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Source of Title Blog : Innovation

A Time-Saving Title Search Tool?
by Robert Franco | 2017/05/29

There really haven't been many advances in title searching in a couple of decades - not since the book indices were replaced by computers.  Even then, it's arguable whether that was really an improvement.  I'm old-school -- I prefer the books.  I think it was quicker to search a name in the books, particularly when it was a common name, or one susceptible of several spelling variations.  Sure, the digitization of the records has made it easier to remotely access the records, but has it really changed the way we search? 

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Categories: Abstractors, Innovation, Technology

Source of Title Blog :: 3 comments ::

Inverse Foreclsoure?
by Robert Franco | 2012/05/09

I have seen two very odd situations recently... where the lenders didn't complete foreclosures.  Both owners are stuck with properties, still subject to the liens, and they can't sell them.  It seems like the homeowners should have some remedy.  Perhaps what they need is a right to force a foreclosure - an inverse foreclosure where the homeowner initiates the process.

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Categories: Foreclosures, Innovation

Source of Title Blog :: 6 comments ::

Are Title Agents Becoming Obsolete?
by Robert Franco | 2009/02/04

In Ohio, and many other states, title insurance rates are filed with the Department of Insurance... and that is what title insurance costs.  Most of the underwriters file the same rates, so there is no difference between what an agent of one underwriter charges versus an agent of another.  Typically, the agent receives a 70 to 80 percent share of the premium for their services... and, they typically charge additional fees for the title examination and the closing.

But, what happens if one underwriter sells direct, cutting out the large agent split of the premium, and files lower rates?  That seems to be the strategy of Entitle Direct Group.  They have filed rates 35% below the other underwriters and claim they can save consumers hundreds or even thousands of dollars.

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Categories: Innovation, Title Industry

Source of Title Blog :: 8 comments ::

Eminent Domain Insurance
by Robert Franco | 2008/03/24

I read an article today about a company that is offering an insurance property to protect property owners against losses incurred as a result of the state's power of eminent domain. I had to check my calendar to see if it was April Fool's Day. I think this is probably the most useless type of insurance I have ever seen... and its not cheap! (see Underwriter Launches Policy to Protect Against Eminent Domain).

For less than $300 per year, the policy provides up to $200,000 loss of market value when the home is sold, plus up to $50,000 to relieve the expense of moving as a result of eminent domain...


The company claims that this was developed in response to the U.S. Supreme Court decision in Kelo v. New London. In that case, the Supreme Court held that a state could use its eminent domain power to take property from a homeowner and give it to a private developer for economic redevelopment. The decision was so alarming that state legislators across the country began working on legislation that would protect their constituents from such takings. Some have been more successful than others, but the backlash from the Kelo decision likely means that this type of taking will be more difficult in the future.

What exactly does this insurance cover? When the state exercises its eminent domain power, they are required by the constitution to compensate the homeowner. That usually means they must pay fair market value. The policy provides up to $200,000 for loss of market value, but how is that measured? Presumably, the loss of market value would have to be attributable to the eminent domain action which will result in a payment of fair market value to the homeowner. Plus the policy will pay up to $50,000 for moving expenses.

The odds of losing your home to eminent domain seem very slight and the payout on such a policy will likely be very limited. Yet, the premium seems fairly expensive at about $300 per year. Of course, the company offering the coverage has exactly the opposite opinion.

[The Ward Group LLC] said the policy offers more than real protection, it provides “peace of mind.”

“When you consider the value and limits of coverage provide and the relatively low premium amount, we are confident a high percentage of homeowners will elect to purchase the coverage,” said Ward.


My advice would be to buy a lottery ticket - your odds of winning the lottery are probably better than having your home seized by eminent domain and it will only cost you $1.00.

Robert A. Franco
SOURCE OF TITLE
rfranco@sourceoftitle.com

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Categories: Innovation

Source of Title Blog :: 2 comments ::

Bernanke: Reduce The Amount Of The Loan
by Robert Franco | 2008/03/04

Feberal Reserve Chairman, Ben Bernanke calls for a vigorous response from lenders to aid distressed homeowners. In what he calls a "longer-term permanent solution," Bernanke believes that lenders should write down principal on mortgages. That is certainly a tough sell to lenders, but the idea has some merit.

"Reducing the rate of preventable foreclosures would promote economic stability for households, neighborhoods and the nation as a whole," Bernanke said. "Although lenders and servicers have scaled up their efforts and adopted a wider variety of loss-mitigation techniques, more can, and should, be done," the Fed chief said.

One of the suggestions Bernanke made was for mortgage and other financial companies to reduce the amount of the loan to provide relief to a struggling owner. "Principal reductions that restore some equity for the homeowner may be a relatively more effective means of avoiding delinquency and foreclosure," Bernanke said.

