CHARLENE PERRY's Blog

A SHINING EXAMPLE OF WHY I HATE E-SIGNATURES

CHARLENE PERRY — Fri, 08 Feb 2013 14:38:25 EST

The case at hand involves a elder seller who has relocated to her daughter's home in another state. Throughout the transaction, I have been in touch with seller, through her daugher. There are 2 real estate agents involved, one for seller, one for buyer. Seller will not be attending closing and there will not be a POA used, she will sign in her own capacity.

We are to close today. Seller has delivered all documents to me signed in ink and properly notarized. Good to go, right? Yup, until....

At the final walk through it is discovered that the house is full of furniture, no, not a piece or two, but 3 bedrooms, 1 dining room, 1 living room and the kitchen; ALL the furniture is still in the house. Buyer, as one might imagine, is not happy. It happens that the buyer is an investor and is able to have the furniture removed by a hauling company, but a cost. So, buyer asks seller, through the agents, to give a credit for furniture removal. OK, GOOD, UNTIL....

I receive from the listing agent an addendum e-signed by seller today authorizing a credit for removal of furniture; hmm... very curious given that I had to send documents to seller's daughter, seller's daughter had to print docs and deliver to seller for live signatures.

So, I called listing agent and inquired, is the seller with her daughter, at the computer, and did she (the seller) just e-sign this addendum. I get the empty air response.......

What am supposed to do with this? Well, I am not sure how you all would respond, but I for one am not going to accept this. I have decided to postpone closing to Monday to allow for seller to actually sign the addendum. Am I going to the extreme? Maybe. I have no doubt that the seller agreed to this, I have no doubt that the seller is willing and able to sign this addendum, I just don't like the way in which this addendum was magically e-signed, within minutes of delivery to the "seller" when I know as an actual fact that the seller was no where near a computer today.

I am old school, I admit it proudly. At the same time, I love technology, I embrace technology, but I also know that technology can create more problems that it cures if safeguards are not put in place and actually used.

That's my rant for the day. Thanks for listening -:)

Maryland Court of Appeals decision has far-reaching consequences

CHARLENE PERRY — Tue, 05 Feb 2013 14:07:01 EST

On January 29, 2013, the Maryland Court of Appeals handed down its decision in the 100 Investment Limited Partnership v. Columbia Town Center Title Company Case;

The opinion can be found here

The Maryland Land Title Association (MLTA) has issued comments on this case advising that this case may have far-reaching consequences for title agents in Maryland.

The court held that a title insurance agent who conducts a title search or provides a title commitment in a negligent fashion can be held liable for damages by those who reasonably rely on the search or commitment. The Court stressed that the customer's reasonable reliance on the the title commitment was foreseeable, and that, because the commitment erronouesly indicated good title to a parcel previously sold off, the title agent could be held accountable for damages for failing to discover the problem.

What does this mean to Maryland Title Agents?

Agents must be careful in how they define the scope of their work for their customers. In the ordinary course title agents rely upon the title search and examination solely for their use in evaluating whether or not title will be insurable; and it is not intended for use by the consumer for their own purposes. The commitment, on the other hand, is a product that provides the terms and conditions under which the title policy may be issued and is not intended as an opinion of title for the customer's own purposes. This case now makes it necessary for us to educate our consumers as to the purposes of the title search and our commitment to insure. Over the years I have debated with those of you on this forum as well in other forums whether or not the title commitment should be given to the consumer at or prior to closing. I still believe that the consumer has a right to review the title commitment, but now, with this opinion it will become necessary to come to a written agreement with the customer, prior to delivery of the commitmment, as to the purposes of the title search and examination and the commitment to insure.

Suggestions I have heard:

Confirm in writing that the only product your provide is title insurance and that the only services your provide are closing services
Have the customer sign a simple acknoweldgement of these facts and to confirm that, in the event of a title problem, the customer will seek recourse solely through the title policy and not against the agent.
Suggest, in writing, that should more specific title review be required, the customer should hire counsel or other title professionals themselves.
Communicate IN ADVANCE of closing the scope of your undertaking with the customer so that the customer will have the opportunity to engage the appropriate counsel, if desired. (engagement letters and contracts being strongly recommended)

Written communication will be an important part of the documentation in our files from here out as it relates to the way in which we receive orders for, and deliver, title and closing services for our customers. Agents should consider adding exculpatory language in communications and title orders.

I think that all title companies and abstractors doing business in Maryland should pay close attention to this case. Its impact on our liability is HUGE. It is up to you to protect yourself by putting in place some additional safe-guards; some of which are suggested above. I have no doubt that this issue will be discussed at great length in the board rooms of underwriters and title agencies state-wide and that more suggestions will be made.

I will keep my eye on this issue and will offer more insights and possible suggestions to limit liability as it becomes available.

Who is the Owner of Record?

CHARLENE PERRY — Tue, 25 Sep 2012 16:11:19 EST

This is one of the questions that has been coming up more and more lately in my office, and frankly, I am not real sure how to answer it.

