Madrona Park Escrow

You have made the decision to buy or sell your home and, let’s face it, the process is often confusing and a little overwhelming. Often, you find yourself giving blind trust to yourbroker, escrow officer, lender and all the other providers of services throughout the transaction.

Once a buyer and a seller get together it’s time to open escrow, a one to three month process that will officially transfer ownership of the property. This escrow process involves several key entities and can be very stressful to the uninitiated. However, the one thing for both buyer and seller to remember is that all of the parties involved are interested in the same objective: to close escrow. Nothing happens and no one gets paid until your escrow is closed.

The premise behind a real estate transaction is simple; the seller is selling and a buyer is buying! You may have been told that you don’t NEED a broker, you don’t NEED an escrow, you don’t NEED a lender; you don’t NEED a title policy. However, unless you are a learned expert in these matters, a consumer shouldn’t even think about entering into escrow without the professional help from at least some, if not all of these providers.

What can you do to make sure things run smoothly? Here are ten tips that every buyer and seller should know in preparing for a trouble-free escrow process.

1. Select a licensed Real Estate Broker to represent you.

2. Choose an Independent Escrow provider - You have a choice. Remember only independent escrow providers licensed by the California Department of Corporations are 100% neutral third parties. Their only concern is to monitor the real estate transaction and safeguard trust account funds. Independent Escrow providers are specialists whose sole purpose is providing escrow. ESCROW IS THEIR ONLY BUSINESS.

3. Sellers: Eliminate surprises - If you have judgments against your property and don’t say anything to any one, you should know that a search of public records is automatic, and will reveal any liens. If you don’t let your broker or escrow officer know about potential problems in advance, your escrow will most definitely be delayed.

4. Buyers: Eliminate surprises - If you have questionable credit, tell your broker or mortgage lender. They know the steps you need to take to clean up your credit. Every lender will require a credit report. Today, many borrowers go through a pre-qualification process before looking for a home. If you are pre-qualified, you know how much of a loan you can obtain and therefore how much you can spend on your new home.

5. Be responsive - The escrow officer may periodically contact you requesting pertinent information. There is always a good reason for the request. Just ask the escrow officer if they need more details; then get them the information they need as soon as you can. Remember nothing happens until the escrow is closed. Don’t think, “If I don’t respond, maybe they’ll forget about it.”

6. Be prompt - You will be required to meet with an escrow officer when it is time to sign the loan documents. If you are not on time, the officer will take the next appointment and you may be the one waiting. Remember, signing documents is at least a 60 minute affair. The escrow officer will go through and explain each document you must sign. Remember: All persons taking title will need to sign the loan documents.

7. Insurance - Make sure you have addressed your insurance needs. Select an insurance agent and inform your escrow officer in advance. Talk with your agent to determine your insurance needs. You must have fire insurance. You may also want a homeowners policy. Most lenders require title insurance as well. Your lender will require the name and address of your insurance agent. Be sure to have this information well in advance of the date escrow is to close.

8. Walk-throughs - Make sure you have completed all walk-throughs, inspections and other contingencies such as termite inspections and any required city permits. Many things can delay the close. Be informed and prepared.

9. Documents -To expedite the escrow closing, bring the following items with you to your appointment:

    Buyers & Sellers -Drivers license or passport (photo ID)

    Buyers Only — The name and address of your homeowners insurance agent

    Sellers Only - If your home is a condominium, make sure you have a copy of the homeowners association information

10. Many people are involved in most real estate transactions. It takes cooperation and communication between all of these entities to ensure a smooth escrow close. A positive outlook and a quick response to anything asked of you will encourage this cooperation. Many things can hold up an escrow - make sure you’re not one of them.

The Obama administration sent a memo to the heads of all executive departments and agencies this week, notifying them that all proposed and not yet implemented regulations should be delayed pending review by the new administration.
 
According to K&L Gates Attorney Phil Schulman, the request will not affect the U.S. Department of Housing and Urban Development’s (HUD) final RESPA rule provisions, which took effect Jan. 16, since they came in under the 60-day phase in period. The review could open the door, however, to re-evaluation of the required use provision and the new good fait estimate (GFE) and HUD-1.
 
Obama’s order advised executive heads to “consider extending for 60 days the effective date of regulations that have been published in the Federal Register, but not yet taken effect…for the purpose of reviewing questions of law and policy raised by those regulations.” He further advised to reopen the comment period for 30 days on delayed regulations “that raise substantial questions of law or policy.”
 
