All Forum Posts by: Tom Gimer
Tom Gimer has started 14 posts and replied 3445 times.
Post: Forums display incorrectly in followed categories, followed, locations, etc.
- DMV
- Posts 3,497
- Votes 3,449
Quote from @Noah Bacon:
Hey Tom!
Can you send a screenshot of the issue your are experiencing? I am sorry, I am not sure I quite understand what is being displayed incorrectly in your post above!
Sure -- the "followed" forums all look like this, regardless of the display toggle: (see images below for how other forums "properly" display)
Post: Forums display incorrectly in followed categories, followed, locations, etc.
- DMV
- Posts 3,497
- Votes 3,449
Toggling back and forth between List Big and List Compact does nothing. Just stuck with a large photo of the user.
Anybody else experiencing this?
Post: Quick claim deed- voids lender/owner title insurance?? Due on sale??
- DMV
- Posts 3,497
- Votes 3,449
Interesting that this thread has been revived.
@Chris Seveney that unpunished decision clearly involved an older policy form. The outcome with a more recent policy might be 180 degrees due to a change in the definition of the “Insured”.
However the analysis regarding transfer to the LLC via quitclaim deed having the effect of terminating coverage for deed warranties is really interesting. Point being you could clearly get a different outcome on an in-house coverage decision vs. a claim that ended up being litigated.
Post: Why use quit claim instead of warranty deed to transfer to LLC?
- DMV
- Posts 3,497
- Votes 3,449
Quote from @John Underwood:
Quote from @Tom Gimer:
Quote from @Erin Wamsley:
Quote from @John Underwood:
QC deeds are easier and I just type them up myself.
Using one doesn't diminish the underlying GW deed.
I guess my question is: What exactly makes a QC deed easier? Amount of paperwork?/Need for an attorney?/Not having to document any title research?
Erin
Nothing.
A QCD will include all other legal requirements for a deed, but without any warranty. If it doesn’t, it’s defective.
To me when I see a quitclaim deed in the chain it just makes me curious about the grantor’s title… also whether the instrument was properly prepared and is valid. That said in some jurisdictions they use QCDs for all transfers.
Don't know if SC is different but a QCD in SC does not require the derivation section to show the previous owner and where their deed was recorded.
I was recording a QCD 2 weeks ago and the Register of deed clerk told me she couldn't file this without the derivation section (that is required on a General warranty deed or a special warranty deed).
I showed her that this was a QCD and she pretty much said "my bad" that I was correct and recorded it.
I can give you a QCD to the Golden Gate Bridge with no burden of proof that I own any of it, but if I don't own any of it you got nothing.
I guess it depends upon the jurisdiction but clerks perform a clerical, not legal, function. Accept payments, record documents, and maintain the database please.
Most states aren't so picky. For example: any deed containing the names of the grantor and grantee, a description of the property sufficient to identify it with reasonable certainty, and the interest or estate intended to be granted, is sufficient, if executed, acknowledged, and, where required, recorded. These are MD requirements.
Notice no being/derivation clause is required by law... but anybody who regularly prepares deeds includes them as they assist with researching title. If you look closer at SC law they're not a legal requirement. The failure to include a derivation clause in a warranty deed does not invalidate it because the statute requiring it is regulatory in nature. SC Code 30-5-35(c). A clerk should accept any reasonable excuse and record the instrument.
Post: Why use quit claim instead of warranty deed to transfer to LLC?
- DMV
- Posts 3,497
- Votes 3,449
Quote from @Erin Wamsley:
Quote from @John Underwood:
QC deeds are easier and I just type them up myself.
Using one doesn't diminish the underlying GW deed.
I guess my question is: What exactly makes a QC deed easier? Amount of paperwork?/Need for an attorney?/Not having to document any title research?
Erin
Nothing.
A QCD will include all other legal requirements for a deed, but without any warranty. If it doesn’t, it’s defective.
To me when I see a quitclaim deed in the chain it just makes me curious about the grantor’s title… also whether the instrument was properly prepared and is valid. That said in some jurisdictions they use QCDs for all transfers.
Post: Seller ID checks
- DMV
- Posts 3,497
- Votes 3,449
@Temi I. Until the title search is done, the status of ownership and who needs to sign the deed and other settlement docs is unknown. Once the owner(s) of record are determined the title company would reach out for seller identification (and death certificates for any deceased owners).
You'd be surprised how many contracts get signed without all of the owners.
Post: Virtual Wholesaling...Virtual Title Companies
- DMV
- Posts 3,497
- Votes 3,449
You don’t need a virtual title company… you need Docusign or one of the many alternative electronic signature platforms (or a printer and a scanner/fax).
Post: How to pull equity out of a subject to property?
- DMV
- Posts 3,497
- Votes 3,449
Quote from @Courtney Allen:
Quote from @Tom Gimer:
Obvious answer: sell it
Reason: subto is not a viable long term hold solution
Because on at least an annual basis, the lender could discover the transfer and invoke the due on sale clause. I discuss that issue in a series of articles I wrote... here is a sample:
https://gimerlaw.com/the-dangers-of-subject-to-part-2/
Hence I only recommend this strategy to those who have access to funds for an immediate full payoff or use subto for savings on transaction costs in connection with buy/rehab/resell.
