California - Title Advantage · Industry is the fact that an Abstract of Judgment does not list the...
4
Protecting Your Property Rights CALIFORNIA TITLE COMPANY HAS A VESTED INTEREST IN THE CONSUMERS OF THE STATE OF CALIFORNIA. Protecting Your Property Rights California CONSUMER REPORT CALIFORNIA TITLE COMPANY HAS A VESTED INTEREST IN THE CONSUMERS OF THE STATE OF CALIFORNIA. MARCH 2018 ISSUE The information contained herein is deemed to be reliable, but it is not guaranteed. California Title Company assumes no responsibility for errors or omissions. Images may be subject to copyright. ©2017 California Title Company. The Cost of Title Insurance is Worth the Investment Whenever there’s an article in the news about title insur- ance, all too frequently there is criticism about the cost. This perception occurs because there are fewer claims with title insurance compared to other forms of insurance. The higher percentage of claims an insurance company pays should not be equated with the value and cost of the policy. This is especially true with title insurance. Most types of insurance cover incidents that may occur in the future, which is the case with health, life, auto and homeowner’s insurance. The cost of these policies is based on the insurers’ estimation of how much they will likely pay out in claims over a given period, plus administrative costs and a reasonable profit. The volume of claims is typically high with these types of insurance. Title insurance, on the other hand, is based on loss preven- tion, which means that a much larger percentage of the premium dollar is spent preventing title problems from oc- curring. These upfront costs cover searching, identifying and eliminating risks that could result in a future claim. A typical title search involves searching the public records, including visits to the offices of recorders or registers of deeds, clerks of courts and other officials, and the com- pany’s own title plant. Title professionals look for such things as second or third mortgages, judgments, liens, street and sewer system assessments, special taxes and levies, and numerous other matters. No other line of insurance does this level of due diligence before issuing a policy. Over the long term, title insurers pay fewer claims than other insurers, but their operating expenses are much higher because of these upfront costs. To compare, operating expenses for property and casualty companies, which issue auto and homeowners insurance, is less than 30 percent of revenues. The expense ratio for title insurers averages 90 percent. Another reason some mistakenly believe that title insur- ance costs are high is because they don’t fully understand its value. Title insurance protects the single largest financial investment most people make. One out of every three resi- dential real estate transactions has an issue with the title, which is usually resolved by title professionals before the buyer closes. When there is a claim, it is often due to a title defect that was undetected during the title search. The most common problems resulting in title claims are the result of fraud and forgery. And, when there is a loss, it is usually significant— sometimes in the hundreds of thousands of dollars. An owner’s policy, which can be obtained in addition to a loan policy, remains in effect for as long as the policyholder (or their heirs) owns the property that is insured. A claim could actually be filed 50 or 100 years after the policy was issued. Also, owner’s policy covers legal expenses involved in defending the title on behalf of the homeowner. The cost for title insurance is a one-time fee, as opposed to other lines of insurance that charge a monthly, quarterly or annual premium over the life of the policy. When you con- sider the size of the asset being protected, title insurance is probably the best value among the majority of costs associ- ated with closing on a new home. As an example, the cost for an owner’s policy for a home in Washington, D.C., listed at $474,000 and assuming a 20 percent down payment, is around $1,100. Over the aver- age duration of homeownership, that spreads out to about $85 annually or about $7 per month. The longer you own your property, the overall cost decreases even more—yet the protection of your owner’s policy stays the same for as long as you own the property. http://www.homeclosing101.org/the-cost-of-title-insurance-is-worth-the-investment/
Transcript of California - Title Advantage · Industry is the fact that an Abstract of Judgment does not list the...
Protecting Your Property Rights
CALIFORNIA TITLE COMPANY HAS A VESTED INTEREST IN THE CONSUMERS OF THE STATE OF CALIFORNIA.
Protecting Your Property Rights
Califor nia CONSUMER REPORT CALIFORNIA TITLE COMPANY HAS A VESTED INTEREST
IN THE CONSUMERS OF THE STATE OF CALIFORNIA.
MARCH 2018 ISSUE
The information contained herein is deemed to be reliable, but it is not guaranteed. California Title Company assumes no responsibility for errors or omissions. Images may be subject to copyright. ©2017 California Title Company.
