September 12, 2011 ~ John Bethell, President and Owner of John Bethell Title Company, Inc. announced today that the company has purchased the assets of Bloomington based Best Title Company, LLC from Dan Stewart. The purchase will become effective October 1, 2011. Stewart will then join John Bethell Title in the position of Senior Vice President and Title Counsel. Stewart will be primarily responsible for managing the title services team. Julie Vonderschmidt, Stewart’s Closing Processor has also agreed to join John Bethell Title.

“Dan and I have discussed combining our businesses off and on for several years,” said Bethell. “More recently John Bethell Title has been looking to add a highly experienced title professional to our team. As our leadership team considered what steps to take, it seemed natural to follow up again with Dan, a thirty year veteran of the business. This time, Dan’s goals coincided with ours. Dan and Julie are both great additions to our company.”

Stewart said “John and I share a common vision of treating customers fairly and providing excellent service for good value. It is more challenging today for one person to do everything it takes to close a transaction. I am thankful that my business has grown, but there are only so many hours in the day. Joining his larger organization will allow me to continue to serve my customer base and to assist his management team in serving our growing market.”

Until October 1st, Best Title will continue to service and close its pending transactions. After October 1st any pending transactions will be closed by John Bethell Title. Post closing services for Best Title’s transactions will also be performed by John Bethell Title.

Dan Stewart and Best Title Company, LLC have been a fixture in Bloomington’s real estate market for over thirty years.

Founded in 1973 and purchased by Bethell in 2002, John Bethell Title Company, Inc. is a leading provider of title insurance and settlement services to the greater Bloomington area. The company operates from one location at 329 South Walnut Street in Bloomington.

Last Friday evening, June 17th, we completed our purchase of the Bloomington Indiana office of Meridian Title Corporation. All of Meridian’s pending title insurance and closing transactions are being converted and will be closed at John Bethell Title.

Mike Duncan and Rose Henry are now located at our World Headquarters. They will work to ensure that Meridian’s existing client base, especially those with pending transactions, are well taken care of during this transition. Mike’s direct line is 812-245-1061. Rose’s direct line is 812-245-1068. Meridian’s phone, fax and emails are being forwarded to John Bethell Title.

Any required conversions of title insurance commitments and/or closing protection letters will be completed during the coming week. Affected clients will be individually contacted. Closings may be scheduled by contacting Mike, Rose or any other member of the John Bethell Title closing team.

Requests for post closings services on Meridian transactions should be directed to Mike Duncan. Mike will coordinate these requests with Meridian for you.

Sandi Weddle, Meridian’s third employee, has been granted a leave of absence and will not be joining us at this time.

Thank you to everyone who expressed their congratulations and good wishes last week. Especially all of Meridian’s clients who continued to place new orders with us after the purchase was announced. That speaks volumes for how well you regard Mike, Rose and our company. All of us here are looking forward to providing an even greater level of service to you in the coming months.

~John Bethell

Today, June 13th, we announced that the company has entered into an agreement to purchase the Bloomington Indiana office of Meridian Title Corporation. Meridian’s three employees, Mike Duncan, Rose Henry and Sandi Weddle have accepted positions with John Bethell Title. The transaction will become effective June 17, 2011.

Mike, Rose and Sandy are experienced and highly regarded title professionals. I’m delighted that they’ve chosen to join us. They will fit right in with our great team and allow us to improve upon our market leading service.

Mark T. Myers, Chief Executive Officer of Meridian Title Corporation said, “Bloomington was our only office in southern Indiana. While considering whether to leave the market we were most concerned about our employee’s well being. As we talked, it was obvious to us that John shared this philosophy. We think this is a win for everyone involved.”

We are also acquiring a great deal of historical land title records. With the addition of Meridian’s back files, we will now have access to prior title work on about 80,000 transactions. These prior files reduce the need for costly and time consuming title searches allowing our customers to close their deals within shorter time frames.

Meridian will continue to close its transactions through June 17, 2011. Beginning June 20th, any pending transactions will be converted and closed at John Bethell Title. Post closings services on Meridian transactions will be coordinated by John Bethell Title.

Meridian Title Corporation is one of Indiana’s largest title insurance agencies with over thirty offices in Indiana, Illinois and Michigan. Meridian purchased the then Bloomington Abstract Company in 2003. Bloomington Abstract was founded by the late Martha Sims in the early 1950’s.

Please be assured that taking care of Meridian’s existing clients, especially those with pending transactions, is our number one priority. While a few of the transition logistics still need to be worked out, Mike, Rose and our leadership group have a plan in place to ensure that we meet all of our client’s expectations.

