Have You Updated IndependenceTitleAgent?

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Have you ever tried to explain a Seller’s Net Sheet to someone and their native language is Vietnamese? Or have you ever had trouble comparing multiple offers IndependenceTitleAgent can help! IndependenceTitleAgent is a closing cost app that will help you calculate closing costs, run Seller Net Sheets and Buyer Quick Estimates, and so much more!

IndependenceTitleAgent has added new features in its most recent update! Below are the features you can start using today:

Languages: IndependenceTitleAgent has added 6 new languages to the app: Vietnamese, Japanese, Korean, Polish, Russian, and Arabic. The new languages can be applied to all printouts and marketing pieces. To change the language, simply select the language icon at the top of the preview screen.
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Multiple Offer Comparison Enhancements: Comparing multiple offers can be confusing and time consuming. Instead of creating a spreadsheet, have the app do the comparing for you! Before the update, you could compare up to 3 offers but now you can compare up to 12 offers!

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New Printout Styles: Every client that you work with is different. Some may be visual learners while others may just want a list of data. There are many new printout styles to choose from when sending customized reports to your clients. After generating a report, simply swipe left to see the different styles.

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Closing Date Default: Instead of choosing a closing date every time you run a quick estimate or seller’s net sheet, simply choose a default of 30, 60, or 90 days out and it will automatically default to that every time.

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Contact your ITC Business Development Representative for more information about IndependenceTitleAgent!

To Download click below!

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Beware! Wire Fraud is at an All Time High.

WireFraudSQYou’ve done it!  You took a Buyer from shopping for a house, to a contract on a house, to the closing table and you couldn’t be more ecstatic for them.  Then… in total shock you find out your Buyers have wired thousands of dollars to a thief!  You discover the “I could never be a victim to wire fraud, it’d never happen to me” has actually happened to you!  It’s becoming more and more common in our industry and way more sneaky and sophisticated than you may think.

Unfortunately, we are seeing attempts to divert wires to imposters’ accounts on a weekly basis, leaving the Buyer, Seller, Realtor and Title Company at risk.  More often than not, the fraudster hacks into the Realtor’s email account (yes YOUR email account) or creates a close duplicate email account along with your exact signature, and then posing as the Realtor gives bogus instructions trying to divert the funds of one of the parties involved.  It’s happening and it could very well happen to you!  As a Realtor, the video below is a great tool to send to your Buyers & Sellers warning them of the risk.  NAR’s General Counsel, Katie Johnson, has made this video to help you educate your clients on how to avoid being in a wire fraud scam.

Here at Independence Title, we have put many policies and procedures in place to combat this growing issue.  This document is a great tool to send to clients during the contract process.  We send this out to all parties with a commitment and/or contract.  It is critical that you take the time to educate your Buyers and Sellers and warn them of this risk.

How are you going to see your figures for closing?

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As we near the end of 2015 I think we should focus on one detail of the new Consumer Financial Protection Bureau (CFPB) regulations, which is the American Land Title Association (ALTA) Settlement Statement. For most residential transactions the ALTA Settlement Statement is a Realtor’s new best friend. This form is quickly becoming the golden ticket among title companies as a solution for navigating new privacy rules that limit which closing documents can be shared from a real estate transaction.

New lending practices mandated by the CFPB, effective Oct. 3rd, in conjunction with existing privacy laws, prevent title companies from sharing the Borrower’s Closing Disclosure with the seller or with Realtors. The Closing Disclosure, or “CD,” combines the HUD-1 and Truth in Lending form and is prepared in most cases by the lender. There are promulgated authorizations from TREC (last paragraph of the new Third Party Financing Addendum) and TAR (“Authorization to Furnish TILA/RESPA Integrated Disclosures”), but it is unknown if lenders’ compliance departments will accept these authorizations. The Closing Disclosure contains non-public information like the term of the loan, interest rate, payment amount, and so forth.

