Our firm is now offering low fees to our clients who are refinancing. We charge a flat fee for our services which include processing the CEMA request. Our services start when you obtain your mortgage commitment and we will work with you until closing to make sure you do not pay anything more that you have to (for taxes, title charges or otherwise). Remember, not all banks will make the CEMA option available so we cannot guarantee that we will be able to close with a CEMA. However, in most cases we can find out in the beginning of the process and we will set our fee accordingly. Please note that no attorney client relationship will be created until a retainer agreement is entered into.
Never retain anyone who charges you a percentage of your savings.
January 29, 2009
Citibank CEMA Fee Update
I recently found out that Citibank no longer charges $650.00 upfront to process a CEMA request. It is collected upon payoff. In order to process the CEMA, they have a fax number to which you can fax a request and they will get back to you in a few days to let you know who their attorney will be. Several days after, the attorney should contact you to let you know the status of the documents. Citi's turnaround time is pretty good as the last 2 requests I made were ready to close within 2 weeks. I guess they really want their money back.
As a point of reference, Countrywide CEMA requests take up to 6 weeks and they still require over $800.00 upfront in certified funds.
As a point of reference, Countrywide CEMA requests take up to 6 weeks and they still require over $800.00 upfront in certified funds.
January 16, 2009
Title Insurance When Refinancing
In response to a comment to a prior post, when refinancing, the new lender, even if it is the same bank currently holding your mortgage, will require a new title insurance policy to protect its interest in the property. This is because the bank will want to insure itself over any items that may have appeared since the old mortgage such as a judgment against the homeowner or a mechanic's lien, for example.
The cost of this policy is usually paid for by the homeowner. For HELOCs, some banks do not require title insurance and others will pay for it (provided you do not pay off the loan for a certain amount of time).
The good news is that title insurance rates for refinances are dramatically lower than for a purchase. This is especially true if you are refinancing within 10 years of the original mortgage in which case you are entitled to a "reissue rate" which is 50% of the regular refinance rate up to a loan amount of $475,000.00 and 70% of the regular refinance rate above a loan amount of $475,000.00. For example, the regular refinance rate is $1,746 for a loan amount of $400,000.00 so it will be $873.00 if you already had a mortgage on the property.
Make sure that your title company is charging the reissue rate on refinances. Many companies were not doing so and it was resolved in the Court system. They have to give you the lower rate.
Again, the costs discussed herein only include the premium and do not include the cost of recording, the title search and other fees charged by the title company.
The cost of this policy is usually paid for by the homeowner. For HELOCs, some banks do not require title insurance and others will pay for it (provided you do not pay off the loan for a certain amount of time).
The good news is that title insurance rates for refinances are dramatically lower than for a purchase. This is especially true if you are refinancing within 10 years of the original mortgage in which case you are entitled to a "reissue rate" which is 50% of the regular refinance rate up to a loan amount of $475,000.00 and 70% of the regular refinance rate above a loan amount of $475,000.00. For example, the regular refinance rate is $1,746 for a loan amount of $400,000.00 so it will be $873.00 if you already had a mortgage on the property.
Make sure that your title company is charging the reissue rate on refinances. Many companies were not doing so and it was resolved in the Court system. They have to give you the lower rate.
Again, the costs discussed herein only include the premium and do not include the cost of recording, the title search and other fees charged by the title company.
Title Insurance Costs in New York
My prior post described in a nutshell the role of title insurance. But how much does title insurance cost? New York State is divided into 2 zones. I practice in the New York City Area which is considered Zone 2 and includes most of downstate New York and so I will only discuss this zone. Also, please note that in this post I am only discussing the cost of the insurance premium and not of any other cost associated with buying title insurance (such as the cost of the title search and recording fees which I will discuss in later posts).
Title insurance rates are set by the title insurance companies and are published with the NYS Insurance Department. Although the rates are not "regulated" by any governmental agency, title companies cannot deviate from their published rates. Several years ago, most underwriters reduced their rates by 15% after a lawsuit initiated by the NYS Attorney General at the time. I believe that Old Republic did not sign on to this reduction and are still charging the higher rates. If I am incorrect, please let me know so that I can change this post. Regardless, make sure that the company insuring your title signed on to this reduction and if not, switch companies to save the 15%.
