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Another look at negative amortization

National Mortgage Professional
Jun 05, 2005

Close more loans with a title expertMichael P. Meehantitle agent, licensed attorney, settlement services, closing issues Legal issues affecting title can be complex, confusing, and frustrating, which usually translates into delay, or worse yet, failure to close a loan for the mortgage broker. It's no secret that "problem deals" are least favored by most loan officers, and such deals are often left to wither on the vine, while the "cherries" are picked and closed. Paradoxically, the "problem deals" may be the most financially rewarding for the loan officer and mortgage broker, yet through fear or ignorance of the unknown, these deals fail to close. Of course, the customer still needs the loan, and most likely, some other broker will close it. The difference may very well be a title expert. Choose wisely Most title issues can be resolved in a timely fashion with the help of a knowledgeable title agent, who can identify title problems early on in the closing process, and explain, in layman's terms, to both the loan officer and the customer (if necessary) the title problems and their resolution so that the loan will close. Typically, this service is provided free of charge in conjunction with the settlement services for which a fee is normally charged. Because the title agent is an important resource to resolve title problems, the choice should be made carefully. Is the title agent truly an expert? What are the title agent's qualifications? What is the title agent's reputation for fast, efficient, ethical service with other area brokers? Put an attorney on your team Because of the plethora of legal issues affecting title, e.g., foreclosure, bankruptcy, divorce, lawsuits, judgments and liens, just to name a few, and due to the fact that the society in which we live is becoming increasingly more litigious as time goes by, the insurers underwriting the title agent are increasingly requiring that the agent they appoint to sell title insurance be a licensed attorney with a lending, real estate, or title background (or any combination thereof). The insurer's theory in imposing this requirement is that an attorney is uniquely qualified to understand and resolve legal issues pertaining to title. From the insurance company's perspective, such an agent is less likely to generate claims against the premium dollars produced by the agent, and is therefore more profitable to the insurance company. The insurance company's preference for title agents who are also attorneys has an unintended and beneficial consequence to the mortgage broker in that today's broker has more opportunity to develop a relationship with a title agent who is also an attorney, who in essence is available to the broker and the loan officers for free legal advice in connection with the closing of a transaction. Think about it--it's commonplace for an attorney to charge $150 (and up) per hour for legal services, yet the broker and loan officers can have legal advice for free, which directly benefits them because they will close more loans. Take advantage of this valuable free resource. Ask the prospective title agent if he or she is a licensed attorney, or if there is a licensed attorney on staff to answer your legal questions. Make sure that the "on staff" attorney does more than merely prepare the deeds and does not maintain an office at the title agency; you deserve and therefore should demand actual timely legal advice for your title questions. Put a title expert on your team. You will notice the benefits in the form of more closed transactions, more satisfied customers and more referrals. Michael P. Meehan is president of Evergreen Title Agency Ltd., which is licensed in Ohio, Mich., Ind., Ky. and Colo., and a licensed Ohio attorney at law. He can be reached at (877) 427-2270.
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