The ALTA Settlement Statement shows all fees from the contract and the Closing Disclosure It also allows Realtors to confirm that all provisions of the contract have been honored and all agreements between parties are satisfied, without specific authorizations for the lender to release the Borrower’s CD. The ALTA form does not contain non-public information, and can be shared with all parties. Most importantly, Realtors requesting a preliminary closing statement will likely be receiving the fees on the ALTA Settlement Statement.

If your title company is unaware of this solution, feel free to refer them to the “ALTA Combined Settlement Statement”.

For more information, visit the Independence Title Blog, and our Austin Education page.

Should you have coffee with your lender?

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CFPB & TRID regulations are now upon us! As of October 3rd any loan applications submitted will fall under TRID (TILA RESPA Integrated Disclosures) regulations. If you have a lender that you refer business to Independence Title Co encourages you to have coffee or lunch with them to find out how your lender will be conducting business with the new rules & regulations.

Over the last 10 months we have spoken with numerous loan officers, processors, attorneys, and compliance departments and each lender may interpret TRID regulations differently from one another. Here is a list of questions to get the conversation started with your favorite lender.
Q: Who prepares your Closing Disclosure?
ITC Perspective:
• Most lenders are taking on this responsibility
• They are responsible for the accuracy of the Closing Disclosure
• They are also responsible for adhering to the strict timeline for delivery
Q: How will you deliver the Closing Disclosure to the consumer?
ITC Perspective:
Delivery method can impact closing date
• USPS mail may require up to 7 days
• Overnight delivery may require up to 4 days
• Hand delivery or electronic delivery may require 3 days
Q: Do you require a signature on the Closing Disclosure to start the 3-day review period?
ITC Perspective:
• It is not in the regulations that the consumer must sign the Closing Disclosure
• Lenders may or may not want a signed copy returned
Q: Can I get a copy of the Closing Disclosure from the lender?
ITC Perspective:
• The regulations state that the Closing Disclosure to the consumer
• The Texas Association of Realtors created an Authorization Form for consumers to give authorization for their Realtor to receive a copy of the Closing Disclosure
• Some lenders may not accept this form but they might have a similar form to allow the Realtor to receive copies of the disclosures
Q: What is your contract to close turn around time?
ITC Perspective:
• Most lending professionals agree that a 45 day turn around time is realistic
• By early 2016 we might see a 30 day contract to close timeline
Q: Tell me about your pre-qualification/pre-approval process?
ITC Perspective:
• Prior to the CFPB there was a regulation in regards to pre-qualification/pre-approval process in existence but it was mostly overlooked
• The rule stated that a lender cannot require upfront documentation prior to a bone-a-fide loan application
• With CFPB audits right around the corner some lenders may be changing their pre-approval process
• Consumers may voluntarily provide upfront documentation for pre-approval
• See our Consumer’s Guide Brochure

For more information on CFPB check out our related blog post

Our Online Calculators ready for the New Regulations

New Regulations Are Around The Corner

Are you unsure how to best prepare your clients for closing in light of the new rules set out by the Consumer Financial Protection Bureau(CFPB)? We’ve got you covered!

Below are seven tips to help you and your client prepare for the changes effective October 3rd, 2015.

  1. Encourage your buyer to remit financial documents to the lender voluntarily for pre-approval
  2. When considering an offer on a listing that includes a pre-approval letter, confirm the following with the lender:
    1. pre-approval was based on more than a credit score
    2. proper verification documents were obtained
  3. Set realistic expectations with your clients regarding the timeline to close and emphasize items now required earlier in the closing process such as the buyer’s choice for the home warranty company
  4. When writing a contract or considering multiple offers, confirm a realistic closing time-frame with the lender.
  5. Become familiar with the new closing documents; Independence Title will be utilizing the following documents for TRID transactions:
    1. Borrower’s Closing Disclosure
    2. Seller’s Closing Disclosure
    3. ALTA Settlement Statement
    4. Texas Disclosure
  6. To ensure proper commission disbursements due to the new Texas Disclosure, remit your disbursement authorization form to the title company well in advance of closing
  7. Mark your calendar to keep track of the closing disclosure timelines for each transaction

 You’re not alone in preparing for the new regulations, we’re ready at Independence Title! 

