Posted by MistarellaFL on 7/3/06 12:34pm
Msg #130537
Alta explanation for borrowers
Can someone give me a heads up on a better explanation of Alta?
I'm not sure I get it, and want to be clear on tbe explanation.
TIA
| Reply by MistarellaFL on 7/3/06 1:26pm
Msg #130548
OK, What I know about it
is that American Land Title Assn (alta) provides forms, not insurance.
Charges can be anywhere from $25-300+, for a variety of endorsements.
I need to know generally about the endorsement fees.
No one is touching this inquiry with a 10-ft pole, so I guess I am not the only one with confusion, LOL.
Except for the fact that I could not provide a satisfactory explanantion to a brw,
I probably wouldn't have given it a second thought myself.
If I can't get an answer here, I'll expand my research and advise ya'll of what I've learned.
| Reply by GWest on 7/3/06 1:53pm
Msg #130560
Re: OK, What I know about it
ALTA (American Land Title Ass) is a form of title insurance. The endorsements are to the title policy and the list of endorsements are numerous. The Lender requires endorsements for difference things, ie. property address, adjustable rate loans, assignment of deed of trust, etc.
If you read the lenders instructions to title they list the endorsements they want in addition to the ALTA Title Policy.
Possibly if you have a title company that you work with alot, they can give you a list of endorsements and what they cover.
If the Borrower has questions as to what these are they should contact the title company.
| Reply by sue_pa on 7/3/06 1:56pm
Msg #130561
Re: OK, What I know about it
Not sure what you are asking. Why and how did ALTA ever come up in conversation? Endorsements are the equivalent of 'riders' to the insurance policy.
| Reply by PAW on 7/3/06 2:27pm
Msg #130574
Re: Why and how did ALTA ever come up in conversation?
Look on the HUD in section 1100 usually right after "Title Insurance" it will list the ALTA forms. Quite often with the word "ALTA" preceding the endorsement number.
| Reply by AngelinaAZ on 7/3/06 3:12pm
Msg #130587
Re: Why and how did ALTA ever come up in conversation?
I get this question sometimes... in purchases and refi-s. Especially with lower income or people that don't speak English as a first language. They see the words Title Insurance and they get stuck on the word insurance. They want to know the difference in the Title Insurance and the Homeowner's Insurance. In their minds... they already paid the Taxes and Insurance and they think they are being charged again.
| Reply by MistarellaFL on 7/3/06 8:59pm
Msg #130645
Sue, the alta endorsement fees are listed on the HUD n/m
| Reply by sue_pa on 7/4/06 7:47am
Msg #130678
Re: Sue, the alta endorsement fees are listed on the HUD
I'll have to pay more attention. I looked at the 2 I had for yesterday and they both just listed endorsements & the appropriate numbers, no mention of ALTA.
| Reply by AngelinaAZ on 7/3/06 2:03pm
Msg #130563
I'll touch it...
But this should not be construed as legal advice...
The definition of the ALTA POLICY (and it is an insurance policy):
A title insurance policy that protects the interst in a collateral property of a mortgage lender who originates a new real estate loan.
Here is the difference in coverage of an Owner's Title Insurance Policy:
A STANDARD COVERAGE POLICY (not ALTA) normally insures the title as it is known from the public records. In addition, the standard policy insures against such hidden defects such as forged documents, conveyances by incompetant grantors, incorrect marital statements, and improperly delivered deeds.
An EXTENDED COVERAGE, as provided by an ALTA policy, includes the protections of a standard policy plus additional protections. An extended policy protects the homeowner against defects that may be discovered by inspection of the property: rights of parties in possession, examination of a survey, and certain unrecorded liens.
Things NOT COVERED by either policy are:
1) defects and liens listed in the policy
2) defects known to the buyer
3) changes in land use brought about by zoning ordinances
In a nutshell... Title Insurance is a contract under which the policyholder is protected from losses arising from defects in the title that occurred before issuance of the policy. It is considered 'formal defense' of title.
I hope I helped and didn't just give you a bunch of crap you already had! 
| Reply by AngelinaAZ on 7/3/06 2:23pm
Msg #130571
The Reason for it....
Proof of ownership is evidence that title is marketable. A deed itself is no considered sufficient evidence of ownership. Even though a warranty deed conveys' the grantor's interest, it contains no proof of the condition of the grantor's title at the time of conveyance. The grantee needs some assurance that he or she is actually acquiring ownership and that the title is marketable. A certificate of title, title insurance or a Torren's certificate (depending on the state you are in) are commonly used to PROVE ownership.
