Now, with this session of Congress drawing to an end, the chance of a hearing, consideration or a vote has dropped to just about zero.

Where’s The Note?

Sponsored by Rep. Marcy Kaptur (D-OH), the legislation would require lenders in a foreclosure situation to identify the actual owner of the mortgage note, the originating mortgage lender and all subsequent loan owners. In other words, in the same way a title search is used to assure that property owners actually have the right to sell a house, the Kaptur bill would require lenders to show they have title to a loan before they can foreclose — a requirement which is supposed to already be part of every foreclosure claim.

This should not be a big deal. After all, we plainly know who originated the mortgage — that would be the lender who sat with you at closing and collected a fee for their work.

And if the loan was sold then surely someone, somewhere has a record showing the date of sale and the purchase price each time the loan was sold and re-sold. After all, we know who owns 100 shares of IBM no matter how many times it has been traded.

Or maybe not. There was, after all, the New Jersey mortgage broker who allegedly took in $11 million by repeatedly selling the same loans to Wall Street.

Unfair Terms

The Kaptur legislation would require lenders to detail whether any terms of the mortgage were unfair or deceptive. That’s necessary because the Federal Reserve has the authority as a regulator serving the public to prohibit “unfair and deceptive acts or practices” under the Home Ownership Equity Protection Act of 1994. However, it did not bother to do so when option-ARMs and interest-only mortgages were first marketed. Such loans, of course, are at the heart of the mortgage meltdown, the foreclosure crisis and lender losses on Wall Street.

The Kaptur bill would also force lenders to state as part of the foreclosure process whether any material misrepresentations were made to borrowers when a loan was originated and whether borrowers actually benefited when refinancing in terms of a lower rate, smaller monthly costs or more stability, such as going from an ARM to a fixed-rate mortgage.

Subprime Borrowers Overqualified

The misrepresentation requirement is important because huge numbers of subprime borrowers — the borrowers with the steepest foreclosure rates — in fact qualified for conventional, FHA and VA financing. Conventional, FHA and VA mortgages are cheaper and less toxic than the subprime loans borrowers were sold, and traditional loans are not loaded with prepayment penalties, huge payment increases and other hazards. According to the Wall Street Journal, 55 percent of all subprime borrowers qualified for better financing in 2005, a figure which rose to 61 percent in 2006. (See: Subprime Debacle Traps Even Very Credit-Worthy, The Wall Street Journal, December 3, 2007)

Kaptur — a Democrat who swam against the Tea Party tidal wave and won re-election with 59 percent of the vote — can try again in the 112th Congress, which starts next year.

The mortgage foreclosure legislation Congress won’t touch is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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The lender selling REOs (real estate owned by a bank or other lender) does actually care how you own title, What it does care about is that you buy the property for as much as possible (good luck) and from there on out you’re the owner.

Foreclosure Title

In basic terms you can hold title as:

An individual.

In a tenancy by the entireties. This is a form of ownership reserved for married couples. Each spouse owns 100 percent of the property, meaning if one dies there’s nothing to inherit (because ownership is already held by the living spouse) and if one is sued the property cannot be lost if the other party wins the suit. Alternatively, real estate acquired during the term of the marriage may be held as community property in several states.

The property can be bought by several people as tenants in common. In this case ownship interests need not be equal, there is no automatic right of survivorship, individual owners can sell their interests individually.

Lastly, title may be held in the form of a joint tenancy. Such a tenancy requires four unities — the unity of interest (the same form of ownership for each owner), the unity of time, the unity of title (all owners make their investment at the same time) and the unity of possession (equal access to the property).

Title options can vary according to the jurisdiction where the property is located. Because important matters may be involved — inheritances, survivorship, liability, taxes, etc. — foreclosure buyers should always consult with a knowledgeable real estate attorney for specific advice when determining the right way to hold title.

What Kind of Foreclosure Title Can I Expect? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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What is a “deed in lieu” of foreclosure and is it good or bad?

