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Lost Note & Missing Beneficiary

Man any of you probably know that you can do “the bond thing” if the preliminary report discloses an old deed of trust, and the seller tells you, “I paid this off many moons ago, but I do not have any of the original documents and the beneficiary cannot be reached. He was last seen ascending the Himalayas with the Dalai Lama long ago. I’m sure he’s drifted into the great void by now.” But do you really know about the ramifications of “the bond thing”?

In situations where both the beneficiary and the original note are missing, “the bond thing” is a multi-step process wherein obtaining the bond is just the first step. (See California Civil Code Section 2941.7)

To obtain a bond an insurance agent must be contacted, who in turn will work with a surety company that issues Lost Note Bonds. The insurance agent will request that the applicant/seller provide copies of the note (if available) and copies of documentation that evidences payment of the note, such as cancelled checks, payment books, etc. Additionally, the applicant/seller will be asked to sign an indemnity agreement in favor of the surety company issuing the bond. Occasionally, (typically when the bond is for a substantial amount of money), the insurance agent will request a financial statement from the applicant. Standard practices charged by bonding companies would be a premium paid for the bond ranging from 1.5 to 2%, double the original principal obligation of the deed of trust (the original principal will be increased to include any additional advance amounts disclosed by the official records).

 

The minimum requirements for all bonds are:

1. The bond shall be the greater of either (A) two times the amount of the original obligation secured by the mortgage and deed of trust and any additional principal amounts, including advances, shown in any recorded amendment thereto, or (B) one-half of the total amount computed pursuant to (A) and any accrued interest on such amount, and shall be conditioned for payment of any sum which the mortgagee or beneficiary may recover in an action on the obligation secured by the mortgage or deed of trust, with costs or of litigation and reasonable attorney’s fees.

2. The obligee named in the bond can be:
a) The mortgagee or mortgagee’s successor in interest
b)The trustee who executes a reconveyance and the beneficiary or beneficiary’s successor in interest
Once the bond is in hand, is the deal all set to go? Can a reconveyance be obtained from the trustee? Unfortunately, the battle has just begun. Section 2941.7 sets forth that the bond and a declaration must be of record for at least 30 days before the trustee may issue the reconveyance. It is important to note that “prior” to the recording of the declaration, the code section requires that a notice of recording of declaration and bond be mailed by certified mail, return receipt requested to the last known address of the person to whom payments under the mortgage or deed of trust were made and to the last mortgagee or beneficiary of record at the address for such obligation shown on the instrument.

Lastly, it is recommended that the title officer, together with the owners, initiate personal contact with the trustee, who will be the person tasked with the job of reviewing the bond and declaration and who will ultimately be the one issuing the desired reconveyance. If the title officer and owners establish early contact with the trustee, the trustee will be in a position to review early drafts of the bond and declaration and thus provide the owner with helpful input. Such input will enhance the likelihood that the bond and declaration that was initially forwarded to them will be acceptable. Just as important, if the title officer has developed a rapport with the trustee, it is very likely that the trustee will deliver the reconveyance back to the owners in a very timely manner. Working together to solve title issues is how Pacific Coast Title Officers rise above the competition.

Uninsured Deeds: What you should know

Have an Uninsured Deed?

Here is what you should know.

Most common problems from Uninsured Deed’s come from Quitclaim deeds between family members, especially
husband and wife. When a person is added to title, it is a window of opportunity for matters against him/her to attach
to the property.

You should be concerned when taking a listing…

• Is it a divorce situation?
• Was it signed in distress?
• Possible bankruptcy?
• Possibly a Forgery Deed

How can you spot an uninsured deed when you order a profile from Pacific Coast Title? Here are some red flags for your reference.

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Title Thursday: Forgery, A cause for alarm.

Forgery

What is forgery?

Forgery is the crime of falsely and fraudulently making or altering a legal document. It is a felony punishable by imprisonment in a state
prison. It is also an act which will cloud title to property and may result in protracted legal proceedings.

Who are the victims?

The incidence of forgery is escalating, and the victims are innocent property owners. Title industry figures reveal that over the last decade forgery losses have escalated at an alarming rate, accounting for heavy losses paid by title insurers. This indicates that the
consumer’s chances of becoming a forgery victim are the greatest ever. Forgeries affecting real property are created in a number of ways.

