What Is The Ideal Texas Title Company?

The following story reminds me of a “priest, rabbi and a minister” joke, but it is a true story about Texas title companies and how they differentiate their very commoditized products and services nonetheless. However, it shed new light on what the ideal Texas title company does or should be doing for its clients within the highly regulated framework created by the Texas Department of Insurance.

A mortgage company is having their weekly meeting in which they invite current and prospective vendors in to solicit the mortgage company’s business. On this occasion, three Texas title company representatives are there to try to earn the mortgage company’s business for their respective title company. When the first Texas title company representative has the opportunity to give his spiel, he states, “The price of Texas title insurance is fixed by the Department of Insurance, so the bulk of the fees charged by all Texas title companies is the same generally, so the way we differentiate our title company is in our customer service”. The second Texas title company representative has his chance next, and asserts, “The first Texas title company representative is correct in what he says that there are very little differences in what Texas title companies charge, and so customer service is what sets us apart. And that is why our title company’s customer service is second to none”. It was now the third Texas title company representative’s turn to give his pitch. The loan officers are waiting for him to say something—anything—interesting and different from what the first two said. Instead, the third Texas title company representative says, “The first two Texas title company representatives have said it best. I have nothing further to add”.

In my head, this story is comical, but the reality. I actually agree with all three Texas title company representatives that it all comes down to customer service: they are all correct. But how are mortgage and real estate professionals supposed to see the difference between Texas title companies and their varying degrees of “good customer service”? I ask myself this question constantly because differentiation is always important when clients have a choice in who they use.

At Griffin Law Firm, which is a fee office for a major Texas title company, we know we haven’t thought of everything and every tool we can be providing for our clients. There will always be more ideas to come. We also know that the ability to fulfill the needs of our clients comes from engaging with them and building strong relationships with them in order to know what voids could be filled. That being said, we have some very clear ideas of what sets us apart from other Texas title companies that goes beyond the usual dog and pony show. This may not be the silver bullet that meets all your needs, but I believe it gives us a good foundation from which to start. We are always willing to listen and always asking why. We want to be the Texas title company that is on your team.

A2XYUWT4CBY6

Happy Thanksgiving from Your Texas Title Company!

I know that with all the hustle and bustle of the new RESPA rules, end of month, end of year coming things can be rushed and everyone seems to focus on the subject at hand, which is to get as many loans closed as possible by the end of the month; be prepared for the New Year RESPA Rules (so you can continue without slowing your closing pace); and somewhere in between try to make a few bucks.

Okay, now it’s time to breathe. All of the matters at hand are important, and I realize there are dead lines in all situations, but there is something even more important coming your way—and that is Thanksgiving. I know we are all thankful for our jobs, especially in this market. But how about that son or daughter that tugs on your pants while he or she looks up to you? Or how about the wife that waits patiently while you work the long hours to make sure they are cared for adequately? Or how about the brothers, sisters, mom and dads that you haven’t really had time to see because of all the time restraints and challenges with your career?

I would like to challenge you to set aside some time, maybe a day or two to reflect on what REALLY matters in life. Then once you have decided, tell someone how much you love them, why you are thankful and how thankful you are that they are part of your life.

In this day and time, love can be lost in translation.

Make this Thanksgiving true and sincere.

Happy Thanksgiving from all of us at Griffin Law Firm!

Does your Texas Title Commitment Insure Mineral Rights?

As of this year, a rule was passed allowing Texas title insurance companies to insure mineral rights on a residential property. The insurance comes in the form of a blanket policy and certain criteria must be met before issuing the T-19.2 aka Minerals and Surface Damage Endorsement.

Note that this is not an endorsement that will be automatically issued. In order for the owner or lender of the property to be insured, the endorsement will need to be requested directly with the Texas title company insuring the transaction.

There is still some uncertainty as to the pricing of the T-19.2 and if credits such as the R-8 refinance credit, apply, but the Texas Department of Insurance presumably will clear this up in the next few weeks.

For timing’s sake, it will be important to notify your Texas title company if this endorsement is going to be requested as soon as possible. Mineral right researches require more work than a normal title search and, thus, much more time. Some mineral right researches can take weeks depending on issues such as how far back the deed was taken out, were the minerals ever severed from the surface, were there any deaths, were the rights transferred, etc.? And once the research is completed, the information gathered concerning the mineral rights being insured by your Texas title policy will need to be reviewed by the appropriate underwriter or attorney. Only upon their approval will the endorsement be issued.

The point I’m trying to drill into your rock is there will be many steps to obtaining this endorsement and may require time. If you need this endorsement or you think you may need it, request it up front from your Texas title company to save your closing from being prolonged.

This new endorsement may not be a big deal in the Houston area where typically, residential owners do not own the minerals to their property. However, in areas like the Dallas-Forth Worth metroplex, it is quite common for residential owners to still retain the minerals to their property. It is worth taking the time to ask your borrower if they would like this endorsement to show them you are the smartest mortgage specialist in the room.

Need a Texas Real Estate Contract?