Many of us are seeing more and more transactions of late where the Note Holder has agreed to accept a Deed in Lieu of Foreclosure. As is often the case many lenders (Note Holders) are marketing and selling the property through an Asset Management Company in advance of the recording of the actual Deed in Lieu of Foreclosure. In many instances the actual Deed in Lieu is recorded simultaneously with the Warranty Deed from Note Holder to contract purchaser.

BUT.. the Note Holder insists that the Contract of Sale identify the "Seller" as 'the owner of record'. Hmm...So, then in the event the Deed in Lieu has not been recorded at the time of contract acceptance who is the 'owner of record'? If you read the signature line of the 50+ page contract of sale you will find the seller's signature to read something along the lines of ABC ASSET MANAGEMENT CO., on behalf of XYZ BANK. You will generally find a separate addendum to contract similar to an REO Asset Addendum which again is signed by ABC on behalf of XYZ. BUT, you will NEVER see a contract of sale in these cases signed by the ACTUAL "Owner of Record"

Many of the transactions that have crossed my desk lately have been Deed in Lieu transactions and in some instances the contract purchaser is taking a new purchase money mortgage to acquire the property. I have recently had several situations where the buyer's lender has requested an addendum to contract naming the actual "owner of record", but who do we name? The REO Asset Management Company; the Record Owner; or the Note Holder? When it all shakes out and we go to record there will be at least 2 deeds; one, a Deed in Lieu from the Record Owner to the Note Holder and then another from Note Holder to contract purchaser.

Of course our Title Commitment reveals the name of the record owner as well as the fact that we are going to be recording a series of deeds.

I am probably over thinking this, as I often do, but I would appreciate your thoughts about this. So far, we have usually been required to name the Note Holder in the Addendum in order to satisfy the lender's requirements.

IDOT's, DEFAULT AND DOCUMENT STAMPS (TAXES)

CHARLENE PERRY — Thu, 20 Sep 2012 14:23:57 EST

We in the REO arena in Maryland have been awaiting a decision from the Maryland Tax Court relative to the collection of Document Stamps on foreclosed IDOT's. The Maryland Tax Court issued it's decsion on August 28.

An IDOT (Indemnity Deed of Trust) secures a Note to the Lender which note is executed not by the property owner, but rather by the borrower and guarantor. The IDOT is recorded among the land records to secure only the guarantors liability.

For instance, lets pretend that The Preferred Title Group, Inc. (hereafter PTG) takes a loan from a lender and the lender requires security in the form of real estate. PTG does not own real estate, but I, Charlene Perry, do. So, I would offer the real estate as collateral, the loan would be issued to PTG who would be named as the obligor, and I (Charlene), would guaranty the repayment of the Note and use my real estate as collateral for my gurantee. In the event of default the lender would seek recourse from both PTG and me. Ultimately in the event of default the lender would foreclose on the real estate owned by me.

Prior to July 1,2012 there was no requirement to pay documentary stamps (taxes) on the IDOT at the time of recording. (As of July 1, 2012 recordation taxes must be paid on IDOT's securing loans of $1 Million or more) The rule, prior to July 1, 2012, was that when the IDOT was recorded, the debt that it secured had not been "incurred" by the guarantor, and. therefore, no recordation was due until default by the borrower. As time went on and defaults on IDOT's became more and more prevelant some Maryland jurisdictions claimed tha the unpaid recordation taxes due on the IDOT created a lien on the property and that a purchaser at foreclosure sale was required to pay both the unpaid recordation taxes on the IDOT and recordation taxes and transfer taxes on the Trustee's Deed following the foreclosure sale. Essentially, a double dip.

As you might imagine, this created a entirely new category of costs associated with foreclosures in Maryland and many foreclosure attorneys as well as their clients and many REO title agents locally ended up having to pay these double dip fees until some clarity from the Tax Court was provided.

On August 28, 2012, the court held that in an IDOT transaction, although recordation taxes are typically due when the borrower defaults, only the guarantor is liable for such taxes. The Court held that the unpaid recordation taxes due on the IDOT do not create a lien on the underlying property There is no statutory or legal authority that provides that any other party, including the purchaser at a foreclosure sale, must pay the recordation taxes due on the IDOT. The Court held that after foreclosure, the purchaser need only pay the recordation taxes on the consideration paid on the Trustee's Deed.

One local county in particular has been ordered by the Court to refund taxes collected by them on foreclosed IDOT's.

The decision is still subject to review, an appeal can be made to the Ciruit Court.

For now at least those of us working in the REO field know with some clarity what fees we need to collect and present to the clerk of the court when attempting to file our Trustee's Deeds in cases of foreclosure on IDOT's.

A TALE OF ADVERSE POSSESSION ON A TITLE AGENT'S LAND

CHARLENE PERRY — Thu, 02 Aug 2012 12:36:42 EST

As a title agent with more than 25 years experience behind me I have heard many tales of adverse possession. I never thought I would be a victim of adverse possesion myself, but sadly, I find that my property has been used, for some time evidently, by others for their enjoyment, without my knowledge, by actual, open, hostile, and continuous possession I need to file a title claim.

