All Forum Posts by: Eka Linwood

Just posting an update here to let everyone know that I ended up calling the title agents. I found out that the one who carried the Owner's Title Insurance Policy was actually the SELLER's title agent. They advised me that I should call up my BUYER'S title agent so I did. Then my BUYER's title agent told me I should call the SELLER's title agent since they issued the insurance policy.

Welp, great!

I got a call back from the SELLER's title agent though. They told me they're checking with the county. I told them I was planning on paying the county Wednesday, and I did. Didn't get a call back from the SELLER's title agent. BUYER's title agent called me Thursday telling me that everything is clear LOL Yes Ma'am, everything is clear because I paid the delinquent fees.

Anyway, I contacted title insurance - they have a phone number on the policy too. The guy on the phone told me to send a claim via email. Just got an acknowledgement, and assigned a case manager. They said they'll make a decision in 30-days so we will see!

@Account Closed

Sounds like calling the title company first thing Monday morning to get a game plan is the best thing to do. I was hesitant on calling them first because I was afraid they'd be more interested in going out from this guilt-free. Sounds like I should still contact them first as good faith and try to get them to resolve these issues before escalating.

The sale process was a little shady. The seller wanted to "settle" the security deposit outside of the formal sale process. I disagreed, and insisted to settle this through the title company. My buyer's agent initially pushed me to settle outside of the sale process, but then agreed with me after talking with her broker. I can definitely see the seller cancelling his personal checks after sending the receipt to my title company so we'll see how things work. 

Thank you for the advices! I will post an update on Monday!

So I closed on this property (triplex) around Mid-Feb 2020. I just found out thru a letter from the county, that I am now in foreclosure because I'm apparently delinquent on my property tax. I thought this was weird or some sort of a scam, because I bought the property thru a mortgage, so I pay property tax as part of my monthly escrow payment. After looking at the county website, the property tax from 2019 is indeed delinquent. The previous owner "paid" his 2019 tax "late" on 1/31/2020. My settlement date is on 2/24/2020. The county website says that the 2019 tax is still "owed" for 2 of the 3 property.

The sale process included two title companies (I think). The Owner's Policy is dated 2/25, and states that the title insurance "insures...against loss or damage...incurred by the Insured by reason of...lien of real estate taxes...due or payable but unpaid". The exception from coverage section states "Taxes, or special assessments, if any, not shown as existing liens by the Public Records". 

The penalty from the 2.5 years of being delinquent has resulted in the property tax due being essentially double from what it was. I'm planning to file a claim against the title insurance, but wanted to see what else I can do:

- I got the letter late - one of the tenant gave the letter to me today, dated 5/26 and was issued to the "occupant" which was him. I just got the letter today and confused on what I need to do. Planning to call the county Monday to see what I need to do. Letter says there's a foreclosure / tax sale Aug 15. Is the foreclosure process finalized? Is the property no longer mine?

- What is the extent of the damage here that I can claim from the title insurance? Will they cover the 2019 property tax and penalty ? If the foreclosure has been finalized, will they cover any losses from that sale? The coverage is up to the sale value of the property in 2020. 

- I tried paying the tax online, but website told me to go to the county office. Should I go ahead and pay the delinquent tax + penalty to the county ? If it helps avoid the foreclosure process, I don't mind paying the amount due, as long as I am later reimbursed by the title company. 

- Who should I contact first? Title Insurance, Title Company or County?

A lot of people will say "Time in Market beats Timing the Market". I agree with this to some degree, but we are in very volatile market these days - depending on your location. If you are in any of the metro locations (NYC, Chicago, etc.), I would probably wait until the market stabilize.  Especially considering your situation (no credit).  Market will stabilize around 6-months to 1-year from now.  Buy at that time, through better financing terms and you'll make more money overall.

