Study: D.C. Metro homebuyers save big by shopping for title services

Washington, D.C. (17 February 2011) – SHOPPING FOR TITLE SERVICES in the District of Columbia could save homebuyers up to $1,180, according to a recent study, while shopping in Maryland or Virginia could mean a savings of over $900.
"This serves as a reminder to homebuyers and their agents the importance of shopping for a title company," said Todd Ewing, president of Federal Title & Escrow Company.
The study, commissioned by Federal Title and conducted by Veris Consulting from February 1 through February 11 of this year, compared title charges among Washington Metro Area-based title companies, revealing stark differences in charges for identical real estate purchase transactions.

STUDY CRITERIA · Only Washington Metro Area Title Companies that published a settlement fee and enhanced title insurance premiums for Owner’s and Lender’s Coverage. · Purchase Price: $500,000.00 · Loan Amount: $400,000.00 (1st Mortgage Only – not including costs for simultaneous 2nd Mortgages) · Type of Title Insurance: Enhanced Coverage (aka, Extended, Standard, Homeowners) Full Premium/Non-Reissue Rate · Owner’s & Lender’s (Simultaneous Issue) Policies · The “Total Title Charges” figure excludes Government Recording Costs & Recordation Taxes and Location Survey

It included only those title companies that published their settlement fees/charges and title insurance premiums for both owner’s and lender’s coverage – also known as title charges – on their respective website.
Further, the study used identical criteria for real estate purchases in the District of Columbia, Maryland and Virginia. In the District of Columbia, the difference between the most expensive and the least expensive title services was $1,180; in Maryland, the difference was $935; and in Virginia, the difference was $934.
"About 70% of variable closing costs paid by the average D.C. Metro Area homebuyer are title-related," Ewing said. "Yet, very few homebuyers, or their agents, take the time to shop settlement companies to compare title charges."
Title expenses such as settlement fees, title insurance and lender origination charges may vary among service providers, and these kinds of expenses are known as variable closing costs, Ewing said.
He added that comparing title charges among D.C. Metro Area settlement companies can be a daunting task for the untrained eye, which may explain why so few consumers take the time to research title companies.
The study also examined each title company's Better Business Bureau rating to determine if there was any connection between higher title fees and ranking but found none.
Out of 25 companies, six had rankings and the only two that were accredited – Federal Title & Escrow Company and Express Title – were among the lowest and highest cost title service providers, respectively.
"The study suggests that higher fees do not equate to a higher BBB rating," Ewing said. "To the contrary, Federal Title is one of the lowest cost title service providers and also has one of the highest Better Business [Bureau] ratings, proof that a title company can offer top-notch customer service at competitive prices," he said.
While the study mostly focused on how shopping for title insurance services can amount to significant savings for homebuyers, fees charged to the home seller were also examined. Seller fees ranged from $393 to $736 and averaged around $500.
Below are the results of a study of rates published online by D.C. Metro Area title companies. Study criteria was the same across the board, and results are accurate as of February 11:

DISTRICT OF COLUMBIA

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Company Name / Website	Total Title Charges	Seller Fees	BBB Rating
Federal Title & Escrow Co.	$3,190.00 [PDF]	$495.00 [PDF]	(A) A+
Counselor’s Title, LLC	$3,265.00 [PDF]	$443.00 [PDF]	NA
Settlement Pros	$3,580.00 [PDF]	$438.50 [PDF]	NR
Stewart Title	$3,925.00 [PDF]	not published	NR
Pinnacle Title	$4,084.99 [PDF]	not published	NA
National Settlement Services	$4,089.99 [PDF]	not published	NA
District Title	$4,090.00 [PDF]	not published	A+
Paragon Title	$4,125.00 [PDF]	$454.50 [PDF]	B
Mid-Atlantic	$4,130.00 [PDF]	not published	NA
Capitol Title	$4,135.00 [PDF]	not published	A+
KVS Law Group	$4,139.99 [PDF]	$520.00 [PDF]	NA
RGS Title	$4,185.00 [PDF]	$641.00 [PDF]	NA
Express Title	$4,339.99 [PDF]	not published	(A) A+
Avenue Settlements	$4,370.00 [PDF]	$468.75 [PDF]	NA

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(A) = Accredited | NR = Not rated | NA = Not listed