As for the rates, they are based on the amount of insurance which is based on the cost of the property or the amount of the loan. The formula if difficult to explain but for illustrative purposes:
a. title insurance for a $200,000.00 house purchase with a mortgage of $160,000.00 will be $1,291.00
b. title insurance for a $500,000.00 with a mortgage of $420,000.00 will be $2,688.00.
c. title insurance for a $1,000,000.00 with a mortgage of $800,000.00 will be $5,439.00
So you see the range of the cost to you depends on the price.
When purchasing a property, the title insurance premium is divided into 2 parts which I combined in the examples above. One part is the title insurance you buy to insure you, the homeowner and the other part, which is considerably cheaper is the lender's title insurance which will be discussed in the next post.
Title insurance rates are set by the title insurance companies and are published with the NYS Insurance Department. Although the rates are not "regulated" by any governmental agency, title companies cannot deviate from their published rates. Several years ago, most underwriters reduced their rates by 15% after a lawsuit initiated by the NYS Attorney General at the time. I believe that Old Republic did not sign on to this reduction and are still charging the higher rates. If I am incorrect, please let me know so that I can change this post. Regardless, make sure that the company insuring your title signed on to this reduction and if not, switch companies to save the 15%.
As for the rates, they are based on the amount of insurance which is based on the cost of the property or the amount of the loan. The formula if difficult to explain but for illustrative purposes:
a. title insurance for a $200,000.00 house purchase with a mortgage of $160,000.00 will be $1,291.00
b. title insurance for a $500,000.00 with a mortgage of $420,000.00 will be $2,688.00.
c. title insurance for a $1,000,000.00 with a mortgage of $800,000.00 will be $5,439.00
So you see the range of the cost to you depends on the price.
When purchasing a property, the title insurance premium is divided into 2 parts which I combined in the examples above. One part is the title insurance you buy to insure you, the homeowner and the other part, which is considerably cheaper is the lender's title insurance which will be discussed in the next post.
January 8, 2009
Title Insurance
Title insurance is a type of insurance that a purchaser of a property (other than a coop which will be discussed later) should buy at the closing of title. This insurance will insure the purchaser's ownership of the property free of any liens, claims or encumbrances. Most people just think it is a fee that has to be paid at closing and is of no significance. In reality, however, it is no different than any other type of insurance in that you buy it and you hope you never have to use it. But if you do have to resort to filing a claim with the insurance company, you will be very thankful that you purchased the insurance (even if at the time you were annoyed to spend the money).
A dramatic example of how title insurance protects a homeowner is as follows. You bought a house from John Doe. As it turns out, John Doe died three years prior to the closing. At the closing, a person with Jon Doe's ID signed the deed and took off with your money. After the closing, the real John Doe's daughter comes to the house and is shocked to see that you moved in to her deceased father's house. If you bought title insurance, and assuming this very simple fact pattern, the title company would be on the hook for making you whole as far as returning to you the money spent to purchase the house. As an aside, you will not be covered for closing costs.
This is a very simple explanation of title insurance and there are many other facets as well as different options of coverage available so if you have any questions, please comment (or email) and I will do my best to reply.
A dramatic example of how title insurance protects a homeowner is as follows. You bought a house from John Doe. As it turns out, John Doe died three years prior to the closing. At the closing, a person with Jon Doe's ID signed the deed and took off with your money. After the closing, the real John Doe's daughter comes to the house and is shocked to see that you moved in to her deceased father's house. If you bought title insurance, and assuming this very simple fact pattern, the title company would be on the hook for making you whole as far as returning to you the money spent to purchase the house. As an aside, you will not be covered for closing costs.
This is a very simple explanation of title insurance and there are many other facets as well as different options of coverage available so if you have any questions, please comment (or email) and I will do my best to reply.
Subscribe to:
Posts (Atom)