With low or negative equity in their home, a stressed borrower has less ability — because there is no home equity to tap — and less financial incentive to try to remain in the home, he said.
(See Fed Chief: Mortgage Crisis to Continue)


There is a problem here, however, that would make his suggestion very difficult to pull off. How do you determine who gets the reduction in principal? Lenders do not want to reduce principal for everyone - and definitely not those who have the ability to repay their mortgages in full. To the extent that borrowers can repay their obligations, they should. So who would determine who can and who cannot afford to payback their mortgages?

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Categories: Foreclosures, Innovation, Legislation, Mortgage Industry, Subprime Lending

Source of Title Blog :: 4 comments ::

To Touch And Concern
by Robert Franco | 2008/02/01

This is really the third post in what has become a series on covenants that require a private transfer fee to be paid to the declarant of the covenant. The first post, Patently Stupid, discussed what I perceive as practical problems with these covenants in the title industry, the burdens they create on the property, and the absurdity of patenting "legal strategies." The second post, Freehold Licensing Defends Covenants, continued my opinion on the use of the covenants and addressed comments posted by Freehold Licensing. This one, however, will be a bit different. Today we will look at the requirements for a covenant to run with the land and whether such covenants would even be enforceable.

In yesterday's post I said that "It is my sincere hope that the courts will find an insufficient nexus between the covenant and the property to hold that it runs with the land and that they will find them unenforceable." There are three basic requirements for a covenant to run with the land:

  1. the intent of the parties as can be determined from the instruments of record;

  2. the covenant must be so closely connected with the real property that it touches and concerns the land; and,

  3. there must be privity of estate between the parties to the covenant.


INTENT OF THE PARTIES

There is usually very little difficulty establishing the intent of the parties. The covenant Freehold describes in its patent application specifically states "...for the foregoing benefits and other good, valuable and independent consideration, receipt of which is acknowledged by acceptance of the Deed, and as a covenant running with the land..." That would seem sufficient, but the analysis does not end there.

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Categories: Abstractors, Innovation, Title Industry, Title Problems

Source of Title Blog :: 2 comments ::

Freehold Licensing Defends Covenants
by Robert Franco | 2008/01/31

My last post, Patently Stupid, addressed the pending patent of Freehold Licensing, Inc. - “Springing Interests Flowing From Benefits That Run With Land”. The company has a patent pending on a "real estate strategy" that is basically a covenant that runs with the land and requires the declarant of the covenant to receive a payment of one percent of the purchase price on subsequent sales of the property for a period of 99 years. If you haven't read the post, you should do so. Then, read the comment by Freehold Licensing, which I will parse through below.

Freehold claims that my post was incorrect - that the Texas legislators did not ban the use of the covenant on residential real estate transactions, but only prohibits the buyer from paying the fee - not the seller.

 

Robert, the Texas statute (5.017), crafted in subcommittee after the senate rejected a ban, only prohibits the buyer from paying the fee - not the seller.



I don't know what the subcommittee drafted, or what the senate rejected. However, after reviewing Texas Property Code § 5.017 - I think that Freehold is wrong about that. It appears to me that such covenants are void and unenforceable in Texas, at least as applied to residential property.
 

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Categories: Abstractors, Attorneys, Innovation, Texas Legislation, Title Industry, Title Problems

Source of Title Blog :: 4 comments ::

Patently Stupid
by Robert Franco | 2008/01/29

A Texas-based company, Freehold Licensing, Inc., has filed for a patent of a deed covenant that requires that the creator of the covenant be paid one percent of the sales price on any future transfers of the property for 99 years. (United States Patent Pending No. 11/176,724 styled “Springing Interests Flowing From Benefits That Run With Land”). Not surprising, the company will license its patent to sellers of real property and they will get a portion of the one-percent transfer fee.

A reader of the Source of Title Blog recently sent me an article on this issue, but it is not the first I have heard of it. At least one other abstractor called me when she first saw one of these pop up in a rural Ohio county. They are out there now - so be aware.

According to the patent application, "the device of the invention may be created by reciting language such as:"
 

