Half the year is gone! Time sure flies when we are having fun visiting, eating and playing with others.
I get many calls and email questions from consumers all over the country who have looked at my YouTube Think Escrow channel. I’d like to share a couple of them with you each month. Who knows, maybe you or your client have had these burning questions come up!
YOU HAVE QUESTIONS, WE HAVE ANSWERS!
VIVA ESCROW Q & A SEGMENT
(Real questions sent to us – verbatim!)
Question: I read your article online. If new buyers permit, can title with a mechanic’s lien be transferred from seller to buyer? Or do title companies refuse to issue new title policies if there are mechanics liens?
However, be advised that if there is a Lender involved who is giving the Buyer a new loan, this lender may not agree as the existing Mechanic’s Lien will then take precedence over the new mortgage loan to be filed.
Answer: As long as the Buyer agrees, the mechanic’s lien or any other lien that belongs to the Seller can remain on the property after Buyer purchases it. It will show as an exception to the Title Policy. Normally the Escrow Officer will prepare an amendment that the Buyer will sign signifying their agreement that those particular liens will remain at closing and will not be included in the title insurance policy. With these instructions the Title Company should not be refusing to insure the property.
Educational Moment: What is important to understand is the function of the Title Policy. This all important policy insures the property ownership based on the names of the Buyer as shown on the Grant Deed recorded and insures the Buyer’s new loan per the new Deed of Trust recorded. There will be items that WILL NOT be insured, and those are called exceptions.
Reviewing the preliminary title report when you get it from the Escrow Officer at the opening of escrow becomes very, very important. Those items that are listed on the preliminary title report will be the exception to the future title policy and the policy insurance will not cover it. In other words, we will insure everything EXCEPT…. if there is a problem on a particular item that shows on the title policy after closing and the Buyer wants to make a claim against the title policy for that item, they will not be able to do so.
So in our question, if the Buyer tells the Escrow Officer not to worry about the Mechanic’s lien that is showing as an exception item in the prelim, then the Title Policy will insure the property with that exception and the Buyer will not be able to come back to the Title Company and make a claim on that Mechanic’s Lien in the future.
Question: Would you kindly clarify for me regarding a Trust of Deed. We’re filing for divorce. Part of the agreement is the house will be hers. We’ve just refinanced it with my wife and she is the only one who signed the promissory note of the loan. I then signed the house over to her with her name only on the new Grant Deed recorded after the closing day. Everything is done, only when I look at the Deed of Trust from the bank, it has my name and her name on it. Our divorce is not finalized yet. My question – is the Deed of Trust done correctly ? Am I responsible financially if later on, she can’t handle the loan. My name is not on the loan and the Grant Deed.
Answer: Yes, the Deed of Trust is done correctly. If you were still married to her when she did the refinance and before you signed over the property to her with a Grant Deed, then the Lender has to show you on the Deed of Trust because at the time of the refinance you were still an owner of the property. However, as you did not sign the Promissory Note, the Lender cannot hold you liable for non-payment. If she does not pay it will be her credit that is affected and her property that will be foreclosed on if it goes that far.
Educational Moment: Since he did not sign the Promissory Note, the wife might not have needed her soon-to-be ex-husband’s credit to apply for the loan. If that is the case it is my personal opinion that the best thing he could have done for his peace of mind was to have her refinance after he signed and recorded the Deed to take his name out of the ownership. Then he would not be involved in the signing of any of her loan documents. Since he will no longer claim the property, why should he leave his signature on a Deed of Trust which is recorded into public records?
Do you have other questions I can answer for you? Please feel free to email me at Info @ Vivaescrow.com
~ Funny of the month~
From zero to 60 in 9 seconds flat? It takes some talent but you can turn a car salesperson’s hair grey in the same amount of time! https://biggeekdad.com/2013/03/camaro-test-drive/
~ Quote of the month ~
We could certainly slow the aging process down
if it had to work its way through Congress.
– Will Rogers –
My YouTube offering for the month:
Escrow Tip # 8: Why Name Changes = Delays!
You Have Questions? We Have Answers!
Juliana Tu, CSEO, CEO, CBSS, CEI, SASIP
“Escrow is my FOREMOST language!”
The opinions expressed in this blog are solely the author’s.
Your comments and viewpoints are always welcome.
Info @ VivaEscrow.com