Below are seven ways we’ve worked to ensure continued smooth closings for your clients.  We have:

  1. the largest education & training department in our industry in Central Texas
  2. taught over one thousand classes on the new regulations and implementation to the REALTOR and lender community
  3. updated our online calculators to comply with CFPB and TRID regulations and provide accurate estimates 
  4. completed software updates to our closing systems that integrate with lender portals allowing for back and forth communication of fees, documents and instructions
  5. trained all Escrow staff to prepare and are ready for your next transaction
  6. proudly become the first title company to implement a Best Practice Policy Guide to comply with CFPB requirements
  7. continued to provide resources for the real estate and lending community to communicate with clients such as A Consumer’s Guide to Buying or Selling After October, 3, 2015 and Why You Need Title Insurance

 

Keep Calm Independence TItle

Our Online Calculators are Ready for the New Regulations

As many of you now know the implementation date for the new TILA RESPA Integrated Disclosures (TRID) regulations set out by the Consumer Financial Protection Bureau (CFPB) is October 3rd. Most residential transactions with a loan applications dated on or after October 3rd, 2015 will be affected by these new regulations. This summer we released a brochure, The Consumer’s Guide to Buying or Selling After October 3rd, to aid in your conversations with clients.

If your clients have bought or sold a home in the past, the new forms will look different so even seasoned buyers and sellers may have questions. One change on the forms is how title insurance is disclosed; the loan policy will be disclosed as if it’s the only policy being purchased (called single issue) and the owner’s title policy is marked as an optional purchase on most literature from the CFPB. We’ve prepared a brochure for your clients, Why You Need Title Insurance to help them understand what they’re paying for.

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We pride ourselves on providing some of the best online tools in the real estate community, and our calculators are no exception. If you need to know the title insurance premium; how much a seller may net from the sale of property; how much a list price needs to be in order to net a certain amount; or the closing costs and estimated payments on a particular loan, you can plug in some numbers and receive an instant estimate. To keep these figures accurate and assist with the process of gathering fees for the new disclosures we’ve been working hard with developers to update the calculators. Below are the updates you’ll find available:

Our Premium Calculator calculates the promulgated rate set by the Texas Department of Insurance of the Owner’s Title Policy, Lender’s Policy and endorsements. The update now shows the cost difference between a Loan Policy being issued alone (single issue) and  an Owners Title Policy and Loan Title Policy being issued at the same time in one fee (called simultaneous issue).

Premium Calculators: Austin | DFW | Houston | San Antonio

The Loan Estimate Worksheet is completely revamped for the new CFPB Loan Disclosure. This calculator provides lenders with all the fees needed to complete their loan estimate including:

  • title insurance premiums
  • recording fees
  • courier fees
  • escrow/closing fees
  • tax certificate fees

The Loan Estimate Worksheet prints to a PDF revealing exactly where the fees need to appear on the loan estimate.

Loan Estimate Worksheets: Austin | DFW | Houston | San Antonio

In addition to updating our calculators, preparing educational literature on these changes, and updating our software systems we have created and taught over one thousand classes to the real estate community. Our goal is to be a resource to the real estate community during this transition, if you haven’t attended one of our classes contact a Business Development Representative today.

An Interview About Mineral Rights in Texas

Mineral rights are a hot issue in real estate transactions. Since mineral rights can also be a confusing topic, I sat down with our legal counsel Jay Fitzgerald to try and clarify what mineral rights are and whose  role it is to determine those rights. 

Q: Let’s say a buyer is interested in the mineral rights on a potential property. How would a buyer find this information?