All the information provided comes from the Transaction Coordinator handbook at the TC that I do in-house stuff for.
As far as pricing... in AZ it is generally done by the selling price (however the Lender's policy cannot exceed the loan amount).
For example, here are some approximate quotes:
$100,000 Home - Standard policy is $504.
$100,000 Home - Extended policy is $756.
$200,000 Home - Standard policy is $702.
$200,000 Home - Standard policy is $1052.
These are quotes based on the most common and most required endorsements.
| Reply by AngelinaAZ on 7/3/06 2:24pm
Msg #130572
Oops, the last quote of $1052 was for extended. n/m
| Reply by PAW on 7/3/06 2:45pm
Msg #130583
Rates in FLORIDA
The minimum title insurance premium rates are filed with the Department of Insurance in Florida. These rates represent only the risk rate. They do not include search and examination fees.
For the title company that I work with the most, the Owner's coverage (based on the appraised value) is 0.5% (that's one half of one percent) of the value. Lender's coverage is determined by the lender and administered by the DofI.
The seller customarily pays for the owner's title insurance, but this practice is negotiable. The purchaser/borrower usually pays for the lender's policy.
For specific questions, contact the Florida underwriting personnel.
| Reply by Gerry_VT on 7/3/06 2:03pm
Msg #130562
ALTA also publishes a rather strict set of standards for land surveys, so if the real estate transaction includes a land survey, the ALTA standard could specify how the survey is to be done.
| Reply by Janlee_MI on 7/3/06 2:15pm
Msg #130566
ALta Sets the standards to all title insurance companies to
be able to issue policies. Be it Surveys, Legal Discriptions, Exceptions to title, how long of search needs to be done. Alta are also endorsements which are riders to the policy.
But it is an American Land Title Association. 99 % of all Title Companies are members of the Association.
| Reply by PAW on 7/3/06 2:14pm
Msg #130565
For FLORIDA, most sales, especially of new construction, requires at least TWO and most often THREE endorsements to the Title Insurance Policy. Those endorsements (which further define or restrict the coverage) are:
FL Form-9 (Restrictions, Encroachments, Minerals)
8.1 Endorsement (Environmental Protection Lien Endorsement)
5.1 Endorsement (Planned Unit Development Endorsement) - Only if the property is in a PUD
For more information, see the Stewart Title Virtual Underwriter at:
http://www.vuwriter.com/vuforms-links.jsp?displaytype=0&statecode=FL
| Reply by MistarellaFL on 7/3/06 9:27pm
Msg #130651
Re: Alta explanation for borrowers-thanks Paul
for that link, but I looked for it online and couldn't find it.
Getting ready to start new construction this fall with a local builder, so my new-found knowledge may be beneficial, even if I never have to explain it to another brw.
I hate to be in a room full of professionals who are conversing about a particular subject
and I know little about what they are talking about.
You da best!
| Reply by John_NorCal on 7/3/06 6:41pm
Msg #130627
Re: Alta explanation for borrower, why is this coming up?
These are explanations that the lazy a$$ loan officers, Realtors are supposed to be giving to their clients. As a signing agent it is not our responsibility to explain the ins and outs of every document, we are to point out what the document is, the purpose of the document and that is it. If I have to sell the loan, then I want part of the commission. I have been a Realtor and a loan officer, and I would never want someone else explaining my documents.
| Reply by John_NorCal on 7/3/06 6:42pm
Msg #130628
P.S. All this for $75.00 signings?? n/m
| Reply by MichiganAl on 7/3/06 7:29pm
Msg #130637
Because knowledge is an important tool
Even if it never comes up, even if it's beyond my scope, the more I know, the more valuable I am at a signing. And if someone asks, "what's ALTA?" I don't think it's UPL or beyond what I'm allowed to say to give them a general description. Just another difference between a $50 point and sign notary, and an experienced, knowledgeable signing agent that saves a lot of grief and uncertainty at a signing. And you can bet when you're working directly with title and mortgage companies, this is the type of knowledge that distinguishes someone. I think this is a great question and discussion.
| Reply by MichiganAl on 7/3/06 7:32pm
Msg #130638
P.S. Real estate experience isn't necessary either.
