Nikki Smith

Nikki Smith

A graduate of Cal State Fullerton, where she was executive editor of the award-winning Daily Titan newspaper, Nikki Smith moved to D.C. in 2006 to write the news.

When the economy collapsed, Ms. Smith switched from print news to Web marketing. She wears many hats at Federal Title: copy writer, event planner, media liaison, graphic designer, Web developer, marketing strategist. She is the architect behind and managing editor of the company's official blog, Real Estate Settlement Observer. Smith left Federal Title in April 2017.

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Wire fraudsters relentless in phishing attempts for down payments, seller proceeds

Wire fraudsters relentless in phishing attempts for down payments, seller proceeds

A very serious cyber threat continues to loom over the homebuying process, and hyper-vigilance is presently the only way homebuyers and sellers, as well as real estate professionals, can protect themselves.

The threat is wire fraudsters, who remain relentless in their efforts steal homebuyers’ down payment funds and sellers’ net proceeds and are becoming increasingly deft at defrauding title companies and consumers alike. We’ve encountered multiple scams in which criminals attempted to phish away down payments and net proceeds funds belonging to unsuspecting to consumers.

How do these wire fraud scheme work?

As far as we can tell, the fraudsters are gaining entry to the email accounts of unsuspecting real estate agents probably through some kind of malware attack.

Once the criminals have access to the agent’s account, they scan the inbox looking for information they can use to make their email scams sound more legit, in particular property addresses, closing dates and the title company that will handle the closing.

Next the scammers create a phony email account that looks almost identical to the agent’s legit email account that was hacked – perhaps an extra hyphen or dash is the only difference. With the acquired bait and the phony email account in place, the trap is set.

The would-be victim receives an innocuous email. She recognizes the sender’s name because she has been working with that agent the past few weeks or even months leading up to the closing. If she is not paying close attention, she may not notice the sender’s email address is only slightly different from previous exchanges.

That’s when the defrauding occurs. The victim executes the wire transfer request and the money is gone. Fraudsters are becoming so clever they even time the delivery of their fraudulent emails to coincide with the actual dates and times of closing.

Homebuyers’ down payment funds at risk

In this scenario, the real estate agent’s email account has been compromised and the fraudsters have learned the agent is working with homebuyers and in the final stages of helping them purchase the new property.

With intel in hand, the fraudsters will reach out to the homebuyers from the phony agent email address a day or so prior to closing. The fraudster’s email directs them to wire their down payment funds to the title company’s escrow account in preparation of their big day. In this scam, the “title company’s” bank account belongs to the fraudsters.

We recommend homebuyers verify over the phone the authenticity of any wire transfer instructions just to be on the safe side, because once funds are transferred to the wrong account and cleared out by the cyber-criminals, they are virtually impossible to recover.

Sellers’ proceeds from home sale at risk

This version of the scam targets title companies more directly than consumers, but it’s worth noting because it can lead to a delay in the delivery of proceeds to the seller who may be planning to use them on the purchase of another property.

Just last month our title company spotted two of these wire fraud attempts. We received emails purporting to be from the real estate agent representing the property seller and referencing a property that was scheduled to close at our office. It was a different agent for each case, which suggests the scam may be becoming more widespread.

In the phony email the agent asked for our help wiring funds to the seller’s bank account. In this case, obviously, the scam is that the “seller’s” bank account belongs to fraudsters. What’s not always so obvious, though, are the clues to alert the would-be victim of the fraud that is taking place.

Just as we advise homebuyers, we verify over the phone the authenticity of any wire transfer instructions just to be on the safe side because, again, once funds are transferred to the wrong account and cleared out by the cyber criminals, those funds are virtually impossible to recover.

Many title companies purchase cyber fraud insurance as added protection against increasingly sophisticated wire fraud attempts, including ours. But understanding how the scheme works help avoid the hassle of filing a cyber fraud insurance claim.

3 must-have apps for real estate agents who crave better cyber security

3 must-have apps for real estate agents who crave better cyber security

The threat cyber criminals pose to real estate agents – and specifically their inboxes – has come up in a lot of recent conversations within the real estate and title insurance world lately. Wire fraud scams have cost the industry millions, if not billions, over the past decade or so.

At Federal Title, we’ve received several phony emails supposedly from real estate agents, asking us to wire funds to a particular account. We’ve read about these scams happening in other parts of the country as well.

Our staff is trained to spot these fake emails. We also make phone calls to agents, lenders, buyers and sellers to ensure the funds are going where they are supposed to go because we take our clients' privacy and security very seriously.

But in the interest of cyber security for all, we can recommend a few apps that we think are essential for better inbox protection. These services are free to use and go a long way toward protecting sensitive information, such as the kind that is exchanged throughout the homebuying process.


First and foremost, make sure you’re sending sensitive information through encrypted email. Most email by default is transmitted in the clear or encrypted after it is sent to the email provider’s server, which means it’s possible for emails to be intercepted. Sending emails over free and public WiFi networks, such as in a coffee shop, makes the contents of one’s emails particularly vulnerable.

When it comes to buying or selling homes, it’s necessary to report personal information such as social security numbers, salary history, alimony payments, wage garnishments, etc. Your real estate agent and lender as well as third parties like the title company are legally required to maintain confidentiality, but a rogue party like a cyber-criminal is not.

ProtonMail, a free and open-source end-to-end encrypted email service that was originally created for researchers at the European Organization for Nuclear Research (also known as CERN in Switzerland) offers a more secure solution. Available as a webmail client or via the iOS / Android app, ProtonMail allows the user to encrypt email contents and data before they are sent to the ProtonMail servers.

With the click of a button, a user can enable to the encryption feature on ProtonMail and set a password, which is then sent separately to the intended recipient(s). Without the password, the contents of the email would present as a series of jumbled characters rendering the email useless to a cyber-criminal.

Another cool feature of ProtonMail is that it allows the user to set an expiration time for the message so that the contents of the email become inaccessible after the pre-determined number of minutes, hours or days, whether someone has the correct password or not.


Most IT professionals will usually advise their clients to create a unique password that contains upper- and lowercase letters, a number and a character. The password should also be double-digits in length – and it can’t be used for any other accounts! To make passwords even more interesting, some companies require their employees to change passwords every month or quarter – and it can’t be one that’s been used in the past six months!

Who has time to remember so many random sequences of letters, numbers and characters? It’s really no wonder that so many of us will still default to easy-to-remember phrases such as “Password123!” or passwords that can easily be socially engineered such as kids’ or spouse's names, or mother’s maiden name.

That’s where a password manager service like LastPass comes in quite handy. Essentially, it’s a digital lock box that protects all your unique passwords. With a service like LastPass, all you have to do is remember one difficult password. LastPass will automatically remember and fill in login credentials for every site in your lock box.

LastPass is certainly not the only password manager on the market, but it happens to be the service we like. Skeptics out there may be wondering what happens if a user’s LastPass master-password is cracked, or if a security breach occurs that compromises hundreds of passwords such as the security breach of LastPass in 2015?

That’s where two-factor authentication can really save the day.

Google Authenticator

We’ve talked about two-factor authentication before, a second layer of security that user must clear to gain access to an account. A user must configure two-factor authentication with an external device, usually a smart phone or a thumb drive. We like Google’s free Authenticator app.

Services like ProtonMail and LastPass both offer the option to configure the account with two-factor authentication, and we highly recommend our clients take that extra precaution to protect their encrypted email account and password manager service. (After all, if a cybercriminal gained access to either of those services, it would undermine the whole purpose of this post and likely cause all kinds of hassle.)

When two-factor authentication is enabled, upon logging in a user will either receive a text message containing a six-digit code to unlock the account or be prompted to enter a 6-digit code from her authenticator app. In either case, the code is randomly generated and changes every 30 seconds making it virtually impossible to crack with a brute force attack.

Many social platforms offer some version of two-factor authentication including Facebook, Twitter, LinkedIn, Gmail and Yahoo! Mail. For independent contractors who use TurboTax or Mint to manage their finances, Intuit also offers a two-factor authentication option for their suite of services.

What is two-factor authentication, and why is it important for your real estate business?

We’ve noticed an uptick in agent email addresses that have been compromised by cyber criminals with the intent of defrauding home buyers, sellers and title companies – and most agents are totally unaware when we tell them.

The emails we’ve received of late are generally inquiries about wire transfers of seller proceeds. The sender is hoping the recipient (in this particular scam, title companies) will fall for a request to wire funds to their “client’s” account. If the victim is duped and sends funds, the fraudsters will quickly clear the account making it virtually impossible to recover the funds.

Reports of wire fraud scams have come in from all over the country and have cost the industry millions, if not billions, of dollars over the past several years.

These emails inquiring about wire transfers don’t come from the agent’s legitimate email account either, which is why the agent is often unaware any cyber hacking has occurred. Instead, the emails come from phony email accounts that look almost identical to the agent’s legit email account that was hacked – perhaps an extra letter, hyphen or dash is the only difference.

By the time the title company receives one of these phony email inquiries, the real estate agent’s legitimate email account has already been compromised along with all the contents of the inbox. Information pertaining to upcoming closings, specific property addresses, names and email addresses of other parties in the transaction are all used to bait the wire-fraud trap.

Needless to say real estate professionals must do all they can to protect their inboxes and the interests of their buyers and sellers, and email accounts have proved a particularly vulnerable area for attack. That’s where 2-factor authentication comes in handy.

What is two-factor authentication?

Pretty much like it sounds, two-factor authentication creates a second layer of security that a user must clear to gain access to the account. A classic example is the ATM card. To take money out, the individual must know their pin code (password) AND be in possession of the bank card that’s linked with the account that matches their pin. Having one or the other is not enough.

Two-factor authentication works very similarly with email, and many major email providers such as Gmail and Yahoo! Mail offer the option. To configure, a user goes to account settings, ticks the box to enable two-factor authentication and enters her mobile phone number. There’s an option to receive a verification code by phone or text. Enter the verification code to configure two-factor authentication with that mobile device.

From then on, any time the user logs into her account she must also enter a unique code to gain entry. It might seem like a hassle, but it increases email security significantly.

Even if an individual’s username and password are compromised – maybe they accidentally downloaded malware from a spam email or used public, unsecured WiFi to access their email – the criminals cannot gain access unless they also possess the specific mobile device that was configured with the email account.

The two most common two-factor authentication methods rely on text messages and/or mobile applications to produce the code.

With text message, a user logs into her email account with username and password and then receives a text message on her phone that contains the unique six-digit code. Once she successfully enters the code at the email login, she unlocks the second layer of security and gains access to her account.

A second method is similar to the SMS approach but instead relies on a free smart phone app, such as Authenticator by Google, which produces a new six-digit code every 30 seconds. A user logs into her email account with username and password and then opens the app to obtain the unique six-digit that unlocks the account.

With both methods, the user must have knowledge of their username / password AND possess a specific device that’s configured with the email account. Knowledge of the username / password makes one factor, and possession of a specific device makes two factors.

Catching up with the First-time Homebuyer Tax Benefit Amendment Act of 2015

Catching up with the First-time Homebuyer Tax Benefit Amendment Act of 2015

First-time buyers and real estate pros in the District of Columbia awaiting word on the status of the First-time Homebuyer Tax Benefit Amendment Act of 2015 can expect to hear a response from the office of Mayor Muriel Bowser this week.

A final version of the bill that would amend the District of Columbia Deed Recordation Tax Act was transmitted to the Mayor’s office Feb. 2, and a response is due by Feb. 16.

