Typical End of the Month

All of you in Real Estate and Lending can appreciate this…kind of a summary of closings for the month!

Realtors and Lenders- picture this scenario:

You have a listing now for 9 months that you JUST got a contract on that WAS NOT either $100,000 under list, or by a buyer using an unregistered LLC or the 123 Happy Street Trust, Jimmy Hoffa as trustee. It is a short sale, the sellers are going through a divorce, the husband moved out of state, and has told you several times “ I don’t care what EQUATOR needs, I’m not sending you anymore updated bank statements and current pay stubs, I should just let the bank have the house!”

After barely keeping the transaction together, convincing the buyers and/or their agent that it will just be a few more weeks before we close, and why they shouldn’t walk away from their $500.00 deposit that they borrowed from mom and dad, you are getting down to closing. The buyer’s financing is approved by a thread based on the wife’s second income working nights at Denny’s. The house appraised $10.00 over contract price after the 6th comp.

You just discovered the house 4 down from this one has some “settlement cracks” appearing on the garage wall.  A Tropical Depression appears to be forming off the coast of Africa, and your buyer hasn’t bound insurance yet.

The short sale is good until Friday.

The Rate Lock expires on Friday.

The 1st seller cant sign until Friday night after community service hours are served.

The 2nd seller’s mail-away doesn’t return until Monday.

The Lender has to have the package back in their office Monday before noon.

The Buyer’s moving van is sitting in the driveway.

You have been contacted by Verizon wireless for exceeding minutes allowed under the UNLIMITED plan….

Sound familiar?

It sounds familiar to us to. We call this scenario “Typical Friday”.

We are Hillsborough Title. We have been in business for 27 years. We have been here when you needed us. We go above and beyond the call of duty for our clients. We value our relationships with you, and are proud to call you our friends and clients.

Trust your transactions to the EXPERIENCED professionals who were here yesterday, today, and will be here tomorrow when you need us.

Visit www.hillsboroughtitle.com for contact information. Or contact any of our closers on how to make a killer martini- LOL!


Troubled home market creates generation of renters For many Americans a home now feels too costly, too risky or unlikely to appreciate

WASHINGTON — A growing number of Americans can’t afford a home or don’t want to own one, a trend that’s spawning a generation of renters and a rise in apartment construction.

Many of the new renters are former owners who lost homes to foreclosure or bankruptcy. For others who could afford one, a home now feels too costly, too risky or unlikely to appreciate enough to make it a worthwhileinvestment.

The proportion of U.S. households that own homes is at its lowest point since 1998. When the housing bubble burst four years ago, 31.6 percent of households were renters. Now, it’s at 33.6 percent and rising. Since the housing meltdown, nearly 3 million households have become renters. At least 3 million more are expected by 2015, according to census data analyzed by Harvard’s Joint Center for Housing Studies and The Associated Press.

All told, nearly 38 million households are renters.

Among the signs of a rising rental market:

— The pace of apartment construction has surged 115 percent from its October 2009 low. It’s still well below a healthy level. But permits for apartments, a gauge of future construction, hit a two-year peak in March. By contrast, permits for single-family home are on pace for their lowest annual level on records dating to 1960.

— The number of completed apartments averaged about 250,000 a year before the boom. They fell to 54,000 last year and will probably number around the same this year. But then the number will likely double to about 100,000 in 2012 and hit 250,000 by 2013 or 2014, according to the CoStar Group, a research firm. The lag is due to the time it takes for an apartment building to be completed: an average of 14 months.

— Demand is driving up rents. The median price of advertised rents rose 4.1 percent between the end of 2009 and the end of 2010, census data shows. Few expect the higher prices to stem the flood of renters, though. One reason: Younger adults don’t value homeownership as earlier generations did and many prefer to rent, studies show.