The Cost of Title Insurance is Worth the InvestmentWhenever there’s an article in the news about title insur-ance, all too frequently there is criticism about the cost. This perception occurs because there are fewer claims with title insurance compared to other forms of insurance. The higher percentage of claims an insurance company pays should not be equated with the value and cost of the policy. This is especially true with title insurance.
Most types of insurance cover incidents that may occur in the future, which is the case with health, life, auto and homeowner’s insurance. The cost of these policies is based on the insurers’ estimation of how much they will likely pay out in claims over a given period, plus administrative costs and a reasonable profit. The volume of claims is typically high with these types of insurance.
Title insurance, on the other hand, is based on loss preven-tion, which means that a much larger percentage of the premium dollar is spent preventing title problems from oc-curring. These upfront costs cover searching, identifying and eliminating risks that could result in a future claim.
A typical title search involves searching the public records, including visits to the offices of recorders or registers of deeds, clerks of courts and other officials, and the com-pany’s own title plant. Title professionals look for such things as second or third mortgages, judgments, liens, street and sewer system assessments, special taxes and levies, and numerous other matters. No other line of insurance does this level of due diligence before issuing a policy.
Over the long term, title insurers pay fewer claims than other insurers, but their operating expenses are much higher because of these upfront costs. To compare, operating expenses for property and casualty companies, which issue auto and homeowners insurance, is less than 30 percent of revenues. The expense ratio for title insurers averages 90 percent.
Another reason some mistakenly believe that title insur-ance costs are high is because they don’t fully understand its value. Title insurance protects the single largest financial investment most people make. One out of every three resi-dential real estate transactions has an issue with the title, which is usually resolved by title professionals before the buyer closes.
When there is a claim, it is often due to a title defect that was undetected during the title search. The most common problems resulting in title claims are the result of fraud and forgery. And, when there is a loss, it is usually significant—sometimes in the hundreds of thousands of dollars.
An owner’s policy, which can be obtained in addition to a loan policy, remains in effect for as long as the policyholder (or their heirs) owns the property that is insured. A claim could actually be filed 50 or 100 years after the policy was issued. Also, owner’s policy covers legal expenses involved in defending the title on behalf of the homeowner.
The cost for title insurance is a one-time fee, as opposed to other lines of insurance that charge a monthly, quarterly or annual premium over the life of the policy. When you con-sider the size of the asset being protected, title insurance is probably the best value among the majority of costs associ-ated with closing on a new home.
As an example, the cost for an owner’s policy for a home in Washington, D.C., listed at $474,000 and assuming a 20 percent down payment, is around $1,100. Over the aver-age duration of homeownership, that spreads out to about $85 annually or about $7 per month. The longer you own your property, the overall cost decreases even more—yet the protection of your owner’s policy stays the same for as long as you own the property.
http://www.homeclosing101.org/the-cost-of-title-insurance-is-worth-the-investment/
Home Equity Lines of Credit (HELOC’s) can be a sig-nificant concern to title companies. This is due to HE-LOC’s being a large source of claims. A HELOC is a revolving line of credit secured by a deed of trust on real property. There have been many instances where a HELOC was paid down to a zero balance, but was not properly closed. This allowed the previous owner of the property to still draw from the account, and in-cur additional debt secured real property that they just sold.
An example of this would be when an owner sells their property to a new buyer, which secured an existing line of credit. When the property was sold to the new buyer the line of credit was paid to zero, but remained open as it was not properly requested to be closed by the seller.
The seller then borrows additional money from the eq-uity line and stops making payments. The new buyer now receives foreclosure notices in the mail on ac-count of the seller’s having incurred a new balance on the HELOC which is now unpaid.
Typically, the escrow or closing agent handling the transaction will obtain a payoff demand for the HELOC. Many times, the payoff demand will provide an addi-tional form that will need to be signed by the borrower in order to “close” the account. If the payoff demand does not have this form attached, title companies may use their own specific form for the borrower to sign. In either case, a “close” letter or statement signed by the borrower closing the HELOC will be needed prior to closing the transaction.
HOME EQUITY LINES OF CREDITCLOSING OUT
IN THE ESCROW PROCESS
Hit by Wire Transfer Fraud? Use the Kill Chain ProcessJanuary 30, 2018 | https://www.alta.org/news
Criminals launder billions of dollars overseas through financial fraud schemes like wire transfer fraud, corporate ac-count takeovers, business e-mail compromise scams and other financially motivated crimes.