A: What we usually suggest they do is hire what our industry has historically called a “l and m an”. A land man is a person who professionally reviews the mineral conveyances or severances in a chain of title, and they will usually give an opinion as to who holds the mineral interests in a  piece of property. If an owner holds both the right to use the surface of the property and the right to produce the minerals on the property, they hold an unsevered property interest .A “severance” occurs when the rights to use the surface of the property and the rights to the minerals from the property are split, with one person owning the right to use the surface and another person holding the right to produce and benefit from the minerals on the property.

Q:  Are mineral rights something title companies research?

A: For insurance purposes, title companies will typically do one of two things  In a county where we are able and willing to do so, we will research the minerals back to the early 1900s in order to be able to list specific mineral severances on our title insurance commitment in Schedule B as exceptions. When we do that, there will generally be language inthose exceptions stating that we did not research any further conveyances of a given mineral interest once it was severed. In other words, we do research conveyances of a mineral interest to a limited extent , for the purpose of determining how we will insure. The other way mineral rights are addressed by title insurance companies is to show the promulgated general mineral exception,  which makes exception for any mineral severance or lease of record .

Q: Would the promulgated general mineral exception eliminate coverage in cases where there was a mineral severance prior to 1900?

A: Yes, although the more typical case, in a situation where there is limited title evidence, would be that we only have title evidence going back to around 1950 . If we can research back to 1900 or earlier, the typical underwriting standard is that we may proceed to list specific severances as exceptions without the general mineral exception.

Q: If I am the owner of the property and I have a title commitment with an exception stating that one-third of the mineral estate has been conveyed to someone else, am I guaranteed by my title company to own the other two-thirds interest in the mineral estate?

A: No. The only reason we have exceptions on the title commitment , and ultimately the policy, is because the company is willing to insure on those terms. If you’re the seller on the transaction, nothing on the title commitment insures you whatsoever. You might look at your existing title policy and see what it reveals. If you’re the buyer and want to know the status of the mineral rights for a property, our advice in every case will be to have a land man review the chain of mineral severances and conveyances for you. Regardless of what’s reflected on the commitment, which will usually only contain the original mineral severances (and perhaps mineral leases that we find that have not been expressly terminated), the buyer may want to know exactly how the mineral rights have been divided. It is entirely possible that there are scores of fractional interests in the mineral rights on a property, particularly if a large portion of the mineral estate has been separated out and then re-divided through the years among several people. This is often the case when there has been active mineral production on the property.

Q: Would it be correct to say the title commitment and title policy represents more of a notification of what has been filed in the county records regarding the mineral estate ,and is not a guarantee as to what mineral interests are owned?

A: I would say that our commitment is never intended as a representation of title , whether it’s title to the mineral estate or any other aspect of property rights. It’s simply an indication of how we propose to insure on the policies that we are going to issue.

Q: So the policy doesn’t guarantee that an owner actually owns any mineral rights ?

A: It depends on the exceptions. If you have a policy where there are no general exceptions made as to minerals, and  no specific mineral exceptions taken, then you may have policy coverage extending to a mineral estate. It is unusual to see a policy owner make a claim because they thought they had a mineral estate and they didn’t actually have one,  because in an active production county the mineral rights have most likely already been severed by instruments of record . The last major slew of claims like this came out of the Dallas area a few years ago, when people realized there was value in natural gas in the Barnett Shale.

Q: While mineral rights issues don’t apply to most transactions we deal with , there are a few outliers. In what instance should an agent advise their buyer/seller to use the TREC mineral addendum?

A: First, when the seller simply says, “Hey, I want to be sure I reserve any mineral rights I have.” That’s pretty obvious.  Additionally, the TREC form could be used when there is active production on the property or some other value in the minerals. In most cases there’s already mineral production and a stream of income from production, and as a seller you want to figure out if you’re going to hang on to your rights to mineral production, or you could decide to adjust the sales price for whatever you think is the value of the future mineral income.

Q: So really at the time of listing, when a realtor is taking a listing that doesn’t fit in the box, maybe it’s out past Liberty Hill, they need to be asking the question “Do you know anything about your mineral rights?” and they need to know if they want to keep that or convey it.