June 20, 2011: We’ve completed our acquisition. Here’s a link for details. http://www.johnbtitle.com/john-bethell-title-company-inc-completes-purchase-of-bloomington-office-of-meridan-title/

Imagine for a moment that you’ve sold your house. While reviewing the settlement statement at your closing you see a charge equal to one percent of the selling price going from you to an investment banker in New York City. “What the heck is that for?” you demand to know. “Well”, says the closing agent, “all the properties in your development are subject to a private transfer fee.”

The closer goes on to explain that the original developer created a covenant that provides that for the next 99 years every time a property in your development is sold, one percent of the sales price must be paid to the developer. The developer then sold this right to receive these payments on your property and every other property in the development to the New York investment banker. The investment banker packaged this stream of future payments along with payments from many other developers and sold them as a security to other investors seeking a steady and somewhat predictable source of income.

Insisting that you didn’t know about this when you bought your property, the closer pulls out a copy of the
recorded subdivision covenants and restrictions. “It’s right here in black and white,” he says, “on page 47 after the ‘no RV’s in the driveway’ and right before the ‘no chickens in the backyard.’”

This doesn’t sound like a closing that I’d want to conduct.  And I don’t think that I’d want to be the real estate agent that sold them the house, either.

These covenants exist in a number of states and are still legal in about twenty two of them. I am not aware that any such restrictions had yet been created in Monroe County. Fortunately, thanks to a new law passed in Indiana, we won’t have to worry about that any more.

House Bill 1541 was signed into law this week by Governor Daniels. It expressly prohibits these kinds of “Private Transfer Fees.” The bill was the work of the Indiana Land Title Association and was supported by many other real estate trade groups including the Indiana Realtors Association. This is a victory for the free and unencumbered transfer of real property. These fees are predatory and in many states difficult to find in the public record.

The new law also elimates the risk caused by unscrupulous title companies that do not search for recorded restrictions. Instead, they put general exclusions in their policies to avoid liability for such things.

The Federal Housing Finance Agency has proposed a rule that would prohibit any government mortgage agency from participating in a mortgage on properties that are subject to these fees. Hopefully such a ban will go a long way to eliminating these private transfer fees and forcing their purveyors to crawl back under the rock from whence they came.

The Tax Man Cometh!

We conduct over one thousand closings a year. Occasionally we hear the snicker; occasionally we see the wink. Someone thinks they’re sticking it to the man by claiming a homestead exemption on more than one property. Well guess what? The man is all over that now.

Monroe County officials searched their data base and discovered about forty individuals who were receiving homestead credits on multiple properties. You’re only entitled to claim one. A gotcha letter was dispatched to the offending property owners. The County generously recalculated the taxes on the second property. This corrected amount was then added to this year’s tax bill―with ten percent penalties. One owner of a high priced property owed an additional ten thousand dollars!

When the property tax caps went into effect a couple of years ago the value of a homestead exemption increased exponentially.  The tax cap is one percent of assessed value for property with a valid homestead exemption.

Without the exemption the cap is two percent. Since most real estate taxes in Monroe County are at or near the cap, the annual value of the exemption is significant. A homestead property with a two thousand dollar annual tax bill would be four thousand dollars without the exemption. The difference between the two is value of the exemption, in this example its two thousand dollars. Not chump change by any stretch.

With every sale transaction there is a sales disclosure form filed with both the County and the State. The disclosure  requires the unique portion of the buyer’s social security number if the form is used to apply for the homestead credit, which it almost always is. This information goes into the state’s computer data base. In this case Monore County officals searched their own data base for matching names in only Monroe County. The ability exists to search for matching names anywhere in Indiana using the Sales Disclosure Data Base maintained by the Indiana Department of Local Government Finance.This will finger the guy who claims homestead exemptions on properties in Bloomington and South Bend.

I can almost hear the snickers turning into moans as property owners find they owe the man a few more thousand dollars of real estate taxes.

Combining the RESPA based Good Faith Estimate with the TILA disclosure required by the Truth In Lending Act into one easy to understand form is one of the many mandates given the recently created federal Consumer Finance Protection Bureau. I wrote last week in my February Mortgage Market Share commentary about an American Land Title Association suggested version of such a combined form. (click archives button on right sidebar) 

Others are also noticing that the current form of GFE falls short in providing consumers with all the information that they require to make intelligent decisions. Today’s New York Times contains an article about other problems with the form. It’s a good read and here’s the link.

 http://www.nytimes.com/2011/03/27/realestate/27Mort.html?_r=1&partner=rss&emc=rss

What’s your favorite indicator of where the market it going? Each month I publish a variety of Monroe County statistics hoping to lend perspective to our local real estate and mortgage finance markets. Mortgage and deed recordings, transfers, foreclosures started and finished just to name a few. I slice them, dice them and try to put them in meaningful relationships with a cool graph or two.

