender (if there are multiple lenders, we will pursue the additional lenders);

Delivering a minimum of weekly file status updates to the listing agent and seller;

Forwarding all approval letters to the listing agent; and

Forwarding the approval letters to local title agency branch to complete the closing.

Please note: Short Trac will not negotiate or attempt to negotiate a reduction in the loan amount in connection with the short sale.

What's the cost?

In addition to the normal title and closing fees charged by the title company, the seller will pay Short Trac a fee of $800.00 at closing. If closing does not occur, no fee will be due.

Want to learn more?

Contact your Title Service Rep or contact Short Trac directly at:

start@shorttrac.com | (888) 485-3432 | (303) 876-1311 (fax)

IMPORTANT NOTICE: Short Trac is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit.

Maryland Nonresident Withholding Tax Drops to 6.75% for Individuals

noreply@blogger.com (Derek Massey / MASettlement) — Wed, 12 Jan 2011 21:53:00 +0000

As we discussed here, Maryland imposes upon a nonresident seller an income tax withholding at the time of settlement. For the past several years, the rate has been 7.5% of the net proceeds of the sale.

We have recently learned that Maryland has dropped that rate from 7.5% to 6.75% for individuals (including estates, revocable trusts, etc.). The business tax rate remains the same at 8.25%.

Brokers will want to update their forms, and agents will want to advise their nonresident sellers of this change.

We're Looking for a Northern Virginia Branch Manager

noreply@blogger.com (Derek Massey / MASettlement) — Fri, 07 Jan 2011 02:31:00 +0000

As many of you know, we recently opened a direct, full-service title office in Tysons Corner, VA.

Now? we're looking for someone to run it.

The newly created Northern Virginia Branch Manager will manage our operation for Northern Virginia settlements. The successful candidate will coach and mentor a team of 4-6 settlement officers (we call them Title Service Reps, or "TSRs") and 2-3 settlement coordinators (you might call them "processors"). This is a producing manager role - we expect the individual to perform settlements as needed. This is a great opportunity to meet and work with some of the best brokers and agents in the area! Lastly, this position is a part the Mid-Atlantic Settlement Services Leadership Team.

Sound good? Click here to apply through LinkedIn. You can also forward your resume careers[at]MASettlement[dot]com.

PS - Don't forget we're still looking for a Maryland Sales Manager as well. We have received some great resumes and conducted some fantastic interviews, but we've yet to make a final decision.

Wanted: A Maryland Sales Manager!

noreply@blogger.com (Derek Massey / MASettlement) — Fri, 31 Dec 2010 13:50:00 +0000

Is one of your New Year's resolutions to embark on a new career?

If you have title, mortgage, or real estate brokerage sales experience, we may have a great opportunity for you to lead the most gifted team of settlement officers and attorneys in the region. Becoming the Maryland Sales Manager gives you the following:

* The chance to lead this exceptional team of closers!

* A seat on this fantastic leadership team.

* The good fortune of working with me every day. :)

* The ability to meet and network with some of the very best real estate professionals in Maryland, including brokerage leadership, high-producing real estate agents, and seasoned loan officers.

* The security and strength of being part of something bigger, yet with local autonomy and leadership.

Sound good? Click here to apply or email recruiting[at]TRGC[dot]com. You can also reach out to me directly at Derek[dot]Massey[at]MASettlement[dot]com.

Happy New Year!

Get educated in 2011!

noreply@blogger.com (Derek Massey / MASettlement) — Wed, 15 Dec 2010 20:30:00 +0000

We are currently scheduling classes for 2011!

We offer a great mix of credit and non-credit classes for real estate agents and loan officers. Here are some of the classes we currently offer:

1031 Exchange: The various aspects of a 1031 exchange transaction, timelines, accommodator role, benefits and overall transactional structure.

Contracts: Contracts on a macro level and the Regional Sales Contract and common addendums.

Ethics: illegal flipping, predatory lending, the history of the code, articles commonly violated, recent decisions and case studies.

From Contract to Closing: After an offer is accepted, we discuss how to keep a contract current, removing contingencies, working with lender and title company and overall how to keep a transaction together until closing.

Negotiating Closing: the anatomy of an offer, understanding offers from buyer's and seller's position, evaluate the merits of an offer, how to support an offer.

Real Estate Agency: the history of agency, fiduciary relationship, terminology, review Virginia/Maryland agency law and required disclosures.

Real Property Rights / Public Records: the various land records web sites available to the public and other services.

