Monica McNamara

We are all a bit Irish on St. Patty's Day. The wearing of the green seems to bring out high spirits and festive behavior regardless of how much or how little Irish you really are.

The 29^th annual Ocean City Maryland St. Patrick's Day Parade, will be held on Saturday March 14, 2009. The parade begins on 60^th Street at 12:00pm. It heads south to the 45^th Street Village and the reviewing stands. However, you don't have to wait until noon to be feeling that strong Irish feeling. The annual Irish Festival starts at 11:00am also at the 45^th Street Village.

For good food and good fun, come visit our Bonnie Town of Ocean City for the weekend of March 14^th!

What's a Parrot Head you say? Well a Parrot Head is a member of the Ocean City, Maryland Parrot Head Club. They are a wonderful group of people who love the "island" lifestyle, listen to Jimmy Buffet's music and appreciate the meaning of having a good time.

Most importantly, the Parrotheads have raised thousands of dollars for many organizations and charities. One of their more celebrated fund raisers is the annual Mardi Gras Carnival.

Several generous men and women compete for the title of "Mardi Gras King and Queen". The contestants are judged based upon the amount of monies that they raise at their various personal fund raisers. Each year the monies raised are designated for a particular organization or charity. This year the "Women Supporting Women" "organization has been chosen.

The individual man and woman who generate the most money are crowned the King and Queen at the Mardi Gras Carnival. This year the event is scheduled for March 27, 2009. It will be held at the Carousel Hotel in Ocean City, Maryland from 7:00pm - 12:00am.

Women Supporting Women is a fantastic community resource for breast cancer support. The year 2009 will be a year full of awareness, education and continued service to the Eastern Shore of Maryland breast cancer survivors and their families and friends.

I urge you to come out and support one of the many events scheduled to take place in the next few weeks to support this worthwhile group.

I recently attended a fund raiser held by Bradley Gillis (member of the King's court), celebrating a "Night At the Oscars". Fun was had by all, and I am sure that Brad is piling up the monies as he makes his run for Mardi Gras King.

Best of luck to all of the contestants.

3 Important Title Issues When Buying Bank Owned Property

So you want to buy a bank-owned (REO) property? Well they can be a great deal for buyers and the buying experience does not have to be comparable to getting dental work done without Novocain.

You put in an offer on an REO property and eventually the lender comes back with an addendum that includes the "requirement" that the buyer must use the lender's title company.

Here are a few things to keep in mind:

•1) Are you getting "Insurable Title" or "Marketable Title" to the property? Is there really a difference and if so why should we care?

•2) Insurable Title - Title to the property may have issues such as unreleased liens, this can include deeds of trust and other money related issues. Even if those liens have been paid off, the public records may not reflect that since a Certificate of Satisfaction or a Release has never been recorded. Other matters may encumber title as well, and those are what I will call "Title Baggage". The lender will find a Title Insurance company at that point who is willing to assume the risk and insure the transaction without cleaning up the baggage. Buyer is then acquiring "Insurable Title".

•3) Marketable Title - Title to the property may have baggage but the settlement agent handling the transaction insists on clearing up those messes. For example, they may track down a prior lender on a loan that has been paid off but no one bothered to record the release in public records, you will want that release obtained and very importantly recorded. Of course there are times when tracking down a lender is not possible. For example, a loan made by a private individual who has since "disappeared", retired on an island somewhere, and cannot be found, or has long ago died.

So why should you as a buyer care? Once the buyer acquires "Insurable Title" and say wants to refinance a year or two later, guess what is still on title? You got it, the "baggage" we talked about earlier. This can cause delays and in some cases interest rate locks may expire while cleaning up the mess, known as "Title Curative Action", which can take a while. Of course the borrower can always go back to the same company that insured it to begin with, but that can also be challenging on many different levels. Or worse, we've had situations where the buyer goes to sell at some point in the future only to find out that the "baggage" is still there, delayed settlements can be frustrating and in some cases costly.

In short, if and when possible, it is usually a good idea to have your own settlement agent review the title, address curative matters, and settle the transaction. So what about the "free" owner's policy the REO lender entices the buyer with? Experience has shown, that in a lot of cases when you compare a preliminary HUD 1 (settlement sheet), from the REO lender's preferred settlement company vs. a settlement company that's going to make every attempt to clean up the "baggage", the cost is nearly the same to you the buyer, and not to mention that you, the buyer, will acquire "Marketable Title" to the property.