"Within, and for the benefit of, the subdivision and the Lots therein, Declarant has created a master subdivision plan, set aside parkland and common areas, and constructed streets, drainage and other improvements, (jointly and severally "Improvements"), which a party taking possession of any Lot stipulates all and singularly benefit said Lot. In consideration therefore, the Owner of any Lot in the development ("Owner"), by acceptance of a Deed therefore, whether or not it shall be express in the Deed, and for the foregoing benefits and other good, valuable and independent consideration, receipt of which is acknowledged by acceptance of the Deed, and as a covenant running with the land, is deemed to covenant, agree and shall be obligated to pay Declarant or assign(s), upon each transfer of title to a Lot in the Subdivision, a "Conveyance fee" equal to one percent of the Gross Sales Price of the Lot (including any improvements thereon). No Conveyance fee shall be levied upon the transfer of a Lot (a) by the Declarant; (b) by a Builder; (c) by a co-Owner of a Lot to a person or entity who was a co-Owner of the Lot immediately prior to such transfer; (d) by a Grantor to any entity wholly owned by Grantor; provided, upon any subsequent transfer of any ownership interest in such entity, a Conveyance fee shall become due; (e) by an institutional lender pursuant to a mortgage that is superior to Declarant's lien or upon foreclosure of a mortgage that is superior to Declarant's lien; (i) for transfers made on or before the first occurrence of (i) Jan. 1, 2010 or (ii) completion of improvements on ninety percent of the total Lots within the subdivision (g) if the Lot being conveyed is unimproved. For purposes hereof, the term "Builder" refers to a person or entity who purchases a Lot in the Subdivision from Declarant for the purpose of constructing a residential dwelling thereon and who is regularly engaged in the business of constructing homes for sale to individuals, and the term "Gross Selling Price" of a Lot shall mean the total consideration paid by the purchaser of the Lot, as is (or ordinarily would be) indicated on the title company's closing statement or, if a contract for deed or similar instrument, as indicated in the contract for deed or similar instrument, including consideration paid for all improvements on the Lot."



Aside from the fact that this just smells bad - some have referred to it as a scam - the idea of patenting a "legal strategy" is... well... patently stupid and absurd.
 

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Categories: Abstractors, Attorneys, Innovation, Legislation, Title Industry, Title Problems

Source of Title Blog :: 18 comments ::

The $2,500 Car
by Robert Franco | 2008/01/11

Watch out, Detroit! The country that brought you cheap title searches has announced the world's cheapest car - at $2,500! Of course, the car is plastic and held together with glue.... really! And, though they have been criticized for their environmental impact, the Indian company producing the car, Tata Motors, says that it will meet all of India's emissions standards.

 

Four years ago Tata Motors embarked on an ambitious project to bring millions of people in India and elsewhere into the car-owning class. Today Chairman Ratan Tata (pictured above) unveiled the result: the Nano, a stripped down car with a 624 cc four-stroke engine that can seat four passengers. The car is a feat of engineering-it's made from plastic parts held together with adhesives-and meets all India's environment standards.



Is there anything left that India cannot do for next to nothing? Soon they may be selling tickets to the moon for $99 round-trip.

I don't think that Americans will be too fond of a 624cc motor producing a whopping 33 horsepower. My motorcycle, a Honda VTX 1800, has an engine nearly 3 times that size and produces more than 100 horsepower. I can't imagine trying to drive this thing uphill in a headwind.

But, Americans seem to embrace "all things cheap." They put up with poisons in their toys imported from China, they deal with customer service reps that barely speak English, and they buy "knock-off" purses and clothing. Soon, the "made in the U.S.A." label will become a collector's item - anything domestically produced will probably bring top dollar on Ebay.

I guess we really shouldn't be surprised that we are now importing our country's public records from India. Though it seems absurd, it's really just a reflection of our society - "anything to save a buck."

Though I doubt the Tata Nano will be imported into the United States any time soon, if you see one on the road, try not to run over it in your gas-guzzling SUV.

Robert A. Franco
SOURCE OF TITLE
rfranco@sourceoftitle.com

 

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Categories: Innovation, Public Records

Source of Title Blog :: 22 comments ::

Imitation Is The Sincerest Form Of Flattery
by Robert Franco | 2008/01/10

I am flattered! It is true what they say, imitation is the sincerest form of flattery. When I began working on Source of Title in 2002, it was because I had a lot of clients calling me asking for referrals for counties I did not cover. Often times, I just didn't know anyone and I thought there really should be an easier way for potential clients to find abstractors. After all, if my clients are having trouble finding abstractors in other counties, there must some out there that can't find me.

The first thing I did was look online to see if I could find any other abstractor directories. Who wants to reinvent the wheel? I didn't find any, so I buried my head in programming books for the summer and create the first version of the site myself. It was very rudimentary, but functional. By the time we started to grow, there were a few other sites offering an abstractor directory. Since we were all in the very early stages of growth, I don't think any of us copied the others. In fact, we all had very different plans for how to model our sites. It was obviously going to come down to who implemented the best plan as to which directory would become the standard.

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Categories: Abstractors, Innovation, Opportunities, Title Industry

Source of Title Blog :: 6 comments ::

< < Get older blog entriesGet newer blog entries > >
Source of Title Blog

Robert A. FrancoThe focus of this blog will be on sharing my thoughts and concerns related to the small title agents and abstractors. The industry has changed dramatically over the past ten years and I believe that we are just seeing the beginning. As the evolution continues, what will become of the many small independent title professionals who have long been the cornerstone of the industry?

Robert A. Franco
SOURCE OF TITLE

 

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