MARYLAND

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Company Name / Website	Total Title Charges	Seller Fees	BBB Rating
Federal Title & Escrow Co.	$2,300.00 [PDF]	$495.00 [PDF]	(A) A+
Counselor’s Title, LLC	$2,375.00 [PDF]	$443.00 [PDF]	NA
Settlement Pros	$2,755.00 [PDF]	$410.00 [PDF]	NR
Stewart Title	$2,787.50 [PDF]	not published	NR
Paragon Title	$2,870.00 [PDF]	$454.50 [PDF]	B
Olde Key Title	$2,943.00 [PDF]	$433.00 [PDF]	NA
Mid-Atlantic	$2,948.00 [PDF]	not published	NR
Capitol Title	$3,045.00 [PDF]	not published	A+
Pinnacle Title	$3,045.00 [PDF]	not published	NR
RGS Title	$3,045.00 [PDF]	$530.00 [PDF]	NR
National Settlement Services	$3,050.00 [PDF]	not published	NR
KVS Law Group	$3,100.00 [PDF]	$520.00 [PDF]	NA
Village Settlements	$3,149.00 [PDF]	not published	NR
Express Title	$3,175.00 [PDF]	not published	(A) A+
Avenue Settlements	$3,235.00 [PDF]	$538.75 [PDF]	NA

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(A) = Accredited | NR = Not rated | NA = Not listed

VIRGINIA

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Company Name / Website	Total Title Charges	Seller Fees	BBB Rating
Lighthouse Title	$2,321.00 [PDF]	$570.00 [PDF]	NR
Federal Title & Escrow Co.	$2,380.00 [PDF]	$495.00 [PDF]	(A) A+
Counselor’s Title, LLC	$2,455.00 [PDF]	$443.00 [PDF]	NA
New World Title	$2,550.00 [PDF]	$535.00 [PDF]	NA
Dominion Title	$2,595.00 [PDF]	$470.00 [PDF]	NA
All American Title	$2,645.00 [PDF]	$393.00 [PDF]	NA
Settlement Pros	$2,960.00 [PDF]	$411.00 [PDF]	NR
National Settlement Services	$2,980.00 [PDF]	not published	NR
Republic Title	$3,025.00 [PDF]	$460.00 [PDF]	NR
Key Title	$3,029.00 [PDF]	$624.00 [PDF]	NR
Mid-Atlantic	$3,060.00 [PDF]	not published	NR
Stewart Title	$3,087.50 [PDF]	not published	NR
Capitol Title	$3,125.00 [PDF]	not published	A+
Pinnacle Title	$3,125.00 [PDF]	not published	NA
Global Title	$3,175.00 [PDF]	not published	B
RGS Title	$3,175.00 [PDF]	$736.00 [PDF]	NR
District Title	$3,180.00 [PDF]	not published	A+
KVS Law Group	$3,180.00 [PDF]	$520.00 [PDF]	NA
Avenue Settlements	$3,235.00 [PDF]	$418.75 [PDF]	NA
Express Title	$3,255.00 [PDF]	not published	(A) A+

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(A) = Accredited | NR = Not rated | NA = Not listed

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Temporary foreclosure moratorium issued for some service members

If you are a veteran, active duty service member, or surviving spouse, and you are having difficulty making your mortgage payments, it is imperative that you contact your mortgage servicer immediately.  

Freddie Mac issued a statement to its mortgage servicers last month to delay the initiation of foreclosure proceedings against military service members, who are released from active duty for a period of nine months from the time of discharge, through the end of 2011.  

This is an attempt by Freddie Mac to give additional time to its mortgage servicers to assist borrowers in preventing the loss of their home to foreclosure.  However, this program by Freddie Mac only applies to those service members who have a Freddie Mac-owned mortgage.

Fannie Mae announced last September its effort to assist surviving spouses and wounded warriors who may be struggling with their mortgage payments, to prevent foreclosure as well.  

The “Unique Hardships” program enables eligible wounded warriors and surviving spouses to either reduce or suspend their monthly mortgage payments for a six-month period.  Also, as part of the program, any reporting to credit bureaus for late or missed mortgage payments would also be suspended during the specified six-month period.  

Fannie Mae also created a special hotline number (877-MIL-4566) and a new consumer education website, knowyouroptions.com, to provide struggling homeowners with additional resources and guidance.

