American Land Title Association Applauds U.S. Representatives for Introducing Bill Protecting Consumers from Harmful Private Transfer Fees

ALTA NEWS

Contact: Jeremy Yohe                                

Office: 202-261-2938              

Phone: 202-590-8361
E-mail: jyohe@alta.org

** Immediate Release **                                                          

American Land Title Association Applauds U.S. Representatives for Introducing Bill Protecting Consumers from Harmful Private Transfer Fees


Washington, D.C., Sept. 29, 2010
— The American Land Title Association applauds U.S. Rep. Maxine Walters and co-sponsors Gwen Moore, Brad Sherman and Albio Sires for introducing a bill that protects consumers from a harmful real estate scheme that strips homeowners of equity in their house and depresses home prices.

Known as the Homeowner Equity Protection Act, HR 6260 would amend the Real Estate Settlement Procedures Act (RESPA) to prohibit the collection of private transfer fees by for-profit third parties on all federally related mortgage loans. When a private transfer fee is placed on a property, it requires that every time the property is sold for the next 99 years, 1 percent of the sale price of the property must be paid to an independent third party.

“We congratulate Rep. Walters and the co-sponsors for introducing this much-needed, consumer-protection bill,” said Kurt Pfotenhauer, chief executive officer of ALTA. “While traditional covenants have an accepted and beneficial role in the housing market by benefitting the land, these predatory instruments steal equity from American homeowners forcing them to pay a premium for the right to sell their own property.”

The use of private transfer fees has already been restricted in 18 states, while the Federal Housing Authority has already confirmed that the government won’t insure mortgages backed by homes with private transfer fee covenants attached. The Federal Housing Finance Administration has issued a guidance that would restrict Fannie Mae, Freddie Mac, and the Federal Home Loan Banks from investing in mortgages with these fees.

“Since RESPA is a consumer protection statute, this amendment makes perfect sense to ban these fees because they add no benefit or value to a property, and are little more than a predatory scheme meant to take advantage of unsuspecting homeowners,” Pfotenhauer said. “ALTA thanks the representatives for recognizing the danger that these fees pose to homeowners and the real estate market.”

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About ALTA

The American Land Title Association, founded in 1907, is a national trade association representing title insurance companies, title agents, independent abstracters, title searchers, and attorneys. With offices throughout the United States, ALTA members conduct title searches, examinations, closings, and issue title insurance that protects real property owners and mortgage lenders against losses from defects in titles.

Jeremy Yohe | Director of Communications | American Land Title Association | 1828 L St N.W., #705 | Washington, DC. 20036| Ph: (202) 261-2938 | Fax: (202) 223-5843 / (888) FAX-ALTA (239-2582)

  Visit ALTA online at www.alta.org for news and resources for the Title Industry.

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If ever there was a case for Title Insurance – this would be it

Their home was sold by mistake

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By MARILYN KALFUS THE ORANGE COUNTY REGISTER
The Orange County Register The Orange County Register
updated 9/27/2010 2:15:42 PM ET

Douglas Garhartt and Brandon Lively were just settling in to the ocean-view San Clemente townhome they bought in March when suddenly they were faced with the threat of eviction.

Less than a week after they closed sale on the condo, it turned out, a small group of investors had purchased the same property — at a foreclosure auction.

How could that have happened? How could one home have been sold to completely different buyers?

Both sides say they did everything right. Both sides have deeds. And both sides are in court right now, trying to sort out the mess.

‘Why are you getting evicted?’

Garhartt said he and Lively were thrilled when they bought their 3-bedroom condo on March 11. The seller had been in default on his mortgage and Garhartt and Lively purchased the place as a short sale for $365,000, far less than the $712,552 the seller owed on the loan.

But on March 15, records show, the bank that was involved in the short sale sold the same property at auction for $346,896.

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Report: Don’t give up on ‘nonprime’ lending | Inman News

Harvard researchers make a case for government’s continued role

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With so many people now saddled with poor credit, reestablishing “nonprime” lending is increasingly important to the future of homeownership, researchers at Harvard University’s Joint Center for Housing Studies argue in a new report.

The 212-page report, “Understanding the Boom and Bust in Nonprime Mortgage Lending,” analyzes how the practice of pooling nonprime mortgages into securities that were sold to investors helped fuel the housing bubble and resulting financial crash and recession.

Although much of that territory has been explored before, the report also looks ahead, drawing lessons from the past to put forward ideas for “sustainable” nonprime lending, and advocating a continuing role for government in guaranteeing mortgage debt.

Nonprime lending — subprime, alt-A and higher-priced lending — grew at a rapid pace during the housing boom, collapsing when the secondary market for those loans froze in August 2007.

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“sustainable non-prime lending” isn’t that like jumbo shrimp or wireless cable?

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