The FBI offers a Financial Fraud Kill Chain (FFKC) process to help recover large international wire transfers stolen from the United States. ( http://grefpac.org/images/downloads/News_Articles/04.2016_ffkc_bank_outreach.pdf )
The FFKC is intended to be utilized as another potential avenue for U.S. financial institutions to get victim funds returned. Normal bank procedures to recover fraudulent funds should also be conducted.
The FFKC can only be implemented if the fraudulent wire transfer meets the following criteria:• The wire transfer is $50,000 or above• The wire transfer is international
• A SWIFT recall notice has been initiated• The wire transfer has occurred within the last 72 hours.
Any wire transfers that occur outside of these thresholds should still be reported to law enforcement but the FFKC cannot be utilized to return the fraudulent funds.
Additional resources about wire fraud:• Wire fraud video : https://www.youtube.com/watch?v=ek4TwC9owwY • Wire fraud infographic : https://www.alta.org/media/pdf/alta-wire-fraud-infographic.pdf
ESCROW/CLOSING OFFICER: An escrow or closing officer is a non-biased third party who works with all participants to facilitate a successful closing of a real estate transaction. At closing, the closing of-ficer will collect the purchase money funds from the buyer and lender as well as the settlement costs from each party. They disburse the funds according to the terms & conditions of escrow and record the necessary documents to transfer ownership of the property.CPL: Closing Protection Letter. Additional title insurance coverage insuring the lender against loss-es caused by errors or infidelity of the closing attorney or the closing agents in the handling of the transaction.*Source: *https://financial-dictionary.thefreedictionary.com/Closing+Protection+Letter
CLTV: Combined Loan to Value. The calculation used by mortgage and lending professionals to deter-mine the total percentage of a homeowner's property that is encumbered by liens.T
ITL
E
TE
RM
An Abstract of Judgment is a court issued document that may allow a claimant (creditor) to place a lien on Real Property owned by another (debtor). The lien attaches to any Real Property presently owned, and subsequently acquired by the debtor in the county when the Abstract is recorded.
The challenge to the Title Industry is the fact that an Abstract of Judgment does not list the property affected by the lien. The document will show the name of the debtor, the amount of the lien and the date it was entered with the court. In addition, other information may be included, if known to the creditor. This can include the driver’s license, social security number, date of birth and last known address. From that information, California Title Company will have to determine if the judgment debtor is the same person as the property owner. In cases where the owner has a common name, there may be a large number of Abstracts of Judgment recorded with the same or similar names. So the
challenge is to sort through the various recorded judgments and attempt to determine if any affect the Real Property in question.
The tool that the California Title Company uses to eliminate such matters from their reports and policies is a “Statement of Information” also commonly referred to as an “SI”. This is a very important form the principals need to complete early in the transaction. In it, the parties give certain personal information about themselves. That information can then be compared to the recorded Abstract of Judgments.
The Statement of Information should be delivered to the California Title Company well before close of Escrow. One reason is to allow sufficient time to review the liens. Perhaps more important is to allow enough time to obtain payoff information or take other steps should the liens turn out to be against one of the principals.
ABS
TRA
CT
OF
JUD
GM
ENT
A Statement of Information form is available for download at www.CalTitle.com and click on the “Documents” tab.
Stay up to date on title news, events and more.
