A 10-minute closing may sound like it’s great for the borrower, but will the consumer really benefit from faster closings. It may sound like it would be consumer oriented, but is it since it changes the fundamental process of a closing.
The borrower may be able to sign their name on 30 documents in less than 10 minutes when they don’t read anything that they are signing, but should they. One can suppose that they may have read those documents in advance.
An online closing is a different medium, so signers should still read what they are signing and ask questions. The mortgage industry has a lot of moving parts and sometimes it is the closer that makes the difference and drives a company to success. It is nice to still have that one on one contact with your borrower.
What is a HELOC. It is a Home Equity Line of Credit loan and we often find that they don’t get discharged when they are paid off. The reason for this is that this type of loan is similar to a credit card. The loan can be drawn on and paid back during the period of the loan which may range for as long as 30 years.
Many homeowners do not even realize that this type of loan is still secured by a mortgage on their home. When they go to sell the property they discover that the lien has not been discharged. It is important to remember that when you pay off a HELOC you must specifically request in writing that the loan be closed and discharged unless you plan to draw on it at a later time.
Sometimes an owner of property may think they will save some money by preparing their own deed to transfer their ownership interest. Perhaps they just want to add their spouse to the deed, which sounds pretty easy to them. They should not do this unless they have legal knowledge and fully understand what they are doing. Here are some examples of problems that can be created:
You decide to add your minor child to the deed and then decide to sell the property. The minor child does not have the legal capacity to convey an interest in property. You find out that you will need to go to court and have a legal guardian appointed for the child.
You add your spouse to the deed without stating the tenancy. One of the parties dies and the other decides to sell the property. The surviving spouse assumes they automatically inherited the property at the death of their spouse and only finds out they did not a week before the closing was to take place. You will need to file probate which will take months and perhaps cost you your sale.
You prepare your own deed and fail to have owners release rights of homestead.
You prepare your own deed and leave out some of the names, use the wrong names, fail to include a trustee certificate, fail to get park owner consent, the deed is not properly acknowledged or executed.
There are many ways to create title issues when you don’t fully understand the process. Contact us and we can see that your deed is prepared properly.
Carefully look at the contents of an e-mail. If an e-mail contains the following red flags, then it’s likely to be spam:
• The words “Kindly Find” or “Please view/review”
• Unusual and vague subject line content that may not make sense o e.g., “Payments&Statements” with random number references at the end
• Analyze the “From” field to see if the e-mail address matches the sender’s name
Inspect the e-mail domains of a contact. In other words, free e-mail providers, such as gmail.com, aol.com, yahoo.com, hotmail.com, outlook.com, etc., are domains that bad guys often use.
If you’re still unsure if an e-mail looks legitimate or not, here are a few more warning signs that can be found within phishing e-mails:
• E-mail makes unrealistic threats: “Click here” or your Microsoft account will be deleted within two days…
• Strange senses of urgency: Review the below closing form within the next five minutes for the deal to go through…
• You did not initiate the action: Ask yourself, did you send a message to this sender who is requesting information?
• Shortened URLs or URLs with IP addresses in them: www.bit458.y.com, 188.8.131.52.com
• Asks for personally identifiable information (PII): SSN, driver’s license, birth date, legal status, etc.
Wire fraud is on the rise everywhere and the Federal Reserve is being asked to take a more proactive role in preventing it, especially as it relates to real estate transactions. Two key points are:
1. All parties involved in the real estate transaction need to help educate customers on the dangers of wire fraud and on the ways to protect data and funds. For example, by encouraging consumers to call their known reputable source at a verified number to verify instructions before transmitting funds.
2. Financial institutions on the receiving end should match not only the account number but also the payee’s name when there is a wire transfer. Oftentimes fraudulent wire instructions will say the transfer is to be sent to the attorney’s trust account, for example, but instead it goes to the criminal’s personal account as beneficiary.
If you intend to wire funds to us and suspect anything may be wrong with the instructions, please phone us to verify. If we have sent you instructions and you suddenly receive an email asking you to wire to a different account, phone us to verify. We have only (1) IOLTA account, so we will never change our instructions and ask you to wire to a different account.
1. An offer is accepted by the seller and a contract is signed by both parties, marking the effective date of the contract.
2. At the same time , a deposit is paid to an attorney, broker or escrow agent. The deposit does not become the property of the seller until the closing takes place.
3. The buyer reviews and signs off on any disclosures. These disclosures vary based on property type, but often include things like known flaws with the property, prior improvements or repairs, radon gas and lead paint disclosures.