My husband and I share a peaceful home life on our 17 acre parcel of property with many of God's creatures and for the most part they leave us alone and we leave them alone. There have been those rare occassions when we have had to remove (humanly) some of the inhabitants of our little slice of land, but those have been rare over the years.

I personally don't like anything that even closely resembles a mouse, rat or other rodent and in fact I actually have a phobia about such creatures. As such, my husband is constantly taking steps to insure that there are no rodent like creatures near the actual "homestead" which area contains about 2 acres. Naturally, given that the entire property is backed by acres of woods and we have trees everywhere, the squirrels run amok in smallish "herds" but they really don't bother me and are kind of fun to watch.

In addition to the squirrels I have actually given a "pass"" to ONE groundhog, whom I have nicknamed "Blondie" because his hair or whatever it's called is really light. Blondie goes about his day seemingly always alone and he is also kind of fun to watch. Well, now, Blondie has gone "off the reservation" and has evidently been fooling me all along.

A few weeks ago my dear husband advised me that he had to set traps to eradicate what he deemed to be too many groundhogs in and around the homestead area; claiming that they were destructive and that they just had to go. I questioned his position because I had only ever seen Blondie running around alone and had never seen any other groundhogs.

WELL, upon further inspection it appears that Blondie has been abusing my good nature and has in fact been systematically moving his entire family onto the property without my knowledge or permission!!

The family unit which may have started out with only Blondie and his significant other has grown substanatially and now includes not only Blondie, his "wife" and "offspring", but evidently the in-laws with their progeny have decided to take up residence as well. These critters are none too shy and have been blatently and systematically overtaking a 1/2 acre parcel, making it their own and enjoying life to the fullest!!

These critters have never pulled a permit to enable the construction of their homesite, they don't pay me any taxes or rent and they have not requested, nor been granted, an easement into my husband's vegetable garden. I think I have a good claim.

Before I prepare the necessary documentation to prove my claim, my husband is going to attempt to remove all of the illegal occupants by using humane traps and relocating them. As of today's count, he has removed 4 of the interlopers and he estimates there are least 8 more that simply have to go. I can only hope that he leaves my little "Blondie" alone, but I fear that at this point he is not going to be as generous with Blondie as he might have been if Blondie had not tried to pull a fast one on us.

IT'S ALL ABOUT TIMING REALLY

CHARLENE PERRY — Tue, 03 Jul 2012 14:55:55 EST

I swear this is a true story. I cannot make this stuff up, I'm not that imaginative!!

I had a gentleman come into my office yesterday who wanted me to do two simple deeds for him. Or so he thought!! As he and I sat discussing these two properties he needed new deeds on the story unfolds as follows:

The client, John, owned two parcels with a business partner, Frank; John and Frank have owned these properties as joint tenants since the early 1980's. In May,2012, John decided that for estate planning purposes he wanted to sever the joint tenancy and create a tenancy in common with Frank. Frank agreed to this and new deeds are drawn executed and recorded. So, now John and Frank are tenants in common, their partnership remains intact and really nothing much has changed except that John is assured that his children will benefit from this estate planning tool.

AND THEN, in June, 2012, Frank is murdered!! Seriously!! Frank owned several businesses and one of his businesses was robbed, he was killed in the robbery. ENTER THE VULTURES!

Frank was a wealthy businessman with many assets. He leaves no wife or children behind and he leaves no will. His parents have been appointed as Personal Representatives of his Estate and are in the midst of administering the estate; etc. John, who has known these folks for years, goes to them and says, "hey, I need to get these properties back into my name solely, will you sign a Deed over to me? The properties are both encumbered by small mortgages, which I will pay off, I just need a new deed" .

The vultures response; YUP, give me $15K per property and pay off the underlying the debt and the properties are all yours!! "

So now what should have been two simple deeds has resulted in John having to go through actual settlement transactions on both parcels as well as his personal residence to enable him to acquire the entire estate in his own name (he has to borrow money to pay the 30K to the vultures).

Some people!! Even in the aftermath of the death of thier child these vultures are only thinking about MONEY; they have given no consideration to the fact that John and Frank had been business partners for years, that John and Frank had paid down the debt together (as part of their business) on these properties. All they can see are the dollar signs.

I feel for John, I really do. Had he delayed his decision to have new deeds executed he would have been sole owner, he would not have to encumber his personal residence and his family would still have been protected. TIMING, it's all about TIMING

You hired me to do a job so, get out of the way and let me do it

CHARLENE PERRY — Wed, 20 Jun 2012 16:08:53 EST

You ever have a client you wanted to fire? Of course, we all have. But this one takes the cake for sure!

This returning client hired me to do a rush job on an investment property he was purchasing. He had convinced the seller to hold the note on the transaction and wanted me to push this entire transaction through within less than 10 business day! In my opinion he was afraid the seller would wise up and realize that he was being shafted on the sales price and wanted the deal to close before the seller could back out. But, that's my opinion, not a statement of fact.