Attorney Howard Lax of Michigan-based Lipson, Neilson, Cole, Seltzer & Garin said that as far as reopening the new RESPA rule for comment, “…the memo only says that agencies should ‘consider’ reopening the comment period. It does not mandate reopening the comment period. I expect that HUD will notify the OMB director that the rule does not raise any issues of ‘law or policy’ that are critical and/or the change in the disclosure format is critical for financial reasons and, therefore, the changes to the rule should be exempt from the directive.”
 
GFE and HUD-1
 
Schulman said that although possible, it was unlikely the administration would ask HUD to withdraw the GFE and HUD-1 portions of the regulation. He noted that the GFE and HUD-1 are already in a holding pattern as they don’t take affect until January 2010.
 
“They’re not that controversial,” Schulman commented. “The whole idea was to give transparency and clarity, and I think they do provide that. Could the Obama administration go farther? Require more consumer protections? I think it’s unlikely, given their priorities at HUD.”
 
HUD’s options
 
HUD has already agreed to a 90-day delay of the required use provision, giving the courts time to hear arguments in the lawsuit filed against HUD by the National Association of Home Builders. The court is fast-tracking that case to make a decision before that 90-day period runs out.
 
“As for required use, that is the unknown here,” Schulman said. “Right now HUD is scheduled to go back into court at the end of March to contest the motion for permanent injunction.”
 
Schulman said HUD will have to make a decision between four different options regarding “required use.”
 
“One is to fight, which would be to vigorously defend the Nov. 17 regulation on required use,” he said. “The second thing is to just fold, and say, we didn’t write this rule, it didn’t happen on our watch and it’s not an issue that we want to prioritize at this time, and so we will withdrawal the new definition and stick with the old definition until we have time to study it.”
 
Schulman said the third option would be for HUD to compromise and re-revise the required use definition. “If they did that, then they would have to open it up for comment again,” Schulman noted. “That would open up that whole can of worms and start the debate between consumers, mortgage brokers, home builders and other settlement service providers, and I don’t know if a new administration would have the stomach for that,” he commented.
 
The fourth option Schulman said would be for HUD to draft a policy statement to interpret the new rule broadly, so that it would provide some breathing room for home builders to participate and provide for consumers incentives to their affiliates.
 
For example, HUD could offer the builder an opportunity to say to the buyer, “I’ll give you $10,000 off the price of my house, if you use one of four mortgage companies, one of which is my affiliate,” Schulman explained. This would give the consumer choices Schulman said, and would make for a more liberal and broader reading of the rule.
 
In Schulman’s opinion, he thinks HUD will go with either the first option of fighting the lawsuit or the second option of throwing the rule out, using the old definition of “required use,” and revisiting the provision at a later date.
 
Lax said it was unlikely HUD staff would withdraw the final rule.
 
“They are not going to go back now, after they won the fight, unless they get a direct order from the new secretary of HUD to scrap the rule,” he said. “If there is to be a delay, the secretary may need to get the General Counsel’s office to draft a notice for the Federal Register, so that the notice will be published this year. HUD staff took 12 years to change the Servicing Disclosure Statement after ordered to do so by Congress. Do you really think that a memo like this is going to spark any action at HUD to delay a rule that HUD staff wants?” Lax questioned.
 
Obama’s memo covered six areas of instruction outlined as follows:
 
“…no proposed or final regulation  should be sent to the Office of the Federal Register for publication unless  and until it has been reviewed and approved by a department or agency head  appointed or designated after noon on January 20,  2009…  
“Withdrawal from the Office of  the Federal Register all proposed or final regulations that have not been  published in the Federal Register so that they can be reviewed and approved by  a department or agency head…
“Consider extending for 60 days  the effective date of regulations that have been published in the Federal  Register but not yet taken effect…Where such an extension is made for this  purpose, you should immediately reopen the notice-and-comment period for 30  days to allow interested parties to provide comments about issues of law and  policy raised by those rules…
“The requested actions set  forth…do not apply to any regulations subject to statutory or judicial  deadlines.
“Notify the OMB Director promptly  of any regulations that you believe should not be subject to the  directives…because they affect critical health, safety, environmental,  financial, or national security functions of the department or agency…  
“Continue in all instances to  comply with any applicable Executive Orders concerning regulatory  management.