Survey Deletion Coverage is often also referred to as “Survey Deletion”, “Survey Amendment”, and “Survey Coverage.” When survey deletion coverage is given in the title policy it offers Buyers protection for errors or omissions that may have been made by the surveyor and accepted by the title company by changing the language in the “standard exception” of the title policy to read “Shortages in Area” only. The “standard survey exception” in a title commitment or policy (before being amended) reads:
“Any discrepancies, conflicts, or shortage in area or boundary lines, or any encroachments or protrusions, or any overlapping of improvements.”
Upon receipt of an acceptable survey, the title company may amend this exception to read “Shortages in area” only. Things that a title company will look at to determine if a survey will be acceptable include, but are not limited to, the following: that items noted on the survey are listed in the title commitment, verify the legal description, check platted building lines and platted easements, and other matters such as the seal and signature of the engineer, date of the survey, and north directional arrow.
Survey Deletion is addressed in paragraph 6. A. (8) of the TREC One to Four Family Residential Contract, where the parties select between the options of amending or not amending the standard exception in the title policy and who will be responsible for the payment of the premium.
There are other issues that may show up in the review of a survey, such as a building or driveway or fence over a building line, or into a platted easement. When this happens, the title company may still accept the survey and amend the standard exception to read “Shortages in Area” only, but will generally add a special exception on Schedule B of the title commitment and owner’s title policy for any of these issues that were shown on the survey.
The cost of survey deletion coverage on residential transactions is 5% of the Owners Title Policy Premium, and is 15% of the Owner Title Policy Premium in a commercial transaction.
Republic Title’s Dennis Pospisil, Senior Vice President of Digital Settlement and Signing Services recently sat down with eOrignal to talk about bridging the lender and settlement divide in a digital world. Check out the conversation here:
eOriginal: What barriers do you see standing in the way of a completely digital real estate experience?
I think engagement and adoption across the industry is crucial, but certain barriers may exist, like having the necessary equipment to support the adoption of digital mortgages. For example, consider escrow agents using a mobile notary. Are they prepared, willing and ready to take digital closings on the road with them? Has everyone (and I do mean everyone) involved in the closing had the required training? Are they setup in the system with logins, etc.?
The other thing that concerns me is the existence of multiple platforms. Is that scalable for settlement companies? Are settlement companies willing to receive transactions across multiple systems?
On a different side of the transaction, are loan officers willing to adopt and change what the closing experience and celebration will look like? Will they partner for the future by thinking about what they want the closing experience to look like in the years to come?
These are a few of the questions I believe the industry should consider as we move into this digital era.
Many people subscribe to the “if it’s not broken, don’t fix it” philosophy, but sometimes it is about making an existing way of doing things better. To continually be relevant in the market, you have to ask, “Can we make it better? If so, how?” I don’t see enough mortgage professionals focusing on those questions.
There are other barriers directly related to finances. For example, some settlement companies are not setup properly for high speed internet nor, in some cases, do they possess technology like tablets, laptops, and/or other items that are necessary to conduct a completely digital closing.
Lastly, there are practical barriers unique to our industry, such as legislation and the county clerks’ offices in the areas we serve. Does your state have legislation in place supporting remote online notarization (RON)? Does your state have legislation in place supporting the papering out of eSigned recordable documents? What about the steps necessary to bridge the traditional method of recording with the non-traditional method of eSigning?
Unique barriers are going to exist outside of these thoughts, so those interested in supporting digital closings must identify and work through them one at time.
eOriginal: What do you think is on the horizon? How about 5 to 10 years from now?
First, I think we’ll see additional RON legislation in various states. We are still at the beginning of this new digital age and several states still don’t have legislation in place to allow remote online notarization. You also have some states with RON legislation in place but with a few key elements still missing or being worked on, like a “papering out” bill. As an example, Texas should expect a “papering out” bill to pass very soon, as early as September 2019.
On the seller side of real estate transactions, I see RON making a shift towards a new and more convenient experience. The borrower side is probably heading in that direction as well, but from a settlement agent’s perspective, we’ll have to see how each of our lending partners adopts the concept of digital settlement, since it isn’t something we can control.
Then we have AI, or artificial intelligence, and machine learning, which are big ticket items beginning to play a role in the life cycle of the real estate transaction. They are still some time away, but it’s fascinating to read about all the work and projects already underway.