Good & Bad

In basic terms, a deed in lieu of foreclosure works like this: The borrower has a mortgage which cannot be paid. Rather than get foreclosed, the borrower agrees to simply give back title to the lender. Symbolically the result is “jingle mail” as in the sound keys make when held in an envelope.

Sending in the keys is not enough, however. The lender — and the world — need to get proper paperwork to show that title to the property was transferred. Because of the need for this paperwork (and because the lender wants to avoid the higher costs of a foreclosure) the borrower may actually have some leverage to negotiate a better bailout with the lender.

What’s negotiable with a deed in lieu of foreclosure?

First, the lender wants the property returned in good condition. The alternative in the worst case is a “trash out” where the property is left in ruin and stripped of appliances, pipes and anything else vandals can get.

Second, the lender wants paperwork so that the transfer of title is legal, legit and cheap. A foreclosure can be a huge expense for a lender, perhaps as much as $40,000 to $80,000 per property according to one congressional report.

Third, the lender may actually want the owner to remain in the property to avoid maintenance issues.

Okay, so what about the owner?

Owner Demands

The owner has some leverage and might ask for:

• Time to move so there’s no eviction and household goods are not dumped out on the street. In fact, an owner might actually ask for the opportunity to rent the property.
• A release of all liability so there’s no obligation to repay any debt which remains after the lender sells the house.
• Some sort of better credit mark than one would get with a foreclosure. This is a cosmetic matter because credit is likely to be woeful by the time an owner gets to the point of considering a deed in lieu of foreclosure.
• Cash in the form of a moving allowance. (You can always ask…).

For specific information in your jurisdiction please consult an attorney or legal clinic — this is not a do-it-yourself job and you can bet that the lender has 800 lawyers working on its behalf. Free and low-cost legal services may be available from state bar associations, community housing organizations and local law schools.

When speaking with an attorney be sure to ask about foreclosure, short sales, bankruptcy and a loan modification as alternatives to a deed in lieu of foreclosure.

What’s A “Deed In Lieu” Of Foreclosure? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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In general terms a condominium is a property where there are units with individual title and financing as well as common areas which are owned by the condo association. All unit owners are members of the condo association and have a right to use common areas.

A cooperative is different. With a co-op a corporation owns the entire property. Individuals own shares in the co-op, have the right to use common areas and also have an exclusive right to use their own specific unit.

Condos and co-ops generally get into trouble in two ways: First, owners do not pay their monthly co-op or condo fees. Without money the condo or co-op cannot be pay its debts and obligations. Second, a major repair is required, a repair so large that the condo or co-op does not have sufficient reserves to pay and so it bills owners for a special assessment.

If bills cannot be paid by a condo, then a creditor could force the condominium into foreclosure and bankruptcy. The common areas of the condo could be lost to a creditor. However, because the individual units are separately titled and financed the condo creditor could not seize those units to pay off the debt.

However, a condo unit can be foreclosed if there’s a condo fee or special assessment which is not paid. In that case, the fee becomes a lien against the unit and if unpaid can lead to the condo foreclosing the unit owner. (The same, of course, is true if a condo owner does not pay the mortgage.)

With a co-op it’s possible to be foreclosed or bankrupted if bills aren’t paid. Because the co-op actually owns and has title to the individual units, co-op owners could lose both the value of their shares in the co-op as well as all rights to their unit. In effect, they could become renters — if allowed to stay. In particular, co-ops often have an underlying mortgage secured by all units. If the underlying mortgage is not paid then the entire property can be lost.

What to do?

___ Never buy a condo or co-op without asking about the budget, reserves and special assessments. Ask for a letter from a certified public accountant (CPA) saying that the financing for the property is in good shape.

___ Always ask if the condo or co-op expects to charge for a special assessment during the next two years.

___ Always ask if the condo or co-op is now being sued or has any reason to expect that it might be sued.

___ Get advice from a real estate attorney when buying a condo or a co-op — and make any purchase depend on the approval and satisfaction of your lawyer.