But I bet it comes in handy at times.
| Reply by MistarellaFL on 7/3/06 9:16pm
Msg #130648
Re: Because knowledge is an important tool
I agree, Al, and I think it is a legit question from the brw.
I'm not a snob, but I quit doing $75 signings, and because I don't want to
accept fees like that anymore, I believe I owe it to myself and the hiring parties
I work with, to know or learn what certain fees are related to.
Usually when I explain to a brw who questions the alta endorsements, I explain
it is additional fees related to the title insurance, underwriting, and up until today,
that response sufficed.
If I can answer a brw's question w/o calling the L/O or title (and not UPL'ing),
I prefer not to. Especially if it is non-"why" related.
| Reply by MistarellaFL on 7/3/06 9:18pm
Msg #130649
Thanks for sharing your knowledge and opinions n/m
| Reply by TitleGalCA on 7/3/06 9:27pm
Msg #130652
First, this topic is simply not necessary for a notary signing agent to have extensive knowledge of. A general understanding is perfectly acceptable for a signing agent.
For a general explanation, the current standard ALTA policy was born because most loan originators are national and other factors such as the government-backed pooling of loans, lenders perceived the need for standardized title insurance policies. Loan originators, who are now required to warrant compliance with title insurance requirements to investors, did not want to have to read and compare local policy forms. They needed uniform policies that can be accepted with a brief review. They got that product thru ALTA, who is national, vs. CLTA (California) who is local.
Also, secondary market lenders need reliability in the instruments that they sell to investors, and make those requirements to meet the needs of the securities markets. The secondary market for residential mortgages is the single most important source of demand for title insurance because its two largest players, Fannie Mae and Freddie Mac both make detailed requirements for loan title insurance as a prerequisite to buying mortgages from an originating lender.
When purchasing a home, the buyer gets an Owners Policy, protecting him from a variety of issues, as simple as protection from an interest in your property to zoning violations. Coverage varies according to requirements. Most Title Insurers now offer a really great product in their comprehensive Homeowners Policies. The second policy issued is to the Lender, and they always want ALTA coverage (national). It is just the standard.
So, in a sale…two policies – one for the homeowner and one for the lender – for a refi, one policy to insure their interest in the land.
During a signing, when hard pressed to give an explanation I would simply say, "ALTA stands for American Land Title Association and is the universally accepted standard for title insurance for Lenders. The lender won’t fund the loan without this basic title insurance that protects their interest in the property”. That’s it, and that is all I would say. It explains who ALTA is and the purpose of the fee on the settlement statement, without having to be an expert in title insurance.
One less thing to worry about!!
| Reply by TitleGalCA on 7/3/06 9:31pm
Msg #130653
As an aside in re: endorsements
The lender also will specify those. Most common are the environmental endorsment (no charge), PUD endorsments, Condo endorsements, etc. It is not necessary to know the form number of these for a signing agent.
It is rare that most of these common lender endorsments have a fee...for those outside of the norm, there may be a fee for endorsments that protect against violation of CC&R's, and others, but generally - they are nominal.
| Reply by MistarellaFL on 7/3/06 9:35pm
Msg #130654
Re: As an aside in re: endorsements
It was a PITA brw, wanted to know why alta endorsements in additon to title insurance, L/O and TC closed today, of course. But, a legit question.
It was the first time a simple explanation wasn't enough.
And, it is nice to know for future reference.
Thanks again!
| Reply by TitleGalCA on 7/3/06 9:39pm
Msg #130655
You know what...Mistarella
If the standard blurb about "being a notary and a signing agent, and no other expert in anything having to do with your transaction" isn't enough for the PITA borrower...I simply jot down the telephone numbers of the experts so Mr. PITA Borrower can avail himself of all the information he can choke down.
As the SA, I am NOT the Wizard of Oz that has all the answers. "PITA" says it all!!
| Reply by MistarellaFL on 7/3/06 9:48pm
Msg #130656
Re: You know what...Mistarella
Well, we did that, they're off for the holidays, and that just got us off on the wrong foot.
(HUD 1st doc for review whilst I record ID info in journal)
He kept telling me he would rescind if no one could explain it to him
to his liking. I got tickled, and told him I was on his side, and I wanted to
have it explained to me, too.
He just didn't understand the diff's w/ title ins. and the alta endorsements,
and I couldn't enlighten him. TGI4J
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