— Rental housing is giving builders more work just as construction of single-family homes has dried up. Still, that economic lift won’t make up for all the single-family houses not being built. Apartments account for only about one-fourth of homes. And renters are outspent roughly 2-to-1 by homeowners, who pay for items from lawn care to remodeling and help drive the economy.

Before the housing bust, mortgage rates were so low it was often cheaper to buy than rent. That was true a decade ago in more than half the 54 biggest metro areas, according to Moody’s Analytics. Today, by contrast, it’s cheaper to rent in about 72 percent of metro areas.

Consider Mason Hamilton, 26, an energy consultant who rents an apartment with his wife for $1,100 a month in Alexandria, Va., outside Washington. He’d like something bigger. But he says he doesn’t plan to buy even though he could afford to.

“My parents always told me, ‘You need to buy a place; you need to buy property,'” he says. “But the housing market is insane.”

Many younger Americans see owning as risky. It hardly seems the best way to build wealth, especially when prices are falling.

“There’s been this idea for years, a part of the American dream, that owning a home improves and strengthens communities,” said John McIlwain, a senior fellow at the nonprofit Urban Land Institute. “But what we’ve learned over the past few years is that many people simply are not ready to own a home.”

From the 1940s until 2007, homes appreciated an average of nearly 5 percent a year, adjusted for inflation. In the past four years, the median price of a single-family home has sunk 37 percent, by $57,500, to its lowest since 2002. Yet in some areas, owning is still too expensive for many.

“It’s becoming so difficult for most Americans to afford a home, with larger down payments and tighter credit, that it is creating a renter’s nation,” says Robert Shiller, a Yale economist and co-creator of the Case-Shiller home price index. “The home is no longer an investment; it’s a burden.”

Homeownership bestows its own financial advantages, of course. Each loan payment builds equity. Loan interest and property taxes provide tax deductions. And in normal housing markets, home values rise over time.

But for now, renting is more attractive. Hamilton, the energy consultant, says his father, a 58-year-old teacher in Richmond, Va., still owes nearly as much on his mortgage as his house is worth.

“He’s stuck in that house,” Hamilton says. “After telling me to buy for all of those years, he’d love to rent like me.”

This article is from Real Estate on MSNBC.com

Short Sales: Nightmare or a Path to Financial Solvency?

Short sales, the hot potatoes of the real-estate market, are becoming easier to handle. Over the next three years, look for the number of short sales and mediations to grow, as the last reset of those toxic adjustable-rate mortgages comes due and major banks and their servicing divisions get more cooperative.

But throwing a line to upside-down homeowners isn’t happening out of the goodness of lenders’ hearts. They’ve just figured out that it’s a smarter way to do business.

Michelle D. Plevel, broker and short sales division consultant with Chase International, says that over the past three years, lenders have learned that letting homes go into foreclosure left them holding properties that continued to devalue, and in many cases degenerated physically when left unoccupied. Not to mention the public pressure against allowing foreclosed homes to blight neighborhoods and decrease property values. “Lenders have realized that a short sale is much better,” said Plevel.

The biggest obstacle is servicing time: How long it takes the lender to approve the short sale, especially if there’s more than one lender involved. That can scare off a potential buyer. (At a recent short sale symposium for real estate agents, Housing Pulse reported that it takes, on average, three potential buyers to make a short sale stick.) And since short sale properties are sold “as is,” there’s also some uncertainty about what you’re buying.

A Breeding Ground for Alligators?

Julie Escobar, a single mom of three teenage daughters, bid on a $149,000 Tampa, Fla., short sale last year so that she could take advantage of the tax credit offered to first-time home buyers. “The paperwork was a long process,” she said, “but for me, the scariest part was the condition of the house. What was I buying?”

Her biggest fear was what lurked in the “black swamp” in the yard — the in-ground pool. “It was pure sludge,” she recalled, perfect conditions for those Florida alligators. She’d heard that some sellers, angry about losing their homes, use the pool as a receptacle for everything, including car engines, washing machines and household trash.