The revised transfer tax rule would retroactively go into effect Oct. 1, 2016, according to the final bill, provided the measure is approved by the Mayor and passes the 30-day congressional review period.

As we previously reported, the bill will create a new transfer tax rate of 0.725% for homebuyers who have never purchased a house, condo or share in a cooperative unit in the District of Columbia. The current transfer tax rate for D.C. homebuyers is 1.1 percent on purchases of $399,999 or less and 1.45 percent on purchases of $400,000 or more.

The median home price in the region soared to a record high of $446,000 last summer, the Washington Post reported.

When we checked in last April with the bill known as B21-0417, or the First-time Homebuyer Tax Benefit Act of 2015, it was under committee review and awaiting scheduling for a mark-up. That happened last November.

After a first reading of the of the bill was delivered Dec. 3, 2016, Councilwoman Elissa Silverman (D-At Large) was the only one to vote against the measure, later telling Washington City Paper that because the bill did not specify income limits, the tax break would benefit a homebuyer in Ward 3 five times more than a homebuyer in Ward 8, rendering the benefit "regressive."

Councilwoman Silverman was not the only individual to express this sentiment. The lack of an income restriction has been a concern of the bill’s critics all along.

During testimonies that took place about a year ago, a representative from the D.C. Fiscal Policy Institute said the city would negatively impact its Housing Production Trust Fund, which has produced or preserved more than 8,000 affordable homes since its inception in 2002.

“Rather than provide a new tax benefit for all first-time homebuyers, DCFPI recommends that policymakers review the city’s current deed tax assistance to low- and moderate-income homebuyers and make adjustments if they appear warranted,” said DCFPI Housing Policy Associate Claire Zippel in her testimony last February.

The city regularly alters the income and purchase price restrictions on its popular D.C. Tax Abatement program, and the D.C. Office of Tax and Revenue most recently increased the income and purchase price limitations at the end of last year.

However, the income-restriction concern in regards to B21-0417 was addressed Dec. 13, 2016 when Councilwoman Anita Bonds (D-At Large) introduced an amendment that added two eligibility requirements, an income limit of 180 percent of the area median income as well as proof of District residency.

The median income in D.C. in 2015 was $109,200 annually, so buyers earning up to $196,564 could potentially qualify for transfer tax relief.

The amendment also created a lifespan of four years after the program’s implementation date, at which point the Mayor must submit a report to City Council that reviews the benefits or impact of the tax relief program on homeownership rates.

With the Bonds amendment in place, Council voted unanimously in favor of the First-time Homebuyer Tax Benefit Amendment Act of 2015 on Dec. 20, 2016.

How to change your chosen title company after you have a ratified sales contract

Most homebuyers know by now that it’s their legal right to choose their own title company and that shopping for title services is one of the most effective ways to reduce costs at the closing table.

(For those who haven’t heard this, read our content on Marketing Service Agreements and Affiliated Business Arrangements and see for yourself how these common deals jack up closing costs for consumers.)

But what happens if a homebuyer doesn’t learn about this important right until after her sales contract has been drafted, accepted and signed by all parties? And is it possible to change title companies once a title company has been designated in the contract and an earnest money deposit has been delivered to that designated title company?

The short answer is you can change your mind with the consent of the seller, through a simple addendum to the sales contract. View our a settlement agent-change sample addendum.

Once the addendum is completed and signed by all parties, the homebuyer can then use the new title company listed on the addendum.

Even if the earnest money deposit was already delivered, with the addendum in place, the new title company would simply reach out to the old title company holding the funds and arrange for a wire transfer. That’s it!

How might a homebuyer find herself in a situation where she wishes to change her company after all parties have signed a sales contract with a designated and undesired title company?

First and foremost, we encourage every homebuyer to get closing cost quotes from several local title companies and compare costs and online reputations to avoid this situation. We also remind homebuyers that title companies don’t necessarily include all the same services in their settlement fee. Sometimes additional services, i.e., document fees, processing fees, amount to hidden costs, so it’s important to ask what services are included and what extra costs may be charged.

And while it’s technically illegal for real estate agents to fill in the name of a preferred title company if their brokerage has a professional affiliation with that title company, the practice persists. In these cases, homebuyers may not realize until after they have a ratified sales contract that they could have chosen their own title company.

It’s important to ask your agent if his company has a professional affiliation with the title company he’s listed in your sales contract and what benefits or incentives the real estate agent or brokerage may be receiving by recommending that title company. Sometimes the answer is there is no affiliation; the agent is familiar with a certain company and recommends that company from the perspective of good service and pricing.

There’s nothing inherently wrong with an agent directing their client to use their favorite title company, except that it may lead a homebuyer to falsely believe she does not have a choice, or once a title company’s name is written into the contract and that contract is ratified, the decision is set in stone and the title company can’t be changed.

A homebuyer maintains a right to choose her own title company and also has the right to change her mind and choose a different title company.

This isn’t an invitation to change title companies several times prior to closing or to change for no good reason. Keep in mind any addendum to a ratified sales contract must be signed by all parties, including the sellers. You may risk delaying closing, annoying your sellers or even causing your deal to fall through by abusing your right to change title companies after you have a ratified sales contract.

We put this post together specifically to help those who learned after the fact they could have chosen their own title company and would like to exercise that right. Two primary reasons a homebuyer may choose to change title companies might be she’s found a title company that charges lower prices and/or provides better customer service than the company initially listed on the sales contract.

A better way to deliver EMDs

Delivery of earnest money deposit checks is about to become incredibly easy and more secure than ever.

We are excited to share with you the benefits of our new partnership with ZOCCAM, a revolutionary service that lets real estate agents and homebuyers send their EMDs directly to Federal Title's escrow account – with just a few taps on their smart phone.

Simply take a picture of the front and back of your EMD check, select Federal Title's escrow account, confirm the information on your check and hit send.

You and the homebuyer will immediately receive email notification that the EMD was received, plus you’ll have saved yourselves the time and hassle of driving a check across town.

ZOCCAM doesn’t contain or hold any financial account information, and all content is encrypted and sent using state-of-the-art security techniques that ensure every client’s non-public personal information is protected.

We're in the final stages of building our partnership with ZOCCAM and believe it’s only a matter of time before this superior method of delivering EMDs becomes standard practice in our business.

We look forward to providing this great benefit to all real estate agents and homebuyers very soon and will keep everyone posted when the service goes live.

Beware of possible malware attack

Several real estate agents and lenders who work with Federal Title recently received an email purporting to be from a Federal Title employee with the same name as a local real estate professional and with a file attachment for download. The email is a scam, and we implore you to delete the email immediately.

If you ever have questions or concerns about an email you received from Federal Title, please do not hesitate to contact us to verify its authenticity. Also, know that we will never ask for or provide personal / financial information through unsecure channels.

Our technology team suspects the email sent last Thursday at approximately 6 pm was a malware attack. Malware is software that’s intended to damage or disable computers and computer systems.

A malware program might log keystrokes of a user to obtain sensitive login information. Malware can create a computer zombie, allowing a hacker to use that computer to conduct other malicious attacks usually without the owner’s knowledge. An estimated 50 to 80 percent of spam sent worldwide is attributable to zombie computers.

This is not the first time a hacker has impersonated a title company, real estate professional – even a consumer – in an attempt to install dangerous malware or gain access to sensitive information. We want our clients to be aware of another common scam we have observed, one that attempts to steal the consumer’s down payment funds via a fraudulent wire transfer. This kind of attack is unfortunately becoming commonplace, and once the funds have been wired to the scammer’s account they are gone.

The Federal Trade Commission posted a bulletin that explains how scammers phish for mortgage closing costs. They offer a few ideas to help real estate professionals and their clients avoid phishing scams.

  • Don’t email financial information. It’s not secure.
  • If you’re giving your financial information on the web, make sure the site is secure. Look for a URL that begins with https (the "s" stands for secure). And, instead of clicking a link in an email to go to an organization’s site, look up the real URL and type in the web address yourself.
  • Be cautious about opening attachments and downloading files from emails, regardless of who sent them. These files can contain malware that can weaken your computer’s security.
  • Keep your operating system, browser, and security software up to date

We also want to remind you that Federal Title takes Internet security very seriously. We use military-grade email encryption technology and adhere to the American Land Title Association’s Best Practices for the proper handling of each and every individual’s non-public personal information, i.e., social security and bank account numbers.

Unfortunately we anticipate malware and phishing scams will remain a threat to our industry for the foreseeable future. The best way to defend against such attacks is to be skeptical of any email that contains an attachment download or requests sensitive information – and always exercise extreme caution when providing sensitive information online.

The cost of buying a home in Montgomery County to increase Sept. 1

Despite protests from the local real estate community, the Montgomery County Council last week unanimously approved an increase to the recordation tax, paid by homebuyers and sellers at closing, as a way to pay for school construction.

The recordation tax rate will now increase for the first $500K from $6.90/$1,000 to $8.90/$1,000 and for amounts above $500K from $10/$1,000 to $13.50/$1,000, a "pretty significant increase said County Council President Nancy Floreen who proposed the bill.

Put another way, a property purchased for $400,000 under the old tax rate would carry a recordation tax of $2,415 split between the buyer and seller. Under the new rate, the recordation tax will be $2,670, an increase of $255. A property purchased for $700,000 will see an increase of $1,155 in recordation taxes. A property purchased for $1,000,000 will cost an additional $2,205 in recordation taxes.

The median sales price in Montgomery County was approximately $411,000 last April, up 1 percent from a year ago.

Initially the tax increase was slated to take effect July 1, but the Council pushed it back to Sept. 1 amid protests from the real estate community who said they need more time to adjust to the change. The Council also opted to increase the county’s principal residence exemption from the first $50,000 to the first $100,000 in response to industry concerns.

Those in favor of the tax increase, such as the county’s Board of Education and the PTA, said funding increases for schools have not kept pace with growing enrollment. Montgomery County Public Schools is adding around 2,500 new students per year.

Those opposed to the tax increase said the financial burden was being unfairly placed upon a small subset of the county’s population. Roughly 13,000 units are bought and sold each year in Maryland’s most populous county that is home to over 1,000,000 residents. They also said increasing the recordation tax unfairly affects first-time homebuyers and elderly residents.

In the near future, the Council will examine ways to ease real estate tax burdens for senior citizens. They are also contemplating a 6 to 9 percent increase in property taxes.

Check back for updates as we hear more from County Council.

State, federal tax benefits for homeowners

The ink has dried and keys have been exchanged. Your real estate agent snapped a few pictures for social media, commemorating the day you became a homeowner.

If you’re like most Americans, your home is now your largest asset. And while that comes with great responsibility, it also comes with some perks. Among those perks are the myriad tax benefits Uncle Sam has made available to homeowners, and here we will explore many of them.

  • Mortgage Interest Deduction

    Taxpayers who own their own home may deduct the interest paid toward their mortgage loan from their total income earned when it comes time to pay income taxes in April. The IRS says you can claim this deduction for a primary residence as well as a secondary residence such as a vacation home, provided you spend at least a few weeks out of the year at the secondary home.

    Points paid to lower home mortgage interest rate

    Some homebuyers and borrowers opt to pay “points” up front when obtaining a mortgage loan to lower the cost of their interest rate over the course of the loan. Each point is typically equal to 1% of the principal loan amount. The IRS says home mortgage points as prepaid interest, and therefore in most cases considers them tax deductible. Points paid on a home improvement loan, such as a home equity line of credit (HELOC) are also potentially tax deductible.