To help the readers understand the interplay a bit better, consider AI as the broader concept of machines being able to carry out tasks in a way that we would consider “smart.” Machine learning is a subset or current application of AI based around the idea of providing machines access to data and letting them ‘learn’ for themselves. Within our space, we are already seeing some of the large-scale real estate sites using AI for home or rental recommendations.
I agree with Dennis’s comments. At Fairway, the experience delivered to the consumer is critical, and we see settlement agents as a crucial component to ensuring that experience is positive, both now and into the future.
The mortgage industry is moving quite quickly. On the one hand, you have the proposed Uniform Residential Loan Application (URLA) changes that are happening, and on the other hand we see many different investors, programs, and products available, so it takes a lot of effort just to keep up with our market. Then factor in the Ginnie Mae offerings and the move toward digital transactions, and it’s clear that this is an exciting time to be in mortgage!
eOriginal: Where can others go to learn more about digital mortgages and lender and/or settlement agent best practices?
They’ve already found one resource, this blog article. Others worth visiting include:
Texas Welcomed More Than a Half-Million New Residents in 2018
The 2020 Texas Relocation Report released today by Texas REALTORS® shows the state ranked second in the nation for relocation activity in 2018, with 563,945 new residents moving to the state.
Texas eclipsed its 2017 total for new residents (524,511), and accounting for those moving out of state, saw a 78.1% increase in net new residents—from from 57,173 in 2017 to 101,805 residents in 2018.
“For the sixth year in a row, more than half a million people chose Texas as their new home,” said Cindi Bulla, 2020 chairman of Texas REALTORS®. “And why not? In addition to its business-friendly environment with no state income tax and abundance of jobs, land. and opportunity, Texas is known for its diverse, friendly spirit and culture.”
The top states for incoming residents to Texas were California (86,164), Florida (37,262), Louisiana (29,108), Oklahoma (24,590), and New York (21,509). Compared to 2017, the number of incoming residents from California increased 36.4% in 2018. Of the state’s new residents, 201,559 moved to Texas from outside of the country.
Texas saw 462,140 residents relocate out of state in 2018—the third-highest figure among U.S. states. California (37,810), Oklahoma (31,551), Colorado (26,930), Florida (24,197), and Louisiana (23,588) were the top destinations for those moving out of Texas.
Republic Title’s Dennis Pospisil, Senior Vice President of Digital Settlement and Signing Services recently sat down with eOrignal to talk about digital trends from a settlement industry perspective. Check out the full conversation here:
eOriginal: Dennis, would you mind giving our readers an overview of your background?
Dennis: I originally received a degree in Information and Operations Management (or MIS), which focused on the intersection between technology and business. But my work history centers on real estate, having started my career as a real estate agent and then working across all aspects of a settlement company, eventually finding myself leading the charge for technology at Republic Title of Texas, Inc.
eOriginal: Why is Republic Title of Texas supporting the move toward digital mortgages? What is in it for you?
Dennis: At Republic, we take an “outside-in” approach, meaning that we first consider what is best for our customers, along with their wants and needs. We are starting to see the persona of the consumer change. Gone are the Baby Boomers and in are the Generation Xers and Millennials, who tend to be more comfortable with and have a preference for digital technologies.
Secondly, we consider decisions from a strategic company perspective, ensuring we meet the needs of the market. The market desires a digital buying experience, and frankly, closing is the last piece of the buying process that hasn’t gone digital. There is a lot of pent-up value waiting to be tapped just by digitizing that last element.
eOriginal: You’ve had a lot of experience with digital technologies. Would you mind talking about your early experiences with digital mortgages?
Dennis: I’ve done a number of hybrid closings on smaller platforms that died over the years. In those early days, the promise of digital closings sounded great from a settlement agent’s perspective, but the settlement community did not have the right technology to make it a convenient and positive experience for the consumer.
To paint a picture, consider what a closing with both electronically and wet-signed documents was like 10 years ago. The first part of the closing would go smoothly, but just when the borrower thinks they are finished, they would need to step into another room to complete the eSigning portion with a desktop computer and a large monitor. That’s not just inconvenient for the borrower, it’s also confusing.
But today, with mobile devices and tablets as well as existing wireless technologies, the supporting technology is in place to ensure a smooth digital closing experience. We can offer concierge closing services that match the busy lives of today’s consumers.
eOriginal: You’ve used several digital solutions. What is some advice you can give to mortgage professionals and, more specifically, settlement agents about what to look for in a solution?
