Big trouble in reverse mortgage land?

Welcome to Vested Land Services LLC.  Whether you are an investor in commercial real estate, contemplating a home purchase, mortgage refinance, reverse mortgage or home equity loan, we are the title insurance agent to turn to; we do it all.

The New York Times headline reads - "A Risky Lifeline for Seniors Is Costing Some Their Homes."  It's not a pleasant story.

The very loans that are supposed to help seniors stay in their homes are in many cases pushing them out.

Reverse mortgages, which allow homeowners 62 and older to borrow money against the value of their homes and not pay it back until they move out or die, have long been fraught with problems. But federal and state regulators are documenting new instances of abuse as smaller mortgage brokers, including former subprime lenders, flood the market after the recent exit of big banks and as defaults on the loans hit record rates.

So why is this happening?  One of the drawbacks of reverse mortgages is the fees associated with obtaining the mortgage. 

Now, as the vast baby boomer generation heads for retirement and more seniors grapple with dwindling savings, the newly minted Consumer Financial Protection Bureau is working on new rules that could mean better disclosure for consumers and stricter supervision of lenders. More than 775,000 of such loans are outstanding, according to the federal government.

Yet,

Used correctly, reverse mortgages can be a valuable tool for seniors to stay in their homes and gain access to money needed for retirement. Seniors who have built up equity in their homes can borrow against a percentage of that and take out a lump sum or a line of credit. The loan doesn’t have to be repaid until the homeowner moves out or dies, but borrowers still have to pay property taxes, maintenance and insurance.

To be sure, three major lenders, MetLife, Bank of America and Wells Fargo have left the marketplace.

Into the void left by the big banks have moved smaller mortgage brokers and lenders. Some of them steer seniors into expensive, risky loans with deceptive sales pitches and high-pressure tactics, according to regulators, housing counselors and elder-care advocates.

Read the full article.

 

 For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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"Divorce specialists" for real estate sales?

New Jersey has it all- great beaches, miles of parkway and turnpike, entertainment, you name it.  Now it seems that there are real estate brokers who specialize in sales of property where the owners are undergoing divorce.  So reports the New York Times.

[L]urking with quiet devastation behind many “for sale” signs is the big, sad shift that almost always requires that somebody move out: divorce.

For real estate agents and brokers, deals that spring from divorce are an inevitable slice of the business, and over the years, many find themselves gathering answers to questions they hoped never to ask.

How does one represent two people who won’t speak to each other? How does an agent show an apartment that has been divided by awkwardly placed locks or temporary walls? And what if your client’s highest priority is making sure their former partner does not come out ahead?

Two real estate brokers in Livingston, New Jersey, not far from our office in Fairfield, believe they have built-up an expertise in divorce sales.

“We specialize in it,” said Vicki Stout, an agent at Keller Williams Suburban Realty in Livingston, N.J., who proclaims herself to be a “divorce specialist.”

“But it is hard to advertise,” added Bob Bailey-Lemansky, her business partner. “No one is going to go to our Facebook page and ‘like’ divorce.”

Read more here.

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. We are the title insurance agent that does it all for you.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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Mortgage protection insurance, a good investment?

A recent article circulated by Bankrate.com discusses mortgage protection insurance, sometimes called mortgage life insurance.

Dear Insurance Adviser, What is mortgage protection insurance, or mortgage life insurance? Should I purchase it? I don't want to leave my two children with the burden of paying the mortgage.
-- Esther

Dear Esther, Mortgage life insurance is a policy sold by your mortgage company/bank that pays off your mortgage upon your death. The beneficiary of this type of policy is almost always the mortgage company. Under some circumstances, that may be your preference. But in many cases, it may work out better for your loved ones to receive the proceeds themselves, giving them the choice of whether to pay off the mortgage. There may be more pressing needs than paying off the house.

Essentially, the value of a mortgage insurance policy declines with the principal balance of the mortgage.  $10,000 balance at death, that's what the policy pays.
Compare to conventional policies-

Term life insurance sold in the open market is often more competitively priced and allows you to name your children as the beneficiaries rather than the mortgage company.

Bottom line?  Read the full article to find out.

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us.  We can help. We are the title insurance agent that does it all for you

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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Real estate contract escalation clauses making a comeback?

According to Realty Times: Escalation Clauses Are Back: Handle With Care! by Bob Hunt

 One sure sign that the market has heated up is that not only have multiple offer situations become commonplace, but also that offers with escalation clauses are showing up in those situations. In this context, an escalation clause in an offer says that the buyer will pay some fixed amount more than any competing offer the seller might receive. There are - or should be - more details to it than that; but the stated willingness to pay more than others is the essence.