REO Representation: the default cycle, REO tasks associated with a transaction, listing servicing, pre-foreclosure involvement and overall REO client expectations.

Safety in Real Estate: how to stay safe in the real estate business, how to practice "safe showings".

The Settlement Process: all the various stages of a settlement from contract ratification to post-closing.

Short Sale Strategies: the "default cycle" from origination to REO, deficiency disposition, phantom tax, listing, packaging, negotiation and case studies.

Title Insurance: the history of Title Insurance and its evolution, various title insurance policies and compare coverage, title insurance claims and prevention.

Transaction Red Flags: the various obstacles to anticipate and various issues that can delay or "blow-up" a transaction and how to address them.

Want to schedule a class? Reach out to your Title Service Rep or call/email us at (800) 530-9372 | info[at]MASettlement[dot]com today!

Tech Tip: Get your email when you want it!

noreply@blogger.com (Derek Massey / MASettlement) — Tue, 14 Dec 2010 13:00:00 +0000

We've all been there.

An email arrives in your bloated inbox that you know you will have to address, but not until next week.

Or, you've just sent an email out to someone who should respond to you in one week. You want to make sure you're reminded to follow up in case they don't.

Your options have historically been to:

- Keep it in your inbox in the hopes of reviewing it next week.
- Add it as an item in your calendar.
- Add it as a "to-do" item in a tasking program.
- Set up a separate "hold" or "follow-up" mailbox to review later.
- Tie a string around your finger.
- Forget about it.

Until now.

With Laytr and NudgeMail, you can simply forward any email to a date in the future and you'll get it at that time. It's simple, easy, and a great way to keep your inbox at zero by putting in front of you only what you need to handle today.

Try it now! If you're getting this post via email, forward it to Dec.21@laytr.com or Dec.21@nudgemail.com, and put off reading it for a week. Don't worry, I'll never know. :)

What are "good funds?"

noreply@blogger.com (Derek Massey / MASettlement) — Mon, 13 Dec 2010 16:20:00 +0000

Think of an escrow account as a water tower, except with money. Money goes in, money goes out. For each particular real estate transaction, the amount of money coming in must match what's going out - to the penny.

Typical incoming funds:

- Loan funds
- Buyer's personal funds

Typical outgoing funds:

- Seller's loan payoff
- Broker's commission
- Tax payments
- HOA payments
- Title and lender closing costs
- Seller's proceeds

Another key requirement of real estate escrow is that the incoming funds must be irrevocably in the title company's account before it can disburse against them. In other words, they must be in the water tower such that no one can get them out. There are typically only two ways to accomplish that upon receipt:

Wires
Certified or cashiers checks

Wires are self-explanatory: A wire is a direct deposit of water into the tower.

What makes certified / cashiers checks superior to personal checks?

When a certified check is prepared, the money is pulled out of the account right then and there. Unlike a personal check - which can bounce due to the asynchronous nature of check writing and depositing - a certified check is not merely a promise to deposit water if there is enough water in the account, but it actually has the water attached to it.

I'm an agent or loan officer. What do I do with this information?

Remind your buyers that good funds are needed for settlements, particularly in table-funded states like Maryland. Instruments like personal checks, ACH orders and retirement account checks are NOT good funds, and cannot be disbursed against until they irrevocably clear in the title company's escrow account. Knowing and communicating this well in advance of closing will allow the parties to find the best solution for ensuring a timely settlement!

Flickr photo by doug_wertman

Why do we close at the end of the month?

noreply@blogger.com (Derek Massey / MASettlement) — Mon, 06 Dec 2010 21:54:00 +0000

I'm not breaking any ground by stating that more real estate settlements happen at the end of the month (defined as the last day or two) than any other time of the month. We're all well-versed in the stories and issues that come with end-of-month closings: courthouse recording offices backed up, lender packages not arriving in a timely fashion, settlement attorneys frantically scheduling and rescheduling to make the closing happen.

There are 20 days in a typical business month. If closings were evenly distributed throughout the month, 5% of the total would close on any given day, including - of course - the last day of the month.

In fact, 17%* of all settlements occur on the last DAY of the month!

That's a drastic increase in volume that puts on a strain lenders, title companies, recorders, couriers, brokers, and - ultimately - buyers and sellers.

