Well, it seems that some title agents just can't read
Good Morning to all!!
I wanted to share with you a very interesting conversation I had this morning with a first time home buyer in the State of Maryland.
The buyer called me after reading a few of my blogs here and in Activerain relating to the Fannie Mae addendum. She is purchasing a Fannie Mae property here in Maryland and she is taking a loan through HomePath. See FAQ's in the link
Her questions to me were in relation to whether or not she was able to use her own title agent, and whether or not she would lose the seller's credit if she did not use the seller's title agent and whether or not she, as a first time home buyer, would be responsible for the payment of the full amount of transfer taxes and stamps. This poor woman was just beside herself because she received a letter from Fannie Mae's "Preferred Settlement Agent" (In a letter delivered to the buyer, that's what they labeled themselves).
After reading my blogs she became increasingly confused because she was of the belief that she:
a) Had an absolute right to select her own title agent
b) Was absolutely going to get the 3.5% seller concession as offered by Fannie Mae through the HomePath program; and
c) Was not required to pay the entire portion of transfer taxes and stamps on the transfer
As a Fannie Mae vendor this title agent should be aware of the wording in the new addendum, but the letter that was sent to the poor buyer states as follows:
Please note that Fannie Mae is strictly enforcing section 2(b) of the Fannie Mae Amendment to Please Purchase Agreement. Section 2(b) states that the buyer must utilize the seller's choice of title company if the seller (Fannie Mae) is paying the buyer's closing costs, including the lender's and owner's title insurance policies. If the buyer is paying their own closing costs, they may choose to use another title company; however, it is preferred by Fannie Mae and makes for a smoother closing process if the buyer uses the preferred closing agent. This will prevent unnecessary delays and ensure a timely closing for all parties.
And, this is the language from Item 2(B) of the Fannie Mae Addendum:
2. Time is of the Essence: Settlement Date:
a) It is agreed that time is of the essence with respect to all dates specified in the Agreement. This means that all deadlines are intended to be strict and absolute.
b) The closing shall take place on a date ("Settlement Date") on or before ___________________,2010 ("Expiration Date"), unless extended in writing signed by the Seller and the Purchaser or extended by the Seller under the terms of the Agreement. The closing shall be held at a place so designated and approved by the Purchaser. The Purchaser has the right to make an independent selection of their own attorney, settlement company, escrow company, title company and/or title insurance company in connection with the closing. (emphasis added) The date the closing takes place shall be referred to as the Settlement Date for purposes of this Agreement. If the closing does not occur by the Expiration Date, or in any extension, the Agreement is automatically terminated and the seller may retain any earnest money deposit as liquidated damages.
Please see the blog I posted some months ago that specifically address just these same questions.
I sent a copy of this title agent's letter to Fannie Mae and immediately got a response advising that in fact the information that I had provided was correct. I wonder how many other poor unsuspecting buyers who have elected to use this particular "Preferred Settlement Agent" have actually LOST money as a result of the fact they this "Preferred Settlement Agent" is misinterpreting or worse, mis-representing the Fannie Mae addendum. Sadly for those folks there is not a lot that can be done for them at this juncture, but for future reference, please advise all of your buyers that if they receive a letter advising that they will lose their seller concession if they elect NOT to use the seller's title agent they should contact me and I will be happy to get them the correct information.
It is always my pleasure to answer all of your questions relating to the purchase of an REO property. Please feel free to call on me.