What's the risk or reward?

Reactions to the use of escalation clauses run the gamut. Some think they are the greatest invention since the catcher's mitt. Others view them as instruments of the devil. Many people say, "huh?" One thing about them is for sure: everyone wants to be very, very careful if and when they come into play.

On the buyer's side, there are a variety of caveats to keep in mind. First and foremost, a buyer should consider putting a cap or limit on his offer. Suppose the property is listed for $220,000; and further suppose that the buyer would be willing to pay up to $250,000, but no more. Then the buyer might want to cap his clause at $250,000. He could offer $220,000, and be willing, let's say, to pay $2,000 above anyone else's higher offer. But not beyond $250,000. Among other things, it keeps him out of an infinite loop that could occur with a competing escalation offer.

The buyer also doesn't want to compete with offers that include seller financing, much longer escrows, or a sale contingency. It should be an apples-to-apples comparison. It is also important for a buyer to specify the manner in which he can authenticate the bona fide nature of the competing offer. I have seen a number of escalation forms; and I have yet to see one that seems comfortable in this regard.

Escalation clause - or sharp bid - offers are neither illegal nor immoral. Indeed, various reputable companies, Realtor® associations, and MLS organizations have, over the years, produced forms designed to accommodate them. Using them is a strategy that some have employed with good success. The point here is simply that they demand handling with care.

Read the full article.

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us.  We can help. We are the title insurance agent that does it all for you

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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What is title insurance?

Here's a great answer thanks to Florida's Title Guru:

Title insurance is a form of indemnity insurance for real property (land and improvements) offering both buyers and lenders insurance against loss arising from defects or unmarketability of title.  Examples of defects or unmarketability include matters such as outstanding liens, errors in property’s legal description, or gaps in ownership – all being things a buyer or lender should be concerned with.

Title insurance differs from other forms of insurance in two major ways.  First, title insurance is not casualty based.  An underwriter or agent will perform a search of the underlying lands to identify the owner, outstanding liens and any other matters that affect the real property.  A title commitment will be created based upon the results of this title search.  A title commitment details the property’s owner and legal description, requirements which must be satisfied in order to provide coverage (including releases of mortgage, judgments or other matters that cloud the title) and matters that will be excepted from coverage (such as easements, restrictions and other matters that run with the land).  This differs from casualty insurance which is typically provided without any due diligence (i.e. given without a title search or requirements to satisfy liens and defects in title).

The second major difference with title insurance is that it insures backwards in time.  Where other forms of coverage such as auto insurance and health insurance are purchased for events that may occur in the future, title insurance insures against loss arising from defects that already happened in the past.  An example of this could include a newly married couple who recently purchased a home, only to receive a call several months later from an elderly woman saying that her grandchildren sold her home without her approval.  If the grandmother was legally in title to the property, the newly married couple may not fully own the home.  An Owner’s Policy would typically cover against such a loss.

Title insurance is typically sold through a network of title agents who write the policies of a title insurance underwriter.  Similar to your neighborhood Allstate office (being an independent agent for Allstate, typically not owned by Allstate company), it is common for consumers, Realtors and mortgage brokers to work with the title agent of a title underwriter, not the underwriter directly.  The title agent will typically perform the closing and remit a portion of the title premium to the underwriter.

The two main forms of title insurance coverage are an Owner’s Policy and a Loan Policy.  An Owner’s Policy insures the buyer against adverse matters which occurred before they purchased the property, but may pop up as problems during their ownership.  As previously detailed, these could be in the form of previous mortgages not satisfied, lack of legal access to the property or owners not accounted for.  The coverage under an Owner’s Policy runs for as long as the owner(s) own the lands.  A Loan Policy is a little different in that it insures a lender that their lien of mortgage is both valid and superior in priority to all other matters not shown as an exception to title.

In addition to the coverages provided under an Owner’s and Loan Policy, the insured may also purchase additional coverage in the form of an endorsement.  Title endorsements vary from state to state but serve to offer coverage for survey elements, mineral rights, violation of restrictions, unpaid assessments and a host of other matters. 

Overall, title insurance can be an abstract concept to most consumers.  Most do not fully understand why they’re paying for it or the benefits they’re getting.  However, after with a little bit of research and question asking, most come to the understanding that title insurance is another form of asset protection that should be obtained.

Original article found on line at eNDORSEMENTS.

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. We are the title insurance agent that does it all for you.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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