___ If you see a building with a lot of empty units beware — a unit with a low price may not be a bargain if you might also face huge fees and assessments.

Can A Condo or Co-op Go Bankrupt? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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The original HUD-1 was developed as a by-product of the Real Estate Settlement and Procedures Act of 1974 — or, as it’s usually called, RESPA. Prior to 1974 settlement forms could be different, meaning that it was very difficult to compare costs or to know what was deductible for tax purposes in the year of the transaction.

So what do we get after 36 years? The new HUD-1 is a vast improvement over the old model. It’s three letter-sized pages long rather than two legal pages, but there’s much more information in the new HUD-1. Buried in the form is an accounting of closing costs and perhaps even some write-offs. Buyers will find the full and complete cost of buying real estate while sellers will see how much cash (if any) they’re getting from the transaction.

Page One

The first page of the form is a summary of the transaction. In effect, it translates the sales contract between buyers and sellers into hard numbers.

At the top of the form we first have administrative data such as:

• The type of loan (conventional, VA, FHA, etc.).
• The place and date of settlement (the date can be very important for tax purposes).
• The mortgage insurance case number (important if you’re ever facing foreclosure).
• The street address of the property. This is a concern because for great clarity and assurance the form would be better if it also included the legal address of the property.
• The name of the settlement (or closing) agent. The party that conducts the settlement is typically regarded as an agent of the settlement process. In other words, they do not represent you.

Page One, Buyer’s Side

The HUD-1 shows transaction costs for both buyers and sellers — you get to see what the other person’s information. More important you get to see your own.

On the right side of the first page we have buyer costs grouped by sections.

Section 100 — This is where buyers see the cost of the property and the cost of settlement (the figure found on line 1400). Combine the two and you get the gross amount — but not the final amount — due from the purchaser.

Notice that there can be some adjustments in this section. For instance, it may be that the seller has paid local property taxes in advance — those payments would be a credit to the seller and a cost at closing to the buyer.

Section 200 — As a buyer you may have certain credits to offset your gross costs. Credits include such things as your deposit, your new loan (for closing purposes the mortgage is a credit to the borrower because it represents money brought into closing) and any additional financing.

In the 200 section you can also see adjustments which are a credit to the buyer. For instance, maybe the seller still owes some property taxes.

Section 300 — This is a re-cap of all costs and credits. If you take the gross amount due from borrower (line 120) and subtract the buyer’s credits and cash you then get the total cash due to — or from — the borrower.

Most buyers, of course, will need to bring “cash” to settlement. By “cash” what most settlement agents really want is a certified check or a cashier’s check. Also, it may be possible to wire funds to the closing agent. Always ask the settlement provider well in advance of closing how payment can be made.

Gifts: To assure lenders that you are not somehow getting a secret loan from someone, it’s best to have closing funds in your name and on deposit for at least 90 days. If you are getting a gift to close, ask your lender how the gift is to be documented and precisely follow the lender’s instructions.

Page One, Seller’s Side

Settlement is a moment of truth for owners, the time when you find out exactly how much or how little you’re getting from your sale.

Section 400 — The sale price of the house, plus the cash paid for any personal items, are shown here as credits to the owner.

Also in this section are adjustments — credits for property taxes and other costs paid in advance.

Section 500 — If any mortgage debt remains unpaid it shows up here as a cost to the seller. Also, the costs of closing (line 1400) are here as a deduction as well as any adjustments for such costs as unpaid property taxes.

Section 600 — If we take the gross amount due to seller (line 420) and subtract the seller’s closing costs (line 520) we can then see how much cash the owner will get from closing (or, how much cash is needed to close if the seller is upside-down).

Practices around the country regarding cash to owners at closing vary. In some areas there are “wet” settlements where the owner gets a check at closing, in other areas there are “dry” closings where it takes a few days to get a check because it takes time for the lender to fund the transaction and paperwork to be recorded. In some jurisdictions there are rules requiring the disbursement of cash with a few days. For specifics, speak with your settlement agent.