Dennis: I’d suggest they first consider what role the technology plays in their day-to-day activities. Is it an entire production system or is it an ancillary supporting system?
I’d also encourage mortgage professionals to consider the steps required to do basic operations in the product. Are there too many manual or redundant steps? Remember – these systems are supposed to make your lives easier.
Finally, I’ve been exposed to vendors in the past who didn’t have a vision for the future. They might have come out with the innovative and exciting capability that was in the news at the time, but they didn’t consider how those capabilities could provide value at scale, or how to augment and grow them in the future. I suggest others in the industry partner with providers that have a solid roadmap, a pulse on the market, and are seeking to find a different and better way.
eOriginal: What barriers do you see to settlement agents supporting digital mortgages?
Dennis: Many people subscribe to the “if it’s not broken, don’t fix it,” philosophy, but sometimes it is about making an existing way of doing things better. To continually be relevant in the market, you have to ask, “Can we make it better? If so, how?” I don’t see enough mortgage professionals focusing on those questions.
There are other barriers directly related to finances. For example, some settlement companies are not set up for high-speed internet, tablets, or laptops. And, finally, there are practical barriers unique to our industry, like legislation and the county clerks’ offices in the areas we serve. For example, we are still waiting on a “papering out” bill in Texas, but once that is in place, many of the existing hurdles to digital closings will begin to disappear.
eOriginal: One thing we hear about in the market is the potential for cost savings with digital. But we often hear about that in reference to lenders and other sectors of the mortgage ecosystem, not the settlement community. Are there potential cost savings for settlement agents?
Dennis: Yes, but I prefer to look beyond cost savings and consider revenue potential. Depending on the size of the operation, there are obvious hard cost savings in the form of paper, toner, and devices for printing. There are also softer savings like operational efficiency. At Republic Title of Texas, the efficiencies gained from adopting digital allow us to free our talented employees to drive growth for our business through new services and new markets. It allows us to access our business’s untapped potential.
eOriginal: We’ve talked about costs and revenue opportunities, but what about broader headaches? Can digital technology help there as well?
Dennis: Lost or misplaced files is certainly one headache that digital addresses. When you are using a digital system, your files and data are in one place, easily accessible. Another headache is in the talent management realm. There are talented people that settlement companies cannot hire because they don’t live near any of their brick-and-mortar locations. Supporting a digital process may open more avenues for finding top talent.
eOriginal: Do you feel the adoption and commitment toward digital mortgage is different now than in times past? If so, how?
Dennis: Thinking back to the early 2000s, we saw interest develop and then, just as quickly, disappear. The feeling is substantially different today. For one, we’ve seen many more digital closings this year than in years past. In fact, MERSCORP Holdings, Inc. recently announced that there were more eNotes registered in the first quarter of 2019 than in all of 2018. A second point to consider is that the ecosystem required to support and sustain the digital mortgage movement is taking shape, certainly much more than it did in those early years.
eOriginal: As we close, do you have any suggestions for settlement agencies considering support for digital mortgages?
Dennis: Be sure to approach moving to digital as a strategic initiative, rather than a one-off project. Think about your overall business strategy and then factor where digital can provide a sustainable impact. Be prepared to fully support and build on digital capabilities, rather than making a one-time investment in the latest technology. A commitment to digital requires more than just technology, it requires building a team of positive, digitally ready employees along with a strong ecosystem of digitally enabled partners.
As a new property owner, you are required to pay property taxes on this real estate. It is taxed each year by a variety of jurisdictions including the county, city and school district. As a new purchaser, you need to notify the taxing authorities of your ownership so that the tax rolls will reflect the change. You may do this by contacting the appropriate tax appraisal district in your county from the following list:
Collin County Appraisal District – 469-742-9200 – www.collincad.org
Dallas County Appraisal District – 214-631-0520 – www.dallascad.org
Denton County Appraisal District – 940-349-3800 – www.dentoncad.com
Ellis County Appraisal District – 972-937-3552 – www.elliscad.org
Grayson County Appraisal District – 903-893-9673 – www.graysonappraisal.org
Hunt County Appraisal District – 903-454-3510 – www.hunt-cad.org
Johnson County Appraisal District – 817-648-3000 – www.johnsoncad.com
Kaufman County Appraisal District – 972-932-6081 – www.kaufman-cad.org
Parker County Appraisal District – 817-596-0077 – www.parkercad.org
Rockwall County Appraisal District – 972-771-2034 – www.rockwallcad.com
Tarrant County Appraisal District – 817-284-0024 – www.tad.org
Your property is assigned a single appraised value, which is sent to all taxing jurisdictions. The jurisdiction then applies the tax rate, as set by its governing body, to the appraised value.