To further complicate matters we are at the end of our fiscal tax year in Maryland and have very specific cut off dates relating to recording before the end of the tax year or paying the real esate taxes due on July 1. So, as one might imagine, the court house is jammed with title agents and their representatives trying to get everything together within in the allowed time. And in addiiton, there is a document titled "lien certificate" that is required to be presented with deeds which document indicates whether or not the county, municipality or state have placed any liens against the property, including open taxes etc. So, again, as one might imagine, there are HUNDREDS or more RUSH requests at the liens department to get this document in enough time to allow for recording before the end of the fiscal tax year.

Now as this transaction has progressed this is what has occured:

Client called office to speak to me, was told I was in closing and would be at least another hour; client SCREAMED at my assistant stating "there is no way in hell a closing takes an hour, have her call me right now!" and then, immediatly following that call......
client stopped by my office while I was in closing waited for me to come out of the conference room to make a copy and commenced to follow me around my office asking whether certain things had been done relating to his transaction; client was aware that I was in the middle of a closing transaction but kept me tied up for more than 10 minutes
client called DAILY after having called the clerk of the court, the taxing authority and a "friend" who does title searches to see whether or not certain things relating to his transaction had been completed; client claiming we were "dragging our feet"
At closing- client continually interrupted me as I was trying to explain the Note and Mortgage to seller, remember, seller was holding the paper! Client repeatedly stating to seller "none of that matters, just sign and let's get this done, I'm in a hurry"
At closing, client refused, despite the demand of the seller (Note Holder), to allow me to hold an escrow to pay taxes due July 1, stating if taxes aren't paid by June 30 he will pay them himself at that time. Great but, after June 30 if we can't record because we don't have that RUSH lien certificate, we can't record until the buyer pays the taxes and the seller's 1st lien (Mortgage) on the property won't record until then either.

And then today he calls again to stated, in a very animated way "I don't care what you have to do, I don't care what your cost, I WANT THAT DEED ON RECORD TOMORROW! Well, believe me, so do I, but guess what? That RUSH LIEN we asked for is not here yet.

I am about ready to choke this client for real. Who does he think he is?

Why would you hire a professional to provide a professional service to you, ask for and receive preferential treatment as it relates to time lines and then behave in this manner? If you hire me to do a job I will do the job to the very best of my abilities, I will use all of my available resources to meet your demands and I will treat you with respect and courtesy. All I ask is for the same courtesy and for you to GET OUT OF THE WAY AND LET ME DO MY JOB

At what point do you file a formal complaint and if you do who are you hurting?

CHARLENE PERRY — Wed, 16 May 2012 15:23:33 EST

Day in and day out I read and review REO contracts of sale and the counter offer addenda attached. As is always the case, the counter offer addendums control the transaction. Most of the larger default management companies use the same, or same variation of the same addendum, BUT, you have to read each and every on in it's entirety to insure that you have not missed any critical item.

A recent REO transaction included a standard contract of sale and the asset management company's counter offer addendum. For the most part the counter offer addendum was pretty straight forward except that there was an additional page to the counter offer addendum titled "REO Escrow/Closing Disclosure for Buyer's Choice" which reads as follows:

Seller hereby agrees and acknoweldges Buyer has the right to select the Settlement/Closing Company and Title Insurance Company. In this regard the Buyer has selected its own Settlement/Closing and Title Insurance Company other than Seller's designated closing service providers therefore Buyer agrees as follows:

Buyer will pay ALL title insurance and settlement/closing fees, including those customarily paid by the Seller.

OK, makes sense, buyer elects to use our services, buyer pays for all of OUR services to them. And then I receive the seller's title agent's closing instructions to me. Again, very ordinary, EXCEPT that in the closing instructions to me there is this little blurb...

The buyer elected to use your company, please see REO/Escrow closing disclosure for Buyer's Choice. You must collect a seller settlement closing fee of $700 payable to [Seller's Title Agent]. This fee is paid by BUYER.

SAY WHAT!! Now remember that this requested collection of funds from the buyer to pay the seller's title agent is NOT part of the contract, It's part of the instructions to me for preparation of the final HUD for review and approval by seller.

The way I intrepret the REO/Escrow Closing Disclosure is that if WE customarily charged a seller settlement fee then the buyer would pay that fee. In no way did I, nor could I have, intrepreted this to mean that any fees to be paid by seller to others became the responsibility of the buyer.

So, in my preparation of the final HUD I omitted the requested $700 fee. And guess what?? No one balked at that. The seller's title agent sent me a fee sheet with fees to be paid by SELLER unto seller's title agent from the proceeds of sale.

The question then is this. What if I had not omitted the fee but had instead gone ahead and arbitrarily charged that fee to the buyer? You can be sure that the seller's title agent would not have asked that I remove that fee. Thus, the seller's title agent would have gotten paid twice for "services rendered" to seller.

I represent sellers in REO every day. I have NEVER asked that a buyer pay a fee to me that should have or will be paid to me by the seller. And, as a point in fact, I don't think I can ask that a buyer pay a fee to me simply because they elected to use the services of their own title agent, as is their RIGHT in Maryland.

I am sure that this title agent has been paid in the past by unsuspecting buyers; or those who's title agents were not familier with the workings of REO transactions. I am equally sure that this request for payment is a violation of some rule, law, mandate, but I am not certain which rule, law, mandate has been violated. I am also sure that this behavior has to be reported to a regulatory agency within this state, for the protection of future buyers, but I am not sure to whom I would send a complaint.