A: Often, yeah, it will be outlying ranch lands, right.

Q: In order for the seller to reserve their mineral rights, do they have to work with a land man to be sure they’ve correctly reserved their rights?

A: It’s always a good idea to figure out exactly what you have now when you’re trying to negotiate for a future value. For example, in a situation where the property has a mineral lease on it that’s going to terminate in three years, that’s vastly different than other interests that are for a longer term and therefore  more valuable, or may have more future value than present value. Part of the trouble we have right now in clarifying mineral rights is there are new and novel ways of extracting minerals from property that have not been considered in the past. 

 Q: How much does it typically cost for a land man to do research on a property’s mineral estates?

A: It’s going to vary depending on the complexity of the chain of title , and also the volume of real estate records for a given county. If it’s a county with a relatively small volume of real estate records and the property has relatively few severances to follow , then the research is probably going to be less expensive. If the property is located in a county where there has been a lot of mineral activity, there is a larger volume of real property records to research, and there are more records directly affecting the mineral estate, that research is probably going to cost more.

Q: Does Independence have a list of people they use for minerals searches?

A: Yes. We have a short list of people to whom we refer “land man” work .

 Q: How do mineral rights differ from water rights?

A: There’s a running debate on what “mineral rights” are.  There are certain mineral interests perhaps you could consider as the “classic” mineral interests , which included rights in common mineral types considered included in “minerals” generally and requiring no specification. But there are other types of mineral interests that are a little bit more exotic that require specification, because people were concerned these types of minerals wouldn’t be included under the general scope of “classic mineral rights”. Water rights are separate and apart from mineral rights. They’re governed by a different area of law . Once you get into the area of water rights, there’s a whole separate set of licensing and records for water rights interests that are kept by the state. There are experts that practice water rights law. If someone is concerned about their potential water rights on a piece of property, they should go to a water-rights expert.

 Q: So we’ve established that a title policy and commitment do not guarantee whether a property owner holds a mineral estate or water rights, and there are other experts who need to research these issues for the owner to be certain of full ownership and use of any rights on the property.

A: The title insurance policy only insures mineral rights subject to the exceptions set out in Schedule B.

I hope this information regarding mineral rights in real estate was helpful to you.  We also wanted to let you know that if mineral rights have been severed from a piece of property then the Central Appraisal District in your area will typically assign the severed piece of property its own account number.

You Have the Power! Do You Know how to Use It?

By: Kara McGregor
Senior Vice President of Business Development

How do you choose a title company in Texas? Both federal and state laws specifically enforce the consumers’ right to choose their title services provider in a real estate transaction. However, most consumers lack the knowledge to differentiate between title companies, and default to a vendor chosen by their real estate agent or mortgage lender.

New rules adopted by the Consumer Financial Protection Bureau provide fresh emphasis on consumer choice, but again, there are no stated guidelines to help home buyers and sellers make an informed decision on what company should handle their transaction.  Most consumers aren’t sure what title companies really do, much less how to judge which one is “best.”

In Texas, title insurance rates are set by the Texas Department of Insurance, so there is no price differentiation to help steer a consumer toward one company over another. All title policies cost the same one-time fee, based on the sales price of the property, and processing fees charged by title companies cluster around a narrow range.

So, how do you know?

What do you ask?

What search criteria do you put in the box?

Here is a brief primer on some factors that can truly affect the experience of your transaction, with some clarifying questions to ask as you talk to your real estate agent or mortgage lender, or as you browse title company websites in search of clues.

You Have the Power! Do You Know how to Use It?

Are there convenient locations?

With the parties to your transaction in mind, does the title company have a location that is reasonably accessible? Despite the conveniences of the digital age, many aspects of the transaction are best handled in person, and some documents still need “wet signatures” to be legally binding.

Title companies without many options as to brick and mortar locations will offer mobile notary services, but you sacrifice the benefit of working face-to-face with the escrow officer or “closer” who put the transaction together. The closer is empowered to answer questions, catch discrepancies in the documents, make changes as needed to close the transaction smoothly, and manage the process of completing and funding the transaction. A notary merely affirms the signatures and cannot provide any other service.

