I have a quick question about my Deed of Trust. The Deed of Trust is pre-dated by the lender for March 7th, but today is March 10th. Shouldn’t I date it to reflect the day in which I’m signing the document?

No. Lenders are strict when it comes to dating documents. The Deed of Trust allows for borrower’s signatures, but the escrow staff helping you navigate through your documents are usually Notaries and they notarize the last page of the Deed of Trust for the day you are signing the documents.

The form “Itemization of amounts financed (IAF)” is a page in which the summary of charges in connection with making your loan are itemized. Why is it that some of these itemized fees are different than on the Settlement Statement?

Answer:

The fees on the IAF form are the Annual Percentage Rate (APR) effective fees. At the time that the lender draws the documents, they do not know the EXACT fees. The fees on the loan application form (commonly referred to as the “1003″) are also just estimates. These fees can be over disclosed, but not under disclosed with the exception of those fees that are not APR effective which are often located on the bottom section of the IAF.

APR effective fees are those that influence the annual percentage rate. The APR is disclosed on the separate Truth in Lending document.

Federal Regulations (Real Estate Settlement & Procedures Act –RESPA) provide that consumers have a minimum of 24 hrs. prior to closing** to review your settlement statement (HUD-1 form) that discloses all your closing costs or credits associated with your transaction.

**This cannot be accomplished unless your lender sends escrow the loan documents to our office allowing enough time for our staff to prepare your documents for your review.

Bring a valid picture ID with you (Drivers License, Passport…). If required to do so, please bring a cashier’s check written to Legacy Escrow Service, Inc. and any other requested items/documents from escrow

Would you like your check via courier?

If you would like your check sent to you by courier, you will be charged approx. $20-40 depending upon the courier company and time of day the check is delivered.

Would you like your proceeds by wire?

Important: at Legacy Escrow, wire transfer cut-off time to SEND proceeds is 2:00 pm Pacific Standard Time, subject to federal wire regulations, procedures and holidays at the Fed. Reserve. I f you decide that you would rather the funds be wired instead of picked up at our office or mailed as you previously instructed escrow, PLEASE call ahead of time (no later than 2pm) to allow time to wire funds—subject to our work load. Calling at 3pm or later will not help you.

If you elected to have escrow mail your check, please allow two-three business days for the postal service to deliver your mail.

If your closing takes place on a Friday, particularly at month end, your check is placed in the mail after the close of business (5-6pm) which is well after post office final pickup. Under this scenario most mail is picked up on Saturday and you will receive your check the following week.

Will you pick up your check or get it in the mail?

ALL PARTIES MUST ENDORSE THE CHECK!!!! If your check is remitted with two names on it such as Bill Buyer and Betty Buyer, BOTH must endorse the check. If you do not do this, your check WILL BE REJECTED.

In Washington State, closings are not simultaneous as is the custom in a few other States. Closing often takes place several days after signing your documents. Once your paperwork is signed, escrow sends your loan documents back to your lender (sometimes across the country) via overnight air by UPS. THIS IS DONE PRIOR TO THE CLOSING DATE for lender final review and funding.

If a sale transaction fails and yet the parties still wish to work together, a lease option may be a possible solution. In a previous transaction our office handled, it was advantageous for the option to be recorded at the county. When the buyers exercised their option to purchase, the lender considered it a refinance transaction and the equity in the property could be used as part of their down payment. You will need to consult the appropriate resources in drafting a legal and enforceable Lease Option Agreement along with contacting your loan officer who may be able to assist you once the option is exercised.

Is it time for these terms to be “un-engineered” from our psyche?

Here’s the take from 1000 Watt Consulting (video plays in IE, has trouble playing in Firefox)— Watch their video below.

This is a brief from my recent issue from Berntson Porter & Company, CPA’s & Consultants (page four of the .PDF document):

“….. is a possible downside to this bill for those taxpayers who
wish to make their second home their primary residence for
the home-sale exclusion. After 2007, if a home is sold within
five years after becoming your main residence, part of the gain
will be taxed even if the two-out-of-five-year test is met. The
portion of the gain that will be taxed is based on a percentage
of the time before the sale when the home was used as a second
home or rented out.”

This is not tax advice and is for general informational purposes only, consult your beloved tax advisor or tax attorney for your specific circumstances.

• incur needless bank fees for stop payment or NSF.
• incur needless “stop payment” fees also charged to you by your escrow office.
• if a borrower receives a proceeds check from escrow and starts writing checks for bills or purchases on those funds and escrow has to stop payment on that check because of a payoff shortfall created by the borrower by stopping payment on their mortgage, the borrower’s bank will likely charge for every bounced check that occurs.
• Important: if you are considering skipping a mortgage payment PLEASE let your loan officer know because it may jeopardize your current loan approval.

By skipping or stopping payment on a mortgage payment in progress, the borrower may have just cost themselves a lot more interest accruing on their loan until the loan is paid in full. It is not uncommon for a lag time between the time a lender receives an escrow payoff and when escrow is notified of the shortage due to a borrower not making the last scheduled mortgage payment. The lag time could be as long as a couple weeks, maybe more. This is very expensive for the borrower. Escrow will stop payment on any proceeds check issued to the borrower to cover any shortage and will use any means to collect the shortage from the borrower.

It is not uncommon for borrowers to be confused by their last mortgage statement indicating principle owed and the actual amount to be paid off as indicated by escrow—escrow’s amount is usually higher. The difference in the payoff statement escrow calculated takes into account all accrued interest, principle owed and fees—escrow typically collects a day or two extra of interest in the event the payoff is received a tad late due to hick-ups in overnight delivery by UPS or FedEx.

Hope that’s helpful!

-Legacy Escrow Service, Inc. Staff