And too, I am not sure that it would do a lick of good to file a complaint. Who would it help? Me, NO, My buyer? NO, my buyer was not harmed, other buyers? Probably but who are they? How many are there? How do I find them?

And, too, with business being what it is and given that I operate in a very small arena (REO) for the most part, would I end up actually causing myself harm by filing a complaint? There are a handful of firms who operate in the REO arena in my area and we all know one another, and for the most part we all work well together. Do I want to take a chance of losing business because I took the high road?

Sometimes doing the right thing is the wrong thing to do. This may be one of those cases. Nevertheless, I will be ever mindful of this new attempt by this seller's representative to "double dip" and will keep doing all I can to save at least some people from having to pay this extortionist fee.

The foreclosure costs you don't hear about

CHARLENE PERRY — Mon, 07 May 2012 15:32:26 EST

We have all heard and read about the high cost of foreclosure vs. perhaps short sales or deeds in lieu, but do you ever stop to consider the other costs involved that no one is talking about?

In most every foreclosure outsale case that I have been involved in there have been past due bills which need to be paid by the seller at or in advance of closing. Some of these bills are moderate, less than say $100.00 and then we have the other end of the spectrum, bills in the severals of thousands of dollars.

All of the bills in question should have been paid by the servicing lender as part of their servicing agreement, but more and more often I am finding that NO BILLS are being paid in advance of the property being sold to a third party, other than those that may be necessary to enable the recording of the Trustee's Deed.

A particularly frequent occurance of late is the failure of the servicing lender to pay open water bills (liens on property in Maryland) front foot benefits, real estate taxes, HOA bills and ground rent bills.

In one particularly stunning example of the added cost to the public which was not recouped by the seller in their out sale was a bill for front foot benefits which bill started out at $700.00 when the property first fell into default. For those unfamiliar with this term a front foot benefit is a fee that is charged to the homeowner for “construction & installation of water & sewer systems” that are connected to the home. These fees are not part of the annual real property tax bill but rather are paid annually to a third party collection agent for a term of usually 30 years from date of installation. These fees run with the land.

Had the servicing lender paid the bills annually throughout the long and drawn out pre and post foreclosure process they would have paid at most $1400.00, but, because they ignored the bills when the time came to actually convey the property to the third party purchaser, the bill, which now included the cost of filing suit to collect, attorney's fees, late fees, interest etc. totaled in excess of $10,000.00

As is almost always the case these days I was working through a default management company who was representing the seller. This default management firm is tasked with getting the property sold on the open market. Their job includes marketing (through Realtor assignments), management of the property and review and acceptance of offers to purchase. The default management company has no information relating to what, if any, open bills need to be paid by the seller at the time of the conveyance to the third party purchaser. So, the default management firm accepted a contract of sale, based, I assume, on a figure the seller had defined as their minimum gross.

It would seem reasonable to assume that the seller had tasked their closing agent with determining, in advance of marketing, which, if any, bills would need to paid as part of the outsale thus allowing the seller to determine an acceptable minimum gross sales price to cover their total cost of carrying the property, including open taxes, water bills, etc. Evidently, we should not make such assumptions.

In more and more instances I find that neither the seller nor their assigned title/closing agent have taken the steps to determine, in advance, whether or not there are miscellaneous bills that need to be paid as part of the sale transaction. They wait instead until a contract of sale is accepted and THEN they learn what open bills must be paid. In the case at hand I was handling the transfer on behalf of the buyer and the seller's title agent had no idea that this bill was outstanding until I brought it to their attention. At the time of the actual closing this seller had to PAY $3700.00 at closing to enable the transaction to proceed.

The note holder on this property was a "too big to fail" Bank. Is it any wonder, given this failure to properly service the property that these banks needed a hand out in the first place.

Would it not make better sense to pay the fees when due this eliminating late fees, interest penalties, litigation costs, attorney's fees etc.? Do you think that those who are footing these bills; ie: the taxpayers, have any idea how the bail out funds are being used?

I for one am becoming increasingly frustrated with the way in which these servicing lenders are spending money on fees that should never have been allowed to be assessed IF the servicing lenders had actually serviced the loans by paying the taxes, etc. when due rather than waiting for the property to go to sale on the open market.

So, the next time you hear that a "Too Big to Fail" or a GSE is looking for more money from the Federal Government remember that at least some of those monies were spent to cover fees that never should have been allowed to accrue.

Fannie and Freddie and unpaid transfer taxes

CHARLENE PERRY — Wed, 18 Apr 2012 13:32:19 EST

A recent article shared here on SOT and reported in The Berkshire Eagle relating to the payment of transfer taxes and stamps paid to the Clerks of the Courts by Fannie and Freddie on conveyance deeds got me to thinking......

The Fannie Mae Real Estate Purchase Addendum has a specific parargaph Section 10 (c) wherein they claim an exemption under Title 12 for the payment of transfer taxes.