 

What are some examples of forgery?

 A deed may be forged by someone, often a family member or associate, in an attempt to transfer legal ownership of the property without the knowledge of the true owner.

A lender’s recorded security agreement for a loan may be eliminated by a forged instrument falsely indicating payment of the secured debt, thereby allowing another loan to be fraudulently obtained.
 A note and deed of trust may be forged by a person who then sells the note secured by the deed of trust and disappears, leaving an unsuspecting homeowner to discover the cloud on title when the purchaser of the note commences foreclosure proceedings for the nonpayment of the debt.
 A fraudulent document may be notarized by either a person impersonating a notary or a legitimate notary who fails to ascertain that the person signing the document is not the person whose name appears on the document.

 

What is being done to help prevent forgery?

The mounting trend in forgery has received serious attention. No longer may title companies concentrate only on removing risks arising from inadvertences or errors in recordings; instead, they now have the additional responsibility of contending with criminal acts. The title industry is reevaluating its title and escrow practices and strengthening notarization processes, hoping to close loopholes which forgers
might otherwise exploit. In addition, special incentives are being offered to company employees who detect forgeries during the process of title examination and escrow closings.

The title insurance industry is also working with law enforcement agencies, providing them with assistance in the prosecution of forgers by making available industry expertise and offering results of their investigations. Through improved practices and cooperation with enforcement agencies, the title industry has moved vigorously to reduce the incidence of forgery and lessen the opportunities for forgery.

What can you do to protect yourself from forgery?

What can you as a property owner do about forgery? While you may not be able to prevent a forgery, you can be protected. Title insurance provides protection against forgeries in your title which may have occurred prior to the issuance of your title insurance policy. Without this protection, you would single-handedly face the uncertainty and expense of resolving legal issues.

Pacific Coast Title Company will be happy to provide additional information about the title to your property.

 

 

New Tool: Expanded Property Report

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A new listing/listing appointment is an exciting time in the selling process of a home. Unforeseen circumstances pertaining to the property or current ownership can quickly turn that excitement into uncertainty. Our Concierge Preliminary Property Report helps  make you aware of potential obstacles that might prevent the sale of a property.

What kind of obstacles does our report look for?

  • Basic Legal / Vesting Information
  • Affidavit of Death Records
  • Possible Appraisal Restrictions
  • Tax Default and Mortgage Default
  • Possible Lending Restrictions
  • HOA Liens / Approved HUD Condos
  • Involuntary Liens (Child Support, Federal/State Tax Liens & Etc)

Want to know more? Contact your local rep to order your expanded property report.

Title Tech: Become a Neighborhood Expert

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Our Pacific Coast Instant profile app helps you quickly become a neighborhood expert in regards to recent sales and transfers. Many of our clients love that they can access current sales data, ownership information, and property documents all from their mobile device. See below for some great information regarding recent sales.

MORE THAN A PROFILE…

Did you know, That our Pacific Coast Instant Profile app comes with a few features that help you stay on top of all the recent sold properties in your farm area. Along with property profiles many of our clients use our app to pull of the following:

  • Recent Sales Comparables
  • Area Sales Analysis
  • Nearby Neighbors.

All which have proven helpful for both obtaining property information as
well as streamlining their farming efforts.

Want to get setup? Contact Us Today!

Title Thursday: What is Mello Roos Tax?

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WHAT IS A MELLO-ROOS FEE?
A Mello-Roos fee is a separate charge on a property tax bill in addition to the 1% property tax rate allowed by Proposition 13. The funds are used exclusively to pay for public facilities such as police and fire departments, schools, parks, roads and libraries, etc.

HOW ARE MELLO-ROOS ASSESSMENT FEES ESTABLISHED?
Mello-Roos fees are normally established at the request of a major developer to finance the
necessary public facilities to serve the new development. The public agency issues tax-exempt bonds
to pay fo over a number of years. Commercial and industrial property owners are also subject to Mello-Roos.

WHO AUTHORIZED THE ESTABLISHMENT OF MELLO-ROOS DISTRICTS?
The Mello-Roos Community Facilities Act of 1982 was co-authored by Senator Henry Mello and Assemblyman Mike Roos and authorized by State law to allow any public agency to implement fees and issue the necessary tax exempt bonds.