    Interest paid on home improvement loans, i.e., HELOC

    If you took out a home improvement loan to build or make improvements to your home, the interest may be tax deductible the IRS says, under the same guidelines as the mortgage interest deduction. It’s worth noting that to qualify for the full deduction the home interest benefit offers, the total amount of debt on all outstanding loans must be $1 million or less.

    Private Mortgage Insurance

    It’s common for homebuyers who put down less than 20% as a down payment to have to pay some kind of insurance policy on their mortgage loan. Amounts paid as mortgage insurance may be counted as home mortgage interest, the IRS says, which means private mortgage insurance (PMI) – also known as a "funding fee" for Veterans Affairs loans and "mortgage insurance premium" for FHA loans – may be tax deductible each year.

    Income / Interest on Reverse Mortgage

    A reverse mortgage is a loan product available for homeowners who are 62 years of age or older that allows them to convert the equity in their homes into cash. It’s called a reverse mortgage because the lender pays out the homeowner’s accrued equity each month rather than the homeowner paying a mortgage payment.

    The homeowners get to keep the title to their home and are not required to pay back the loan until they move, sell, reach the end of a pre-determined loan-period or die. At that time, the reverse mortgage would be due with interest.

    Because reverse mortgages are considered loan advances and not income, proceeds received from a reverse mortgage are not taxable, the IRS. Any interest accrued on the reverse mortgage is not tax deductible until it is paid.

    This article is for general information purposes only. Consult your tax professional. For further reading, consult IRS Publication 503 and IRS Publication 936
  • Homestead Tax Deduction

    The District’s Homestead Deduction allows homeowners to reduce the value of their property’s assessed value by $71,700 when computing their yearly tax liability, under the DC's Office of Tax and Revenue’s current guidelines.

    At Federal Title, your closing agent or attorney will assist with filing the necessary paperwork. You must file a properly completed DC Homestead Deduction application with the OTC and be able to demonstrate the property is 1) your principal residence and 2) the property is owner-occupied and contains no more than five dwelling units (including the unit occupied by the owner).

    Read more about the DC Homestead Tax Deduction

    Senior Citizen Deduction

    This is an important tax benefit to be aware of not only for senior citizens living in the District of Columbia, but also for the buyers of homes that were previously owned by senior citizens because it can give the potential buyer / would-be owner a false sense of the annual real property tax assessment.

    Property owners aged 65 and older (as well as District residents who can claim disability) may file an application for senior citizen and disabled property owner tax relief. This benefit reduces the qualified property owner’s real property tax liability by 50%. Income restrictions may apply in addition to the criteria that must be satisfied to qualify for the DC Homestead Deduction.

    When searching for homes and condos online, it’s common for websites like Redfin, Zillow, Homesnap and Trulia to list the previous year’s real property tax assessment. However, it doesn’t necessarily indicate if the previous owner qualified for any kinds of tax benefits that may have significantly lowered the liability compared to what a new owner would be liable for.

    DC Tax Abatement

    The District’s tax abatement program was designed by the local government to help lower income residents purchase property. Homebuyers who qualify for DC Tax Abatement are exempt from paying recordation tax at settlement. What’s more, they are also exempt from paying property taxes for the first 5 years they live in the home, beginning the next full tax year.

    For those who were unaware of the DC Tax Abatement program when they purchased their homes, it’s possible to apply for this tax benefit up to three years from the original purchase date. You will still need the meet the guidelines and supply proper documentation; however if you in fact qualify you may be entitled to a refund of part of the recordation tax paid at settlement.

    Purchase price and income restrictions apply – and they change from time to time – so check in with the DC Office of Tax Revenue or ask your Federal Title closing agent for the latest information.

    Read more on DC Tax Abatement.

    This article is for general information purposes only. Consult your tax professional. For further reading, consult IRS Publication 503 and IRS Publication 936
  • Homestead Tax Credit

    The Maryland Homestead Tax Credit operates to limit how much your property taxes can go up each year, if you live in the property as a principal residence. A homeowner pays no property tax on the amount of any increase of the assessed value that is above a cap. The Homestead Percent Caps for Maryland jurisdictions are listed on the website of the Maryland Department of Assessments and Taxation.

    In Maryland, if you meet the requirements and file an application, you may receive a discount on your real property taxes. To qualify you must 1) live in the property as your principal residence, 2) have been in the property as your principal residence for at least a year and 3) submit an application to the MD DAT.

    When you purchase your property, a document is typically filed with the deed stating you will be living in the property as your principal residence – each County has its own form. Once the Assessor’s Office for the County in which you purchased updates the assessor’s records to reflect you as the new owner, an Application for Homestead Tax Credit Eligibility is sent to your property.

    If you do not get an application via mail, you can download a Homestead Tax Credit application off the Maryland government website, fill it out and mail it in. Unlike other tax credits and exemptions, you need only apply once as opposed to every year.

    Read more about the Maryland Homestead Tax Credit.

    Homeowners Property Tax Credit

    This tax credit that offers relief for lower income homeowners sets a limit on the amount of property taxes any homeowner must pay based upon his or her income. Applicants must report total income – gross income before any deductions are taken – and the homeowner must provide documentation of all income sources, including non-taxable retirement benefits like Social Security and pensions, according to the Maryland Dept. of Assessments and Taxation. To qualify a homeowner’s net worth must not exceed $200,000 while the gross household income must not exceed $60,000 annually.

    This article is for general information purposes only. Consult your tax professional. For further reading, consult IRS Publication 503 and IRS Publication 936
  • Mortgage Certificate Program

    This is a relatively new program for first-time homebuyers offered by the Virginia Housing Development Authority. The credit matches dollar-for-dollar 20 % of the total mortgage interest paid by the homebuyer each year, thus reducing the amount of federal income tax they owe. The remaining 80 % of the total mortgage interest paid that year remains eligible for a tax deduction.

    Like most of the tax benefits mentioned in this article, the Mortgage Credit Corticated program comes with income and purchase price limitations. Those amounts vary depending on where the house is located. In the DC metro area, the limits are $121,900 for households of two or less and $142,300 for households of three or more, while the purchase price limit is $500,000.

    Further, with this program a homeowner who sells his or her property in the first nine years of homeownership may subject to a federal recapture tax.

    Livable Home Tax Credit

    The Virginia Department of Housing and Community Development administers this $5,000 income tax credit that offers tax relief to individuals and corporations who purchase a new accessible residence and a credit of 50 % of the cost of improvements up to $5,000 to retrofit an existing property.

    Like most of the tax benefits mentioned in this article, the Mortgage Credit Corticated program comes with income and purchase price limitations. Those amounts vary depending on where the house is located. In the DC metro area, the limits are $121,900 for households of two or less and $142,300 for households of three or more, while the purchase price limit is $500,000.

    Further, with this program a homeowner who sells his or her property in the first nine years of homeownership may subject to a federal recapture tax.

    For a new residential unit to qualify, an applicant must be able to demonstrate the residence includes three features of “Universal Visitability” or include at least three accessibility features such as a zero-step entrance, doors with a minimum of 34 inches of clear width and hallways that are a minimum of 36 inches of clear width, according to the latest application guidelines.

    For a retrofitted unit to qualify, an applicant must be able to demonstrate improvements included at least one accessibility feature.

    Historic Rehabilitation Tax Credit

    Those who choose to purchase and rehab a historical property in Virginia may be eligible for a rehabilitation tax credit aimed at preserving the state’s historic homes. The credit is equal to 25 % of the rehabilitation expenses, while the work must also be certified by the Virginia Department of Historic Resources. The cost of the rehab project must be equal to a least half of the residence’s assessed value or 25 % if the residence is owner-occupied.

    This article is for general information purposes only. Consult your tax professional. For further reading, consult IRS Publication 503 and IRS Publication 936
  • Office In-Home Tax Deduction

    Technically this would be a business expense tax deduction, but if you use a portion of your home as a home office, you may qualify for an Office In-Home tax deduction.

    To qualify for this benefit, the IRS says a taxpayer must use a specific area of his or her home strictly for business, although the space does not need to be marked off with a permanent partition.

    These Items are NOT Tax Deductible

    Most closing costs – title fees, home inspection fees, home warranties, real estate commissions and most other expenses related to the closing process are most likely not tax deductible. Only the items mentioned above are eligible for a tax write-off.

    Home improvements – costs associated with home improvements (outside of interest paid on a home improvement loan) are not tax deductible, but there is a silver lining. Since many home improvements add to the value of a home, it’s possible you could sell your property for more money down the road and recoup your investment.

    Transfer / Recordation taxes – these taxes are traditionally split by the homebuyer and seller in the DC metro area and are dependent on the sales price of the property. While they are not deductible, the IRS says buyers can include them in the cost basis of the property and sellers can reduce the amount realized on the sale.

    For Your Friends Who Are Still Renters...

    The District of Columbia and Maryland offer a tax deduction for renters to offset costs landlords add to their rental rates to pay their tax-deductible property taxes. Both credits come with income and other restrictions, but renters could get back as much as $1,000. Virginia does not currently offer a tax deduction for renters.

    Taking advantage of the renter tax credit is one way renters may be able to save toward a down payment on a house.

    This article is for general information purposes only. Consult your tax professional. For further reading, consult IRS Publication 503 and IRS Publication 936

Did we miss anything?

Tax credits and deductions for homebuyers and homeowners are constantly changing, so please let us know if we missed one of your favorites or if you have another one to add to our list.

MoCo Council to consider increase to recordation taxes

The cost of buying a home in Montgomery County may soon increase, as County Council President Nancy Floreen has proposed an increase in the recordation taxes paid at real estate closings as a way to finance school construction.

The measure is projected to raise $185 million in revenues with $155 million earmarked for school construction, and a hearing on the bill is scheduled for May 10.

The current recordation tax in Montgomery County is $6.90 per $1,000 for the first $500,000 of purchase price. The recordation tax rate increases to $10 per $1,000 for anything over the $500,000 mark. Buyers and sellers customarily split the recordation tax 50/50.

For example, a purchase price of $400,000 at the current recordation tax rate would amount to $2,415 split between the buyer and seller. On a home sold for $600,000 the recordation tax would amount to $4,105 split between the buyer and seller.

Real estate agents are opposed to the tax increase saying it will hurt first-time homebuyers in particular and may have a negative impact on the local real estate market overall. Proponents of the legislation say it is necessary to fund school expansions in the growing county.

Montgomery County’s population has increased by more than 100,000 residents over the last 10 years and exceeds 1 million residents, making it the most populated county in Maryland.

Check back for updates on this legislation.

What’s the status on B21-0417, aka The First-time Homebuyer Tax Benefit Amendment Act of 2015?

Legislation that would offer tax relief for District residents buying DC real estate is currently under committee review and awaiting scheduling for a mark-up, a spokeswoman for the Council's Committee on Finance and Revenue said.

Known as the First-time Homebuyer Tax Benefit Amendment Act of 2015 (B21-0417), the bill would create a new transfer tax rate of 0.725% for homebuyers who have never purchased a house, condo or share in a cooperative unit in the District. It would go into effect Sept. 30, 2016.

During mark-up, which is a vote in the Committee to send the bill before the whole Council, the Committee will have an opportunity to amend the bill (or not) and will also have a chance to review a financial impact statement to analyze costs and revenues of the proposed legislation.

If the bill passes mark-up, it will go to Mayor Muriel Bowser for a signature before going to Congress for review and passive approval. If it fails mark-up, the bill will get kicked to the Committee of the Whole and added to the agenda for the next legislative meeting.