When you say "Hard-money lender", what kind of interest rates can you get through them ?? I got a 3.0% FHA 30-year fixed loan (so effectively 3.85% conventional, due to PMI) with a 3.5% downpayment for a triplex that I intend to owner-occupy. Compare that to a hard-money lender - even at 5%, you're still losing over 1%. Amortize this amount and see how much is the difference. Factor in the price volatility at this time (and the very likely possibility that it house prices will go down). I closed in late Feb 2020, and the Covid-19 situation got worse in early March so I'm SoL, but I would've much preferred waiting 6-months to 1-year from now to buy. I already saw a neighbor's price go down by about $5k... While this doesn't really affect me, it still hurts to think that I could've scored a better deal had I waited another 6 months.

You can threaten to back-out and potentially lose your earnest money.  That is it.  Sellers have a lot more to lose.  Depending on how much money you have put in, this might be a great move for you. Look at the market where the property is located at.  I have seen price-cuts range from $5k to $10k.

@Jeff C. That is good to know! I didn't realize that the Appraisal Fee is portable for FHA. Thank you for the quote!!

I did a little Google Search for a quick clarification:

Appraisals are not generally portable; that is, one appraisal can typically only be used by one lender. Get another lender, and you'll likely need another appraisal. That means two appraisal fees. The exception is that under the FHA program, appraisals are required to be portable.

"In cases where a Borrower has switched Mortgagees," says HUD, "the first Mortgagee must, at the Borrower's request, transfer the appraisal to the second Mortgagee within five business days."

@Jeff C. I have heard that the appraised value of the property sticks with the property, so if the appraisal comes low - the Seller has an incentive to come down and meet the FHA appraisal price or essentially decline to sell to FHA buyers. Have you seen a case where a Lender is willing to work with an appraisal ordered by another Lender?

I agree with what you are saying on the Seller side, so Timing is definitely something that I consider.  Lender X hasn't gotten back to me with a Loan Estimate yet, but I understand there are various fees and points that may make the % rate not "apple-to-apple".  I'll be sure to try and do a fair comparison though.  I have seen this variance during my Loan shopping period, and saw that the "Lender's Fee" is largely on the Underwriting and Closing Cost that are disclosed in the Loan Estimate.

@Ella Vrolyk Thanks for that response! That is what I thought, but Lender X mentioned to me that they will look into it.  I guess we will see how they respond.

@CJ M. Yeah, it is for a triplex over $200k, so 0.25% is about $10k over the life of the loan or about $30 per month. I agree with your points though.  Time will be lost, and I will be losing out on the Appraisal cost and some risks if the appraisal comes in lower. 

Is it common to re-negotiate after a rate-lock?  I read around and some people are saying that most times a fee would be associated with rate re-negotiation / float down with probably a minimum of 0.25%.  The Lender has already started the under-writing process, so there's that...

So, this is probably my fault for not doing a better due diligence ahead of time.

We got under contract early Jan for a closing date of Feb 20, and this is my first time buying a house. I got a pre-approval from Lender A, and right after the Seller accepted the offer, I went shopping for Financing.  I went to Lender B, C and D.  Only Lender B were able to get back to us with a loan estimate.  Lender C and D were not able to, due to the various complexities on the deal.

Just last week, I got curious and read up on FHA rates some more. I found a new Lender (Lender X) that is publicizing 0.25% better rate. Now, my credit score is excellent and DTI is very low, so I should have no problem qualifying for the best FHA rate. I do prefer to sign up for the least amount of down-payment (FHA 3.5%) though, so there is that.

Since I thought this issue is closed, I ended up getting this Lender to proceed with the whole process.  The only thing pending right now is the appraisal (ETA: Jan 31) and the Home Insurance (After Appraisal).

If Lender X rates (2.75%) come in significantly below Lender A's rates (3.0%), I see two scenarios:

• I move to Lender X - potentially jeopardizing the deal and have the Appraisal moved to Lender X or maybe paying for another appraisal altogether.
• I stick with Lender A and ask them to match this new Loan Estimate from Lender X.

My questions are:

• Would it be ethical to do this to the Lenders? 
• Is it possible to "move" appraisals to the new Lender?
• What are the chances of this action jeopardizing the deal?

I've used Transferwise to transfer money to my family and it went pretty smoothly.  Banks will charge you exorbitant fee and you'll need to wait for a few days before receiving the money.  Transferwise took a couple of days.