It’s 5:00 pm…30 minutes until you leave your work life behind—if you are that disciplined….and some of us aren’t. The phone rings, and it is your FSBO borrower wondering if you know how to set up a seller lease-back or have some sort of “Seller’s Temporary Residential Lease” form. Not a very common request for most, and I know your first thought is, “I will call the title company and see if they have one.”

Did you know the Texas Real Estate Commission publishes all the forms they give to real estate agents? If you or your client really need a real estate contract, go to:

http://www.trec.state.tx.us/formslawscontracts/forms/forms-contracts.asp

Cut the middle man out! Save time! Now, go home!

‘Til Death Do Us Part

A goal for some marriages, a strong commitment for others, or maybe just words for some: “‘Til Death Do us Part.” Everyone that has ever been married remembers the day they were married or decided they wanted to be married. Everything coming up roses, the warmth of the sunshine, love in the air,…but then a few months roll by and things become a little complicated.

Unfortunately, marriage can become complicated in real estate transactions as well, but the good news is: you won’t need marriage counseling to resolve the issues. I know you are wondering how marriage can be complicated to the Texas title insurance industry. If the couple is married and a property is purchased, they each have a vested interest in the property. Where’s the problem? Well, there may not be a problem in that scenario, but what if the couple is common law married? Does that create a problem? Is the property purchased as two individuals or is the property purchased as a married couple?

In the State of Texas there are two types of marriages recognized: (1) Formal marriage—where a marriage license is obtained and (2) Informal—also known as common law marriage. Common law marriage has been recognized in Texas since 1847. Tarpley v. Poage’s Adm’r, 2 Tex. 139, 149 (Tex. 1847). Common law marriage is an unavoidable issue that needs to be reviewed when issuing a Texas title insurance policy.

For example, in a refinance transaction, the borrower is asked to complete a marital status affidavit, and he marks himself as “single.” However, the warranty deed or conveyance document shows he purchased the house as “a married man.” After investigating the situation, the Texas title company finds that he had a common law marriage to Betty Sue, but she left him 2 years ago. This matters!! Betty Sue, as his common law wife, has a marital interest in the house. At this point, the file would need to go to the Texas title insurance underwriter to be reviewed for further instruction.

If you think your client may have been in a common law marriage, and they decided to X the “til death do us part” all together, be sure and contact your Texas title company with any questions—and definitely let your Texas title company know in advance so any possible issues can be dealt with before closing.

How To Handle Proper Disclosure of the Texas Title Insurance Premium and Other Title Fees on the New Good Faith Estimate

The lender‘s Texas title insurance premium is part of the new GFE’s Block 4—Title services and lender‘s title insurance. The difference between the new and old GFE is that the new GFE requires the mortgage originator to lump in the Texas title insurance premium along with any fees for title searches, examinations, endorsements and all charges associated with the title services and settlement (closing) agent services as one single cost, whereas the old GFE required an itemization of all of these fees.

Within this lump sum cost, a mortgage originator should include the Texas title company’s delivery fees, notary fees and settlement fees since these fees are included in the definition of title services. The term “title services” is defined to include any service involved in the preparation and issuance of the title insurance policies. See 24 C.F.R. § 3500.2.

It is common practice for the title company to charge both the borrower and seller a fee for conducting the settlement. Only the charge to the borrower must be included in the total for Block 4 of the GFE. Charges that the seller pays as a matter of common practice and experience are not disclosed on the GFE.

However, the owner’s Texas title insurance and recording fees to the county will still be listed separately from the “Title services and lender‘s title insurance” lump sum cost.

Is this simpler for the borrower to understand than the way in which the old GFE addressed title fees? There is an argument that it makes Texas title insurance fees more opaque to the borrower. Come January 2010, these arguments will not necessarily matter anymore because the new GFE will be the mandated method of disclosure.

Is your Power of Attorney Powerless?

It’s down to the wire and your loan is ready to close. Your title is ready, your underwriting conditions are met, and the appraisal and survey have been approved. This is it! You are finally going to close this transaction. You call your borrower to schedule the closing only to find that one of the borrowers decided to take a two month vacation to Zimbabwe! Of course, the lock expires in three days….what do you do? The light bulb goes off in your head. I will use a Power of Attorney!

As brilliant as a Power of Attorney sounds as your silver bullet solution at this point, there is still a lot that goes into the use of one. The mortgage underwriter has to review the POA, but also the title company has to review and approve the POA as well. It seems the latter part is overlooked 99.9% of the time, so please keep in mind that surprising an escrow officer with the use of a POA will stop your closing!

Today title insurance company underwriters examine everything a little closer, and it makes the rules for approval a little tighter on a POA. For example, a medical power of attorney may negate a letter from a medical doctor stating that the patient is competent enough to execute the POA. Or a military POA may require a notary by a commissioned officer and a letter stating the principal is alive and well. If a Power of Attorney is used in a home equity transaction, it has to be specific to the transaction detailing lender, loan amount, etc.

If you are using a power of attorney, have the title company review it IN ADVANCE and BEFORE closing to avoid delays; otherwise your Power of Attorney may be deemed powerless!