Impact on low- to moderate-income residents a concern

The Council held a public hearing about the bill on February 10 of this year, which is when Settlement Observer picked up on the story. Then on February 24 a representative from the DC Fiscal Policy Institute testified before the Committee about concerns regarding a lack of income restrictions and the impact the tax cut would have on the city’s Housing Production Trust Fund.

“Rather than provide a new tax benefit for all first-time homebuyers, DCFPI recommends that policymakers review the city’s current deed tax assistance to low- and moderate-income homebuyers and make adjustments if they appear warranted,” said DCFPI Housing Policy Associate Claire Zippel in her testimony.

The bill was introduced last October by councilmembers Jack Evans (D-Ward 2), David Grosso (I-At Large) and Anita Bonds (D-At Large).

Grosso acknowledged concerns regarding the economic impact of lowering the transfer tax rate across the board and, in particular, how such a deduction would affect the Trust Fund.

“I am committed to working with my colleagues to ensure that the [Trust Fund] receives annual commitments so that it is not dependent on yearly fluctuations in recordation tax revenues,” Grosso said in a statement.

Mayor Bowser’s budget proposal last year included $100 million for the Trust Fund in fiscal year 2016, according to the website of the Coalition for Nonprofit Housing & Economic Development. The Trust Fund is administered by the DC Department of Housing and Community Development with support from the Coalition.

The Trust Fund “enables non-profit housing providers, mission-driven for-profit developers and renters wishing to exercise their Tenant Opportunity to Purchase rights to improve and develop affordable housing in all eight wards,” according to the Coalition’s website.

Since its inception in 2002, The Trust Fund has produced or preserved more than 8,000 affordable homes with upward of 2,000 more in the pipeline, according to the Coalition’s website. In addition the Trust Fund has created an estimated 10,000 short-term and permanent jobs and has helped more than 18,000 DC residents.

The District's homebuying taxes significantly higher than Maryland or Virginia, about 50% higher on average

Current DC transfer and recordation taxes are on average 50% higher than neighboring Maryland and Virginia, Grosso said in a statement, which was the impetus for introducing a bill that would lower the tax burden for homebuyers purchasing for the first time in the District.

Transfer tax rates for District properties vary depending on the purchase price, from 1.1% for purchases $399,999 and below to 1.45% for purchases of $400,000 or more. The tax payment is traditionally paid by both the buyer and seller.

The DC tax abatement program offers relief for some, but homebuyers must satisfy income, purchase price and other restrictions and provide documentation to qualify.

Tax abatement waives the recordation tax obligation for low- to moderate-income first-time homebuyers while also crediting the seller’s portion of the tax to the homebuyer, resulting in a 2.2% swing in favor of the homebuyer. In addition, a qualifying homebuyer is exempt from paying property taxes for the first five years of ownership, but again some restrictions apply.

“If policymakers are concerned that the current deed tax assistance programs are inadequate, the District should look to modify existing programs while keeping a focus on low- and moderate-income families, rather than adopt another tax break that has no income targeting,” Zippel, the housing policy associate, said in her testimony.

We will continue to monitor the story, and readers can also follow along on the Council's website.

Fewer hands in the pie means more pie to go around

Happy Pi Day! What better day than Pi Day to remind homebuyers about all the hands in their "pie" so to speak when it comes to real estate closings.

It's no surprise that everyone wants a piece of the proverbial pie, from the real estate agent's commission to the lender's fees to the government's taxes and, yes, even the title company's charges.

Having to share some of your pie is a fact of life. Having to give up all of your pie is a tragedy of life.

Just like homebuyers, we don't like having to give up our entire pie. That's why we have held firmly as an independent title company – we will not share our pie, or profits, with referral sources through Affiliated Business Arrangements or Marketing Service Agreements.

Not all title companies feel the way we do. They happily share their pie with their referral sources because they believe they can make it up by taking more pie from unassuming homebuyers. Unfortunately, they are often right.

Homebuyers who understand how much dough is at stake, however, are often surprised by the cost difference between one title company to the next. When made fully aware of these differences, most homebuyers choose to spend less.

With fewer hands in the pie, as our company founder Todd Ewing likes to say, there's more pie for everybody. In this case it means a cost savings of up to $750 for our clients.

The cost savings we extend to our homebuyers is part of our revolutionary REAL Credit™ program, which reflects costs passed through to consumers who close with other, affiliated title companies. To date, the cost savings hovers above $8 million.

That's a lot of pie.

Transfer tax relief coming for first-time homebuyers in DC

Transfer tax relief coming for first-time homebuyers in DC

First-time homebuyers in the District of Columbia can look forward to a lower transfer tax rate at the closing table starting this fall, provided the City Council votes in favor of the "First-time Homebuyer Tax Benefit Amendment of 2015" as it is expected to do.

A new transfer tax rate of 0.725% for first-time homebuyers would go into effect on Sept. 30, 2016, according to the bill that is sponsored by councilmembers Jack Evans (D-Ward 2), David Grosso (I-At Large) and Anita Bonds (D-At Large).

To obtain the benefit, a signed affidavit must be provided at closing essentially stating that the buyer is a first-time homebuyer and the unit will be his or her principal residence.

The current transfer tax rate for homebuyers varies depending on purchase price from 1.1% for purchases of $399,999 or below to 1.45% for purchases of $400,000 or more.

This amendment would not be the District's first attempt at offering tax relief to would-be homebuyers. Up until the 2012 tax year, qualifying buyers were eligible for a $5,000 tax credit when they filed their taxes in April. That program had been in existence since 1997 before it was canceled.

Another popular tax program that's still going strong in District is the tax abatement program.

The First-time Homebuyer Tax Benefit Amendment will take effect following approval by Mayor Muriel Bowser and is subject to a 30-day congressional review.

FIRPTA withholding to increase next week

If you work with foreign nationals in your real estate business, be advised that the FIRPTA withholding rate on home sales exceeding $1 million will increase to 15% on February 16.

Also known as the Foreign Investment in Real Estate Property Tax Act, FIRPTA requires foreign persons to pay U.S. income tax on gains made from the sale of real estate in the United States. Home sales that do not exceed the $1 million dollar threshold are subject to a 10% withholding.

There is an exception to the FIRPTA withholding rule. If the sales price is below $300,000 AND the new buyer intends to use the property as a principal residence, then the home sale is not subject to FIRPTA withholding.

The duty of collecting the FIRPTA tax, owed by a foreign national seller, is imposed on the U.S. national buyer The amount that must be withheld can be lowered pursuant to the seller obtaining a withholding certificate from the IRS prior to closing.

In most instances, the settlement agent will actually collect the withholding from the foreign national seller and remit the funds to the IRS on behalf of the buyer. However, the buyer is held legally responsible for the proper withholding and, under the law, the buyer could be liable for any additional withholding tax, penalty and interest if ever challenged by the IRS.

To help you determine when FIRPTA withholding is required, and the rate to withhold, we created a simple flowchart that contains four easy questions. You can view it on our website and download a copy to share with your clients and colleagues.

Have you stopped by our new location on 14th Street?

We are pleased to announce a second Federal Title office located at 1803 14th Street, NW is now open for business.

Our new location is two blocks south of U Street and three blocks north of Logan Circle in the heart of the burgeoning 14th Street Corridor.

Use our main phone number (202) 362-1500 to get in touch with that office or send your general inquiries to This email address is being protected from spambots. You need JavaScript enabled to view it.. Be sure and bookmark our Contact Page to keep our information for both locations at the ready.

Stephanie Dudley will lead our team at our U Street / Logan Circle location as managing attorney. Stephanie has been with our company for about three years now. She received her Juris Doctor from The Catholic University of America in 2005 and has been working in the title industry as an attorney and settlement processor ever since.

Attorney Chris David and settlement coordinator Shantae Holland have made the move with Stephanie from headquarters in Friendship Heights to the new location.

Next time you're in the U Street or Logan Circle neighborhoods, look for our logo on a blue awning, and be sure to drop in and say hello. We look forward to serving you from a location that's even closer to the neighborhoods a growing number of homebuyers are calling home.

CFPB takes aim at Marketing Service Agreements: Washington Post

CFPB takes aim at Marketing Service Agreements: Washington Post

We had a very nice mention in the Washington Post this week on a topic that we are very passionate about:

"The best defense against getting ripped off [at real estate settlement] is to shop for settlement services aggressively, get competing quotes and look for online consumer reviews and complaints. You could save a bunch of money."

The story comes after the Consumer Financial Protection Bureau released a compliance bulletin highlighting the substantial risks real estate professionals assume when they enter into Marketing Service Agreements.

We were pretty excited to see the announcement given that we have been railing against this dirty business practice for a few years now.

Nationally syndicated columnist Ken Harney interviewed Todd about one brokerage that asked Federal Title to pay $15,000 per month in exchange for an opportunity to speak with agents and display brochures in their office. If the number seems outrageous, just consider it was their "going rate."

Word is getting out there about the importance of shopping around when it comes to selecting a title company. Just this afternoon I took a call from a soon-to-be homebuyer who mentioned she had been "doing some reading" and learned that it would be in her best interest to compare title service fees and closing costs. (For what it's worth, she also reported our numbers were lower than the title companies recommended to her.)

'Grave concerns' about use of Marketing Service Agreements: CFPB

'Grave concerns' about use of Marketing Service Agreements: CFPB

Having determined Marketing Service Agreements involve "substantial legal and regulatory risk," the Consumer Financial Protection Bureau issued a word of caution to the mortgage industry in a compliance bulletin published Thursday.

"We are deeply concerned about how marketing services agreements are undermining important consumer protections against kickbacks," CFPB Director Richard Cordray said in a separate statement about the bulletin. "Companies do not seem to be recognizing the extent of the risks posed by implementing and monitoring these agreements within the bounds of the law."

Marketing Service Agreements, or MSAs as they are commonly known, are usually framed as payments for advertising or promotional services, according to the bulletin, but sometimes payments are actually disguised as compensation for referrals.

"It appears that many MSAs are designed to evade RESPA's prohibition on the payment and acceptance of kickbacks and referral fees," according to the bulletin.

MSAs often involve lenders, real estate agents and third-party settlement service providers such as title companies, and they undermine the primary purpose of RESPA, which is to eliminate "kickbacks or referral fees that tend to increase unnecessarily the costs of settlement services."

Offering a thing of value in exchange for a business referral, whether it's a written or an oral agreement, is a compliance risk that leaves participants vulnerable to civil and criminal penalties, according to the bulletin.

The bulletin goes on to state RESPA violations have resulted in penalties upward of $75 million since the CFPB began taking enforcement actions.

Here at Federal Title, we've been leery of MSAs for some time. They seem to have become increasingly popular over the last couple years as the CFPB has cracked down on their not-so-distant cousin the Affiliated Business Arrangement.

CFPB to institute ‘hold harmless’ period when TRID takes effect

CFPB to institute ‘hold harmless’ period when TRID takes effect

The Consumer Financial Protection Bureau is instituting a hold-harmless period during the initial implementation of the Know Before You Owe TILA-RESPA Integrated Disclosure rule, wrote CFPB director Richard Cordray in a letter to the industry obtained by Federal Title.

The letter does not specifically state how long the hold-harmless period will last. Cordray noted in the letter CFPB’s approach is similar to the one it took to enforce mortgage rules that went into effect in January 2014, adding that the hold-harmless approach was successful at that time in making the transition to new regulations a bit smoother.

“During initial examinations for compliance with the Rule, the agencies’ examiners will evaluate an institution’s compliance management system and overall efforts to come into compliance, recognizing the scope and scale of changes necessary for each supervised institution to achieve effective compliance,” Cordray said in the letter.

