Oh, the Hazards of the Escrow Desk!
A sharp eyed Escrow Officer in my company got a copy of the recorded Grant Deed on a property in which the owner contemplated doing a Reverse Mortgage.
The Deed stated that Jane Doe, a widow, (original owner), granted the property to Mary Smith, (present owner). Upon further scrutiny it was noted that the deed was signed by Mary Smith, as the Attorney in Fact of Jane Doe.
Uh Oh. One of the most important principles of a Power of Attorney is that it cannot be used to give a benefit to the Attorney in Fact. That is called “Self Serving”.
The insuring title company and we as the Escrow Holder consider that the ownership under Mary Smith is not valid.
What happens now? If Jane Doe passed away, then we have a cloud on title and determination of the ownership will be up to the Courts.
Ouch.
ALTERNATIVE CREDIT REPORTING:
As reported in our June newsblog, the 3 big credit reporting agencies are revising their areas of reporting and not including judgements and tax liens on their reports.
In this day of “alternative news” it is not too surprising to find other “alternatives” being bandied around out there, and credit reporting is no different.
Lenders must find other ways to document the viability of lending to millennials with no credit or borrowers with past credit issues who would have been shut out if the traditional evaluation methods are used.
Here is a rather long article, but interesting nonetheless. Today’s world is fluid and it pays to be kept up to date. Change are fast and furious!
UPDATE ON ZERO DOWN MORTGAGES
One of the articles last month described the slowly popular Zero Down Mortgages, where certain lenders are able to incorporate the 3% downpayment assistance program within one of Freddie Mac’s programs, leaving the Borrower with no need to worry about any downpayment.
As a follow up, there are conditions (of course there are!), as stated in this article: This program is not offered by everyone, may be available only in certain areas of the country, and is for low income families.
If you know of someone who can benefit, do ask them to shop around. This is not an endorsement of any financial institution but Quicken Loan, Movement Mortgage, Guaranteed Rate and First Third Bank are several that deserve a call inquiry.
I may be a skeptic when it comes down to no skin off the back purchases, but with proper consideration, this is a way to get more low income households into the American Dream.
SHOULD WE KEEP THE CFPB?
One of the many uproars in Congress right now is whether the Democrats’ Dodd Frank Act can be replaced by the Republicans’ Financial Choice Act.
In the middle of the controversy is the status of the Consumer Financial Protection Bureau (CFPB).
What do we do with this powerful agency which is controlled by one person only and he is not the President?
Although I have mentioned many times over the past few years that the CFPB has made life miserable for the small business owners in the lending, real estate, mortgage and title industries, they do have an indisputable reason for existence, and that is to look out for the consumer.
In that capacity they have far exceeded expectations, if only using the volume of complaints submitted to the agency for review as a measure. 200,000 complaints every month for a total of 1,163,156 since 2011.
Their policy is to review and address each complaint. Based on these stats, California is again in the forefront and the number 1 complaint has to do with loan mortgages. No surprises there!
It’s not so much the consumer protection directive that is controversial; it’s the methods used and their high-handedness that makes us wonder: Should we keep the CFPB??
OCEAN FRONT PROPERTY FOR LESS THAN $100,000! COME AND GET IT!
Catch: you have to take a plane there. No, a train or automobile won’t do. Would you like to invest In Puerto Rico?
They may be going through a foreclosure crisis now, and they want to become the 51st state of the United States.
So this is what we should do: we should invest in beachfront property, and with all that increased investment, Congress will be forced to make them the 51st state and then the property values will hugely appreciate and we will all make a killing. Make your own alternative deals.
FORECLOSURES AND DELINQUENCIES:
Talking about foreclosures, we know that delinquencies lead to foreclosures. By all accounts, foreclosures have gone down considerably nationwide, (without Puerto Rico in the mix) and this is a good thing.
What are the states with the highest and lowest percentages of delinquent loans?? Mississippi has the highest percentages and Colorado the lowest.
For once California is not on either list. But then, there are only 10 states mentioned. We were probably 11th.
BLOCKCHAIN – THE NEWEST TECHNOLOGICAL TOOL.
I don’t profess to understand how Blockchain works, but it is the newest buzz word in the industry and so I have to bring your attention to it. Apparently this tool is of particular usefulness when dealing with compliance timeline issues.
The following article summarizes the concept as follows:
“Blockchain-based solutions provide the ability to preserve data, rules, and decisions in an immutable format for future evaluation and evidence. Blockchain allows lenders to in essence “freeze” in permanence everything they did for each and every loan. That way, when they get called out on the carpet by auditors down the road, they can easily do a quality control check on the loan in question and prove that everything was done correctly at the time the loan was created.
Without using blockchain, today’s lenders have no way to guarantee what they did from a compliance standpoint, whether the documents were created yesterday or years ago. There’s no proof of compliance. With blockchain, all events are digitally stored and cannot be changed or added to the timeline.”
No fudging results anymore! No recreating the document and slipping it in.
Either you did or you didn’t. Isn’t technology amazing? Until you are on the receiving end of the audit.
EMPLOYEE POACHING – WHO DOESN’T?
We all know that poaching of good people happens in every industry. One day they are at one company, you turn around and the next day they are enticed to another, probably for higher pay.
It is no different in the real estate industry, but what is of interest is when it leads to expensive lawsuits and the generating of a case study for future lawsuits.
Here is one real estate company who found out the hard way that there is a smart way and a sneaky way of doing this. This is what happens when the sneaky way backfires: $4.75 million in damages.
Lesson learned!
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By the time you read this newsblog, I will be on vacation in Peru! Visiting Machu Picchu has been on my bucket list since before there was a bucket.
As I enjoy a couple weeks of winter in the Andes mountains, keep yourself cool here in the U.S. and the rest of the Northern Hemisphere.
Get that bucket list and start crossing things off!