www.facebook.com/caltitle
@caltitleco
www.caltitlenews.wordpress.com
@CalTitleCo
San Diego Farmers Markets Ongoinghttp://sdfarmbureau.org/BuyLocal/Farmers-Markets.php
San Diego Food Trucks Ongoingwww.sdfoodtrucks.com
Flower Fields at Carlsbad Ranch Mar 1 - May 13This SoCal attraction will open its doors with new landscaping and renovations. See the display gardens developed by the San Diego Master Gardeners, get lost in the fragrant sweet pea maze with new pathways, learn about composting and gardening in the new greenhouses that will offer classes for local elementary students and residents.http://www.theflowerfields.com
San Diego Film Week Mar 2-11The Second Annual San Diego Film Week is a ten-day-long celebration of film in America's Finest City. Over 100 local, national, and international films will be showcased along with workshops, parties, and panels at the Museum of Photographic Arts and other locations across San Diego County. http://sdfilmweek.com/2017/
Mickey Cafagna Memorial Golf Classic Mar 2The Farmers Insurance/Cathy Peterson 5th Annual Mickey Cafagna Memorial Golf Classic, presented by the Poway Chamber of Commerce, gets http://poway.com/
Home & Garden Show Mar 2-4Over 400 exhibits. Everything for your home improvement needs all under one (actually two) roofs. See the annual garden landscape features, where local landscape contractors and horticulturalists put their most creative foot forward to inspire the public.http://springhomegardenshow.com/tickets-discounts
Finish Chelsea's Run 5K Run/Walk Mar 38th Annual Finish Chelsea’s Run in honor of Chelsea King. The event will feature a competitive 5K race and fun run/walk, family festival, children’s activities, team competition, entertainment, and refreshments.https://chelseaslight.org/programs/finish-chelseas-run/
Festival of Science & Engineering: Expo Day Mar 3Expo Day is the official kick-off celebration for festival week featuring hundreds of exhibitors and gives attendees a major preview of what’s to come to area businesses, schools, libraries, and museums throughout the county during Festival Week, eight days of learning, hands-on activities, innovation, and behind-the-scenes opportunities for students in grades kindergarten through 12th grade, as well as adults and families to ignite their passion for STEM education.https://www.lovestemsd.org/
Busker Festival Mar 3-4The celebration brings colorful street performers – from jugglers on unicycles to stilt walkers, contortionists, and acrobalancers – to the waterfront shopping, dining, and entertainment district.http://www.seaportvillage.com/
St. Patrick's Day Half Marathon, BeerFest, and Tribes & Clans Mar 4St. Patrick’s Day half marathon, 5K run/walk, and Tribes and Clans crossfit-style competition. http://www.stpatricksdayhalf.com/
Cherry Blossom Festival Mar 9-11This year marks the Japanese Friendship Garden’s 14th annual Cherry Blossom Festival, a celebration in hanami, the Japanese tradition of welcoming spring and appreciating the temporal beauty of nature.http://www.niwa.org/cbf18
Pechanga Wine Festival and Chocolate Decadence Mar 9-10Friday, Chocolate Decadence. Enjoy an array of chocolates and pastries while sampling a variety of wines, domestic sparkling wines, champagnes, spirits, and dessert wines along with live music.https://www.pechanga.com
Best Coast Beer Fest Mar 10Taste beer from nearly 100 of the West Coast’s craft breweries, enjoy local bands and a food truck alley. Every ticket sold helps a cancer patient.http://bestcoastbeerfest.com/san-diego-2
San Diego Half Marathon & 5K Mar 11Founded in 2012, the San Diego Half Marathon is a premier race that celebrates the beauty and uniqueness of San Diego while raising money to help its communities. As a nonprofit 501(c)(3), all net proceeds are donated to community service projects and local charitable causes. In addition, we hope to catalyze volunteerism as a way to help communities throughout our city.http://sdhalfmarathon.com/
San Diego Latino Film Festival Mar 15-25The festival will occupy five screens for eleven days and will present over 160 films from Latin America, the United States, and Spain as well as Opening Night and Closing Night Parties, the 3rd Annual Sonido Latino Food, Beer & Wine Festival, Q&A sessions with visiting filmmakers, free student outreach screenings, and more.https://www.rolandocc.org/
St. Patrick's Day 5K & 15K Mar 177th-annual event. Race through country roads and vineyards and wind your way to the finish line where you will be awarded with a well-deserved glass of green bubbly.https://events.hakuapp.com
San Diego Cake Show Mar 17-18With a cake design competition open to everyone, a variety of decorating classes for all skill levels, decorating demonstrations, plus raffles and vendor booths featuring a wide range of decorating tools, tips, and supplies. https://sandiegocakeshow.com/
Rolando Street Fair Mar 18Over 100 vendor booths for unique shopping and culinary experiences, beer tastings, a performance stage, bands, and rides for the kids. https://www.rolandocc.org/
LPGA Kia Classic Mar 19-25The Kia Classic features 144 of the best women golfers playing for the $1.8 million purse. The field features 2017 Kia Classic Champion Mirim Lee and crowd favorites Lydia Ko, Paula Creamer, Stacy Lewis, Michelle Wie, and Lexi Thompson.http://www.kiaclassic.com/
Mission Valley Craft Beer & Food Festival Mar 31The 8th Annual Mission Valley Craft Beer & Food Festival brings together San Diego craft breweries/distilleries and chefs for an all-inclusive tasting event. https://www.mvcbf.com/
Visit our website for more title related news and information! WWW.CALTITLE.COM
MARCH 2018San Diego Events Calendar