Escobar closed escrow in 60 days, then assembled a band of teenagers to fish through the muck. Luckily, there were no reptiles. “Everything worked out,” Escobar said, “but I definitely felt that I took a risk.”

For sellers, the risk is not getting the debt relief they seek, ending up in foreclosure, and taking a big hit to their credit rating. Ayanna Dookie bought her home in Baltimore in 2007 for $182,000, getting a 10-year, fixed-rate, interest-only loan. When she decided to move to New York a few years later to pursue an entertainment career, “property values had dropped way below what I had paid for the house,” Dookie said. She ended up selling for $89,000 — less than half what she owed the bank.

The short sale dropped her credit rating from 725 to 697, but at 29, she’s not worried. “I have time to rebuild. This is the time to follow my dreams.”

Getting Short Sale Help

Short sale expert Plevel said that the No. 1 thing for sellers pursuing a short sale to do is find someone strategically trained in loss mitigation.

“John Q. Public can’t handle a short sale by themselves,” she said, “and many real estate agents lack the experience.”

Plevel counsels that sellers should ask potential listing agents how many loan modifications and defaults they’ve handled, and then check their references and ask those clients how the process went.

Rick Keefer of Pacific Union International in the San Francisco Bay Area, another short sale consultant who has closed about $7 million in short sales, suggests these additional tips:

1. Complete short-sale documentation prior to placing your property on the market. That way, an experienced agent/negotiator can identify any potential obstacles. For instance, a second lienholder may want a contribution to remove the lien or to completely extinguish the debt. Many transactions fail, Keefer said, because all the details don’t emerge until weeks or months into the deal.

2. Don’t list too low to start. Banks like to see some days on the market at a reasonable asking price. If you start out too low, the bank may reject your offer. List the property at a fair price, then adjust the price every few weeks until you get an offer.

3. Lenders don’t like to make concessions for repairs. Buyers should inspect the property and send the lender an as-is offer.

4. Take the long view. Make sure the buyer is committed and in the deal for the long haul. If a transaction fails, you have to start at square one and end up losing valuable time.

For more on short sales and related topics, see these AOL Real Estate guides:
Short Sales: Tips for Home Buyers
How to Sell Your Home in a Short Sale
Video: “All About Short Sales.”

This article is from AOL Real Estate

Jury convicts exec in $3 billion mortgage fraud case One of the most significant prosecutions to arise from U.S. financial crisis

ALEXANDRIA, Virginia — A jury on Tuesday convicted the majority owner of what had been one of America’s largest mortgage companies on all 14 counts in a $2.9 billion fraud trial that officials have said is one of the most significant prosecutions to arise from the U.S. financial crisis.

Prosecutors said Lee Farkas led a fraud scheme of staggering proportions for roughly eight years as chairman of Florida-based Taylor Bean & Whitaker. The fraud not only caused the company’s 2009 collapse and put its 2,000 employees out of work, but also contributed to the collapse of Alabama-based Colonial Bank, the sixth-largest bank failure in U.S. history.

The jury returned its verdict late Tuesday after more than a full day of deliberations.

Colonial and two other major banks — Deutsche Bank and BNP Paribas — were collectively cheated out of nearly $3 billion, prosecutors estimated. Farkas and his cohorts — six of whom entered guilty pleas to related charges and testified against him at the two-week trial in U.S. District Court — also tried to fraudulently obtain more than $500 million in taxpayer-funded relief from the government’s bank bailout program, the Troubled Asset Relief Program (TARP).

While TARP at one point gave conditional approval to a payment of roughly $550 million, ultimately neither Taylor Bean nor Colonial received any TARP money, and investigators from that office, along with the FBI and other agencies, helped uncover the fraud.

Neil Barofsky, who recently resigned as TARP’s special inspector general, has called the Farkas case “the most significant criminal prosecution to date rising out of the financial crisis.”