4. The buyer may elect to perform inspections of the property as agreed upon in the contract and these inspections must be completed by a certain date, which is usually within 10-15 days. Based on the outcome of inspections, buyers have a certain number of days to provide the seller with a report revealing any defects and the buyer may elect to ask the seller for repair work, closing cost credits or a reduction in the sale price due to flaws that were uncovered.
For those borrowing to purchase a home, the mortgage process can be the most stressful part of the transaction. It’s best to start as early as possible and be ready to produce lots of documentation.
The detailed steps that make up closing are:
1. A title search is performed to determine if there are any liens or assessments on the title. Provided that the title is clear, the closing proceeds as planned.
2. A buyer’s attorney or title company begins preparing the paperwork to convey title to the property and schedule the date for closing.
3. A final cash figure for what a buyer needs to bring to the closing in the form of a cashier’s check is calculated. This is based not only on a mortgagees closing costs, but also the proration of property taxes and utilities..
4. A final walk through may be performed the day of or before closing to verify the property is in the same condition it was in when the process began.
5. At the closing table the buyer and seller sign all closing documents. At the conclusion of the closing the representative from the title company or your attorney will record the deed and any other documents with the appropriate registry of deeds.
After all of the documents have been signed and payments exchanged, buyers generally take possession of the keys unless a separate agreement has been reached to allow the seller stay in the property for a period after closing.
An important thing to consider if you are paying off a home equity line of credit, also referred to as a HELOC. These are usually open ended loans that allow you to borrow on them for a designated period of time. Therefore, if you pay off the balance, the mortgage that is the security interest for repayment may not get discharged. When paying the loan in full, you must request in writing to have the loan marked paid in full and discharged.
For those that may not know, there is a specific law that covers Condominiums and how they are set up. That law is RSA 356-B and is known as the Condominium Act. Much of this Act covers the establishment of a Condominium, but in 2010, RSA 356-B:70 was added which established a Committee to Study the Laws relating to Condominium and Homeowners’ Associations. The governance of associations has frequently been a problem area.
As a result of that Committee, the Condominium Act was amended and a number of new laws took effect on August 1, 2016. The changes target governance of the Association. Associations often operate informally and consult an attorney only when problems arise. The new laws are aimed at providing more structured governance and greater protection to unit owners once the condominium has been established.
As recently as August, 2017, a woman was accused of embezzling $100,000 from a NH condo association. She was arrested and charged with two counts of theft by unauthorized taking. This charge is a Class A felony and is punishable by a maximum sentence of 7 ½ to 15 years in prison. This is not a random thing, theft of a condominiums funds happens more often than you would think.
One of the major ways these thefts occur is by one of the board members receiving a kickback for work performed or by having personal work done for themselves and rolling it into the associations bill. With that in mind and in an effort to control this type of theft, one of the new laws requires any contractor licensed by the State of New Hampshire who performs work to disclose on the bill any referral fee paid by the contractor.
Some other key changes are:
• Boards may not use social meetings to evade the open meeting requirements
• Roberts Rules of Order Newly Revised are the default procedural rules
• The board must send proxy voting forms with control numbers assigned for each owner
• Electronic noticing and meetings are allowed
If you are a condominium owner don’t be afraid to ask questions of the board. Make sure that you regularly see the bank statements rather than to just rely on being shown a copy of the financials once a year at the annual meeting. If you do find that a board member has been embezzling, consider taking legal action, don’t just let it slide. Often, once they think they got away with something they will continue taking advantage of you in the future.
In New Hampshire, the Department of Revenue Administration is responsible for equalizing the value of property in each municipality. Equalization is used to accurately apportion county and school district taxes among the cities and towns and to distribute state revenues to the cities and towns.
To equalize property values, the Department of Revenue Administration annually conducts a sales/assessment ratio study for each municipality. The information provided on the PA-34 form is needed to assist the Department in determining whether a particular sale involved is an “arms-length transaction” and should be included in our equalization sales/assessment study.
Under Homestead Exemption laws any property designated as a homestead is exempt from execution and sale by creditors for the payment of debts. The protected amount differs in each state, but in New Hampshire every person is entitled to $120,000 of his or her homestead to be exempt from the rights of creditors.
There are exceptions to the above and the following debts have precedence over the rights of homestead:
• The collection of taxes;
• The enforcement of liens of persons having done work for the construction, repair or improvement of the homestead;
• In the enforcement of mortgages on the property;
• In the enforcement of liens filed by homeowner or condominium associations for unpaid assessments.
No deed can convey or encumber the homestead right, except for a mortgage made at the time of purchase to secure payment of the money used to purchase the home, unless it is executed by the owner and spouse, if any. This is why, when a new mortgage is taken out or the property is conveyed, the husband and wife must both sign to release rights of homestead.