In many industries, this kind of "cyclical strain" cannot be avoided. Christmas happens on December 25th, so rather than straight-lining their sales, retailers have to accept a crunch in November and December. Ocean City hotels can't count on robust sales in December and January, for obvious reasons. Even in real estate, we understand sales are better in the warmer months when homes look nicer and taking a ride to house-hunt doesn't require snow tires.

But why the monthly cycle in real estate?

I came up with a few:

A renter who closes mid-month will be paying rent and a mortgage for the remainder of that month.
A buyer's mortgage interest doesn't kick in until the beginning of the next month. (Except a borrower typically pays interest in advance at settlement for the days between settlement and the first mortgage payment).
A seller has already paid their mortgage for the month, and wants to "get what they paid for." (Except that a non-FHA payoff statement is good through a particular date, and the seller doesn't really pay any more than what's owed as of the "good-through" date of that statement).

So, unless we have a renter-buyer and/or a seller with an FHA mortgage, are there other reasons for closing at the end of the month? If not, why do we schedule them at the end of the month?

* According to our settlement schedule for Jan - Nov. 2010. Also, I cheated for August, and included the last 2 days of the month, as the 30th and 31st fell on a Monday and Tuesday respectively.

Flickr photo by Aarongeller

Zillow.com Launches Real Estate Agent "Ratings and Reviews"

noreply@blogger.com (Derek Massey / MASettlement) — Fri, 03 Dec 2010 22:15:00 +0000

Zillow.com, home of the Zestimate, Zillow Mortgage Marketplace, and many other online real estate resources, yesterday launched a "Ratings and Reviews" system for real estate professionals.

This new tool will allow consumers to review and rate real estate agents with whom they've previously worked. Zillow believes this will help potential buyers and sellers in selecting an agent that fits their individual needs, AND will help great real estate agents. Details on the program (with a TON of commentary) can be found here.

What do you think? Is this good for the industry? Good for consumers? For agents?

What should you ask your title company?

noreply@blogger.com (Derek Massey / MASettlement) — Thu, 02 Dec 2010 21:20:00 +0000

Congratulations! You have a ratified contract. Your buyers have signed on the line which is dotted. Your job is done, right?

Wrong.

Not true in any market, much less this one. Now comes the fun part - navigating from contract signing to settlement. An integral part of this process is selecting the title company.

So, how do you pick a title company? Likely you know someone and/or have worked with someone in the past. You have a relationship with them. And like all business, relationships are what drive this business. But let's say you are testing a new company out or want to dig a little deeper to see what is behind that friendly, helpful closing attorney?

Here are some great questions to ask which should help frame your decision:

1. What are your fees? All of them. No one likes hidden fees that do not pop up until the final HUD-1 is presented at the table. Ask your title rep for a fee schedule, or better yet, get the fees for your particular transaction. This can be done manually or via a web-based application, like ours.

2. When do you order the title search? This is the question which prompted this post. Some title companies wait until they hear the appraisal is back before ordering title. Why? It costs money to order title. See here what goes into a title search. However, I would insist that your title company order the search the day you hand over the contract. It's too important to wait. Otherwise, last minute title issues could arise that could have been addressed earlier.

3. How often is your escrow or trust account reconciled? Escrow/trust accounts should be reconciled monthly, no exceptions. If not, a shortage could exist which could come back and haunt your buyer should the title company find itself insolvent.

4. How many title insurance companies do you write for? This is a particularly interesting question today, and here's why it is important: title underwriters, like loan underwriters, are made up of people. People judge things differently. On a number of occasions, Title Insurance Company X will insure something that Title Insurance Company Y will not. It's the nature of the beast. I love my affiliated title insurance company, but I also want to know that I have others to call should I need to get a deal to closing. Is your title company bound by the underwriting staff of just one underwriter?

5. Where will the settlement take place? It all depends on your comfort level and convenience. Do they have a local office? Will they come to you? To the lender? To the buyer's home? Ask in advance, so you know what you're dealing with.

6. Do you have attorneys on staff? Titles can be confusing, and may require someone with a legal background to fully parse through recorded documents, legal proceedings and contract clauses to determine what needs to happen before or at closing. The title company attorney should never purport to fully represent your buyer, but they can provide guidance as to how to get the deal to settlement.

7. How many short sales and REO transactions have you handled this year? Short sales are REOs are different animals, and require much more work than refinance or straight seller-to-buyer deals. Is your title company well-versed in these nuances? How experienced are they?

We hope you find this helpful. As always, please email us at info[at]MASettlement[dot]com if we can ever be of assistance to your or your buyers!