Who’s underwriting the transaction?

Like any insurance policy, title policies are underwritten by a financial holding company that would pay the cost of a claim.  The underwriter makes the rules that determine whether your transaction is insurable. This is a business decision that turns on many factors that come up in researching the history of the property.  Are there gaps in the “chain of title,” or the history of ownership?  Are there buildings that don’t conform to property lines? These issues and hundreds more are considered when a title underwriter assumes the risk of insuring the sale of a property from one owner to another.

When choosing a title company, investigate whether the company has multiple options as to underwriters.  Some companies are direct operations of national underwriters, with just a single set of underwriting guidelines. An alternative is a title agent, an independent company often with multiple underwriters behind them. This might make a difference on a more complicated transaction, because the title agent can shop among several underwriters to find one with guidelines that offer workarounds.

Where is the title research handled?

Many large title companies have followed national trends and sent behind-the-scenes jobs to other states or other countries, particularly parts of the title research process.  On the ground in your town, this can impact the ability of local employees to get timely answers and solutions when there’s a mistake or issue to be cleared up before closing the transaction.

Find out if the company you’re considering has a fully staffed title department at their local headquarters, or at least in your time zone.

Is the company compliant with new federal rules? 

The Consumer Financial Protection Bureau has a host of new regulations that will be effective August 1st, 2015, for any residential transaction involving a federally insured loan.  The new rules touch on many aspects of title company practices, from enhanced security measures to protect personal information, to new forms and time frames for processing.

As this deadline approaches, it will be vital for the health of your transaction that the title company be compliant with all the new requirements. Most lenders will be vetting title companies for compliance well in advance of the official deadline, and your transaction could be stopped in its tracks if the title company you choose is not prepared.

If you’re hoping to close your transaction any time after June 1st, 2015, it’s a good idea to ask the question: “Is your company ready to comply with new rules from the CFPB?” You’ll sound super savvy, and if the person you speak with has no clue what you’re talking about, it would be best to move on.

What value-added service do I get?

Again, Title companies in Texas can’t compete on price, and those that are serious about standing out from the herd offer a range of resources and services to smooth and enhance the experience of buying or selling a home.

Look for things like reports and guides that help sellers answer questions about their property, and explain the closing process for the lay-person. Some offer both printed and online resources that help buyers learn about local schools, taxing authorities, and communities.

Some have online calculators to help in estimating costs, and mobile applications to connect you with branch locations and other resources.

Are there any relationships I should know about?

This item is a question for your real estate or mortgage professional, as they help guide your choice of title company.

Because Realtors and mortgage lenders are involved in more transactions than the majority of consumers, they tend to have relationships with particular title companies and escrow officers. This is a normal and functional aspect of the way these industries work together.

However, some real estate brokerages, builders or title companies form business agreements to steer transactions to a particular provider.  If certain legal requirements are met, this is allowed under existing laws, although some of these rules are under review by federal regulators.

As a savvy consumer, it’s wise to ask whether a title company has been recommended based solely on their stellar service and performance.  Any side deal or “affiliated business agreement” is required to be disclosed by law, and you as the consumer have the final say in what title services provider handles the transaction.

Except … it’s negotiable in Texas

That is to say, buyers and sellers must ultimately come together and agree on the choice of title company.  In Texas, the agreed upon title company is indicated on the promulgated sales contract.

There are arguments on both sides of the issue as to whether sellers or buyers should have their choice. On the one hand, sellers sometimes need to the assistance of a title company to resolve known issues that would complicate the sale, even before talking to a potential buyer. And in Texas, typically the seller pays for the title policy insuring the buyer (although this is also negotiable). On the other hand, the buyer is ultimately the insured party, and will have the ongoing business relationship with the title company.

The important takeaway is that you as the consumer have a voice and a vote.  All title companies are not the same, and a little research can help you make an informed choice.