Prior to February 2010 that particular paragraph was interpreted to mean that if the transfer taxes were collectable (exemption not recognized by the jurisdiction) then the buyer would be responsible for the payment of these fees as part of their closing costs. Many jurisdictions, including some in Maryland, have never recognized this exemption. As a result of that interpretation many consumers have paid over to the Clerks of the Court many thousands of dollars that perhaps should have been paid by Fannie and Freddie.

In January, 2010 Fannie started using a revised Real Estate Purchase Addendum and in February, 2010 they issued an explanatory document relating to that new addednum. A review of that document specifically as it relates to Section 10(c) says that the seller (Fannie Mae) will pay their portion of those fees IF it is usual and customary for a seller to pay and IF the exemption is not recognized. So, beginning in February, 2010 we have been able to "split" those fees in Maryland between seller and buyer.

So, then the question that comes to my mind is this; If it is determined, either jurisdictionally or nationally, that Fannie and Freddie were erroneously claiming an exemption and if, as a result of that error, consumers were made to pay monies on behalf of Fannie and/or Freddie does the consumer have a right to persue repayment of those monies from Fannie or Freddie?

I wonder how many other states are looking at this exact same issue in an effort to get more funds into their budgets? In the Berkshire article it states that the losses to the Southern Essex Registry alone could amount to 4.2 million dollars owed for fees not paid.

One can only wonder how much money was paid over nation wide by consumers on behalf of Fannie and Freddie in those jurisdictions where the exemption was not recognized.

I don't think it would be unreasonable to expect class action suits against Fannie and Freddie by consumers for the reimbursement of these fees.

Is your's the last deed that will be ever be needed on that property?

CHARLENE PERRY — Wed, 04 Apr 2012 15:45:42 EST

Probably not. So, why then would you record a supposed "Deed in Lieu of Foreclosure" that is so vague as to be dang near useless to those of us who come behind you?

Trolling through the morass of documents involved in a "simple" transfer these days is like walking through a mine field with blinders on. So when your transaction is not so "cookie cutter" why would you file a "cookie cutter" deed? And why, when asked to do a simple confirmatory Deed would you put your arrogance in front of your good sense and absolutely refuse to help a fellow title agent?

The case at hand involves a transaction in which there are THREE (3) OPEN MORTGAGES/DEEDS OF TRUST on the property, one of which gave rise to a Deed in Lieu of Foreclosure. The Deed of record from record owners back to bank is a simple Special Warranty Deed that makes no reference at all to the fact that the bank took the property back in lieu of foreclosure, it does not make reference to which of the three open mortgages/deeds of trust the bank held except for a vague reference as to the actual consideration paid, which consideration "sorta" matched on the original loan amounts shown on the open security instruments.

A call to the title agent who prepared and filed the Deed in Lieu on behalf of the bank netted absolutely no help at all. When I asked the title agent to prepare a confirmatory deed that at least referred to which of the 3 open security instruments the bank held I was told that the deed of record was perfectly sufficient to effectuate the transfer of the property and that a confirmatory deed would not be necessary. Now, I never said it was not sufficient to effectuate the transfer, I simply said that it was too vague for those of us who are not mind readers to try to figure out.

After some back and forth between myself and the actual seller (the Bank) I determined which instrument gave rise to the deed in lieu and which instruments I need to get releases for. I was able to have the deed from Bank to my purchaser prepared in such a way as to clarify how the bank came to be in title, etc.specifically referring to the Deed of Trust that had been defaulted upon Now at least when the next abstractor/title agent has to review the chain of title there will be a recorded document that actually explains the back title.

Has everyone suddenly decided that their's is the last deed that will ever be needed to be recorded for that particular property and that no clarity is necessary? I ask because this was one of two files on my desk last week that required clarity and clean up to correct/clarify the chain in order for others to be able to make sense of it in the future.

I'm sure that over the years I have probably filed a deed or two that was drafted in a less than stellar way, but you can be sure that if anyone were to call me to ask for help with clarification I would not respond by suggesting that they were being nit-picky, nor would I absolutely refuse to assist.

Well, in the instant cases the sellers ended paying a fee for title clearance and document preparation which could have been avoided had their title agent simply agreed to assist. Both balked initially until I explained the issues and then both were more than willing to pay the fee.

Try to remember that others are/will be relying upon your work product in the future. Let's not make it harder and more expensive for everyone by insisting on taking the easy way out. Sometimes form deeds just don't work.

Are you inadvertently committng a crime?

CHARLENE PERRY — Thu, 22 Mar 2012 16:14:23 EST

With the large influx of short sale transactions coming across our desks, we are reminded to be careful in just how far we go to get the deal to the table.

I learned just last week that Maryland has a specific provision in its Credit Services Business Act that mandates licensing for those who are negotiating a short sale on behalf of seller.

The specific provison speaks in broad terms, but I have been advised that it definately covers short sale negotiators. I am also advised that there are no exemptions in the Act for title agents or real estate agents. Part of the act states as follows:

Applicability
Businesses which provide loss mitigation consulting, foreclosure prevention, mortgage loan modification, and/or similar services likely will be subject to the MCSBA. As the services provided by these businesses typically include the possibility of deferral of payment on consumers' mortgage loans, these businesses often will come under the definition of "credit services businesses" under the MCSBA. As such, they are required to be licensed as credit services businesses ("CSBs"), and they are subject to various investigatory, enforcement, and penalty provisions as licensees.

