Background Checks

By Lydia Blair
Special Contributor

When buying or selling a home, get ready to reveal some private details through background checks. We’re going to pry, inspect, confirm, clarify, authenticate, and document a lot about you, your finances, and the property. Some of the surprises we unearth would shock your mother, but maybe not your banker.

Just how deep do the folks involved in your transaction probe? Well, there isn’t any kind of testing that involves getting ink on your fingers or peeing in a cup. Nor do we care about your driving record, your education level, your health, or your résumé.

But we will start with requiring your Social Security number and date of birth. We’ll also need to know your past and present marital status, and where you plan to reside after the sale.

As a seller, we’ll run a search of both your name and the property. When something unexpected pops up, like an Abstract of Judgement, a tax debt, or a couple of child support liens, we’ll tell you. This would be the time to ensure your spouse is aware of it as well.

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For those who are laundering ill-gotten gains via real estate transactions, regulators are about to make life much, much harder. 

Geographic Targeting Orders (GTO) are temporary regulations put in place by the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN). The overall point of the orders is to understand and curtail money laundering, tax evasion, and terrorism financing on certain types of transactions. “Geographic” means the orders target specific areas versus the entire country.

On Nov. 15, FinCEN expanded a GTO on residential real estate transactions purchased in cash (actual cash, various checks, and virtual currencies) by foreign shell companies and domestic LLCs mostly. This latest expansion now includes the Dallas-Fort Worth area along with 11 other metros – Boston; Chicago; Honolulu; Las Vegas; Los Angeles; Miami; New York City; San Antonio; San Diego; San Francisco; and Seattle.

The GTO requires Title Companies to not only report on the transaction, but the actual selling price and the identity of the beneficial owner of the property (person with over 25 percent ownership of the LLC) and the person representing the LLC. Identities are verified via copies of passports, driver’s license, or other government-issued I.D. The country of origin of the LLC or shell company is immaterial with reporting required regardless of the LLC’s incorporation location. Why title companies? They’re a common element in real estate transactions and so act as a clearing house for information.

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By Lydia Blair
Special Contributor

Even though the services offered and fees charged by title companies across Texas are standardized, there is some variation in how they operate. Just as real estate brokerages and real estate agents vary in their operating standards and styles, so do title companies.

Title companies in Texas have three basic roles. They include completing a title search, closing the transaction (which includes preparing paperwork, managing funds, recording, etc.), and issuing title insurance. All licensed Texas title agencies perform these roles.

The basic kinds of title companies you’ll find in the Dallas area include:

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By Lydia Blair
Special Contributor

Texas Department of Insurance (TDI) recently released the 2016 Title Agent Statistical Report. Yes, this is now the summer of 2018, so those stats are a bit dated. What can I say? It’s a government agency.

TDI licenses and oversees all title agents in Texas. Our state’s title insurance business is highly regulated and title companies are audited at least every 2 years. Every agency must account for every dime they take in and every dollar they spend.

Take a glance at this 326-page report and you can see why it could take months to compile this information. The report covers every title agency’s income, expenses, and losses. The majority of title companies on the list are Independent Agents. The others are either Affiliated Agents or Direct Operations.

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By Lydia Blair
Special Contributor

The title industry competes for real estate dollars just like mortgage companies, real estate brokers, and insurance agencies. Competition to be the chosen one is just as fierce and the stakes are just as high.

Changes that rippled through the industry in 2015, when the Consumer Financial Protection Bureau (CFPB) went into effect, also addressed the regulation about who has the right to choose the title company in a real estate transaction. This rule has actually been around for a while, but is now being regulated and enforced. Which means fines are also assessed to the rule breakers.

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By Lydia Blair
Special Contributor

Closing costs are expensive when selling a property. Fortunately, they are deducted from the seller’s proceeds at the time of the sale. So when the expenses are lumped into the pile of paperwork at the closing table, the cost of selling a home can be less evident.

How much are closing costs? That depends. How nice are you to the title company?

Just kidding. 

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Brittany Washington is an experienced closer with Community National Title.

Brittany Washington is a senior escrow officer with Community National Title.

On Oct. 3, the Consumer Financial Protection Bureau’s “Know Before You Owe” rules will go into effect. This has made some real estate agents a little nervous. How can they avoid delays? How can they manage their clients expectations?

We wanted to get the low-down on how the new rules will affect closings, so we asked Brittany Washington, an experienced closer at Community National Title. Not only is Washington the beauty and brains behind the brand’s weekly “Title Tip Thursday” feature, but she was able to break down the issues real estate agents may encounter during closing in an easily digestible way.

Jump to find out how you can smooth out your closings after the new CFPB rules go into effect.

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Mortgage loan

By Jon Anderson
Columnist

No, I didn’t dig this out of my 2008 file drawer.

According to RealtyTrac, March 2015 saw an 11 percent jump in foreclosures across the U.S. compared to February. That translates into 152,147 homes rocketing down the chute to foreclosure and the loss of people’s homes in the first quarter of 2015. In the nearly 8 years since the housing bubble popped, apmid a white hot market, people are still losing their homes to foreclosure at staggering levels.

And then there’s Detroit: actively depopulating its own city by issuing as many as 62,000 eviction notices this year to homeowners delinquent on their property taxes. It’s being called an eviction “conveyor belt” that will effect one-seventh of Detroit’s remaining population. This, after the 2008 tidal wave of 250,000 people forced out of the city, leaving behind tens of thousands of their homes. The news of Detroit’s rebirth may have been exaggerated.

These are people who managed to hang on to their home through the worst recession in 80-years, only to lose it now.

So what’s the National Association of Realtors’ response? Why to spend $7.7 million on lobbying in the first quarter of 2015 for the Mortgage Choice Act (and complain about rising flood insurance premiums). As benevolent as “Mortgage Choice” sounds, its goal is to weaken the regulatory “burdens” on residential mortgage lending.

Side note: Doesn’t every piece of legislation, PAC/SuperPAC, and fringe group sound benevolent these days no matter now evil it is?

The Mortgage Choice Act passed the House of Representatives on April 14. NAR is not alone in its support, the Mortgage Bankers Association, the National Association of Home Builders and the Real Estate Services Providers Council Inc. (shockingly, all groups who make money directly or indirectly from mortgages).

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