Good afternoon,

Here with the Better Business Bureau would like to notify you that we have been sent a complaint (ID 44265713) from your customer related to their dealership with you. Please open the COMPLAINT REPORT {WEBLINK OMMITTED} below to find the details on this case and suggest us about your point of view as soon as possible. We are looking forward to hearing from you.

Sincerely,

Fernando Grodhaus

Dispute Counselor

Better Business Bureau

This is NOT a real complaint and you should NOT open the link.

In all likelihood, this is a phishing scam or a virus. Most scams can be identified by the poor grammar or deplorably bad writing. The Better Business Bureau, for instance, is unlikely to request that you “Suggest us about your point of view” or state that your customer has a complaint about their “dealership with you.”

Whenever you receive a questionable email like this, the easiest tool to discover a scam is Google or another search engine. Try a Google search of portions of the email or of the author’s name. In this case, we discovered this to be a scam.

Google Search

This is a dangerous question to answer without treading into the realm of legal advice. The simple answer is: your buyers don’t need to do anything — marriage doesn’t change the fact that they jointly own the property.  But, the deeper question likely being asked is, “How should I hold title now that I’m married.”  This is a legal question and should only be answered by an attorney.

When two or more people acquire title to real estate, their rights can be established by important language on the deed. For instance, unmarried individuals could designate their rights as Joint Tenants or Tenants in Common. Similarly, married individuals may want to own the property with survivorship rights so that the property will automatically transfer to the surviving spouse when one spouse passes away.

These designations have very significant legal meanings and can determine who has ownership rights upon a sale or at death. These choices are not simple, require an analysis of a number of factors, and most importantly, constitute legal advice.

Many lenders, Realtors, and title professionals tell all married buyers, “You should take the property as survivorship marital property – everyone does that.” This may be good advice for the majority of people. But, for the few married individuals who have good reason not to make this choice, this is not only bad advice, it could constitute legal malpractice.

Indeed, there are a multitude of reasons that married individuals might not want survivorship rights, including:

• They have a premarital agreement,
  
• They may be using funds for the purchase that they wish to keep separate,
  
• One or the other of the spouses has children from another marriage
  
• There is a will or estate plan in place
  
• They have or will soon have inheritance
  
• Many other factors
  

The analysis of these and other facts is a purely legal function that should not be undertaken by non-attorneys. The majority of married couples do opt for survivorship marital property, after consulting with an attorney. Nevertheless, this does not mean that non-attorneys should assume that this choice is right for everyone.

The Realtor, lender, or title company that is asked the question, “how should the buyer take title” should answer:

The buyer should consult an attorney to determine what is best for their given facts and circumstances. I am not an attorney and cannot provide that kind of advice.

It is conventional wisdom that the best time to close a home sale is at the end of the month. Closing at the end of the month means buyers bring less cash to closing. While closing at the end of the month might be more convenient for buyers, it can result in a hefty penalty for Sellers who need to pay off FHA loans. Realtors, attorneys, and sellers need to plan carefully when the seller has an FHA mortgage.

Most mortgages will charge interest for each day that the mortgage goes unpaid. The only extra costs to closing later in the month, or into the next month, are the added day(s) of interest. FHA Mortgages, on the other hand, charge interest in one month chunks. One full month of interest is due, without refund, on the 1^st day of each month. Closing on the first few days of the month will result in paying for a full month of interest even thought the seller no longer owns the property. So, it would appear to be best to close on the last day of the month.

Not so fast. A seller that closes on the last day of the month may not be able to get their FHA payoff to the bank until the 2^nd or 3^rd day of the next month. This will result in a hefty, non-refundable, one-month interest penalty. And the title company may not be able to wire out funds immediately after closing to meet the end-of-month deadline. Wire deadlines range from 1pm to 3pm. In addition, wires that arrive at the receiving bank after 3pm will not be credited until the next business day. And wires can take many hours to travel from one bank to another.

If you know your seller has an FHA mortgage that is being paid off, make sure to schedule closing with at least one business day remaining after closing. This will be a quieter time for the title company and lender, will mean less volume and more attention to your file, and will prevent that nasty, one-month interest “penalty.”

Rates ARE at Historic Lows!

Interest rates are indeed at historic lows and, for most people, it makes economic sense to refinance. At this time last year, consumers heard the same drumbeat about low rates. And the news was all true – rates were at historic lows, with 30 year rates at about 4.5%. Today, many banks are offering rates of 3.85% on a 30 Year mortgage. Once again, rates have hit record lows. But many home owners just don’t believe the hype.