Page Two

On the second page of the new HUD-1 we have a series of sections which show costs that may be paid by either buyers or sellers — or split between them. In other words, these are costs which can be negotiated when a sale offer is made. For instance, in a slow market a seller might agree to pay all transfer taxes. In a hot market, the buyer might pay.

Section 700 — If one or more real estate brokers are involved in the transaction, this section will show the compensation to each broker and the cost, if any, to buyers and sellers.

Section 800 — Getting a mortgage is hardly free. When the buyer applied for financing the lender provided a Good Faith Estimate of Closing Costs (GFE) on the new form developed by HUD. This section shows such costs as points, origination charges, appraisal fee, credit report and tax service. Borrowers should check the numbers at closing with the estimates provided in the GFE. The costs shown on lines 801 (origination charge), 802 (points), and 803 (adjusted origination fee) must be the same as the GFE.

Please see our guide to the new Good Faith Estimate form to see how it’s coordinated with the equally-new HUD-1.

Section 900 — Closing is scheduled at a time which is mutually-agreeable to the buyer and seller. That time, however, will mean that for such items as interest, mortgage insurance premiums and homeowner’s insurance there will likely be a need to make some payments for daily costs in advance until the next billing period.

Section 1000 — If you purchase a home with less that 20 percent down the lender will likely require that you pay additional amounts each month for property taxes and insurance. This money is held in an escrow or trust account and then paid out as the bills come due.

If you will have an escrow account then the lender will typically collect money in advance from borrowers to assure that the escrow account is properly funded.

Section 1100 — As part of the buying process, sellers typically promise to deliver good, marketable and insurable title — and buyers should want nothing less. This section shows the costs for title insurance — both lender’s and owner’s coverage.

Lender’s cover — which is required by lenders if you finance the purchase — protects you up to the remaining loan balance in the event of a title claim. In other words, it protects the lender.

Owner’s coverage protects you if there is a title claim up to the purchase price of the property — in other words the loan amount plus your equity. Be aware that some title insurance policies have an inflation rider so that the value of the coverage can actually increase over time. For specifics, speak with your title agent.

Also, take a look at line 1107. This shows the commission paid to the settlement agent for providing title insurance.

Section 1200 — This is where you can see how much state and local governments are getting from the transaction. Governments are elated when homes are sold because such transactions are a major source of revenue. Government taxes can includes such things as deeds, releases, transfer taxes, state taxes, stamps, etc. Call it what you will, a tax is a tax.

Section 1300 — This is where you can find additional settlement costs.

Section 1400 — The total costs to close — this number also appears on lines 103 and 502 on the first page.

Page Three

The third page of the new HUD-1 is partially a confirmation that the costs outlined in the Good Faith Estimate are what you’re actually paying — or pretty close.

Some quoted costs on the GFE cannot be changed, some can be changed as much as 10 percent and some can simply change with the winds.

Also shown on page three is a recap of your loan including the mortgage amount, interest rate, loan term, ARM-related terms (if any), prepayment penalties (if any), balloon payments built into the loan (if any) and related matters.

IMPORTANT: Always keep your closing papers in a safe place for tax reasons and to assure that your loan terms are actually the same as disclosed on the HUD-1. For questions regarding closing issues, speak with your real estate broker, mortgage lender and closing agent. Be aware that some costs found on a HUD-1 may be tax deductible — for specifics speak with a tax professional.

How To Read The HUD-1 is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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There’s some truth to these claims. The Internet has made the process of finding a job very much faster and easier than in the past if only because so many options are available. That said, going online to find a job is not a sure thing, as a job seeker you have to do your part.

Setting The Right Criteria

The first step toward successful online job hunting is to figure out what you really want to do. What is the right job description? What are the buzz words that an employer would use to find someone like you?

Next, what about a job title? What do we call people who do what you do? This is important because we pay people differing amounts depending on their titles, even though their actual job skills and responsibilities may not be much different or different at all. The classic example concerns people who want to be freelance writers, technical writers and consultants. These are terms without any standard definition, but it’s likely that the freelance writer is paid least.