I have never knowingly violated this act, but because it is so broad, I wonder just what the limitations are.

This Act seeks to protect consumers from those who may want to take advantage of others by requiring licensing for those who are seeking to assist consumers in their efforts to stave off foreclosure.

I don't know exactly what the requirements are for obtaining the license, but this broad language certainly makes you realize that you may have inadvertenly been acting as a defined foreclosure consultant without even realizing it.

Who is a "Foreclosure Consultant"?

If a person offers the services described below to a mortgage borrower who is at least sixty days in default, it is likely that the person will be a "foreclosure consultant" under PHIFA.⁶ Thus a homeowner need not be in foreclosure for PHIFA to apply.

"Foreclosure consultant" is defined under PHIFA as a person who:

Solicits or contacts a homeowner in writing, in person, or through any electronic or telecommunications medium and directly or indirectly makes a representation or offer to perform any service involving any of the following:

Stopping, enjoining, delaying, voiding setting aside, annulling, staying, or postponing a foreclosure sale;
Obtaining forbearance from any servicer, beneficiary, or mortgagee;
Assisting the homeowner in exercising a right of reinstatement provided in the loan documents, or in refinancing a loan in foreclosure and for which notice of foreclosure proceedings has been published;
Obtaining an extension of the period within which the homeowner may reinstate the homeowner's obligation or extend the deadline to object to the ratification;
Obtaining waiver of an acceleration clause contained in the mortgage on a residence in default or in any promissory note or contract secured by the mortgage;
Assisting the homeowner to obtain a loan or advance of funds;
Avoiding or ameliorating the impairment of the homeowner's credit resulting from certain events related to the foreclosure;
Saving the homeowner's residence from foreclosure;
Purchasing or obtaining an option to purchase the homeowner's residence within 20 days of an advertised or docketed foreclosure sale; or
Arranging for the homeowner to become a lessee or renter entitled to continue to reside in the homeowner's residence after a sale or transfer; or
Systematically contacts owners of residences in default to offer foreclosure consulting services

Foreclosure consulting service" includes any of the following:

Receiving money for the purpose of distributing it to creditors in payment or partial payment of any obligation secured by a lien on a residence in default;
Contacting creditors on behalf of a homeowner;
Arranging or attempting to arrange for an extension of the period within which a homeowner may cure the homeowner's default and reinstate the homeowner's obligation;
Arranging or attempting to arrange for any delay or postponement of the sale of a residence in default;
Arranging or facilitating the purchase of a homeowner's equity of redemption or legal or equitable title.
Arranging or facilitation the sale of a homeowner's resident or the transfer of legal title, in any form, to another party as an alternative to foreclosure; or
Arranging for or facilitating a homeowner remaining in the homeowner's residence after a sale or transfer as a tenant, renter, or lessee under terms provided in a written lease.

You can be sure that I will be taking special care not to violate any provisions of this act, and, I will also be asking for the license number of the person(s) who are acting as short sale negotiators in my Maryland transactions from here out.

There is a push to have real estate agents exempted from this rule, but for now, real esate agents are not exempt and thus cannot, without seperate licensing, be a party to the actual negotiations between seller and short sale lender.

This is an ever changing arena and we all need to make sure that we are current and up to date on those rules that may affect us and our clients. While this rule has been in place for quite some time, I truly did not know about it until last week. I do all I can to keep up on all matters that may affect my office and my clients but somehow this one just got past me.

You may want to check with your State Licensing Bureau to insure that you are not inadvertenly violating any licensing provisions that my have been mandated by your individual state.

Things that should be revealed by a title search

CHARLENE PERRY — Mon, 27 Feb 2012 12:26:35 EST

I often act as liason/seller rep in REO transfers and work together with many local title agents who are doing the actual closing and issuing policy to the buyers and their lenders. I must admit it's a little frightening to me when I ask certain questions of buyer's title agent and get a response such a this....

Our title report revealed that the property was subject to two seperate recorded "exceptions" to title, both of which affect the new buyer and both of which should be read by and accepted by the new buyer in advance of closing.

One of the documents, properly filed and easily found, is a Declaration of Easement which creates a conservation easement over the property. There are certain specific restrictions relating to this easement that the buyer needs to be aware of.

The second document is an Inspection and Maintenance Agreement which refers to a private storm water management faciity on the property; this private storm water management facility can be inspected by the County at any time AND there are potential future fees that could be associated with the maintenance of this faciity. The document clearly states "this Agreement shall bind upon and run with the land subject to this agreement...."

So, I asked the buyer's title agent to have the buyer sign a copy of both agreements. I ASSUMED that the buyer's title agent would have a clue as to the agreements I was talking about but she had no idea what I was referring to. I was able to give her the recording information, but I was curious as to why she did not already have information relating to these two exceptions. Her response, "my abstractor just notes, "subject to all matters of record.........to the extent that the same apply to the real estate described herein".

