Be aware that there’s a company out there offering a cash advance to homeowners willing to provide them the exclusive right to list the property for a period of 40 years. The interest is recorded in the public record. And three lawsuits filed against the company allege that the agreements the company provides their customers give the brokerage the right to foreclose on their clients homes if the homeowners’ heirs don’t assume their liability upon death.
The state of Florida has recently asserted that these kinds of agreement are illegal under Florida law. Real Trends (registration required) did a nice job shining some light on the process, and it’s not just happening here (nor is it only illegal here). The states of Pennsylvania and Massachusetts have now joined Florida in filing suit against a brokerage called “MV Realty,” alleging, among other things that the company targeted low-income and elderly homeowners and that they used deceptive and misleading marketing.
The article continues:
“The Attorney General in Florida stated that these liens are illegal under Florida law. MV Realty made more than 9,123 public record filings that might ‘cloud’ homeowners’ titles and Hillsborough County is one of the counties with a high number of public record filings, according to the attorney general’s office. At least 588 people in northeast Florida and southeast Georgia have signed up to the program.”
In addition, shortly before the time of this post’s publication, a Massachusetts court had granted a preliminary injunction prohibiting “homeowner benefit agreements” such as these from being offered or enforced until the pending case is resolved.
As always, we’ll keep an eye on this at FAN and continue to work with our real estate partners as well. We’ve already begun training our employees about where and how to spot the issue, and what to do. As we’ve always said, an up-front title search is the one of the most effective ways to protect all parties, especially when it comes to programs of questionable or unproven value. If you’d like to learn what to look for or how we can help you help your clients, don’t hesitate to drop us a note or give us a call.
If you somehow haven’t heard about Chat GPT in the past several weeks, take a moment to get caught up. If you don’t even have the time for that, take our word for it. The future is here. Technology has taken a huge leap.
Chat GPT is the AI-driven chat bot the abilities of which are breathtaking. More importantly, it’s a stark example of what it looks like when technology takes a significant step forward. Already, the Internet has exploded with discussion about how businesses can best employ Chat GPT in their own day-to-day operations. And the other big question? What’s coming next?
Chat GPT is a fantastic reminder that innovation—be it in the form of technology or ideas—doesn’t wait for anyone. History barely remembers the holdouts to innovation throughout the years, such as to the adoption of email, smart phones, the Internet, cars….possibly even wheels or sliced bread. And yet, we still see businesses across the title and real estate industry that prefer to do things the way they do because “that’s the way they’ve always done it.” These are the firms that decide new technology is too expensive, or that prefer to communicate with partners and clients the old fashioned ways. That may work for some folks in some situations. But the tide is turning.
Today, lenders are increasingly seeking partners who can help them with RON and digital closing technology. Those capabilities won’t be a “nice-to-have” much longer. Title agencies that aren’t capable of handling a lender’s RON requests will likely pay the price. Now’s the time to partner with a RON-capable firm if you’re not planning to adopt the technology yourself.
REALTORS, borrowers and even sellers are increasingly coming to expect—not just hope for—streamlined and efficient interactions with title companies and closers. Not voice mail tag. Not endless email threads. Modern communications via text and technology on their terms when they want the information. Down the road, this may become a deal breaker as lenders and REALTORS find that “traditional” settlement firms don’t fit their updated models.
The days of ferocious competition between title agencies, and a lack of cooperation, are also slowly fading. Today, the most successful title agents are partnering, collaborating and sharing resources for mutual benefit. In a competitive purchase market where variable costs are the name of the game; the most successful firms will be combining resources to earn their share of the market.
It’s still to be determined what impact Chat GPT will, in and of itself, have on title agents and the greater mortgage and real estate industry. It may go the way of the Beta VCR or Blackberry phone for all we know. But it’s another of history’s reminders that progress waits for no one. And challenging markets always bring about innovation. So whether that’s a modern approach to doing business or the use of new technology, it will be the businesses that heed that warning and ask themselves, earnestly, “what can we do better?” who will come through a challenging market cycle successfully.
Available, affordable housing is becoming more by the day, leaving lawmakers and city planners scrambling for possible solutions to this ever-growing problem. With several shopping centers and plazas being decimated by the pandemic and general economic decline, do these unique structures present a potential opportunity to solve this issue?
There is legislation coming forward this spring that would build upon a law passed previously in 2020 that makes it easier to convert vacant retail space into affordable housing for Floridians.
The new legislation includes incentives for counties and cities to redevelop vacant commercial space into housing, building upon the previous legislation that streamlined the development process by eliminating the need to rezone a property not previously designated for housing.
Skyrocketing rent has made living near the coast impossible for many lower-middle and low-income people, yet many work in these areas and are forced to take multi-hour commutes to get there. By creating affordable housing in the regions where people work, lawmakers can dramatically improve the lives of residents and help rebuild areas that were otherwise economically destroyed by the pandemic and everything that followed.
