Happy New Year! I hope you had a wonderful holiday, and we’re looking forward to working with you toward a phenomenal 2019. This email details some process changes for closings that are resulting from the recent form contract changes.
- The regulatory environment now is such that we have to actually charge a scrivener fee. Our fee is $2.00, and when we run the closing instructions on our system for closing that will show, but if the listing broker is preparing those then the blank for scrivener’s fees should be filled in with that $2.00
- We’ll have to actually charge that $2.00 to the listing broker firm for each transaction. We’re hoping that you will be amenable to a quarterly invoice for those charges for any closings for which your office was the listing broker in the prior quarter. If not, please let me know so that we can discuss alternatives
- We will be sending the draft Deed to the agents for review at the same time we send the statements for review.
- Our Closing Instructions Addendum, which currently mainly deals with federal regulatory compliance and with wire fraud warnings, will also include a broker signature line and an acknowledgment that we have prepared the Deed in our capacity as a scrivener in accordance with the Contract and Closing Instructions
- If we are closing a transaction under the 2019 form contract, we will prepare the form of Deed selected and will copy the exceptions from the title commitment which are appropriate to that form of deed. A general warranty deed will include all exceptions, and a special warranty deed will include only those exceptions arising from documents recorded during the period of the seller’s ownership. Our form of deed will also make reference to any other exceptions from the warranties that may have been agreed to per the contract (similar to our current deed forms), as I believe that is consistent with the contract terms, but we can modify these at the parties’ or their agents’ request.
- We will ask agents and parties to acknowledge review/acceptance of the form of Deed at closing through signature on our Addendum to Closing Instructions
- If you or your client have questions about the different forms of deed, see the flier we’ve prepared to help with that.
- In order to insure title, we have to confirm that there are no unpaid assessments or known violations of the covenants, and we also provide the recorded HOA documents, which usually just means the Covenants/CC&Rs/Declaration and the Plat/Map. We will, of course, continue to do so, and we can share any response from an HOA representative with the brokers for the transaction, but that usually occurs within the two weeks or so prior to closing. This is largely so that we can be assured that we have the most current information for closing and for prorations. We do not have access to unrecorded documents (such as budgets, minutes, unrecorded bylaws, etc.)
- As you know, most of our local owners’ associations, if formally organized at all, have volunteer owners and a fairly loose management structure. It may be worth considering using the “Additional Provisions” in the Contract to modify the parties’ expectations based on what is actually likely to be provided by the Association. Unlike Denver metro, we’re not in a position to seek or receive a formal complete package, even if a fee were to be paid. I would hate to see unintentional termination rights used when the extensive HOA requirements under the current contract cannot be met
Party and Funding Information
This last item isn’t driven by the contract changes, but rather by what is actually happening in our industry. We’re asking that agents share a phone number or email address for their clients with us so that we can reach out to them directly about the funding process and for any sensitive information (such as payoff lender information). We’d like to have an opportunity to actually talk or correspond directly with the parties early in the process about the dangers of wire fraud and identity theft and how best to prevent it. If you have any questions or concerns in this regard, please let us know.
Check out our new great rates for Park County! We finally got what we’ve been requesting for years from our underwriter, and Park County is now classified with Chaffee instead of the front range in FirstAm’s 2019 rates. Our rates and fees are always available on our website – www.centralcoloradotitle.com – or don’t hesitate to call any of us with questions.
We strongly believe in the importance of having a real estate professional involved at every stage of the transaction, and we feel lucky to work with the best agents in the state. We are grateful for your business and your confidence in us, and we truly enjoy the opportunity to work with you. We hope these suggestions and requests will be taken in the spirit in which they are offered – as one more way of making sure that we are providing the best possible service to you and your clients and ensuring that they enjoy a smooth, pleasant, professional closing.
LENDERS AND TIMING:
If your deal involves a conventional lender, whether you are representing the Seller or the Buyer, the three day minimum TRID requirements could impact you and your client. If there are invoices or other items to be paid from closing, those need to be delivered at least 5 business days in advance of closing to ensure that they will show on the Lender’s approved CD (which covers items paid by sellers as well as those paid by buyers). If you are representing a buyer and receive a proposed CD, please forward it to us so that we can flag the additions/corrections the lender needs to make before that three day period begins to run. If the buyer will be a mailout, please coordinate closely with the lender to ensure that the final CD is sent early enough that the buyer can sign at least one day in advance of the seller’s expected funding date, since we are not permitted to fund until we actually have the original documents back and meet all of the lender’s funding requirements. We try very hard to be proactive and to seek documentation and figures from the Lender as soon as we can get them, but title companies generally work for lenders, not the other way around, so they are often more likely to respond to requests from buyers and from agents, who are in turn their clients and referral sources…
If you represent the Seller and there will be a Seller mailout, note that we are required to provide a Seller CD that matches to the lender’s final CD and that many lenders have other documents on which they require a Seller signature, so we often are not able send out the Seller mailout package until we have the buyer’s Lender’s package. Most lenders also now have funding conditions, meaning that we have to scan executed documents to them after the buyer and seller have both signed, and then await the lender’s approval before we are given authorization to fund. If your Seller has requested a wire for their proceeds, this could mean that the Seller may not actually receive their funds until the next business day following the closing. If the time of possession will be tied to the time the seller receives their funds rather than the time the funds are disbursed (which occurs at funding authorization), it should be contractually specified and should drive discussions with the buyer’s lender and the scheduling of the parties’ signing and delivery.
While we believe we provide resources that are helpful to you and to your clients, we also rely heavily on the real estate agents to provide us with information about the property and the parties. You know the property and the parties – we don’t even have access to MLS! All we know is what is in the contract/order (and what is recorded with the county clerk and recorder), and often times those mysterious CTMe buttons don’t get triggered to share even all of that information with us… We try to ask the right questions, but the more information you can give us about the property (MFH, well, UAWCD, propane, HOA, etc.) and the parties (divorce, death, name change, etc.), the better we can serve you and your clients. Please expect to see some more detailed requests for information from us when we open your orders, and if it’s at all possible we are asking that you complete the order form to which your office is accustomed (or the CTME order sheet) and send that with your order. Please also be sure to send us any counters, amend/extends and any resolution documents that may impact the closing documentation or timing.
If you’d like more information about what we need to know for closing, and why we need to know it, an annotated form is attached here for your reference:
FUNDING AND FRAUD:
We all need to protect our customers’ private information and help them to protect themselves. All parties should be aware that they should be sure that sensitive personal information is sent only by secure email, hand delivered or faxed (eg, social security numbers, loan numbers, wire instructions).
Parties sending wires should be warned in advance of cyberfraud/wire fraud risks, and buyers should know to only use the wiring instructions that we will send to them upon their affirmative request (or, if they are signing remotely, with their closing package). Anyone sending funds should always call a known number to verify instructions before releasing their funds. Please note that we need a reference (party name, address, or file number) for any wires we receive so that we can allocate them to the correct file (right now we get a lot of wires on behalf of kids, siblings, etc. without any matching info…).
If your buyer wants to bring cash for closing, please contact us in advance as our bank will require some information and there may also be timing requirements.