The letter went to the heads of several groups in the mortgage and real estate industry, including the American Land Title Association, the National Association of REALTORS and the American Bankers Association, and is a response to their efforts to delay implementation of TRID.

“We recognize that the mortgage industry has dedicated substantial resources to understand the requirements, adapt systems, and train affected personnel, and that additional technical and other questions are likely to be identified once the new forms are used in practice after the effective date,” Cordray said in the letter.

While TRID is slated to go into effect October 3, ALTA and others continue to support legislative action to extend the hold-harmless period to February 1, 2016 and provide relief from civil liability, said ALTA CEO Michelle Korsmo in an announcement sent to members last night in response to Cordray’s letter.

'eClosings study': Advanced document delivery empowers homebuyers, improves grasp of closing process; technology helps

'eClosings study': Advanced document delivery empowers homebuyers, improves grasp of closing process; technology helps

HOMEBUYERS WHO RECEIVE THEIR CLOSING DOCUMENTS well in advance of their closing date are more likely to report higher levels of understanding, efficiency and empowerment regarding the real estate closing process, according to a study conducted by the Consumer Financial Protection Bureau.

CFPB Director Richard Cordray delivered prepared remarks during a forum about the pilot project known as "eClosings."

"Though the sample for this pilot was somewhat limited, the correlation between eClosings and the positive outcomes we observed is encouraging and consistent with our expectations," Cordray said.

The program seeks to assuage three primary gripes consumers have about the real estate closing process: They don't have enough time to review documents; they are overwhelmed by the sheer volume of closing documents; they discover errors in closing documents but remain under urgent pressure to close.

Over a four-month period, the project surveyed approximately 1,200 homebuyers about their feelings surrounding the real estate closing process. Some of the respondents closed with traditional paper documents, while some closed with electronic documents and others still closed with a combination of electronic and paper documents.

"[H]omebuyers end up signing documents without properly understanding or evaluating the most critical information," Cordray said. "This creates new anxiety as they worry about what was buried in the stack of paper that may create some nasty surprises in the years ahead."

The findings of the eClosings pilot program are consistent with the impetus behind the "Know Before You Owe" rule and implementation of the TILA-RESPA Integrated Disclosures that have many title agents and lenders scrambling to ensure they are in compliance by October 3 when the new rule takes effect.

Implementation of the new mortgage disclosure rules is expected to cost settlement service providers $67.8 million and lenders $207 million over the next five years, bringing the total cost to $1.3 billion. In his remarks, Cordray said eClosings "hold much promise" for the mortgage industry to improve efficiency and accuracy at a potentially lesser cost.

"While technology alone will not address all consumer concerns, eClosings do offer potential to make the process less complex," Cordray said.

View Cordray's remarks in their entirety at the CFPB newsroom.

CFPB proposes effective date of Oct. 1 for new mortgage disclosure rules

Title companies and lenders who are bracing for one of the biggest shake-ups of the mortgage industry in decades may have a couple more months to prepare. 

The director of the Consumer Financial Protection Bureau announced a proposed amendment to push the effective date of the new mortgage disclosure rules from August 1, 2015 to October 1, 2015

The proposed amendment is up for public comment, and a final decision will be made afterwards; however, for all intents and purposes the new effective date is now October 1, 2015.

The CFPB discovered an "administrative error" in meeting the requirements of federal law, which ultimately resulted in the effective date being pushed into the fall. 

In a statement issued yesterday regarding the Know Before You Owe mortgage disclosure rule, Director Richard Cordray said:

"The CFPB will be issuing a proposed amendment to delay the effective date of the Know Before You Owe rule until October 1, 2015. We made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks. We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will be busy with the transition to the new school year at that time." 

Implementation of the new mortgage disclosure rules is expected to cost settlement service providers $67.8 million and lenders $207 million over the next five years, bringing the total cost to $1.3 billion.

Representatives from the American Land Title Association, American Bankers Association and Finance Policy Center for the Urban Institute testified before Congress last May, asking for a "hold harmless" period through the end of this year. 

So far efforts to establish a hold harmless period have been unsuccessful, while the proposed amendment is expected to go final shortly. 

Best Practices policy safeguards our clients

Best Practices policy safeguards our clients

Federal Title & Escrow Company was one of the first title companies in the country to implement a series of business procedures with the best interest of consumers – homebuyers and sellers – in mind.

The procedures are known as "Best Practices," and consumers, financial institutions, and real estate agents who work with us can rest easy knowing that each settlement is fully compliant with federal and state regulatory requirements.

What is your title company doing to ensure consumers are protected and treated fairly?

  Federal Title Other title companies
Provides Online Guaranteed Pricing   √   ?
Provides clear, up-front options in choice of owner's title insurance coverage   √   ?
Procedures in place to protect consumers' non-public personal information (NPI)   √   ?
Ongoing training and annual background check requirement for all employees   √   ?
Cyber Privacy and Data Breach Protection Insurance – Up to $1 million of coverage per claim   √   ?
Errors & Omissions (E&O) Insurance – Up to $2 million of coverage per claim   √  ?
Fidelity and Surety Bonded – Up to $250,000 of coverage per claim   √   ?
Meets federal regulatory requirements having completed a standardized risk management process   √   ?
Provides avenue for clients to submit complaints, compliments and other feedback  √   ?
Procedures in place for tracking and resolving customer feedback   √   ?
On-staff Chief Compliance Officer to ensure licenses, insurance, ongoing training and customer feedback log stay current   √   ?

Realtor Day at DC Design House

Realtor Day at DC Design House is happening Wednesday, April 22 from 10 a.m. to 3 p.m. with light bites and beverages being served at noon, provided by Federal Title.

Tickets are $30 and may be purchased at the door. Realtors who present a business card will receive a $5 discount, courtesy of DC Living Real Estate. 

This year's canvas is a McLean country estate. Twenty-four design firms have been selected to reimagine 28 spaces spanning three levels. This is the 8th Annual DC Design House to benefit Children's National Health System. In its first 7 years, DC Design House has donated over $1.25M to Children’s National.  

REALTOR DAY at DC Design House
Wednesday, April 22
10 a.m. to 3 p.m.
9526 Mackall Farms Lane
McLean, VA 22101

Tickets will be sold at the door and can also be purchased in advance here. The $5 Realtor discount is only available at the door. We hope you enjoy this special Realtor Day, all for a worthy cause of transforming children’s healthcare in our nation’s capital. 

Greatest media hits of 2014

We enjoyed some nice press over the past year, including a couple mentions in the Washington Post as well as our first mention in a feature story from Inman News, a real estate tech website.

Coverage mainly focused on our app Close It! and the announcement of our partnership with MRIS to offer a specially licensed version for their agents. Federal Title's version remains available to all and has had nearly 13,000 downloads to date. 

The mobile way to buy or renovate a home (Washington Post)

Close It!: This app "is like Turbo Tax for real estate transactions," says Todd Ewing, president of Federal Title & Escrow in Washington. "The app immediately produces a cash-to-close estimate along with an estimated mortgage payment and a shareable HUD-1 Settlement Statement similar to what the buyer will see on the day of the closing. All the buyer has to do is enter a purchase price and a property jurisdiction."

Apptitude: Wondering what your closing fees will be? Ask Close It! (Washington Post)

A D.C. title company has come up with an app that takes the guesswork out of closing on a local home. Buyers can use Close It! by Federal Title and Escrow to input the purchase price and jurisdiction, and the app will predict how much money they will need for closing and what their monthly payment will be.

MRIS partners with Federal Title to launch closing app (RIS Media)

Through a partnership, MRIS, which facilitates nearly $125 million a day in real estate transactions, now offers a custom, specially licensed version of Close It! to calculate total cash-to-close and net proceeds for real estate transactions.

MLS arming agents with app that calculates buyer and seller closing costs (Inman News)

Like the Close It! app, the MRIS version allows users to compare closing costs in different jurisdictions and show the difference in closing on the first of the month compared to at the end of the month, MRIS and Federal Title said.

MRIS and Federal Title launch comprehensive closing costs calculator (Geek Estate)

Mid-Atlantic Multiple Listing Service (MRIS), and Federal Title & Escrow Co. have launched MRIS Close It!, a desktop and mobile app that provides quick and concise closing cost estimates.

Top posts of 2014

As another year comes to a close at Federal Title, we take a moment to look back at some of the most popular articles posted to our blog in 2014. 

Supplemental tax bill catches some Maryland homebuyers off guard
By Catherine Schmitt

A supplemental tax bill is a bill that is issued when a property is reassessed during the current tax year. Often the supplemental bill will be for a specific period, i.e., a quarter, half or three-quarter tax period. This bill is an additional bill that is sent directly to the home owner and is paid directly by the owner.

Maximum VA loan county limits for 2014 released 
By Jackie Kurz

The Department of Veterans Affairs Loan Guaranty Program recently published county "limits" to be used for VA Loans effective January 1, 2014.

How can real estate agents protect against Internet security threats? 
By Nikki Smith

A solid Web marketing strategy can be a boon to business of any size, but it can also make a business more vulnerable to cyber attacks if proper precautions are not taken.

Headlines: Bizarre story of missing real estate agent ends in tragedy 
By Nikki Smith

The body of missing Arkansas realtor Beverly Carter has been located north of the Little Rock area in a shallow grave, the Pulaski County Sheriff's Office said early Tuesday

5 safety tips for real estate agents 
By Nikki Smith

While rare, attacks on real estate agents do happen from time to time and (sadly) women in particular are vulnerable. In light of this recent event, I thought it'd be good to explore the topic and offer some safety tips for real estate agents.

Avoid the DC recapture tax 'surprise' 
By Todd Ewing

DC Office of Tax and Revenue has recently been imposing a recapture tax against properties that were receiving senior citizen tax relief but ineligible due to the property owner’s death – i.e., a change in eligibility.

A wake-up call from CFPB regarding Marketing Service Agreements 
By Todd Ewing

Federal Title has actively taken a strong stance against both MSA’s and Affiliated Business Arrangements (ABAs), recognizing that such arrangements only enrich the referral sources at the expense of the consumer and further drive up the costs of title charges.

New Maryland bill to limit cost of condo resale package 
By Todd Ewing

There's currently a proposal to limit the fee to $50. Hearings on the legislation continue and we will keep you apprised of the final bill.

DC Council passes the Senior Citizen Real Property Tax Relief Act of 2013 
By Joe Gentile

Ten members of the Council of the District of Columbia voted for and passed the "Senior Citizen Real Property Tax Relief Act of 2013" earlier this week. The bill will now be submitted to DC Mayor Gray for his signature.

Real estate predictions for 2014 
By Nikki Smith

"You've got a migration of folks from all over the country trying to crack the DC [housing] market," said Todd Ewing, whose company handled more than 1,400 purchase closings in 2013. "That trend will continue."

5 marketing ideas for real estate agents from Close It!™

The best real estate agents are constantly on the look-out for ways to better market themselves to their home buyers.

And while the latest report shows it's 34% more affordable to buy versus rent in the DC metro area, many would-be homebuyers remain on the fence

How can you get these homebuyers off the fence – and then convince them to buy the fence along with the house that comes with it? Here are 5 ways Close It!™ can help you market your real estate business:

1. Follow up with clients by sharing Close It!™ in your email, social media or blogging campaigns. 

You've already got a database of email addresses, Facebook page likes and Twitter followers. Perhaps some of those contacts are would-be homebuyers who aren't quite sure if they can really afford to buy a house. Reach out to them about the only app in the region that calculates a homebuyer's total cash to close. It's a fun and useful tool that lets them crunch the numbers any way they want. 

