Tuesday, February 4, 2014

Important Information About Flood Insurance in Florida

One practice that Titan Home Lending has implemented since the recent legislative changes to flood insurance…


I recently took an application for a buyer purchasing an 832 square foot home in Palm Harbor, Florida. Before we ordered the 203k inspection and appraisal, I convinced the buyer to let me get insurance and flood quotes for the home. We discovered the flood insurance was going to be $13,765 per year for a $115,000 home.  The mortgage on this home would have only been $929 per month, however, with the flood insurance added it made the payment completely unattainable for my buyer at $2,076 per month.  Many home buyers apply with banks and credit unions, spend over $1000 and 60 days waiting only to find out the home is simply unaffordable for them.  

Please make sure you take the proper steps to find out the entire payment upfront, so you are not disappointed in the long run.  We now make it a practice to get home insurance and flood quotes on every property during the prequalification stage so our buyers aren't blindsided with unexpected costs. 

Please call me or email me if you want accurate information on how much a home is going to cost you… (monthly payment and cash out of pocket).

Andy Wood
Titan Home Lending

HUD Certified 203k Instructor
State Licensed for Continuing Education
20 Years Experience in FHA 203k Lending
Over 5000 203k’s Closed, Managed and Funded

Thursday, October 17, 2013

Municipality and Code Violation Liens may not need to be paid… When purchasing a Fannie Mae, Freddie Mac or Bank-Owned Property

The Supreme Court of Florida (City of Palm Bay vs. Wells Fargo Bank N.A. No. SC11-830 Fla.2013) recently ruled that local municipality liens do not have priority over the bank’s mortgage lien as the mortgage was recorded prior to the lien. While the Supreme Court held that municipalities have the right to enact legislation to collect and enforce such liens, “a municipality’s concurrent legislation must not conflict with state law” (Thomas v. State 614 So. 2d 468,470 Fla. 1993). The State Law clearly prioritizes liens in the order of which they were filed. When Fannie Mae, Freddie Mac or any other bank completes the foreclosure process and is granted a warranty deed, the inferior liens are considered “Null and Void”.

Since 1993, I have spent most of my career originating and closing FHA 203k Renovation Loans for properties that need repairs and improvements. Since 2009, hundreds of these properties have been owned by Fannie Mae, Freddie Mac and many banks who have taken back the properties in the foreclosure process.

For the last four years, I have seen Realtors and buyers pass over great properties at bargain prices because of outstanding municipality and code liens. I have witnessed Fannie Mae, Freddie Mac and other banks write checks for thousands of dollars paying off these liens to get buyers closed. I have discovered many listing agents cancelling contracts because they believe these liens will prevent a sale and requiring a buyer to satisfy or pay the liens or re-list in search of a cash buyer.

Earlier in 2013, I was financing an FHA 203k Renovation Loan for a customer in Orlando and had come across this situation. The closer was requesting the buyer sign a “Hold Harmless” for the $30,850 worth liens on the property related to code violations owned by Fannie Mae.  Both the buyer and our underwriter refused to close with the $30,850 in outstanding liens. This is when we discovered that these liens may not be valid or enforceable. 

Just two weeks ago, an agent sent over a cancellation on Fannie Mae/REO property located in Miami with code violations and outstanding liens. I explained to the listing agent that I had recently discovered that these liens on foreclosed properties may be invalid and possibly removed with a few simple steps from the agent and title company, thus saving the deal for all parties involved. 
You can follow these simple steps to remove a code violation lien on a Bank-Owned/REO Property:

1.       Ask the title company for a list of all outstanding “Code Violations and Municipality Liens”
2.       The Listing Agent for the property should assist with providing the contact information for the Code Lien Supervisor for the local municipality.
3.       Ask the title attorney to send a copy of the Supreme Court’s Decision (No. SC11-830) A copy is located at www.FHA203k.org
4.       The title attorney will advise that the purchaser is using an FHA 203k Renovation Loan to correct all deficiencies after closing and request a “Release of Lien”. A copy of the “Specification of Repairs” may be provided from the lender if needed.
5.       The Municipality Lien supervisor may consult with their attorney but will ultimately provide a “Release of Lien”    

Over the last few months we have successfully closed these 203k Renovation Loans while saving Fannie Mae, 
Freddie Mac and other banks thousands of dollars in unnecessary costs. 

Andy Wood
Titan Home Lending
5010 W Carmen St.
Tampa, FL 33609