In a conference call Tuesday evening with reporters, the Justice Department’s criminal division chief, Lanny Breuer, said Farkas was “one of the masterminds in one of the largest bank frauds in history” and that his misconduct “poured fuel on the fire of the financial crisis.”

“TBW was a major, major player in this industry,” perhaps the second largest in the country depending on how it is measured, Breuer said.

Farkas testified in his own defense at the trial and claimed he did nothing wrong. He claimed he was unfamiliar with details or knowledge of many aspects of the various fraud schemes, testimony prosecutors derided as incredible in their closing arguments.

Farkas’ lawyer, Bruce Rogow, said the six executives at Colonial and Taylor Bean who struck plea deals skewed their testimony to bolster the government’s case in the hope of receiving lighter prison sentences for their cooperation. Rogow said Farkas and everyone else at Taylor Bean was working honestly and ethically to get control of its finances and perhaps could have done the job if the government hadn’t essentially shut the company down when it raided company headquarters in 2009.

Rogow said late Tuesday he was disappointed in the verdict and plans to appeal.

“I had hoped the jury would have accepted our argument that the six people who pled guilty did so not because they felt they were guilty but because they wanted to minimize the sentences that the government threatened them with,” Rogow said.

U.S. District Judge Leonie Brinkema ordered marshals to take Farkas into custody immediately following the verdict, a relatively unusual step since most defendants are allowed to remain free until they are formally sentenced. Farkas will be sentenced July 1 and potentially could spend the rest of his life in prison.

According to prosecutors, the fraud began in 2002, when Taylor Bean overdrew its main account with Colonial by several million dollars. Mid-level executives at Colonial agreed to transfer money into Taylor Bean’s accounts at the end of each day to avoid generating overdraft notices, a process known as “sweeping.

As the hole grew to well over $100 million, Taylor Bean and a handful of Colonial executives concocted a scheme in which Taylor Bean sold hundreds of millions in worthless mortgages to Colonial, mortgages that had already been sold to other investors. More than $1 billion in such phony mortgages were eventually sold to Colonial, which listed them on its books and on its quarterly reports as legitimate assets, prosecutors alleged.

In a related scheme, Taylor Bean created a subsidiary called Ocala Funding that sold commercial paper — essentially glorified IOUs — to banks including Deutsche Bank and BNP Paribas. But prosecutors said the collateral that supposedly backed that commercial paper was worthless, and when Taylor Bean collapsed in 2009, the two banks lost roughly $1.5 billion.

Prosecutors said Farkas was motivated by greed and a lavish lifestyle that included a private jet, a seaplane, numerous houses including a home on Key West that he paid servants to hand wash with a sponge to prevent salt damage, a collection of several dozen classic cars and an executive dining room at company headquarters that served pheasant and caviar.

Farkas, 58, was charged with 14 counts of bank fraud, wire fraud, securities fraud and conspiracy.

Trial testimony revealed that the bankers at Colonial who worked with Farkas felt trapped as the hole in Taylor Bean’s accounts grew exponentially. Cathie Kissick, a vice president at Colonial who did not tell her superiors about the vast majority of Taylor Bean’s problems, testified that she had little leverage over Farkas because of the trouble she would be in if the size of the hole in Taylor Bean’s accounts was discovered.

Farkas exploited that leverage, telling a colleague: “If I owe you $100, I have a problem. If I owe you $1 million, you have a problem.”

This article is from Real Estate on MSNBC.COM

Faulty paperwork slows foreclosure activity, survey shows

WASHINGTON — The number of Americans who lost their homes to the bank fell in April as faulty paperwork continued to slow foreclosure activity, which fell to a more than three-year low, a closely watched survey said on Thursday.

Banks seized about 69,532 homes in April, down 8.6 percent from March and a drop of more than a third from a year earlier, real estate data firm RealtyTrac said.

The number of foreclosure filings, which includes default notices, auctions and repossessions, fell to just 219,258 in April, the seventh straight monthly decline and the lowest level since December 2007.