2. Customize your Close It!™ reports with photo and contact info.

You're already working with several prospective homebuyers who no doubt have lots of questions about how much everything is going to cost in the end. Follow up on last weekend's house tour with a set of HUD-1s custom branded with your professional photo and contact information. Your homebuyers will be impressed when you outline every cost for them down to the penny.

3. Appeal to the foreign investor market.

If you're working in neighborhoods like Georgetown, Foggy Bottom and the West End, it's quite possible you've worked with foreign investors or that you will at some point. Did you know that sellers who do not participate in the U.S. tax system must pay the IRS a tax of 10% of the sales price for all properties over $300,000? A surprise like that at closing could cost you a client, or worse yet, merit you a negative online review. Close It!™ helps you better serve foreign clients by accounting for FIRPTA withholding along with every other nuance of real estate law and tax code for each jurisdiction.

4. Appeal to the first-time homebuyer market.

The first-time homebuyer demographic may make up a smaller share of homebuyers now compared to historic levels, but it's only a matter of time before an influx of millennial homebuyers causes it to explode. And the millennials, more than previous generations, are more likely to look to technology to help them gather information about the process. Be their guide. Keep up with real estate technology, including mobile apps, and share your favorite findings with your millennial homebuyers. Close It!™ is one app homebuyers in the DC metro region in particular will appreciate, but there are many more apps, tools and resources to discover. 

5. Appeal to the move-up buyer market with seller's calculator. 

For buyers in the move-up market, how much house they can afford often depends on how much money they can net from their existing home sale. Introduce those clients to the app that toggles between a net proceeds calculator for the seller side and a cash-to-close calculator for the buyer side. 

Close It!™ is a free iOS and Web app that helps real estate agents, buyers and sellers drill down the costs of buying and selling real estate.

MRIS to offer custom, specially licensed version of Close It! to members through partnership with Federal Title

MRIS, the industry-leading Mid-Atlantic Multiple Listing Service (MLS), and Federal Title & Escrow Co. today announced they have launched MRIS Close It!, a desktop and mobile app that provides quick and concise closing cost estimates.

"MRIS Close It! accurately answers questions real estate agents commonly hear such as 'how much cash do I need to close?' and 'how much can I expect to net from the sale of my home'," said Andrew Strauch, Vice President of Product Innovation at MRIS. "Through this new core product, our customers now have the ability to quickly and easily answer these questions for homebuyers and sellers on the fly."

Through the partnership, MRIS, which facilitates nearly $125 million a day in real estate transactions, now offers a custom, specially licensed version of Close It! to calculate total cash-to-close and net proceeds for real estate transactions. MRIS Close It! allows users to instantly create, edit and share HUD-1 Settlement Statements and net sales sheets.

"I am going on 37 years in this business and MRIS Close It! is as easy as it gets to calculating closing costs for buyers and sellers," said Scott Miller, MRIS customer and Associate Broker at RE/MAX 100. "My clients and I can rely on MRIS Close It! for quick and helpful closing cost estimates."

Federal Title, a technology pioneer in the title industry, initially launched the consumer-facing Close It! app in May 2013 to simplify homebuying costs. The app, along with the MRIS version, can compare costs in different jurisdictions and show the difference in closing on the first of the month compared to at the end of the month. Many features are customizable including the mortgage rate and down payment amount and allow the user to differentiate between FHA, VA loans and cash purchases.

"We created the most accurate app on the market that simplifies the closing process," said Federal Title founder Todd Ewing. "It removes the guesswork from the equation and is the ultimate closing costs calculator."

The app is a new core product for MRIS customers and is included in their MRIS subscription at no additional charge. To learn more about MRIS Close It! and to download the app for iPhone/iPad, please visit


MRIS is Real Estate in Real Time™. We’re a leading provider of real estate information technology and services, and are frequently ranked among the most productive Multiple Listing Services (MLS) in the nation, facilitating over $45 billion in system wide sales in 2013. In its core market, MRIS supports over 45,000 real estate professionals spanning the Mid-Atlantic region, including Maryland, Northern Virginia, Washington, D.C. and parts of Pennsylvania, Delaware and West Virginia. MRIS provides a portfolio of technology solutions and proprietary databases for real estate professionals, as well as broker and agent software products and an industry-leading consumer portal, (formerly HomesDatabase). In addition, the CURE Solutions Group, a subsidiary of MRIS, provides proprietary back-end technology to other MLS systems, serving nearly 180,000 customers each day. Visit MRIS at and our web based TV station, “Like” us on Facebook/MRISonFB, follow us on Twitter, @MRIS_REal_News and be sure to visit for real-time news and company updates.

About Federal Title & Escrow Company 

Federal Title & Escrow Company is the largest independently owned title company in Washington, D.C. – innovators within the title industry, trend setters who leverage technology to streamline the closing process, pioneers of a business model that has saved homebuyers more than $8 million in closing costs. Their innovative app Close It!, has over 10,000 downloads to date. It was nominated for a Tabby Award in October 2013 and has been featured in the Washington Post, Title Report and Washington and Baltimore business journals. To find out how this unique company is changing the way homebuyers and sellers think about title companies, visit

.realtor coming in October

All you tech-savvy real estate agents out there who wish to further distinguish yourselves online will be able to register a .realtor domain name by Halloween, says the National Association of Realtors

If this is something that interests you, make sure to jump on the band wagon early since NAR is offering a year's worth of free hosting to the first 500,000 people who register. And if you have an existing profile at, you'll be able to transition it into a stand-alone site with your name on it. 

The .realtor domain name, in the works since 2012, is NAR's latest attempt to close the gap between the number of buyers who find their real estate agent online (about 9 percent) and the number of buyers who search for homes online (about 89 percent). They've tried other approaches in the past that didn't pan out so well. 

NAR initially applied for the .realtor domain name to help its Realtors® stand out from other real estate professionals and to help consumers distinguish between websites operated by industry professionals from sites maintained by third parties, according to an earlier report from Inman News

Washington Post profiles our awesome app Close It! in this Sunday's magazine

Word is spreading about the app that takes the guesswork out of closing.

This weekend, the Washington Post will run an article in their Sunday magazine that profiles our free iOS and Web app, Close It!

Reporter Kathy Orton breaks it down:

"Whether you want something quick, easy and accurate to estimate closing costs and monthly mortgage payments, or you want to drill down into the numbers, this app takes the mystery out of closing."

Believe it or not, this is the third time the Washington Post has mentioned Close It! in their editorial pages since we launched the app in May 2013. About a year ago we had a one-inch blurb on the inside of the front page. About two months ago Close It! was included along with several other real estate apps engineered in the DC metro area. 

We're doing what we can to get the word out to homebuyers as well as their agents and lenders about our awesome app as well as the importance of shopping for title services. Hopefully the app gives consumers a good reference point in terms of calculating closing costs and total cash to close. 

Agents and lenders out there who are interested in adding the Web version Close It! as a feature, tool or resource on their own website, feel free to get in touch with me. I'm happy to assist or offer advice on how to make that happen.

Federal Title targets consumers' best interest with 'Best Practices'

While real estate settlement service providers across the country groan about new government regulations stemming from Dodd-Frank, the largest independently owned title company in the region is capitalizing on the changes in its latest effort to turn the title industry on its head.

A "leader in compliance," Federal Title & Escrow Co. at the beginning of this year became one of the first title companies in the country to implement a series of business procedures with the best interest of their clients – homebuyers and sellers – in mind. The procedures are known as "Best Practices," and financial institutions and real estate agents working with Federal Title can rest easy, too, knowing each settlement is federally compliant and hassle-free. 

"The consumer is our client," said company founder Todd Ewing. "They are the ones paying the bill at settlement, not their agent or lender. Therefore it's our duty to look out for the consumer's best interest." 

Protecting the consumer's best interest

Among other things, Best Practices established procedures for protecting consumers’ identities and something called non-public personal information: social security, driver's license, and credit or debit card numbers for example. It also established procedures for safely storing, emailing and disposing of sensitive documents. 

To further protect consumers, Federal Title took out several insurance policies including a cyber protection policy that's good for up to $1,000,000 per claim with a provision for hacker attacks. Copies of these policies are available upon request. 

"Behind the scenes, we're going above and beyond the minimum requirements according to Dodd-Frank to deliver the highest level of protection to our clients, that they hopefully never have to realize," Ewing said. "Agents and lenders in the area are hearing about our efforts from other real estate professionals as well as their buyers and sellers – we take these compliance requirements seriously."

Turning the title industry on its head

Too often, in today’s environment, title agents depend on the referrals of agents and lenders – often leading to added cost for the consumer.

Real estate brokerages have forged Affiliated Business Arrangements (ABAs) to refer business to title companies for a price, Ewing said, and that expense gets kicked down to the homebuyer or seller. The federal government's Consumer Financial Protection Bureau has paid close attention to ABAs in recent years, resulting in a rise in Marketing Service Agreements (MSAs).

"It's like putting lipstick on a pig," Ewing said. "No matter what they call it, it’s a kickback with the same end result taking more money out of the pockets of consumers and putting it into the pockets of big brokers."

A large swath of Federal Title's business comes from referrals by real estate agents and lenders, but Ewing said he will continue to target homebuyers and sellers directly while appealing to like-minded real estate professionals who have the consumer's best interest at heart. 

"Demonstrating a level of professionalism to our clients – that we take seriously their privacy as well as compliance with the federal regulations – is the latest in a string of efforts to earn the consumer's trust and ultimately their business," Ewing said. 

Leveraging technology to earn clients' trust

The implementation of Best Practices is one way Federal Title has leveraged technology to change the way the title industry interacts with consumers. Last year the company developed a free iOS and Web app known as Close It! that accurately calculates cash to close for home buyers and cash in pocket for sellers. 

They were the first title company in the region to publish their rates online and offer an instant discount on transactions where the order was placed through the company's pioneering online order system. (Coincidentally the discount illustrates how much is kicked back to referral sources through ABAs and MSAs.)

"No other title company invests as heavily as we do in consumer-driven technology," Ewing said. "We have to try to reach the consumer directly before they get steered to their broker's preferred title company partner and pay more for inferior service."

Dodd-Frank Wall Street Reform and Consumer Protection Act and the title industry

Passed in 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act mandated new consumer financial laws and created an agency known as the Consumer Financial Protection Bureau to enforce them. 

Among other things, the CFPB is tasked with regulating financial products and services such as home mortgages. They have the authority to supervise financial institutions for compliance with these laws and, by extension, third-party service providers such as title companies.

Banks are under the CFPB microscope, and they in turn are taking a hard look at third-party service providers to ensure business practices and services are on the up-and-up in terms of the new requirements mandated by Dodd-Frank.

To guide settlement service providers through the changing landscape, the American Land Title Association developed a series of industry guidelines dubbed "Best Practices." Implementation is voluntary, but in doing so title companies can demonstrate to the consumers and real estate professionals alike a level of professionalism – and ensure a compliant real estate settlement experience. 

5 safety tips for real estate agents

A female real estate agent who was preparing to show a vacant property in New Carrollton, MD was robbed on Monday, according to news reports. It appears the attacker took her purse and some personal items, but the woman will be O.K.

While rare, attacks on real estate agents do happen from time to time and (sadly) women in particular are vulnerable. In light of this recent event, I thought it'd be good to explore the topic and offer some safety tips for real estate agents.