The Monthly Mortgage Market Share report reflects my unfulfilled desire to find the holy grail of market indicators. The one stat that above all others would tell me when the market would turn, how vigorous it would be and when it would end. Were I able to find such a metric, I’d be forever free from the anxiety of living or dying with daily order counts―a curse I’ve endured for over thirty years.

My job would be easy. My confidence would soar. I’d know exactly what decisions to make and I’d always be right. Staffing, capital expenditures, expansion would all be easy considerations. Alas, my search continues. I do know if asked that “Well, we’re busy in the summer, and slow in the winter.” But that’s about it. Anything else I can add is history; what happened last month, quarter or year.

So I still form my opinions about the future from anecdotal evidence that over the years I’ve learned to trust. For example, I mentally track the number of new for-sale signs between home and the office every week. Before email and Adobe® attachments became common place, I could tell how things were going by how much fax paper we used every day. More than a ream and I knew that we’d be rocking soon.

One of my favorite market predictors is the weekend parking lot indicator. It’s quite simple. On any Saturday or Sunday, I just look out my office window and across the street to Re/Max Professionals’ parking lot. When it’s empty, I know that none of my friends are schlepping buyers around looking for dream houses. When it’s full though, especially with cars I don’t recognize, get ready. The market will be turning soon. Make sure there’s paper in the fax. Right now this indicator is pretty darn bullish.

What’s your favorite market indicator?  Leave a comment and let the world know.

See our Careers page under the Contact tab for our open positions.

Recently a closing was delayed, let me share this scenario offered up by one of our Closing Specialists, Stephanie Monzo…

You have a client purchasing a property and plans to bring  $10,000.00 as a down payment for the purchase.  You have prepared your client to wire the funds to the Title Company and explained the GF Law.  However, due to a few delays in the process figures do not arrive to the Title Company until late the day before closing.  Your client makes a trip to the Bank and estimates they need to bring $10,600.00 based on figures from the GFE.  The bottom line on the HUD ends up being $10,750.00.  The buyer shows up with $150.00 in a cashiers check.  DUE to the Good Funds Law a Title Company cannot accept the cashiers check.  Any funds $10,000.00 and over must be in the form of wire funds.  A cashiers check or personal check  will not be acceptable.

The point to this scenario is to always over estimate what your client should wire to the Title Company whenever you’re working with tight deadlines.  The Title Comapny can always refund the overage.

Mortgage foreclosures are once again making headlines. This time it’s about revelations that documents used by the lenders to prove to the court that the foreclosure is warranted may be faulty.

Here is a link to a great New York Times article about how this all came to light.

Courts require evidence in order to prove that a borrower is in default under their loan. Often this evidence is provided in the form of a sworn affidavit made by an employee of the lender. The affidavit states how much is owed and other pertinent facts necessary to establish that a foreclosure and resultant eviction is warranted.

The affidavit will state that the employee making it has personal knowledge of the facts. Apparently in many instances this may not be true. Lenders are accused of hiring employees just to sign hundreds of these affidavits every day without much understanding of what the affidavits meant, let alone whether the facts were true.

And if the evidence used to support the judgment of foreclosure is faulty, maybe the foreclosure itself is faulty? That’s what borrower’s attorneys will be arguing anyway.

Investors and homeowners that have recently purchased property that came through foreclosure are concerned. If the validity of the foreclosure is challenged because of a faulty affidavit or other reason, where does that leave them? Hopefully the new owners purchased or received an owner’s title insurance policy when they acquired the property. If the foreclosure is later challenged, in most instances the title insurance company will be obligated to defend the new owners in court.

In the unlikely (in my opinion) event the foreclosure is overturned, the title insurance company would either make a payment to secure the new owner’s title or pay the new owner the value of the loss up to the policy amount.

As far as new or pending foreclosures, the major national title insurers are considering requiring that the lenders agree to protect the title insurer from claims that the court proceedings are faulty. Otherwise the title insurers may not insure new purchasers against a challenged foreclosure.

The largest national lenders have postponed their foreclosure activities in the twenty three states where a court must approve a foreclosure. (Indiana is one of them.) Once they review their processes, they may resume the foreclosures or re-file the affidavits. On properties they now own where the foreclosure has been completed it will be interesting to see if they go back and re-open the foreclosure.

Lenders must also deal with the political fallout of fifty state attorney generals running for office while investigating their foreclosure practices. Class actions lawsuits are sure to follow.

This story is strangely fascinating. It’s like watching an avalanche or earthquake in slow motion ―not knowing what will be damaged or destroyed next, but being certain that something will.