Banks have seized about 285,000 homes so far this year, putting the United States on track for slightly more than 850,000 foreclosures in 2011.

More than a million homes were seized in 2010, and this year’s total had been expected to go higher until investigations into the foreclosure process prompted temporary halts from some mortgage servicers late last year.

The government and the largest U.S. banks are in talks for what could be a multibillion dollar settlement over foreclosure abuses.

Regulators and a coalition of state attorneys general are negotiating with the biggest mortgage lenders, including Bank of America, JPMorgan Chase and Wells Fargo.

These banks and other mortgage servicing firms have been accused of foreclosing on thousands of borrowers without having the necessary paperwork.

Nevada, Arizona and California continued to post the highest foreclosure rates in the country, RealtyTrac said.

Just 10 states — California, Florida, Arizona, Michigan, Nevada, Illinois, Texas, Georgia, Ohio and Colorado — accounted for more than 70 percent of all foreclosure activity.

In 2005, before the housing bust, banks took over just about 100,000 houses, according to the Irvine, California-based company.

This article is from Real Estate on MSNBC.com

Professor Aaron's School Of Title Tips TITLE 101 "Class Is In Session"

Part of what my role is at Hillsborough Title besides owner, providing leadership and vision, and cleaning the occasional toilet is EDUCATING our clients.  We sometimes take for granted the insight and knowledge we each have in our prospective industries.

My goal is to educate our clients so they may make more informed decisions.

My industry, the very sexy and entertaining world of title insurance has tons of moving parts to it, and so begins my lessons to the masses: I call it my TITLE 101 series.



Hillsborough Title is an independent title AGENCY. We write title insurance on title insurance COMPANIES (since we so closely relate to Property & Casualty insurance, I’ll refer to them as CARRIERS).  WE as an agency decide what CARRIERS we write our title insurance on. Just like you have homeowners insurance and auto insurance written on various carriers, so goes title insurance. All is well in the world of insurance, until you have a CLAIM. Then you find out exactly what kind of coverage you have, and find out the service levels, liability, legal ramifications, and strength of a carrier you have. Imagine a startup homeowners insurance company who just started writing earthquake insurance in Japan in 2010….unless they had a few billion dollars behind them to pay claims with, chances are they may not be in a very good financial position right now.

A similar thing is happening in our industry right now. The Real Estate industry has been ROCKED for several years now. This downturn in the economy, loss of jobs, Wall Street crash, Sub-Prime crisis, wars, you name it- have decimated anything and everything to do with Real Estate, transactions, sales, building, lending, etc. What we have seen is that ONLY THE STRONG SURVIVED. What once were pillars in our communities and real estate arenas are gone, bankrupt, dissolved, sold, or just shut down. Companies that were overleveraged and over-employed are gone. Real Estate companies, Mortgage Companies, Banks, Builders, Developers, Title Companies- everyone tied to the sale and resale of housing were affected.

Title underwriters too felt the brunt of this. Claims spiked, fraud everywhere, premiums decreased- so only the financially strong sound underwriters survived. The ones worthy of being in business, and able to pay their claims.

Now that we see an improving economy and real estate transactions are on the rise, so are the return of the startups, and yes- some fly-by-nights. We recently saw an underwriter go down that was financially insolvent and unable to pay its claims….so imagine you have paid your insurance premium on your car, get into an accident, and the insurance company says “sorry, we cant pay your claim”….wouldn’t you be just a little irate? You fulfilled your end of the bargain by paying your premiums….now they wont hold up their end?

My advice? Do your homework. As a lender, demand your policies to be written on companies able to pay their claims. Buyers- make sure the policy that you are getting will be good when you need it. Realtors and Sellers- you decided which title company to use and trusted in their choice of underwriters….be sure they are financially sound. Here is a good place to look https://www.demotech.com:8080/01_pages/fsr/companies.aspx?t=1 and here is a good rule of thumb….I like 9 zero’s on my companies 🙂