You never know what will unfold with each transaction. One year after the purchase of a property, the homeowner is now refinancing. What started as an uncomplicated refinance resulted in the discovery of a gas lien filed by the Philadelphia Gas Works (“PGW”). And, while investigating the lien, the HUD1 from the purchase transaction revealed total disregard for the rates and regulations as mandated by the Title Insurance Rating Bureau of Pennsylvania (“TIRBOP”).
Guess who closed the purchase? Bruce the Notary contracted by an out of state title insurance agency. Bruce and I have never met. He may be a nice enough guy. He yields a pen, a stamp, and a notary commission. Unfortunately, that is all that is required these days to conduct a real estate settlement in Pennsylvania.
The fees below as shown on the HUD1 have absolutely no correlation to the filed rates and allowable charges:
Settlement Fee – $800
Notary Fee – $300
Courier Fee – $150
Recording Deed and Mortgage – $450
Release Fee – $300
Title Insurance Premium – $100 ($125,800 lender’s policy)
$320 ($157,000 owner’s policy)
(See below for the applicable rates and charges)
Now, when I questioned a very nice woman at the title insurance agency in Colorado about the horrific (I did not use this word but surely wanted to) charges on the HUD1, she replied that these were the rates of her underwriter. I explained to her TIRBOP, that her underwriter is a member of TIRBOP, and that a licensed title insurance agent in Pennsylvania must adhere to the rates mandated by TIRBOP. In so many words, she replied: “We are a national company and these are our national rates and the rates of our underwriter.” She also implied that Bruce was the one responsible for conducting the settlement, Bruce the Notary.
The lien is for more than $4,000 and is for gas usage prior to the purchase of the property. And, even though the lien was filed after the Deed to the insured was recorded, our underwriter is not willing to insure a new first mortgage lien without PGW being paid in full.
The homeowner would like to move forward with the refinance. The nice lady in Colorado suggested that he pay PGW or he hire an attorney to review the policy issued by her office to determine if he is eligible to make a claim under the policy.
I found no exception for gas usage in the policy.
Local title insurance and real estate professionals are very much aware of the need to obtain a certification from PGW. Bruce is not one of these professionals.
And maybe Bruce is an unfair target. The real culprit here is the out-of-state title insurance agency with no local presence except for Bruce and signing agents like him. I am guessing that Bruce has never met the people out West and further has limited understanding of local customs and practices.
What should have been the charges on the HUD1?
Settlement Fee – ZERO – unless settlement is held after hours or at a location other than the agent’s office (it was a FSBO) and notice of the fee was given to the insured in advance of settlement, then maybe $150-$200.
Notary Fee – $5.00 per acknowledgment.
Courier Fee – out of pocket expense only – $10-$20.
Recording a Deed and Mortgage in Philadelphia – $283.
Recording a Release – $124.50.
The Title Insurance Premium (basic) for an Owner and Lender’s Policy – $1,143.75.
In case you have yet to decide who should be sitting at your settlement table, let me summarize:
The price of doing business with an out of state title insurance agency and Bruce the Notary Signing Agent: Approximately $600-800 in over charges and a lien.
Using a local, licensed title insurance professional: Priceless.
9 responses so far ↓
Diane Cipa, General Manager, The Closing Specialists® // April 26, 2007 at 4:35 pm |
Dave: I strongly suggest for the good of us all that you report the out of state title agency to the PA Dept. of Insurance. You can do it through the portal on their consumer web site. Give them as much info as you can. Or you can mail them a copy of the HUD and a letter.
Diane Cipa, General Manager, The Closing Specialists® // April 26, 2007 at 4:41 pm |
Who’s the underwriter?
Zana Darrow // July 2, 2007 at 1:24 pm |
In defense of Bruce, What did he actually get paid? What was his interest and activity in the loan from application through the underwriters until he received the final documents? Did he have some kind of input on policy and proceedure prior to his receipt of the documents? Is he allowed to express his opinion of the HUD charges?
I agree that the majority of the problem closings stem from the out of state closing companies.
Francine D'Elia Wirsching // July 15, 2007 at 8:24 pm |
Zana, Thank you for your comments.
I have no knowledge of what Bruce was paid. It is my understanding that signing agents earn approximately $150 per transaction. Bruce most likely had little or no input from application through signing. And, that is why he should not have been in attendance in the first place.