Lender and Realtors will tell you that there is no better time to borrow or buy. From the standpoint of interest rates, this certainly appears accurate. Indeed, even if a homeowner purchased or refinanced this summer, it can still make perfect financial sense to refinance again. With interest rates almost a full point (ten basis points in lending terms) lower than early summer, a homeowner with a $225,000 mortgage can save over $130 per month. And, a first time homebuyer has incredible purchase power, with the combination of lower home values and incredibly low interest rates.

Is an ARM an Option?

It is hard to believe that mortgage rates could go any lower. Of course, we’ve all been saying this for 10 years. Still, most people would say it is crazy to pass on locking in on a 30 year mortgage at rates in the 3′s. Then again, how many people own the same house for more than 30 years? Most people move before the end of 10 years. Indeed, it is very common to move every 5-7 years. If you know that you will not be in the same house 4 or 5 years from now (your kids will be in college, your family will outgrow the house, your already thinking of a move), then an adjustable rate loan (an ARM) could be an incredible cost savings. Some banks are offering 5-Year Adjustable Rate Loans at 3.2% or lower. Using the same example above, a homeowner with a 5% interest rate might save $235 per month for the next 3-5 years.

The Challenges of Refinancing

There are challenges to refinancing. Of course, there is the paperwork and time. And there is also the increased standards and scrutiny. Gone are the days when a poor credit score could be overlooked. And gone are the days of easy appraisals. With housing values near or below levels seen 8-10 years ago, many homes simply don’t appraise for enough to support a new loan. For homeowners with decent credit and a lot of equity in their homes, these are not insurmountable hurdles. And, any homeowner thinking of refinancing should work with their lender and never assume they simply won’t qualify.

All of this is to say, believe the hype. Interest rates ARE at historic lows and it IS a great time to buy or refinance. Don’t pass up an incredible opportunity to save money or buy the home of your dreams.

Homestead Title is not a lender and does not provide any loan products. We do provide incredible service and great rates for Wisconsin buyers, sellers, and home owners wishing to refinance their loans.

Homestead Title is excited to announce that we have remodeled our West Office, expanding by over 1,000 square feet. We have also added incredible team members over the last season. Mary Sweeney joined us this summer and brings decades of experience as a residential and commercial closing officer. She is a true professional and an incredible asset. Darlene Noggle recently joined us as a closing coordinator. Darlene also brings decades of experience and knowledge – she was a loan processor with a major local bank for years. She has a deep understanding of lending issues and is a great closer as well.

With our growth and added staff, Homestead is able to provide even more outstanding customer service, with faster turn-around times and even more tender loving care to each closing. Our mission is to assure that, in everything we do and every communication and action we take, we make transactions less complex, less stressful, and smoother.

Please welcome Mary, Darlene, and the changing seasons!

It might seem odd to send a “We Did NOT Move!” announcement. But that is exactly what we are doing.

Homestead Title is still at 3 Point Place, Suite 105 on the West Side of Madison. We still have all of the same contact information and the same downtown and east offices. But, we did remodel our West Side office and move down the hall about 100 feet.

You will find us at almost the exact same place – just one door further down at the South Entrance.

Homestead Title

3 Point Place, Suit 105

Madison, WI 53719

Ph:  608-203-4800  |  Fax: 608-203-4802

We look forward to showing you our new remodeled space. The best way to come see it is to schedule a closing. Of course, you can also just stop by to say hello.  And, we’ll have a Grand Still Opened party soon!

Until then, see you at closing!

Are short sale REALTORS violating federal law by not giving mandatory disclosures?

The Federal Trade Commission (FTC) has issued a new Rule designed to curb unfair and deceptive practices in the “mortgage assistance” area. Too many companies prey on distressed home-owners and make hallow offers to help re-negotiate mortgages or stave off foreclosure. Consumes are often left paying thousands of dollars and still losing their home. The new rule is designed to alert consumers of their rights and limit deceptive practices. Although REALTORS generally are not involved in these assistance schemes or deceptive acts, the rule appears to have broad and sweeping coverage which includes many REALTORS.

The MARS Disclosure Rule

The Mortgage Assistance Relief Services (MARS) rule requires any company providing mortgage assistance relief to comply with certain requirements and provide very specific disclosures. A few of the provisions include:

• It is illegal to charge upfront fees. All fees must be collected only upon a successful outcome.
  
• Information must be prominently disclosed before signing people up for services, including: the total cost of services, that they can stop using your services at any time, that you are not associated with the government or their lender, and that their lender may not agree to change the terms of their mortgage
  
• If you advise someone not to make a mortgage payment, you must also advise that this can result in the loss of their home and damage to their credit.
  
• You may not advise customers to stop communicating with their lender.
  