In addition, the Department of Veterans Affairs also has counseling and other resources available, although it is limited in the assistance it can provide to military members with non-VA loans.

Bank of America to charge 'grace period' fee for some customers

Traditionally, mortgage customers had a 15-day grace period in which they were allowed to make their mortgage payment, without incurring late fees and penalties.  However, Bank of America is changing its method in handling the 15-day grace period.  

Effective February 14, 2011, Bank of America will begin charging some customers a fee if they make their mortgage payment near the end of the traditional grace period.

In a notice of “Upcoming Change to Fees,” which was sent to customers recently, Bank of America advised that: “If your payment is due on the first of the month and you have a 15-day grace period, you can schedule your payment to be drafted prior to and including the ninth of that same month to avoid a service fee.”  However, “[i]f you schedule your payment to be drafted on or between the 10th and 16th of the month, you will be charged a $6 service fee that will be included in your total deducted amount.”

An exception to this new $6 service fee is by making your automatically drafted payment from your Bank of America checking or savings account, even if your payment is drafted on the 10th through the 16th of the month.

Homebuyers may apply for D.C. Tax Abatement up to 3 years after closing

DC Tax Abatement - I didn’t know about this program and I have already settled.  Is there anything I can do?

You can apply for tax abatement after the fact, according to the Recorder of Deeds office.  It must be within three years of your original purchase date.

You will still need to meet the guidelines and supply proper documentation. You must have met the property purchase price threshold, used the property as your principal residence and be domiciled in the District of Columbia.  

In addition, you will need to include with the tax abatement application:

• A copy of your purchase contract
• Your settlement statement
• Your last two income tax returns
• Two most recent paystubs and W-2’s for the tax years provided

The Recorder of Deeds office will review the information provided and let you know if there is any additional information they will need from you. Be prepared to provide the tax returns, notarized statements, etc. for the period in which you purchased the property, as well as, the W-2 for the same period.  

If you qualify, you may be entitled to part of the transfer/recordation tax paid at settlement and the five-year exemption for real estate taxes, so make sure you request a refund!

For further information, feel free to contact Catherine Schmitt.

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Related:

• How to qualify for DC Tax Abatement 
• Overview of the DC Tax Abatement program

HOA and condo foreclosure in D.C. and beyond

The focus in regards to the foreclosure crisis has been directed almost entirely at mortgage foreclosures. But did you know that your homeowner’s association or condominium association has the right to foreclose on your property as well?

HOA and condo fees have largely been ignored during the recent housing crisis. However, as HOAs and condos have seen more and more delinquencies, they are becoming more likely to enforce their right to foreclose.

HOAs and condo associations have the ability to run up several thousand dollars in late fees, interest, fines and attorney charges for a delinquency that may total only a few hundred dollars. They then can use the threat of foreclosure to collect that amount and/or foreclose if necessary.

The typical action taken by an HOA or condo association with a delinquent homeowner is to record an HOA or condo lien for unpaid dues. This lien provides the HOA or condo with protection that the property cannot be sold or refinanced without first paying off the lien – thereby ensuring that the HOA or condo will not only be paid the delinquent dues that are owed, but also penalties and attorney fees. This lien is subject to any underlying mortgages that have already been recorded against the property. 

Then mortgage foreclosures were not as prevalent, this was typically not an issue. Recently however, the subordinate nature of an HOA or condo lien is a major cause for concern: When a mortgage lender forecloses on the property, the HOA or condo lien is often wiped out in the foreclosure, ending the HOA or condo association’s right to collect or enforce the lien.

One way to prevent this from happening is to go ahead and commence a foreclosure for unpaid dues.

One of the biggest concerns is that HOA and condo foreclosures do not face the same restrictions as mortgage foreclosures. In 33 states, an HOA or condo does not need to go before a judge to collect on the liens, so the level of scrutiny for an HOA or condo foreclosure is often considerably lower.

So while mortgage foreclosures have come under attack, HOA and condo foreclosures have come in under the radar, even though they can be just as devastating.

What can you do?  Well, ideally, you should try and make your HOA or condo payments on time to avoid the possibility of delinquency. But if you are unable to do so, don’t just ignore the HOA or condo and assume that the problem will go away – this approach could leave you in the same mess as if you ignore your mortgage payments.