April 10, 2008 Newsletter
This is the Sixth issue of the Colony Title Newsletter.
Foreclosures. Last week in Annapolis an order was signed requiring lenders foreclosing on properties to serve the owner. In the past, since foreclosures were considered an “in rem” proceeding, (against the property, not the person), service of process was not required. In light of all the news about defaults and foreclosures, a lender’s attorney is now required to attempt personal service twice, and then if unsuccessful, post the property for 30 days prior to going forward with the sale. Theoretically it protects homeowners from being foreclosed on without time to mount a defense, if a defense is available. In the case of the cab driver in Columbia who lost his home because the title company (not this one) failed to pay off the other loan in a refinance, the bill affords the debtor time to try and resolve such matters. For the normal foreclosure, the debtor surely knows they have not paid the mortgage payment. It forestalls the process, but if they have no defense it doesn’t really make a difference.
If you know someone who is possibly facing foreclosure, they should first contact their lender and attempt to work it out. If they are unsuccessful, have them contact us about their possible alternatives.
Governor O’Malley also signed a requirement that all deeds of trust (mortgages) should have identifying language or id numbers on them, to identify the mortgage broker or lender who put the deal together. Assumedly this will allow the state to track which lenders or brokers have a track record of failed loans.
Interest rates. Rates again have not moved dramatically, but there is some softening. We are starting to see fixed thirty year rates for conforming loans under $417,000.00, at below six percent. On loans between $417,000.00 and $560,000.00, lenders are charging a premium, so even though they are “conforming loans” the lenders are tacking on a point or more. Above $560,000.00, the market is generally unattractive, with rates closer to 7 percent, BUT, we do have contacts with a lender being aggressive in the jumbo market with both fixed and adjustable rates below market. Call for details.
Titling of property. If you have been through the process of estate planning and your estate is considerable, you may have been advised to establish separate estates and create trusts to minimize federal estate tax consequences. Just writing up a trust does not put the property in the trust, it still must be deeded to the trustees for the benefit of the trust.
Going back to the cab driver case for a moment, it is important that the title company you use for a refinance or purchase is reputable. We want to be your title company and resource for your real estate needs.