August Webinar: The Borrower’s Experience
Join us for our second to last CRMP certified course of 2024!
The Borrower’s Experience
CRMP Certified Course
Thursday, August 15, 2024 at 10:00 am PST
Click here to register.
Title Tale: The Importance of a Boundary Description
Written By: Mylene Marcelo, Title Manager/Title Officer
“You shall not move your neighbor’s landmark, which the men of old have set, in the inheritance that you will hold in the land that the LORD your God is giving you to possess.” This is from Deuteronomy 19:14.
Setting the boundaries has always been necessary in a piece of land. This need arises from the concept of private ownership of property which is a fundamental right of man and one of the cornerstone of Western Civilization. The original 13 colonies used the “metes and bounds” system which has been brought here in America from England and can be traced all the way back to the Roman times. Beyond the 13 colonies and principally west and south of Ohio, the United States uses the Public Land Survey System (PLSS) also known as the Rectangular Survey System which system divides land into grid cells.
A description identifies and describes a piece of property. It delineates boundaries which separate a given parcel of land from those around it. A description by tax lot and block or by street address alone is usually adequate to pass title but it may be unacceptable from an underwriting standpoint. This is due to the fact that tax record descriptions are insufficient, unreliable and can change through time. Only a metes and bounds description or filed map description is generally acceptable for title insurance purposes.
It is important to have a good and true description. It is needed for property transfers and is included in a Deed and the same description is used in mortgages, leases and other real estate documents recorded in the county land records. A mistake in description that has not been corrected and have been passed on to several generations and have been ignored for years can result in boundary disputes and title issues. A construction of improvement may be put on the wrong property and could permanently alter the boundary lines of a property. In the court of law, an incomplete legal description is also not enforceable and without a proper description, the mortgage may even be encumbering onto the neighbor’s property.
Sometimes, it’s worth the client’s time and money to hire a land surveyor to update the description. This is very important especially when the owner owns a big piece of land and the land has been subdivided in order to sell or gift the other parcels. Maybe a portion of the property has been taken away also because a County ordinance said the road along the property needed to be expanded. It can also be caused by nature such as by land erosion or land accretion.
A good description is usually drawn and prepared by a professional surveyor or a real estate attorney. You want to make sure that what is written is what you own and you want to know what is left of your property or what has been gained just in case you want to obtain a loan as the same description will be used in the mortgage. Knowing how to read the legal description of a property is an acquired skill that needs to be learned by the person who is preparing the deed or mortgage. Rest assure that you’re in good hands with Allegiant Reverse Services as our title examiners have trained eyes to spot any discrepancies in the legal description.
Title Tale: Zombie Mortgages
Written By: Kevin Weaver, Underwriting Counsel
Do you ever wonder why title companies concern themselves with unreleased mortgages that are 15 or 20 or even 25 years old, especially when the lender is no longer in business? What could possibly happen, right? Who’s going to come knocking on the homeowner’s door after all this time? Well, unfortunately, there are enough door knockers that our industry has a name for these seemingly dead liens. They are called zombie mortgages. Like creatures from The Walking Dead, they rise up against unsuspecting homeowners and, in some cases, cause the havoc one would expect. One homeowner pulled up to her house to find numerous cars and officials wandering around with clipboards taking notes. When asked, the head honcho informed her the home was being sold in foreclosure. In another case, a $700,000 home was sold at auction for $170,000, twice as much as the face amount of the mortgage due to interest and penalties. And these are not isolated cases. Although accurate numbers are hard to come by, it is estimated New York alone has at least 10,000 old second mortgages that had foreclosure activity initiated on them in the past two years. In Maryland, a researcher found over 500 mortgages that had been in default and unpaid for more than a decade but are now in foreclosure.
How does this happen? It’s a combination of factors. In some instances, borrowers claim they were told their second mortgages were forgiven as part of loan modifications. In others, the lender is out of business, and the homeowner was never notified as to who now owns the mortgage on their property. Mortgage-backed securities also play a large part. Thousands of loans are bundled together and sold to investors. Sometimes they are sold at rock bottom prices by failing banks, especially fifteen years ago when the bottom was falling out of the market. In one case 9,000 loans were sold to an investor for $6,000. Some of those rock bottom acquisitions weren’t productive back then, what with first mortgages ahead of them and declining home values, but now that home prices are at historic levels, they are starting to pay off for the investors. It only takes a few of those 9,000 loans that were purchased for less than a dollar each to make a handsome return on that investment.
Take a minute to research zombie mortgages, and you’ll read some of the horror stories about how these living dead things can ruin people’s lives. The next time you are irritated because you think your title company is dragging its feet on clearing a lien, remember that we are looking out for three parties – ourselves (what title company wants to pay a claim?), the lender (who wants to deal with a claim?), and the borrower (who wants to lose their property?). That requires an extra level of care to determine what risks the old mortgage poses to each party. Some title companies may always require a Release no matter what. Others may remove it no matter what. Neither path seems designed to protect all the parties. A little research can go a long way. Maybe we can track down whoever owns the assets of a defunct company. Maybe there is subsequent financing that’s been insured. Maybe the credit report is revelatory. Maybe the borrower has documentation regarding payoff of the loan, like a Settlement Statement from a newer loan or a letter from the lender acknowledging payment.
Enough maybes can add up to information almost as good as a Release, but sometimes gathering that information takes time. Just remember that your title company wants to close the loan as much as you do, but sometimes killing a zombie is not as easy as it looks in the movies and on TV.
Upcoming Webinar
Introduction to Trusts
Thursday, July 18, 2024 at 10:00 am PST
Click here to register.
May Fee Calculator Updates
We are constantly updating to reflect any increases or decreases in state fees or underwriter changes to ensure that you are pulling accurate quotes each time. Our calculator has been updated to reflect fee changes in the following state(s):
Massachusetts
Conveniently get a quote any time, day or night, by simply and accurately inputting the required information and let our interactive fee calculator do the rest. Please call 844-808-8299 or email solutions@allegiantreverse.com for further details or for a quote.
May Office Closures
Our offices will be closed:
- Tuesday, May 7, 2024 at 3:30pm PST for our ARS Anniversary Celebration.
- Monday, May 27, 2024 in observance of Memorial Day.
May Webinar: Fraud Prevention – CRMP Certified
Fraud Prevention – CRMP Certified
Thursday, May 16, 2024
10:00 am PST/1:00 pm EST
Click here to register.
Happy Anniversary ARS!
One of our favorite times of the year! Our whole team comes together to celebrate with some food, laughs and a little friendly competition. Who will win this year? Team Gold or Blue?
On Tuesday, May 7, 2024 our office will be closing at 3:30pm PST for our ARS Anniversary Celebration.
NRMLA Eastern Regional Meeting
Save the date for NRMLA’s 2024 Eastern Regional Meeting in Washington DC on May 29, 2024. Registration is open now!
Click here to learn more about this event.
Tips to Avoid Delay: Borrower’s Authorization
Please take note of the following to avoid any potential payoff delays.
There is a high probability a creditor will reject an e-signature and will require a wet signature on the Borrower’s Authorization form. In addition, some creditors will also require an ARS specific Borrower’s Authorization form when we are requesting payoffs on the client’s behalf.
Download a copy of the ARS Borrower’s Authorization form below.
Please reach out to your Settlement Team or Solutions@AllegiantReverse.com with any questions.
Contact
TF: 844.808.8299
905 Highland Pointe Dr., Suite 150
Roseville, CA 95678
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