In order to qualify for a residential homestead exemption you must provide the following to the Central Appraisal District when submitting your application:
A copy of the applicant’s Texas drivers license or Texas identification certificate.
IMPORTANT NOTE: The property address on the exemption application must match the address listed on the applicant’s Texas driver’s /Texas identification certificate; otherwise the Chief Appraiser is prohibited from approving the exemption.
**TAX EXEMPTIONS On January 1, value ownership, legal description of the property and exemption status of the taxpayer is determined. Several forms of tax relief are available which may reduce the taxable value of your property. Applying for exemptions is the taxpayer’s responsibility. Some exemptions require a new application each year. Contact your appraisal district to learn more about the following exemptions and how to file for them:
• General Homestead Exemption • Over 65 Exemption • Disabled Individual Exemption • Disabled Veteran Exemption • Agriculture Land Exemption
TO RECEIVE YOUR EXEMPTION(S), YOU MUST OWN THE PROPERTY AND BE LIVING IN THE PROPERTY AS OF JANUARY 1ST. YOUR APPLICATION MUST BE APPLIED FOR ON OR BEFORE APRIL 30TH TO RECEIVE THE TAX BENEFITS FOR THIS YEAR, THIS IS A FREE SERVICE.
Remember, tax statements are generally mailed in October of each year. The taxes are payable on or after October 31st, however, you may elect to pay them as late as January 31st without penalty. Taxes become delinquent February 1st and on this date penalties and interest do accrue. If you receive a Tax Statement and your mortgage company is escrowing funds for taxes from your monthly payments, forward the statement to your mortgage company so that they can pay the taxes.
If the Central Appraisal District sends correspondence regarding your exemption, make sure to respond.
Republic Title of Texas, Inc. makes no express or implied warranty respecting the information presented and assumes no responsibility for errors or omissions.
New year, new house? Could this be the year you finally buy a house and get out of renting for good? There is a lot to consider with this decision so we’ve put together a list of the advantages of buying and some reasons to keep renting in the event buying is not in your best interest at the moment. Take a look and think it over! If you have any questions on buying vs. renting, there’s no better person to talk to than a Realtor. They are your industry experts and can get you going on the path towards buying.
Advantages of Buying
Ample inventory of new and existing homes means more choices and competitive home prices for potential home buyers.
Interest rates are generally low right now, making it a great time to buy.
When you buy a house, you will know that the mortgage rate for the next 5 to 30 years is going to be the same every month. Rent may continue to increase each year.
With each payment, you will build equity and increase the amount of total home ownership.
There may be down payment programs available in your area that can help you purchase your first home.
You Should Consider Buying If
You want to build wealth. Investing into real estate is the fastest way to add zeros to the end of your net worth.
You want to settle down, build community and know you will be in the same city or town for at least 2 years.
You Should Keep Renting If
You need flexibility and don’t want to commit to staying in the same location for the foreseeable future.
You have limited income or are unsure about your current job. Renting allows you the flexibility to downsize your living space.
If you are thinking about buying a home, reach out to a REALTOR® to get started.
In December, 9,056 houses changed hands, the highest total on record for the final month of any year.
North Texas’ housing market ended 2019 on a high note, and the jump in sales during the final month was enough to push the year’s home purchases to an all-time high.
Last month’s preowned home sales were up 15% compared with December 2018.
Area real estate agents sold more than 108,000 single-family homes for the year — 3% more than in 2018, according to preliminary data from the Real Estate Center at Texas A&M University and North Texas Real Estate Information Systems.
“Dallas-Fort Worth winds up with record sales again,” said James Gaines, chief economist for the Real Estate Center. “The Dallas side of the Metroplex was actually a little better than Fort Worth.”
In December, 9,056 houses changed hands, the highest total on record for the final month of any year.
Lower mortgage rates in the second half of 2019 boosted homebuying in the D-FW area and across the country after a slowdown in purchases early last year.
“One of the things that helped was that the fourth quarter of 2018 was a down quarter because interest rates went up, oil prices were down and things slowed down,” Gaines said. “October, November and December numbers looked extraordinarily good on a year-over-year basis.
“The fourth quarter was enough that it made up for some of the slowdown that started earlier in the year.”