Despite the advancement of legislation that makes it easier than ever for municipalities to convert vacant commercial space into affordable housing, adoption has been slower than predicted or expected. Last year, St. Petersburg became the first city in the state to use the law actively, approving the conversion of a former lumber yard into 264 affordable apartment units.
Other governments, including Volusia county and the city of Cutler Bay, have explored options like converting malls into housing. However, these options are projected to be “market-rate” housing, which isn’t affordable for many residents.
Other cities, like Sarasota, have taken steps to ease the development of mixed-use projects along its busier commercial streets, including provisions to encourage developers to add “attainable housing” for residents at or below 120% of the median income of the area.
In Florida, abandoned or vacant shopping strips, plazas, and centers are abundant, lining major thoroughfares throughout cities in the state, with access to nearby transit and other infrastructure. By converting these otherwise derelict properties into affordable housing, lawmakers can aid the millions of residents considered cost-burdened or housing unstable.
Check out this great article from Florida Realtors for more.
This time of year is full of joy and goodwill, and the time for a season of cheer is here. We want nothing more than to keep the party going, so don't let your guard down regarding the dangers of wire fraud.
This story is certainly no ‘Twas the night before Christmas, but it’s another example of the importance of remaining vigilant. Grinchy criminals are constantly evolving and will be even more innovative in the new year.
This time of year moves quickly, and more than just our transactions are getting targeted. Virtual meetings are being watched, and outside of the real estate industry, fraudsters have their eyes on our holiday shopping.
Criminals strike when we let our guard down. We must suit up (just like Santa) to keep our holiday spirit intact. So, we put together these reminders with a holiday twist based on one of our favorite Christmas movies…Christmas Vacation.
Just like Christmas Vacation, we want everything to be just right in the end. So, we wish you Happy Holidays and hope your time with family is joyous, blessed and safe.
Evolving takes place in all parts of the world. In our personal and professional lives, progress happens when we find better ways to complete tasks that are more efficient and effective, and changes are put in place for the betterment of all parties involved.
Before proper title searches and insurance implementation, conveyancers were the “experts” who conducted title searches and signed legal documentation once the title was proven clear and ready for sale. This practice began in the early 1800s, but as the California Gold Rush ensued, conveyancers, abstractors, attorneys and title experts followed the rush to help parcel and sell the land.
The past ways of doing things could not keep up with the increase in title transactions strictly due to volume. So much was happening quickly, and in 1986, the court case of Watson v. Muirhead occurred. In this case, Watson hired Muirhead as the “expert” in purchasing a Pennsylvania property. Muirhead discovered title defects but still reported the title as good and unencumbered. Watson suffered losses from the unreported liens, and the case left no questions that changes were needed.
Much like the quick pace of the Gold Rush, the pandemic rushed in, and the industry needed to adapt and overcome to keep up with the new norm. It’s fair to say that many assumed everything would return to normal once the threat settled. Still, industry professionals found that implementing technological advances streamlined the title process.
Along with these changes came concern regarding the personal aspect of title closings. Regardless of the process, people have always been the backbone of the industry, and many questioned how technology would affect the personal relationships customers and clients had come to expect during settlements.
It’s clear today that the combination of the proper technology and experienced title professionals is the key to successful settlements, but let’s take a closer look at how we transition with technology as it propels us into a brighter, more compelling future.
Technology is here to stay, and the benefits for companies and customers help guide and direct the industry's future.
By now, you may have heard about “The Chainsaw Brothers,” our own CEO, Aaron Davis, and his brother Nate. When Hurricane Ian devastated the Port Charlotte community in Florida, they felt compelled to show up, toting 30 new chainsaws, ready to get to work helping others to clear the debris and wreckage.
But both Aaron and Nate want to be very clear that this really isn’t about them. They received the publicity, but that’s not why they did what they did.
Instead, this is about the Florida Baptist Disaster Relief organization, a non-profit serving some of the hardest hit areas of Florida. This is the group that was among the first into Port Charlotte. Nate tells us there were volunteers in the group whose own homes had been affected by the same storm, and yet, here they were, helping others with hot meals and other services.
If you take one thing from this blog, please think about making a small donation. They don’t promote themselves, nor will they. And they go largely unheralded. Aaron and Nate would rather you express gratitude to these fine people.
If you take two things from this particular posting, please consider this—especially in a world where people are more likely to pull out their phones to take personal video than help someone in need. Aaron and Nate were raised in a small town on a small farm. They were raised to simply step up when the community was in need. No need to tout one’s own good deeds. Just do it. It’s part of the responsibility of being a part of the community.
And yet, it’s a lesson lost in this volatile times.
