In the current economy, short sales have become an increasingly common part of our day-to-day business. Due to declines in market value, the contracted sale prices on many homes are not enough to satisfy all of the liens encumbering the property and to pay the transaction costs.
Therefore, inherent in these types of transactions is the need for legal advice and guidance that is separate and distinct from the run of the mill title service provided by non-attorney title agents.
Generally, non-attorney title agents may perform the following functions:
- Search the title and identify superior and subordinate liens;
- Gather information and prepare the form required by the lender to obtain a payoff statement;
- Obtain estoppel letters from each lien holder in which they commit to release their lien upon payment of a certain amount and/or satisfaction of other conditions;
- Prepare HUD-1 closing statements;
- Communicate information between the parties to the transaction; and
- Obtain payoff amounts, complete the closing and issue the requisite insurance policy.
These represent the bare-boned services provided by any title company and unfortunately, in any real estate climate, these general functions are not sufficient to protect the buyer and/or seller when unforeseen issues arise.
On the other hand, attorney title agents enhance the title services provided by being able to provide the client with an abundance of services, a few of them being:
Give opinions or explanations of the legal significance of any documents involved in the transaction;
- Clear title issues which require the services of licensed real estate attorneys;
- Counsel homeowners that sell their property in a short sale transaction as to the possibilities or legal ramifications of deficiency judgments and the impact of the proposed short sale on those issues;
- Counsel homeowners as to the strategy of negotiating a short sale as it might affect pending or future foreclosure and the implications of legal enforcement actions or other legal rights and remedies;
- Counsel the homeowner on the impact of filing for bankruptcy protection generally or as it relates to a short payoff and/or foreclosure; and
- Counsel the buyer as to whether the proper actions were taken in a pending foreclosure and whether there were any omissions that may cloud title.
At Federal Title our attorneys can assist buyers or homeowners with the often times unexpected yet frequent legal matters that arise during the purchase and sale of real property. At Federal Title there is always an attorney title agent on each transaction that is prepared to explain, negotiate and if needed, represent your legal interests in every transaction.