Along with the higher sales in December, median single-family home prices in the area were up 5% year over year to $270,000. For all of 2019, North Texas home prices were 3% ahead of those in 2018, according to the Real Estate Center.
At the end of the year, 20,535 houses were listed with real estate agents in the more than two dozen North Texas counties included in the survey. That’s a 4% decline in inventory from the end of 2018.
There are indications that January will be another strong month for North Texas home purchases.
The number of pending sales — properties under contract but not yet closed — is up 18% from a year ago.
Gaines said he doesn’t expect the big home sales gains to continue through the new year.
“We won’t see those percentage rates going forward,” he said. “I don’t think we are going to see those double-digit rates of increase.”
Home prices in North Texas have risen more than 60% in the past 10 years.
Looking ahead, Gaines said it’s unrealistic to expect the same kinds of home market growth moving forward.
“The decade of the 20-teens was an exceptional decade for Texas and D-FW in particular,” he said. “As we look forward to the decade of the 2020s, it would be unrealistic to expect us to duplicate that rate of growth.
“It’s not that we won’t grow. It’s just not going to be a very high rate of prosperity.”
Last week, the eOriginal team was out in force at MBA Tech 2019. We enjoyed seeing old friends, making new friends, discussing digital best practices and learning what is top of mind when it comes to mortgage technology adoption.
The conference opened with a riveting discussion on the biggest tech innovators and disruptors, featuring George Blankenship, a former executive at Apple Computer, Tesla Motors and Gap, Inc. In his entertaining speech, Blankenship noted, “Do something that is going to impact your industry forever.”
Do something that is going to impact your industry forever.
This resonated with me as it largely aligns with the current state of the industry. Digital mortgage technology is not just about gaining one benefit. It’s about the myriad of benefits that come with an end-to-end digital mortgage process. Fortunately, the ongoing adoption of digital processes that is taking place today will have a lasting impact on the mortgage ecosystem.
Tech Talks: Digital without the Disruption
Shifting gears, a highlight of the conference was eOriginal’s demo in the Tech Showcase. Last year at MBA Tech 2018 in Detroit, we demonstrated what we were bringing to the market. This year, we highlighted the evolution of the market and proved that the promise of digital mortgage is in fact a reality. To do this, we focused on a real-life scenario that recently took place—a digital closing in Texas.
Dennis Pospisil is Senior Vice President at Republic Title of Texas, the settlement agent that conducted the digital closing. He joined eOriginal’s Chief Product Officer, Simon Moir, and Senior Product Manager, Alex Tepe, on stage for a six-minute Q&A-style presentation. Moir and Tepe asked Pospisil about his experience with the digital closing as well as what he had to do to prepare for a paperless settlement.
Believe it or not, Pospisil found out that the closing would be digital just 24-hours ahead of time. Throughout the conversation, he emphasized how easy the process was—it required no training, no contract, and no fees. An iPad was used for the closing, but any type of connected device with a browser and sufficient screen capacity could have been utilized. DocsDirect, the document prep provider, delivered the lender docs, as well as a one-page training document for Republic Title of Texas. A bonus highlighted by Pospisil was the borrower’s excitement over the ease and convenience of a digital closing. Clearly, all parties involved were more than satisfied with the experience.
eNote Volumes on the Rise
So why are electronic notes important to digital adoption? An eNote is an electronic version of what has traditionally been a paper document. Since it is electronic, it needs to be created, signed, and managed in a specific way to ensure that it has the same legal enforceability as paper. This is the most critical document for all parties in the mortgage ecosystem, including lenders, originators, warehouse lenders, custodians, investors, and servicers, as its validity is essential for the downstream life of the loan on the secondary market. eNotes allow tech-forward lenders to maintain agile operations and achieve greater liquidity than they can achieve through traditional paper processes. As of April 1, 2019, 376,618 unique eNotes have been registered on the MERS® eRegistry. The mortgage industry can continue to expect exponential growth of eNote production in 2019.
Until Next Year, MBA Tech
As the Dallas skyline faded into the distance, I spent some time on the flight reflecting on my experience at the conference. The acceleration of the mortgage industry’s digital transformation comes from all sides. Adoption by originators, custodians, settlement and title agents, doc prep providers, warehouse lenders, servicers, the government-sponsored enterprises (GSEs), and MERS is crucial for its success.
During MBA Tech 2019, it became abundantly clear that digital mortgage isn’t just a promise for the future. It’s a reality today.