Stranger danger! Verify customer information

In addition to getting your new client's full name and phone number, find out what where he works. Ask for an email address. Ask for multiple telephone numbers. Google is your best friend. While some might consider it creepy to Google an individual before a first date, it's totally acceptable to Google a potential client in the name of personal safety. What's more, you might learn a thing or two about your new client that you can use to help him find the perfect property.

Use the buddy system. Tell someone in your office where you're going

If you're out in the field, let people know. Ideally you shouldn't host public open houses or show vacant property alone. Bring a friend. But since that isn't always practical, at minimum it's a good idea to tell a co-worker and perhaps a personal contact, too, where you're going to be and when you expect to return.

Have new clients meet you in your office or another public place whenever possible. In those situations where you must meet a new client one-on-one, remember Google is your friend. (See the first tip.)

Carry your cell phone and keep it in your hands

Since you've already told your buddy that you will be showing houses or meeting a new client, why not pre-program that contact into your phone in case you need to make a quick call? Bonus points for downloading one of those personal safety apps. Some basic personal safety apps are free while fancier ones cost money. Of course, your phone will be useless in a pocket or purse, so keep it in your hands as much as you can. In the event you have to send a distress call, you can make it quickly and then throw your phone at the perp's face (just kidding).

Familiarize yourself with your surroundings

Take a drive around the neighborhood and keep an eye out for safety concerns. Do a quick Internet search before you go to look up crime reports and other information about the neighborhood. At the property, survey the exits and make sure you're able to get out easily in the event you have to make a quick escape.

Likewise, if you're in a property with your client, make sure you know where he is. Keep your client in sight, ideally in front of you and at a safe distance. Let him enter a room first while you linger by the doorway. You don't have to be weird or obvious about it, but keep your guard up. One of the best ways to avoid a compromising situation is to not allow yourself to get into a vulnerable position where a would-be attacker can take advantage.

Trust your gut

If something doesn't feel right, get out of there. Or don't meet the client one-on-one. It's that simple. Don't discount the lessons taught to us in kindergarten about stranger danger and the buddy system. Take extra steps to ensure your personal safety.

While it's unfortunate to hear about what happened with the female agent at the vacant house in New Carrollton, hopefully her experience will remind others of the inherent dangers of working with the public as a real estate agent. Stay safe out there!

What's up in real estate?

Housing outlook 2014: 10 predictions from the experts

In 2013 the housing recovery was a welcome bright spot for the economy: prices were shooting up, fewer homeowners were underwater, and builder confidence was finally on the upswing. It's looking like 2014 should be another good year for housing – mostly.

What are your gripes about closings?
Realtor Magazine

The Consumer Financial Protection Bureau (CFPB) is asking for feedback on the most stressful, confusing, and problematic areas for consumers when it comes to the closing process in a home purchase.

This guy spent the last month dressing up like local realtors and pasting himself over their bench ads

For the last month Phil Jones has been recreating the ads from local realtors and then taping over them with his own version. He called it The Faces Of Real Estate.

Local news

Photos: Metro shows off railcar of the future

Metro today gave the media a look at its new 7000 series railcar, which was greeted at the Greenbelt station by Mayor Vince Gray, Del. Eleanor Holmes Norton, Maryland Gov. Martin O'Malley and other politicians.

New condo supply on the rise
DC Urban Turf

The number of unsold condo units in new projects or those under construction (and not yet marketing) rose to 3,308 in the DC area by the end of 2013, an increase of 1,000 units from the third quarter when the new condo supply hit its lowest level in a decade.

Report: DC-area condo prices to keep rising for the next three years
Washington Business Journal

In its quarterly snapshot of the Washington condo market, Delta notes the year-over-year change in condo prices in the third quarter was positive for the sixth consecutive quarter, even as sales volume fell to the lowest level since the final quarter of 2011.


4 methods for your mobile house hunt madness
Trulia Blog

You’ll want to make sure you find the best solution (home), with the most efficiency (time, money, etc.) and strategic smarts (not driving yourself wild with anxiety or overwhelm). What you need is a little method to avoid the madness that mobile house hunting can bring.

5 DC startups positioned for major growth in 2014
Huffington Post

HomeSnap makes hunting for real estate a breeze. The algorithm uses a combination of big data and iPhone features (accelerometer, gyroscope, location services) to determine where you are and then present a home's details.

Home Improvement

7 storage solutions you didn't know you had
House Logic

Every square foot of your home is valuable. These storage solutions take advantage of underused nooks and crannies. And just for fun, we did some back-of-the-napkin calculations based on the average price per square foot of a U.S. home ($81) to attach a theoretical value to the bonus space.

Low-cost cabinet makeovers
Better Homes & Gardens

Save thousands of dollars by using paint and new hardware to update your existing kitchen cabinets instead of buying new ones. These colorful, budget-friendly examples will help you get started.

Real estate predictions for 2014

Demand will remain high and the cost of homebuying will increase for homebuyers in the Washington, DC metro area.

LIMITED HOUSING INVENTORY is the biggest driver of the DC region's housing market, says Federal Title & Escrow Company's founder, and as long as supply is limited the market in 2014 will look a lot like last year.

Houses with multiple offers selling for tens of thousands dollars above asking price in some cases – it happened frequently enough in 2013 that the editors at Urban Turf created a new column called Above Asking.

"You've got a migration of folks from all over the country trying to crack the DC [housing] market," said Todd Ewing, whose company handled more than 1,400 purchase closings in 2013. "That trend will continue."

Higher interest rates should not affect the region

Some real estate experts are predicting mortgage rates in 2014 will rise above 5% for the first time since 2010, but the increase is not expected to greatly impact the DC region's housing market.

Homeowners who were planning to refinance have already done so by now, Ewing said, and the federal government continues to attract new people to the region who are in need of housing, driving demand.

"There are still homebuyers out there looking, most two-income households," said Ewing, who's been handling real estate settlements and observing market cycles since the mid-90s. "I don't see a rising interest rate having much of an impact on whether a homebuyer moves forward."

Increased oversight from CFBP will increase closing costs

Expect the Consumer Financial Protection Bureau (created through the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010) to crack down on enforcement of the Real Estate Settlement Procedure Act, a piece of legislation from the 1970s meant to protect consumers from unethical business practices, including excessive fees.

"If the CFPB does what its charter sets forth, such as the enforcement of anti-kickback laws, and remains vigilant of those in the industry who engage in such practices at the expense of the consumer, then this crack down could ultimately be beneficial to the consumer," Ewing said.

But any benefit to the consumer will come at a price that will most likely get passed along to the consumer, as additional training, staffing and implementation new technology will add to the cost conducting a real estate closing.

Phasing out the HUD-1 Settlement Statement

The HUD-1 Settlement Statement will become extinct in August 2015, and the Closing Disclosure will take its place, according to a ruling of the CFPB last November. The new document is five pages and will essentially combine the Truth in Lending Disclosure with the HUD-1.

This year title companies will be looking to completely overhaul their software systems in preparation of change, which may lead to added costs for the consumer.

Federal Title anticipated the CFPB's ruling on the Closing Disclosure and incorporated it into Close It!, an iOS and Web app that accurately determines how much cash will cross the closing table during any given real estate settlement.

Tech developments from Federal Title

Speaking of technological developments at Federal Title, Ewing who has been pleased with the initial performance of the iOS app said he plans to announce the release of a new product later this year. Since launching in May 2013, Close It! has garnered nearly 10,000 downloads and the tablet version was nominated for a Tabby Award last fall, Ewing said.

"It's a popular tool with agents and lenders, and it's way ahead of its time in that it produces a Closing Disclosure," Ewing said. "Going forward we intend to keep on innovating, and we're excited to roll out something new for real estate professionals [later this year]."

Greatest media hits of 2013

It proved to be an exciting year for us with the release of our iOS and Web app, Close It!, which has garnered more than 8,000 downloads and was nominated last October for a Tabby Award.

Several publications wrote stories about our app, including the Washington Post, Washington Business Journal, DC Urban Turf and Curbed DC.

42 best tablet apps for business finalists announced by Tabby Awards
PR Web | Oct. 8, 2013

The Tabby Awards /Business, the only competition for the best business and enterprise tablet apps, announced its finalists today in its second competition. The Tabby Awards /Business received submissions this year from a dozen countries: Australia, Canada, Germany, India, Ireland, Israel, Japan, Poland, Switzerland, Turkey, the United Kingdom and the United States.

Real estate settlement app for Apple users
Heads Up RE | June 8, 2013

If you are in the market for a new home and are worried about how much it is going to cost you to complete the transaction, there is a new real estate settlement app for iPhone and iPad users called Close It!. This real estate settlement app allows you to figure out what your settlement costs are going to be when you sit down at the closing table and have to produce your down payment monies. Oh, and did I mention it is free, yes, it is free.

Title company unveils mobile app that produces customizable HUD-1
American Land Title Association | June 4, 2013

The company said getting started with the app is as easy as entering a purchase or sales price. The results can be fine tuned on a live worksheet to narrow down cash to close or cash in pocket within hundreds of dollars or less for consumers in D.C., Maryland, Virginia and Florida. 

Federal Title & Escrow creates app to generate cash to close info
The Title Report | May 31, 2013

Federal Title & Escrow released a mobile app called Close It! that produces a detailed picture of cash to close and monthly mortgage payments for homebuyers and cash in pocket for home sellers on an editable, shareable closing disclosure statement.

Tip of the week: New mobile app
Washington Post | May 31, 2013

Whether you’re the buyer or the seller, you want to know how much cash will cross the table at your real estate settlement. Federal Title & Escrow, a Washington title company, has developed a mobile app called Close It that works like Turbo Tax for real estate transactions.

Free app calculates closing costs
Baltimore Business Journal | May 29, 2013

Washington, D.C.-based Federal Title & Escrow Co. has launched a free application that helps homebuyers and sellers know exactly what their closing costs will be...

New app from D.C. company calculates closing costs
Washington Business Journal | May 29, 2013

The iPad app, called Close It!, produces customizable HUD-1 settlement statements for D.C., Virginia, Maryland and Florida residential real estate transactions, with a detailed picture of cash to close and monthly mortgage payments for buyers and cash in pocket for sellers...

Free app calculates closing costs
Washington Business Journal | May 28, 2013

The app includes 45 closing cost variables on the buyer's side and 22 variables on the seller's side, and produces an official HUD-1 Settlement Statement that can be saved, printed or emailed....

New app calculates total cash outlay for homebuyers
DC Urban Turf | May 20, 2013

Close It! from local title company Federal Title will work on mobile devices — though it’s currently available only on the iPad — and creates a document that replicates what you would see on a HUD-1 on the day that a buyers closes on a new home.

Testing Close It!, an app that calculates homebuying costs
Curbed DC | May 20, 2013

The ease of use on this app is pretty nice. The big important numbers (the cash to close and monthly payments) are significantly larger and anything in red, whether it's the interest rate or the type of property can be changed. Overall, this seems rather helpful in terms of doing the quick math for any purchaser that gets frustrated by that part of the process.

Realtors aim to help buyers navigate a D.C. market short on inventory
NW Current | Apr. 10, 2013

Even so, activity is solid. In the first three months, there was a 9.9 percent rise in contracts for condos and co-ops and a 0.8 percent increase in contracts for single-family homes, compared with the same period in 2012. Settlements are up in both categories — 25.6 percent for condos and co-ops, 6.3 percent for single-family homes.

“We’ve definitely seen things picking up,” said Joe Gentile, vice president of Federal Title & Escrow Co.

DC Tax Credit not renewed
Curbed DC | Jan. 10, 2013

The $5,000 DC Homebuyer tax credit was not renewed under fiscal cliff talks...

