3 minute read
“Just talk to me.” That’s what we all want to hear when we pick up the phone, right? In the era of the automated phone system, it might feel virtually impossible to find someone who picks up the phone.
Have you ever jumped on the phone while multitasking and it’s a voice recognition system? I can’t tell you how many times I’ve wanted to chuck my phone across the room when I hear, “I’m sorry, I didn’t get that” because I accidentally coughed or shuffled papers in the middle of the recording. It’s truly ridiculous at times.
Welcome to the world of settlement officers ordering payoff demands for existing liens on a borrower’s property. It’s one filled with voicemails, automated systems, faxes, emails and sometimes a little elbow grease to find payoff demands.
As it pertains to title insurance and the settlement process, it’s our job to identify and address any problems that are clouding title. Old liens are considered a cloud on title and need resolution. Unlike other types of insurance, title insurance actually works in reverse (how apropos, right?) in that it insures against what has happened in the past on a given property.
Many payoff demands are ordered using an automated phone system, and some companies might require a borrower’s authorization prior to ordering the demand. Some companies are very efficient, while some are so antiquated that they seem to be lost in a deep, dark cabinet.
Some of the daily problems that we face include ordering demands from private beneficiaries. Not only do we have to be incredibly resourceful, but this also requires diligent follow-up on behalf of our clients. If we foresee a problem with obtaining a demand, typically a settlement officer will bring the file to the attention of the loan officer, processor and/or the borrower, depending on the client. We will work with the borrower, processor and loan officer to obtain the original note, original deed of trust and a recordable release from the beneficiary.
Another hurdle to cross when ordering payoff demands is the expiration of the demand. Home equity lines of credit can expire fairly quickly; within one to three days. Other payoffs, like those on first mortgages, often have a good-through date of 30 days.
Judgments are usually ordered via fax or email, and it’s typically a very difficult and labor-intensive process. IRS liens require a borrower-completed form, FHA sometimes collects interest all the way through the end of the month and VA liens may have up-front fees for ordering payoffs. Reverse mortgage demands require a signed authorization, and it’s best to notify your settlement officer whether there is a monthly draw or a line of credit.
Depending on the difficulty in addressing a lien, the statute of limitations and other extenuating circumstances, a settlement officer will escalate the matter to legal counsel or their title insurance underwriter if needed.
In the reverse mortgage world, we always take into consideration our borrowers first. Customer service, communication and consistency are key to effective payoff documentation. Because there are so many variances, it is never recommended to close without proper written records.