So the next time you see someone in need, or something terrible happens in your neighborhood—it need not be as big as a hurricane—consider stepping up. You don’t have to buy chainsaws. You don’t have to be wealthy. There’s always something that can be done. Nate reminded us that both he and Aaron aren’t contractors or construction people, just businessmen working behind laptops. But that didn’t stop them. So rather than thanking them, consider stepping up in your own small way the next time someone in your community finds themselves in need.
We can expect something on the order of $2.58 trillion dollars in overall mortgage origination in 2022, according to the most recent MBA forecast.
That would exceed the $2.25 trillion we saw overall in 2019, which was, by most accounts a very good year. It’s right in line with some of the great, pre-recession years the industry saw in 2004 ($2.7 trillion); and 2006 ($2.73 trillion). It compares very well to 2018 ($1.7 trillion), which was the last time we saw a drop off in refinance volume.
All things considered, especially knowing that the MBA’s latest forecast was reduced from its original forecast, a $2.6 trillion forecast, should it come to fruition, should have folks excited for the opportunity.
And yet, the headlines and conversations we’re seeing and hearing around the industry are far less positive. They have some reason to be—yes, we’re coming off of a $4.4 trillion year in 2021. This is an industry that bulks up its operations in high volume periods, so even if the expected decline takes us back to a historically positive overall volume, it’s still a decline, which means cost-cutting. Yes, this year will be a predominantly purchase market, which means more cost and labor per origination.
But it’s still a $2.6 trillion projection.
If anything, now will be the time when the well-prepared demonstrate their differentiators. Almost anyone can make money when the fish are jumping past the nets and straight into the boats. Now, however, lenders and REALTORS will be competing for purchase clients. They’ll have to prove their value to consumers to earn repeat or referral business…much less win new business. And while a lot of that will be based on the rate a lender can guarantee or the ability to negotiate the winning bid for agents, they’ll also be counting on their partners to make the process a smooth one for their customers.
And the title agencies that step up will have their stuff together. That means faster closings, because they’ve already automated their workflows and centralized their operations to eliminate redundancies, manual efforts and all-around wasted time. That means instantly responsive service. Not “a call back within 24 hours,” but instant, by way of technology for things like “when’s my closing?”
That means tight relationships with the other vendors and parties in the transaction, so that the inevitable wrinkle or two is ironed out long before it becomes a choke point in the march to closing.
And that means knowledge and expertise, nationally and locally, just in case this file is the one where the rare and unusual complication does pop up.
We’re just entering what could be a make-or-break market in 2022. For some, that $2.6 trillion will present opportunity and result in success. For others…well, they’ll really be cursing the purchase market. Odds are the brokerages, agents and lenders falling into the former category will be the same ones who’ve already prepared for what’s coming. And that will include relying on their very best service providers, rather than the also-rans.
It’s nice to see that Zillow recently saw fit to proclaim, in its 2022 real estate market predictions, that “the Sun Belt dominates Zillow’s list of hottest housing markets for the second year in a row.” At the top of that list? Tampa and Jacksonville.
Now, those of us who live in Florida have always known it’s a natural real estate, er…hot spot! But, especially after weeks and months of reading the doom and gloom of the impending decline of the refinance spike; rise of interest rates and shortage of inventory, it’s nice to put it all into perspective.
While it’s easy enough to aggregate numbers from numerous local markets to create some national numbers, there’s no true national market. Just a collection of local markets. So saying many trends will impact each market equally is much more often than not false. Will interest rates rise this year? Probably. But how much will they rise; how long will the rise take to impact each market and to what degree? Let’s not forget, home values have soared over the past three years. It’s not all that apparent that they will suddenly crash. Will appreciation slow? Yes. Are declining appreciation and depreciation the same thing? Absolutely not. In fact, the same Zillow forecast suggests the nation’s top 50 markets are expected to “grow healthily in 2022.” That doesn’t sound like a year of doom and gloom to us.
Now, back to Florida, where the vast majority of FAN's clients, partners and friends live and work. The same forces that drove our largest markets to jaw-dropping growth in 2020 and 2021 are still in place. Home values will likely still grow. Inventory is still moving quickly, indicating demand remands high. And employment and population indicators suggest Florida’s top markets are still home to motivated, capable buyers with confidence in the job market and their earning potential. So whether the Fed raises the primary national rates by a quarter of a percent or .000001 percent (and believe us, it won’t be raising it enough to disrupt the economy dramatically in an election year), odds are that, if you have property or clients with property in Tampa or Jacksonville (or Miami, or Orlando, or Gainesville…), it will be another productive year for our friends in the real estate business.
We’re ready for the volume here at FAN. And we’ve only continued to work at streamlining our processes to create the smoothest, fastest, most tension-free closings you could ask for in a purchase environment. Then again, we’re proud of the places we live and work, and we never bet against them. So Zillow’s just telling us what we already knew!
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