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.
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.
Clients have begun to inquire about transferring firearms in their estate planning. Unique rules and procedures apply to certain firearms – such as NFA firearms, even in estate planning. Limited liability companies (LLC’s) were once the preferred method, but LLC’s require annual maintenance fees to the state and even separate tax returns. Now, “gun trusts” that are prepared as part of an estate plan can be used to pass on the trust creator’s firearms after their death. Prepared separate from a conventional revocable trust, a gun trust may provide access to more people than the original owner, may provide for changes in the law over time, and may require trustees that are more likely to be knowledgeable of firearms and the legal requirements that surround them. A gun trust will not pass on other assets, only the guns, and a separate conventional trust is still needed for other assets. Using a gun trust can provide for the legal, safe transfer of NFA firearms and even keep those weapons in trust for several generations.
Written by J. Kirk Trombley, Esq.
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.
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.
Here are eight housing predictions from the experts:
- Prices will continue to rise, but more slowly. In 2016, prices rose every month up until October. The prediction is that price increases will hold steady because homebuyer demand is stronger than it was at this time last year.
- Affordability will worsen because the share of homes affordable to someone earning the median income is not. This trend will be intensified by a continued shortage of low to moderate priced inventory and rising mortgage rates.
- Mortgage rates will be volatile. By historic standards the rates are still low, but may be rising a bit. For 2017, the Fed’s anticipate there to be three hikes, making it the best time to buy or refinance now.
- Credit availability may improve. The president elect and his team have indicated that they hope to roll back much of the post financial regulation which came about as a result of the Dodd-Frank Act. This act regulates the financial market and rolling it back could open up banks to lend more freely to a wide range of would be buyers.
- Supply will improve, but remain short. Declining inventory was a defining feature of the housing market in 2016. This led to prices increasing rapidly and discouraged some would be sellers from entering the buying fray. There are some signs that the coming year may see a bump in housing supply, at least on the new home front.
- More millennials will become homeowners and renters. According to Zillow, half of all buyers are under the age of 36. Millennials are adults born after 1980 and are not the largest adult generation and make up the greatest percentage of the workforce.
- Competition will grow fiercer. In 2017 sellers will maintain the edge over buyers as demand is expected to increase. In 2016, according to Redfin, the typical homes stayed on the market for just 52 days.
- Political uncertainty will be replaced with policy uncertainty. The president elects pledge to spend more on infrastructure, to cut taxes and to crack down on immigration could impact the housing market. However, opinions vary widely on this.
A Buyer normally pays for the following:
Recording the new deed
Their share of the tax stamps. Tax stamps in New Hampshire are 1.5% of the purchase price and are split equally between the buyer and seller
The title examination and closing
The owner’s and lender’s title insurance policy
All costs associated with getting a new loan
A Seller normally pays for the following
Their share of the tax stamps
Any commission to the realtor for the sale of the property
To prepare the Purchase and Sales Agreement when no realtor is involved
Recording any lien release documents pertaining to their loan
For the preparation of the new deed conveying the property
Both parties share in the proration of the real estate taxes and there may be other miscellaneous costs associated with the sale. Give us a call at 603-836-5309, if we can help with the sale or purchase of your home!
The title company makes sure that the title to a property is legitimate, so that a buyer is assured that once he buys property he is the rightful owner. To ensure that the title is valid a title search will be done. This is a thorough examination of property records to make sure that the person or company claiming to own the property does, in fact, legally own the property and that no one else could claim full or partial ownership of the property.
During the title search, the title company also looks for any outstanding mortgages, liens, attachments, judgments or unpaid taxes associated with the property. They also look for any restrictions, easements, leases or other issues that may impact ownership. Before a title company issues title insurance, it will prepare a title commitment for the Lender, which is a summary of what it found during the title search.
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 $1000,000 of his or her homestead to be exempt from the rights of creditors. That amount is slated to increase to $120,000 per person on January 1, 2016.
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.
Title insurance is an insurance policy issued by a title company. It protects the purchaser or owner, against a loss that may arise by reason of a defect in your ownership or an interest you have in real property. There are two different types of title insurance policies available:
An Owner’s Policy of Title Insurance and a Loan Policy of Title Insurance
Since most property owners mortgage or borrow money at the time of purchase or during ownership, the lender can be expected to request protection of its investment against loss. Lenders generally insist upon a Loan Policy of Title Insurance to protect their investment in your property. An Owner’s Policy of Title Insurance protects your investment (equity) as the buyer or owner of the property. As the owner, you should want to have the same assurance as the lender so that the investment you have made cannot be lost because of a problem or defect with the title.
Title insurance is different from other types of insurance in that it protects you, the insured, from loss that may occur from matters or defects from the past. Other types of insurance such as auto insurance, life insurance, or health insurance, cover you against losses that may occur in the future. Title insurance does not protect against a defect that may originate at a later date.
There are numerous defects or problems that can arise to cause an attack to or loss of the title to your property. Some of these include problems not disclosed by the most careful search of the public records (the title search). Hidden risks can cause a total loss of your investment or heavy legal expenses in the defense of an attack on the title. Some title problems may show up months or years after the original purchase of the property.
Here are some examples of matters that can cause loss of title or an expensive lawsuit:
Forged deeds, releases, wills, or other legal documents
Failure of spouses to join in conveyances
Undisclosed or missing heirs
Deeds from minors, aliens, or persons of unsound mind
Errors in indexing of public records Liens for unpaid taxes including estate, inheritance, income, or gift taxes
Mistakes in recording legal documents
Wills that have not been probated
Title insurance defends you in a lawsuit attacking your title and either corrects the title problem or pays the insured’s losses up to the fact amount of the policy. The policy also protects you after you sell the property for the defects occurring prior to your ownership that cause a loss to a purchaser if the title was warranted by you. The title policy guarantees that at the date the deed was filed for record that the title was free of defects apart from those excepted to in the policy. The policy does not guarantee an actual amount of land.
How do you obtain Title Insurance and what does it cost.. Let us know that you want to purchase an Owner’s Policy of Title Insurance and we can tell you what it will cost. The cost is based on the purchase price of the property and your policy amount must be equal to the purchase price.