• You must provide key information to your customer when forwarding a lender’s offer of mortgage relief, including that the customer does not need to pay you if they reject the lender’s offer
  

The rule also contains specific requirements for advertisements. All ads must clearly and prominently disclose two key facts, in these words:

• “[Name of your company] is not associated with the government, and our service is not approved by the government or your lender;” and
  
• “Even if you accept this offer and use our service, your lender may not agree to change your loan.”
  

Are REALTORS Covered?

The Rule provides that mortgage assistance relief services include assistance in obtaining a short sale. The current interpretation of the National Association of Realtors (NAR), the Wisconsin Realtors Association (WRA), and many attorneys in the blogosphere is that Realtors are required to abide by the rule if they are involved with short sales. The FTC’s website confirms this interpretation:

“The Rule covers real estate agents who promote their services as a way to help consumers to avoid foreclosure, for example, by getting a lender’s approval for a short sale.” See http://business.ftc.gov/documents/bus76-mortgage-assistance-relief-services-rule

Realtors and Brokers should work with their attorneys to draft necessary documents and disclosures and determine on their own when and if they are covered.     

Resources and Citations:

Federal Register Publication of 16 CFR Part 322

Bureau of Consumer Protection Business Center

Federal Trade Commission Web Site

Just Sign HERE!

Joan and her husband (not their real names) had signed an offer to purchase and arrived at the title company with a mixture of excitement and nerves. Soon the emotions turned entirely to stress and nerves. The closing officer simply asked Joan to “sign and date here… sign and date here” without any explanation for each document. Joan became increasingly uncomfortable, feeling like she was signing her life away on documents she did not fully understand. She asked to call her attorney and the closing officer became huffy and irritated. Joan began to cry. This is when the unbelievable happened – the closing officer slammed the documents on the table, barked at Joan “fine, call your attorney!” and stormed out of the room.

Empathy, Insight, and Care

Providing incredible service as a title company means so much more than simply not making mistakes, quickly finishing a closing, or handling a large volume of transactions. Those are minimum standards. Great service requires that everyone involved understand the anxiety, high stress, and emotions of buyers and sellers. Attention to detail, accuracy, and efficiency are core competencies of a good title company. But empathy, compassion, and understanding of buyers, sellers, and the professionals they work with are what set Homestead Title apart. We don’t deal in “transactions.” Rather we help guide buyers and sellers through some of the most stressful moments of their lives by offering guidance, understanding, and a hands-on touch.

I’ll Never Buy a House Again!

The last thing Joan said to us after conveying this nightmare story really struck a chord – “I told my husband ‘I’ll never buy a house again!’” Her experience at the closing didn’t turn her off to that title company. She felt as if the whole process was distasteful and to be avoided. This should not come as a surprise. The closing is the last thing to happen and leaves lasting memories. Be sure to choose wisely when ordering title insurance. As a lender, attorney or Realtor, your choice of title companies reflects upon you. For hands-on, empathetic, caring service, choose Homestead Title. We will reflect well upon you.

To Foreclose or Accept a Short Sale?

Over the past 4 years, short sales – house sales in which the bank holding a mortgage agrees to accept less than the full amount due – have proliferated. Short sale experts have worked hard to dispel the myth that banks never negotiate and never accept less. But now, a recent New York Times article suggests that there may be some truth to that myth.

In a recent article, the Times reported that banks are resisting short sales and putting more focus on foreclosures. In fact, there are some incentives for banks to foreclose, even when a short sale will reduce risk and financial losses. New accounting rules allow banks to delay the “write down” of their loss until the house later sells. In a short sale, by contrast, the bank must take the loss immediately. In addition, the bank with which realtors and home owners negotiate are only one interested party; they are the servicer. Short sales usually also need to have the approval of investors, underwriters, and/or private mortgage insurance companies. And, while the recent foreclosure freeze highlighted the risks associated with foreclosure, banks face many risks in short sales, including fraud. A bank’s decision to agree to a short sale may involve far more than a simple cost-benefit analysis assumed by Realtors, attorneys, and distressed homeowners.

The Times article states that banks are “historically reluctant to do short sales” and suggests that they may be more likely to foreclose, even in the face of a good offer. This has not been our experience, based on anecdotal evidence. Rather, most banks appear very open to negotiating short sales, especially when there is a bona fide buyer in the wings. A large number of short sales are closing. Homestead Title is analyzing data over the past 3 years to determine the percentage of sheriff’s sales in Dane County in relation to the percentage of foreclosure filings.

Homestead Title offers expertise and guidance throughout the short sale process. Owner and attorney Peter Zarov often teaches seminars on foreclosures, short sales, and distressed properties. We will continue to provide updates, information and resources on these topics.