It is my practice to provide a copy of the commitment and all recorded exceptions to buyers and lenders in advance of closing so that they can raise any objections to title prior to closing. The question being, if you don't know specifically what those exceptions may be, how can you raise any objections to them.

Just another example of the "short cuts" being taken by some to save a few minutes or a few dollars.

Training the new generation of "closers"- My Big Blue Bird is catching on

CHARLENE PERRY — Fri, 06 Jan 2012 14:44:41 EST

I wish I could share a picture of my sweet big blue bird, Skyler Blue with you here, but suffice it to say, he is beautiful, and he is very smart!! He could easily learn how to "conduct" a closing if I worked with him enough.

Skyler, a/k/a Big Blue Bird, is my sweet 15 year old Blue and Gold Macaw and he is very bright. He has a vast vocabulary and he has learned to mimic many things that I say to him. He calls for his Mommy, he says help me, cookie, cracker, ouch, and about 30 other words and phrases. He has picked all of these words and phrases up simply because he has heard them over and over again over the years. He does understand what some of them mean, for instance, he does know that if he says "Mom", I will come to him, if he says cookie or cracker he will get a snack, and if he says "help me" I will turn off his radio. (I'm not sure how that came about, it's kinda strange really).

My sweet Skyler is learning "sign here" but he can't seem to grasp "initial here", but we're working on that. Why do I bring the Big Blue Bird into this discussion?

I hear more and more tales of "closing agents" being hired to "conduct convenience closings". Many of these "closing agents" have in fact been involved in the title insustry and many of these closing agents may even be licensed title agents. BUT, many of these "closing agents" are notaries public who are trying to supplement their income and who have signed on with firms that offer convenience closings.

There is absolutely nothing wrong with someone trying to supplement their income by offering a service that is demanded by the public. But, as a professional title agent, I just don't think that the consumer understands how very important it is to meet with a professional title agent, in a professional setting during regular business hours who is familier with your closing file and who has the ability to answer questions that may be presented at the closing, or in the alternative get the answer to your questions.

My sweet big blue bird can say "sign here" and he could probably even learn to point to a particular document while saying that; as I said he is very bright! But if he were to be asked to answer a question about any of the documents presented he would likely respond with "help me". And therein lies the crux of the problem with using non-professional title agents to conduct your "convenience closing".

First and foremost, a real estate settlement transaction commits you to financial obligations. It is incumbent on YOU the CONSUMER to know what you are signing before you sign it. Sure, you may be involved in a refinance transaction, and you may think that the signing of the new loan documents is simply a technicality but that small technicality OBLIGATES you to a debt. Do you really want to take on that kind of responsibility while sitting at your local coffee shop or in your kitchen after business hours when there is no one available to answer your questions?

Yes, we can train almost anybody to "witness" closing, but in order for that "witness" to be able to answer your questions they need to be know the business of title specifically and real estate generally.

Call on the services of The Preferred Title Group, Inc. in Maryland for a professional settlement experience. If you are not located in Maryland, call on the services of an Professional Independent Title Agent in your area.

Robo-Signing..it's still alive and well

CHARLENE PERRY — Thu, 05 Jan 2012 13:55:30 EST

But with a twist. Since the explosion of media attention given to the robo-signing debacle lenders and servicing agencies have all said that they have changed their ways and that robo-signing is no longer an issue, UNLESS...

You consider the widening use of electronic signtatures.

E-signatures have been around for a while and many companies are marketing this as the next best thing for the closing process. But, in addition to that, lenders and servicing agencies have discovered that they can get thousands of documents signed without so much as a hand cramp simply by using e-signatures.

Electronic signatures are legal in may jurisdictions, including Guilford County, NC. A recent study done by Jeff Thigpen, Register of Deeds in Greensboro, NC reveals that banks have wised up and rather than having several people signing the same persons name over and again, the banks are now using e-signatures.

According to records compiled by Mr. Thigpen the use of e-signatures has dramatically increased

Since the forgeries were uncovered, Bank of America’s filing activity has shifted more than that of any other bank. According to records compiled by Thigpen, a woman named Bethany Smith signed off on 97 land records for Bank of America in Guilford County between May 1, 2010 and October 30, 2010.
Over the next six months — from November 1, 2010 to April 30, 2011 — Smith approved 1187 documents filed with Thigpen’s office — more than 12 times as many documents as she signed in the six preceding months. Each document appears to have been signed electronically.

There is absolutely no way to tell whether or not the documents that contain an e-signature were ever reviewed by the person whose names appears in the signature line. But, I assume, because the use of e-signatures is allowed in Greensboro, NC as well as in other jurisdictions, there will also be no in which to ever challenge the validity of the documents should that need ever arise.

I have said many times here in this forum and others that I do absolutely love technology. But, with all technology comes the unintended consequences of mis-use as is suggested by Mr. Thigpens review.

Soon, particularly as it relates to the real estate title industry, human beings will not be needed at all; robots can be programed to load documents, enter data and command the computer to print and deliver the documents to the court.

Do you have your resume up to date? Maybe it's time.