It's a no brainer. As always, thank you so much to Susan Lloyd from Mid-Atlantic Title for her tips and guidance. You can contact Susan directly at - SusanLloyd@MASettlement.com

Happy Closing!

I get updated settlement and title tips from Mid-Atlantic Title. I found their most recent information very helpful to me. I like to keep informed of all aspects related to my real estate business, so I can assist my buyers and sellers make educated and informed decisions.

How title insurance rates are set varies from state to state. Some rates are set by the companies themselves and some are set by the State Department of Insurance. For those states that set the rates (Florida, New Mexico, and Texas), each title company is required to charge the same for title insurance for each different type of policy and for each different type of rate. Some other states, including but not limited to, NY, PA, NJ, OH, and DE, which have rating bureaus authorized under state law, may have uniform rates as well. When shopping in the states listed above, you will receive similar rates for title insurance from each company. While title insurance rates may not be as "shoppable" in these states, the cost of other services provided by the title company may or may not be included in the rate so you can shop for those services. Talk to your local title company for how rates are determined where you live.

As mentioned above, some rates may or may not include other services provided by the title company such as conducting the closing, preparing and notarizing documents, adding endorsements to the policy which may be required (usually by the lender or buyer), and other services. When comparing one rate to another, be sure to get detailed information on what is included in that rate, so you are comparing equally.

Rate Terminology

Here are some terms that would be helpful to know when talking to a title company. Ask your title company which of these you may qualify for:

Basic Rate: The rate charged to a consumer who does not qualify for a reduced rate such as, but not limited to, the reissue rate or simultaneous issue rate. (see below).

Reissue Rate: The reduced rate for an Owner's Policy issued on a property which was previously insured within some period of years. In some states, the term is also used for a refinance rate (see below).

Simultaneous Issue Rate: The reduced rate for a Loan or Owner's Policy issued on the same property or loan at the same time as another policy. The term usually refers to a Loan Policy issued at the same time as an Owner's Policy when a property is purchased.

Refinance Rate: The reduced rate for a Loan Policy issued on the new loan in a refinance transaction, in which the original loan was previously insured within some period of years.

Risk Rate: A rate that does not include the cost of researching the title or the cost of conducting the closing.

All-Inclusive Rate: A rate that includes at least some part of the cost of researching the title or the cost of conducting the closing.

Thank you Susan Lloyd from Mid-Atlantic Title for keeping me informed.

Source: http://www.homeclosing101.org

HUD, (Housing and Urban Development), in an effort to improve disclosure of key loan terms and closing costs paid by the consumer when they buy or refinance a property, HUD has reformed the RESPA Rules.

While the final rule allows one year to implement the use of the new Good Faith Estimate and the new HUD-1 (settlement sheet), there are certain aspects of the final rule that did become effective 1/16/09.

Here is a summary of the final rule:

Good Faith Estimate - now it will be a three page document, including disclosure of yield spread premiums and the tolerance restriction. Effective date January 1, 2010.

HUD-1 (Settlement Sheet)- it will now also be a three page document. It will be redesigned to look like the Good Faith Estimate with cross references and a chart comparing charges in the Good Faith Estimate with the final charges appearing on the HUD-1. Effective date January 1, 2010.

30 Day Cure Period - loan originators may reimburse the borrower for tolerance violations within 30 days of settlement. Effective date January 1, 2010.

Tolerance limitations on settlement charges - 10% price tolerances for certain services packaged by lenders. Effective date January 1, 2010.

No Volume-Based Discounts- this eliminates explicit volume based discount language and reiterates HUD's contention that all settlement service providers may negotiate discounts as long as they go to the consumer.

Use Of Average Charges - this is available to all settlement service providers with added flexibility for calculations. Effective date January 16, 2009.

*Revised Definition of Required Use - this is extended to both sellers and borrowers and allows legitimate consumer discounts. Requires that discounts or incentives be given by the referred provider and not as an inducement by the referrer. Effective date April 16, 2009.

Application Process - a one stage application process with greater flexibility on selecting underwriting criteria. Effective date January 1, 2010.

Misc. - miscellaneous modifications regarding escrow accounts, servicing transfer notifications and the applicability of E-Sign. Effective date January 16, 2009.

*Originally, the effective date was January 16, 2009, but HUD agreed to extend the effective date of the "required use" provision until April 16, 2009.

For more detailed information on the Final RESPA Rules go to:

http://www.hud.gov/offices/hsg/sfh/res/finalrule.pdf.