Is there a company that’s especially attractive to you? Because of the work it does, the location, folks who work there, the pay scale, benefits? If you have a particular company in mind you might want to check their website to see if they have an online job application.

Location is a key issue. Long commutes are tiring and can be expensive in terms of gasoline, fares and tolls. There’s a real value in “living above the store” — or as close to it as possible.

If you can telecommute then location because an issue in a different sense: If you can work by wire then by all means work where you want — the city, the country, the mountains, by the sea, whatever.

Pay, of course, is crucial. You want what you’re worth. Notice that what you “need” does not concern employers. What’s important to them is to get the best possible person for the least number of dollars.

In addition, you want benefits. The most-important is health insurance because a trip to the hospital can cost thousands of dollars without coverage. If health coverage includes dental and optical, so much the better. Other major benefits include vacation time, life insurance, severance pay, sick leave, disability leave, personal leave and retirement contributions. If you can get all of these you’re in luck — employers have been cutting back on such benefits for the past decade, but you can still find such packages, especially in government positions.

Keywords

If you look at print newspaper classifieds you can see that they are static, arranged in a set order. If you don’t see a listing because it is filed in some obscure location, you lose. Online the deal is different, most job sites have a search function which allows you to search by keyword and location.

You can get your keywords by considering the criteria above. Try different search and see what results come up. As you do this write out the keywords in the ads which seem most attractive to what you want, then search using the revised or expanded list of terms.

Cautions

In working with job site search systems there are several limitations to consider.

First, if you put in a location does the system just bring up jobs in a particular community or ZIP code? If so you may be missing out on a job that’s 20 feet over the line in the next county and six minutes from your house. Look for systems that allow you to search not only a particular location but also jobs within a given radius.

Second, about those keywords — the more you use the smaller your list of responses. This may be good in the sense of narrowing your search to a few hits, however you may also be missing good opportunities which do not include all of your keywords. To overcome this problem conduct a number of searches, some with a few keywords and some with a longer list.

Check The Company

If you find a job that sounds promising, go to the company website and check out who they are and what they do. Usually you can find good information on the “about” and “media” pages.  For a capsule look at the firm, check out the news releases on the media pages — often they have a short description of the company at the bottom.

Job Search Online — How To Find The Best Work is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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First, state transfer taxes are typically based on the sale price of the property or the amount of mortgage debt. These tend to be very large sums, so even a small percentage can be a lot of money.

Second, payment for many services occurs at closing — title insurance, legal services, appraisals, etc.

Third, some closing costs are pre-payments, money collected in advance.

Fourth, in addition to transfer costs, there are also loan expenses paid at closing. For instance, points are paid at settlement.

Why Does Closing Cost So Much? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: Closing, insurance, prepayments, settlement, taxes, title

Example: I will sell you my home but I can’t tell you if there are any prior title issues.

When a special warranty deed is offered buyers must obtain a complete title examination and title insurance to protect their interests — no lender will finance a transaction without such protections and neither should a buyer purchase without appropriate title coverage.

For details, please see an attorney or legal clinic in the jurisdiction where the property is located.

What’s a “special” warranty deed? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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A new survey is needed each time a property is sold not because a house might move, but because of encroachments, easements, and such. For instance, the neighbors put up a fence last year and the fence is actually on the property you want to buy. If the fence remains in place, you have less property and perhaps your parcel is worth less. Or, the current owners built a garage which extends over the property line. Your neighbors will allow it to remain in place, but only if you pay them $27,000 for the use of their land.

Why is it necessary to survey a home each time it’s sold? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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For instance, a garage is built over a property line. The property owner never complains for 20 years. Then, one day, the property owner tells the garage owner to move the garage or pay rent. The garage owner refuses, saying that he, in fact, now owns the land.

Depending on state rules, the garage owner may be right. How do you protect yourself against claims of adverse possession? Get a survey.

For specific information regarding title issues, please contact an attorney or legal clinic.

What is “adverse possession?” is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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