Post: Owner’s title insurance - to get or not?
- DMV
- Posts 3,497
- Votes 3,449
Quote from @Account Closed:
Quote from @Peter Walther:
Quote from @Account Closed:
Quote from @Tom Gimer:
Quote from @Account Closed:
Quote from @Tom Gimer:
Quote from @Peter Walther:
Quote from @Tom Gimer:
Quote from @Peter Walther:
Quote from @Shafi Noss:
@Jay Hinrichs Maybe so. I'm happy to drop that theory if the numbers aren't behind it.
Fun read. I read each post. ;-) Okay, maybe not "fun" but very informative.
However, As I was reading through, I came to realize I don't actually understand some of the terms. Could someone please explain:
Is the "Preliminary Title Report" simply a list of what comes up on title but has no insurance effect? (This is what I've been lead to believe)
But, Are "Owners Title Insurance" and "Owner's Extended Coverage" and "Extended form policy" all the same thing, just different names or is there more to it?
What does ALTA do/or is for?
You'll probably get different answers here.
A preliminary title report to me is simply a document showing who owns the property and what encumbers it (mortgages, judgments, liens, etc.). Also known as an O&E -- owner and encumbrance report. It has nothing to do with title insurance.
Owners Title Insurance = basic owners coverage (liens, adverse claims, marketability, etc.)
*Owner's Extended Coverage = Extended Form Policy (everything in basic plus many additional coverages including post-policy matters, subject to different limits)
*not available for investment properties in many states
ALTA = American Land Title Association ... it's a trade association for the title industry. They create standardized forms, conduct lobbying activities, etc.
That helps.
This is from a Settlement Statement of a property I’m selling
Title - Lender's Title Insurance to xxxx Title $857
Title - Owner's Title Insurance to xxxx Title $1590
Why is the Owner’s Title Insurance almost twice the price of the Lender’s?
Coverage for an insured owner lasts as long as an insured has an interest in the property or liability for a breach of warranty given if the insured conveys the property. Therefore, the policy liability "tail" can continue on forever. Practically, the risk of loss diminishes over time and might effectively be extinguished some time years down the road. In addition, the amount of insurance is fixed as the amount shown on the policy.
With a lender's policy, liability lasts only so long as the insured has a lien on the property. If the loan is refinanced and paid off after 3 years, the policy liability is extinguished. In addition, the amount of insurance is limited to the amount of the debt outstanding. So, if a loss occurs after 5 years and a $100k original loan has been paid down to $75k, that is the maximum amount the insured can recover and of course the maximum loss the insurer can experience, even though the amount of insurance shown on the policy is $100k.
Also, if a lender's policy is issued simultaneously with an owner's policy, the premium is generally substantially less than if the policies were purchased separately. That's partially because an owner's policy contains a provision that any payment for loss paid under a simultaneously issued loan policy, will reduce the amount of coverage under the owner's policy.
If Owner's still applies for some reason, & the owner bought for $100,000 and
later sells on a Wrap for $150,000 I would guess that the insurance still only covers the $100,000 minus paydown?
With a land contract / land installment contract / contract for deed (executory), coverage would continue (IMO) until the deed into the buyer was executed because the insured retains an estate or interest in the Land (legal title) until that time.
Post: Owner’s title insurance - to get or not?
- DMV
- Posts 3,497
- Votes 3,449
Quote from @Shafi Noss:
@Peter Walther On the body of law, yes, it's a good point. It sounds like large assureds like Fannie and Freddie are comfortable paving the way for others, hopefully we can all benefit from that and other users and attorney's know to be cautious in the meantime.
I'm asking for aggregate not granular data. If we had aggregate data about losses of people who don't have curative work done, we could compare to the aggregate data of losses for people who did have curative work done, and how much they paid for that curative work. There's still sampling bias but that would be a fair start. I don't believe $175 is enough to pay underwriters so Iowa may be a naturally occurring data set.
People who were unhappy with real estate agents and lawyers receiving title kickbacks could have been told to deal with it or do business in a different country, but RESPA got passed because a bunch of people sat down and agreed there was a different way to do it.
The title insurance industry developed as a result of the shortcomings of the prior system, which was based upon attorney opinion letters.
There are a literal HANDFUL of loans being insured (no owners, lenders only) by AOLs in just a few states versus MILLIONS by title insurances policies.
The Blank Rome article essentially confirmed you need to re-write and heavily endorse attorney E&O policies to even come remotely close (coming up quite short in several key areas) to providing the coverage of a title insurance policy. That sure sounds like a great solution for saving 20 basis points for a borrower.
Do you read or just skim?
And you're citing RESPA as a success? Please. You're in DC -- look up the recent Allied JVs with realtors and millions in kickbacks thru sham AFBAs... or maybe it has been buried in the fake news already.