It is my opinion that a title insurance professional should conduct all closings. I think it is absurd that someone be allowed to meet with the consumer, review documents, and not be in a position to question charges on the HUD1 as they relate to title insurance.
Zana Darrow // July 28, 2007 at 12:12 am |
In my experience the concern about the title insurance charges are the least of the borrowers concerns. Some do ask about the lumping of charges, including the closing, under “settlement services’s”.
Overwhelmingly the questions arise when the terms and costs are not what they were told they were getting. I always encourage them to call their loan officer or broker. I am not about to second guess what was disussed between them prior to the signing appointment. At most I point out where they can find the information they want in the loan packet.
So no, the experienced signing agent does not review the documents and issue an opinion. You can tell who we are by the scars on our tongues.
Bottom line, whether the closing takes place in brick and mortar or at their kitchen table, the borrowers need to be better educated on the product they are buying into. This rests squarely on the lenders. I say this as the final cog in the wheel that is holding the final product in her hand and that product is often still warm from the printer.
The problems I see with Title doc’s are wrong venue, mispelled names, non compliant acknowledgements and jurats, and requests to notarize my own signiture on ID affidavits.
If you are concerned about the experience and professionalism of a field closer, do not find them through a signing service that gives you the cheapest bid. You will get notary and a higher risk of improperly executed documents.
Catherine Peterson // September 1, 2007 at 12:06 pm |
In defense of signing agents…
The notarization fee per signature varies with the state. That being said, add the notaries costs associated with the signing; mileage to the borrowers home, long distance calls and faxes (to the agency, be it a title company or signing agency), a laser printer for edocs, a dsl line and various office supplies. Signing agencies, and title companies to a lesser extent, try to whittle the amount paid to a bare bones minimum. I’ve been offered as little as $40.00 to travel 20 miles on a refinance of 80 pages and 6 notarizations! And then wait 30 – 45 days to get paid!
Also, as signing agents, we are there to witness signatures and confirm identities. We are not there to interpret documents or agree or disagree with settlement charges. And certainly not to police ‘professionals’.
Melissa Haley // September 5, 2007 at 8:46 am |
A Notary Signing Agent is hired to be completely impartial to the transaction. The fees shown on the HUD or HUD-1 Settlement Statement are the figures approved by the lender after they’ve been prepared by the settlement agent or title agent. The notary has nothing to do with how figures are prepared or what fees are shown where. The borrower has the right to have their own attorney/select their own attorney for the transaction.
I also don’t believe your statement that fees average $150 for a signing. They are negotiated on a per signing basis & vary greatly. I’ve had signings where an attorney conducts the transaction and I’m simply there as a notary, other times where I’m working directly for an in-state attorney as the Signing Agent, but any questions are directed to the attorney or title company. There was one time where the borrowers informed me that they were both on title to the home, although docs were drafted with only one name. I had enough experience to be able to call the local attorney to inquire about the discrepancy and get the loan signed with updated documents. It was mother & son on the title, but the processor stopped the vesting at “Joe Schmo, single man” instead of adding the rest of the vesting of “and Jane Schmo, single woman”. Did I practice UPL by conveying the borrower’s question to the presiding attorney?
I drove 5 miles to present the documents, vs. the borrowers or the attorney driving 60 miles one-way. I was able to print the revised documents as soon as they were received to expedite the process.
That’s what a Signing Agent does. They simply act as an impartial witness, but with the knowledge to know where within the documents is the answer to a question or when and to whom to escalate the question asked to a person that is able to provide the answer.
Francine D'Elia Wirsching // September 11, 2007 at 4:38 am |
Catherine and Melissa, thank you for your input. I do not disagree that there may be a limited number of signing agents who have the knowledge and expertise to meet with the consumer and do not doubt the time expended in having documents signed.
You can see more thoughts on this topic by checking out Professional Liability Carriers Taking a Stand « Clearing Title
Mobile Notary Review // January 23, 2008 at 1:13 am |
I’ve earned ever bit of my fee. If those in charge of drawing the docs and getting the loans (those drawing the highest commission) explained the docs to the consumer prior to the signing appointment and were available to answer questions at the signing table then a lot of problems would be eliminated.