HOW CAN I DETERMINE IF MY PROPERTY IS IN A MELLO-ROOS DISTRICT?
Your property tax bill will identify Mello-Roos fees as a Community Facilities District (CFD), followed by a number and the amount of tax.

HOW MUCH IS A TYPICAL MELLO-ROOS ASSESSMENT FEE?
Typically, a formula that relates to the size of the home (lot size or square footage) is used to determine the amount of an individual assessment. The amount of taxes is established before the home is built and is not based on the current value of the property.

HOW DO I PAY THESE TAXES?
Your Mello-Roos tax will typically be collected with your general property tax bill.

WHAT HAPPENS IF A TAX PAYMENT IS LATE?
Because the Mello-Roos tax is usually collected with your general property tax bill, the Facilities District that obtained the lien may withdraw the assessment from the tax roll and begin foreclosure proceedings. Mello-Roos taxes are subject to the same penalties that apply to regular property taxes.

HOW LONG WILL THESE MELLOS-ROOS FEES LAST?
Typically, the bonds are paid off in 20 years, but State law allows up to 40 years. Those who purchase a new home have the option to pay for their Mello-Roos tax in its entirety at the time of purchase.

WILL MY MELLO-ROOS FEE INCREASE?
It can, however, this special tax can increase only at a maximum rate of 2% per year over a 25 year period. On the other hand, it’s also possible that this tax will decrease, should State or other funds become available that could be used to reduce existing bond indebtedness, or be used to construct new facilities in lieu of additional bond sales.

WHO CAN I CONTACT REGARDING MELLO-ROOS FEES?
Contact your local County Assessor’s Office. They have the phone numbers and names of persons to call for each Mello-Roos District.

 

Tech Tuesday: Transfer Activity Report

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Attention Loan Officers

Looking for more insight within your farm area? Our Transfer Activity Report is the answer.

Our Transfer Activity Report compiles key property information that can help you gain insight about all new property transfers in your farm area. Below are a few snippets of the information included in our report.

  • Total Transfers
  • Finance Vs Cash Ratio
  • Avg. Ownership
  • Top Lenders
  • Relevant Transfers

 

Looking to get more information about this? Contact us today. (866) 724-1050

 

Understanding All Inclusive Trust Deed

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Understanding Inclusive Deed of Trust (AITD)

An All Inclusive Trust Deed secures a wrap-around loan, which loan incorporates an existing loan, with a new loan made by the Seller of a property.

For example, the sales price is $200,000, there is an existing first trust deed securing a loan with a balance of $150,000, with an interest rate of 7%, the Buyer has $20,000 cash to put down; therefore, an AITD is created in the amount of $180,000 at 8%. The AITD wraps around the existing $150,000 at, and the Seller makes 1% on the $150,000 at 8%, on the $30,000, thereby effectively increasing the yield.
The Buyer makes payments based upon the $180,000 balance, and the Seller makes the payments on the existing loan secured by the first trust deed.

The terms of the AITD, such as rates, maturity date, payment amount, late charges and prepayment penalty are completely negotiable.

In the event the first trust deed and note contains a “Due On Sale Clause,” the parties will want to seek legal and tax counsel as to the ramifications of doing an AITD.

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Property Taxes: California Homeowner Tax Exemption

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Have you filed?

What is a homeowner’s exemption? A homeowner’s exemption is just a property tax exemption. The California state constitution provides for the exemption of up to $7,000 in assessed value from property tax assessment of any property owned and occupied as the owner’s principal place of residence. This means that the exemption removes up to $70 from your annual property tax bill. This may not seem like much, but it’s easy to obtain, and it adds up! There’s no reason to forgo the benefit.

In order to qualify for the exemption for property, you must be its owner or co-owner, and must use the property as your principle place of residence. (In other words, you only get one exemption…vacation homes don’t count!) Any place you own as your principle place of residence, and that is also subject to property tax, qualifies. You also have to file an exemption claim form with the County Assessor. Luckily, once the exemption has been granted, you won’t need to re-file the claim unless the title on the deed to the property changes.

There is one catch: if you plan to refinance your home, or plan to move your home out of (or into) a living trust, note that doing so may require you to change the title on the deed to the property.  Each time you do so, you will have to re-file your exemption claim, to ensure that you continue to receive the exemption.