Real Estate Professional · Lawndale, CA · Member since 2015 · 1 post · 0 votes
Hi everyone and Happy Holidays! My name is Kenny and I am based in Los Angeles, CA, in particular the South Bay (Gardena, Hawthorne, Torrance).
For the past two months I have been learning and taking action on wholesaling and have hit a road bump. I've been trying to secure a title company that does assignments and double closings/escrows, however after 40 phone calls, I haven't found one (yet!).
I kindly ask any experienced investors/wholesalers/individuals in the area or with connections in the area, if you can help point me in the right direction. Much is appreciated for your time.
P.S. I've been made aware by several title companies that there are new laws in California when double-closing/assigning, full-disclosure is required to close deals between a seller and a buyer. Can someone clarify how this would influence the whole-sale process?
Real Estate Agent and Investor · Los Angeles, CA · Member since 2015 · 52 posts · 20 votes
10y
It's not a California law, but a title company rule that has been spreading around the country for several years now. Title companies want to protect themselves from liability so they ask you to get the seller's consent, in writing, on your contract assignment to a third party for a fee. This involves a document in addition to the purchase agreement, which might already say "and/or assignee". You don't have to tell the seller what is the fee, BUT if the seller asks the title company, they WILL tell.
In addition to this rule, there is a new California law that would affect disclosure, WHEN your buyers is using a federally regulated loan - your assignment fee will be in the HUD-1, which now is called Closing Disclosure.
This is a new Mortgage Closing Disclosure by the Consumer Financial Protection Bureau, which published this final mortgage disclosure rule in November 2013 but delayed the effective date until August 1, 2015. This Closing Disclosure required by the rule combines information from the existing Truth-in-Lending (TIL) disclosure and the HUD-1 Settlement Statement, and must be delivered to borrowers at least three days prior to a closing.
Either the lender or settlement agent - escrow/title - are responsible for completing and delivering the Closing Disclosure to borrowers.
If you have a deal on the table, let me know. We are always looking for good deals and are happy to co-operate if the deal is right.