Most popular posts of 2013

At Federal Title we believe educating consumers and their agents is the best way to ensure the real estate closing process is as quick, painless and affordable as possible. Our attorneys regularly write articles based on their experiences "in the trenches" and provide insight and, occasionally, commentary on the current state of our industry.

Over the course of 2013, visitors to our website viewed Federal Title's official blog more than 65,000 times. The blog contains literally hundreds of articles, and the following is a list of the most popular articles written in the past year.

New simplified loan modification initiative announced to help troubled homeowners avoid foreclosure 
by Jackie Kurz

Fannie Mae and Freddie Mac will offer a new loan modification initiative designed to help troubled borrowers avoid foreclosure and remain in their homes, according to an announcement today from the Federal Housing Finance Agency. (3/27/2013)

What does it mean when my DC property is classified as Class 3? 
by Catherine Schmitt

As a real property owner in the District of Columbia, the last thing you would ever want or need is for the Department of Consumer and Regulatory Affairs to classify your property as Class 3 – Vacant Real Property. (4/9/2013)

My parents are going to be on title with me. Can I still qualify for the DC Homestead Deduction? 
by Todd Ewing

If you are buying a property in DC and otherwise qualify for the Homestead Deduction, you will still qualify even if your parents, who live somewhere else, are co-owners with you. As a benefit to homeowners living in a property as their principal residence, the DC Homestead Deduction subtracts $69,100 from the assessed value of the property before real estate taxes are calculated. (5/30/2013)

Loan payoff includes more than just principal balance 
by Joe Gentile

In about half of the settlements that I conduct a seller will stop me and comment, “The payoff is too high, I owe less than what’s listed.” This is because the seller is confusing the mortgage principal balance with the payoff amount. (3/20/2013)

I just bought a property in Maryland. How do I qualify for the Homestead Tax Credit? 
by Todd Ewing

If you just bought a property in Maryland, there is nothing that you need to do right now to qualify for the Maryland Homestead Tax Credit. The property taxes you pay are calculated based upon the assessed value of your property. If the assessed value goes up, your property taxes go up. (5/28/2013)

Refinance appraisal: What you can expect 
by Dianne Pickersgill

The following are some thoughts, based on my own personal experiences with refinance appraisals, including a refinance appraisal of my DC condo that took place this month. I’m not an appraiser, so this is not a professional opinion. (2/25/2013)

Popular $5,000 DC Homebuyer Tax Credit for first-time buyers not renewed for 2012 tax year 
by Nikki Smith

First-time homeowners in the District of Columbia, who purchased their principal residence after Dec. 31, 2011, will not be able to take advantage of the popular $5,000 DC Homebuyer Tax Credit when they file taxes this year. (1/8/2013)

Condominium limited common elements: Know what you're buying 
by Dianne Pickersgill

Condominium ownership is really popular in DC, Maryland, and Virginia. Here at Federal Title, condominium sales make up about 25% of our transactions. (2/11/2013)

6 real estate apps that make you look like a genius 
by Nikki Smith

Want to look smart in front of your clients? It’s gonna take more than having a smart phone with access to email and Internet. You need to know what real estate apps can increase your productivity, expand your networks and, well, make you look like a tech genius in front of your clients. (7/1/2013)

Benefits of a VA loan in today's real estate market 
by Jackie Kurz

With interest rates remaining steady at all-time lows and a housing market that has seen below-market prices in most areas, now is a great time for servicemembers to purchase a home or refinance their existing home and take advantage of the benefits of a VA loan. (4/10/2013)

Close It! nominated for Tabby Award

We've got exciting news to share! Our iOS app is one of three finalists for a Tabby Award in the Business Products and Services category.

Launched in May of this year, Close It! has already received more than 5,000 downloads. The app is available for iPad and iPhone (the former is the version that's in the running for this particular award).

Close It! is like Turbo Tax for real estate transactions. If you've downloaded the iOS app, you know already know how easy it is to accurately calculate your buyer's total cash to close or your seller's total cash in pocket.

If you haven't downloaded Close It! yet, what are you waiting for?! Download Close It! >>>

For those who have never heard of the Tabby Awards, it's a worldwide competition for the best iPad, Android and Windows 8 tablet apps.

At least a dozen countries are represented this year. More than 40 apps, including Close It! were selected as finalists in 18 categories.

An international panel of judges will choose the winners on November 13 in New York City.

How to choose a really good real estate agent

The idea of buying a home is simultaneously enchanting and daunting. For instance, it's fun to daydream about color palettes and kitchen / bathroom renovations and coming home to your very own Home Sweet Home. It's less fun to think about what the transition from daydreaming and dream home entails.

A really good real estate agent can walk you through the steps of homebuying and even help you negotiate an offer that might lower your upfront and ongoing costs of home ownership.

Really good real estate agents are familiar with the neighborhoods where you'd like to live. They know how long houses have sat on the market and can tell you the difference between listing prices and recent purchase prices.

The question is how do you find a really good real estate agent?

Talk to friends & relatives

Whether through Facebook or other social media platforms or (gasp!) face-to-face, ask your friends and relatives who've had recent homebuying experiences what real estate agents they recommend. And find out why.

Was their agent especially skilled at contract negotiation? Did he or she have encyclopedic knowledge about the local market? What about their communication skills? Did their agent return phone calls and emails in a timely manner?

These kind of details will help to paint a colorful picture of what it's like to work with a real estate agent. And presumably, if it's coming from your friends and relatives, it's coming from a source you know well and one you can trust.

Read online reviews

If you don't have friends or relatives with recent homebuying experiences in your area, the Internet may be the next best thing. Sites like Angie's List (paid subscription required) and Yelp (no subscription necessary, but be sure to check the "filtered reviews) have tons of reviews about local real estate professionals.

Real estate sites like Redfin, Zillow and Trulia post agent reviews as well. The downside of online reviews is you most likely don't know who the source is. More than likely the review is bias, but reading multiple reviews should allow you to get a fairly balanced picture.

Contact top prospects, interview them

Once you've made a short list of prospects, call them and ask more questions. For added peace of mind, find out if your prospective agents have additional references.

Pick their brains about the neighborhoods where you'd like to live. Find out, on average, what percent of the listing price do their clients typically pay. Obviously a real estate agent who negotiates deals for less than the asking price is someone you want negotiating your home purchase.

The more research you do at the beginning of the agent selection process, the better your chances of finding a really good real estate agent and having a pleasant homebuying experience.

Once you've made it through the all the steps, consider posting your own agent review to give future homebuyers an idea of what it was like to work with your agent selection.

And if these tips don't help to ease your mind about how to select a real estate agent, feel free to reach out to our office and ask for even more agent recommendations. We closed roughly 1,500 deals last year, so we know a lot of real estate agents (mortgage lenders, too).

6 real estate apps that make you look like a genius

6 real estate apps that make you look like a genius
Want to look smart in front of your clients? It’s gonna take a lot more than just having a smart phone with access to email and Internet. You need to know what real estate apps can increase your productivity, expand your networks and, well, make you look like a tech genius in front of your clients.

The desire for transparency in the real estate market was brewing long before the housing market collapse, but now more than ever your clients demand access to instant information – so much so that they are sidestepping real estate agents with growing frequency. To stay top of mind and on the cutting edge, check out these awesome apps.

Find homes faster with Homesnap

This innovative – “fast and easy-to-use application,” according to the Los Angeles Times – is probably the coolest way to shop for homes as well as one of the smartest ways real estate agents can market themselves. What’s makes this app so special?

Well, for starters Homesnap can pull up all kinds of information about any house or condo when you snap a picture of the property using the app’s camera. How cool is that? And creating a profile within the app allows you to keep a diary of your snaps in an Instragram-like photo feed.

Beyond the photo feed, real estate agents will also appreciate the client-sync feature. It allows them to import their clients’ contact information then see their snaps in real time while the app adds the agent’s branding to every snap. Clients can reach out to their agent in just one tap to schedule a showing or get more info on the property.

The developers of Homesnap recently launched a Foursquare-esque check-in feature that lets agents “check in” to houses. By having the most check-ins, an agent becomes the neighborhood’s equivalent of the Foursquare “mayor.” Potential buyers see this as they use the app to search for homes, increasing the agent’s credibility and visibility at the same time!

To get the word out about this new feature, the Homesnap team has announced a contest for real estate agents.

Close It! for iPad ready for download

Free mobile app calculates cash to close for homebuyers and cash in pocket for home sellers with great accuracy

Close It! for iPad ready for download

Ever wonder what your total cash to close would be to buy your home? Or how much money you will pocket from the sale of your home? Now there's an app for that.

"Close It! is like Turbo Tax for real estate transactions," said Todd Ewing, president of Federal Title who first conceived of the app last summer. "And the results are accurate within one-tenth of 1 percent on average."

Download the app now >>

Close It! is the first mobile app that produces a complete, picture of cash to close and monthly mortgage payments for homebuyers and cash in pocket for home sellers. It's free to download for iPad.

Title professionals across the country have used technology like this in-house for years now, but Close It! is the first app that makes it easy for homebuyers and sellers to produce a HUD-1 Settlement Statement – such as what would be reviewed and signed at the closing table – right from their mobile device.

Getting started with the app is as easy as entering a purchase or sales price. Then fine tune the results on a live, dynamic worksheet and instantly narrow down cash to close or cash in pocket with great accuracy.

Whether you're shopping for homes or getting ready to sell, calculate your costs right on the spot with Close It!

Save Our Homes in Florida

To homebuyers in Florida: beware of misleading annual property tax assessments when researching homes online.

An amendment to the state constitution known as Save Our Homes, around since 1995, caps annual increases to assessed property value at 3% or the change in the Consumer Price Index – whichever is lower.

When the property changes ownership, the SOH property assessment value expires at the end of that calendar year. The new owner must apply for her own Homestead Exemption, and the property will receive the SOH benefit beginning the second year. I'm paraphrasing this article.

Homebuyers who are unaware of the program may view the annual property tax assessment listed on a real estate website or government database and mistakenly think their property tax assessment will be roughly the same. But in many cases the new assessment will be significantly higher than the old one, resulting in a large jump in annual property taxes that are due.

SOH is only good for homes that are receiving the Homestead Exemption. Rental and investment properties do not qualify. In the majority of cases SOH may not be inherited. If the house is a duplex and 50% is owner-occupied principal residence, only 50% of the property assessment is shielded by SOH.

Florida homeowners enjoy a Homestead Exemption of $50,000 for if their Florida property is their permanent residence, but they must apply for it. That amount is deducted from their property's assessed value and the taxes are based on that lower number. There are a number of other exemptions available ranging from persons with disabilities to veterans to widows and surviving spouses of service members.

Real property tax assessment guide

While all government jurisdictions collect taxes on real property, each does so in its unique way. Collection methods and tax due dates, for example, vary from one jurisdiction to the next.  

To help you navigate real property taxes in the District of Columbia, Maryland, Virginia and counties in Florida where we operate,  we have compiled this list of tax collection & billing offices along with links to property tax assessment pages wherever possible. This information will help you better understand how property taxes work and predict your property tax liability for any given property in that jurisdiction.

Click beyond the jump to continue reading.

Popular $5,000 DC Homebuyer Tax Credit for first-time buyers not renewed for 2012 tax year

This credit no longer exists however you can find the LATEST information here on DC's Newly Enacted First-Time Homebuyers Recordation Tax Reduction program.  

First-time homeowners in the District of Columbia, who purchased their principal residence after Dec. 31, 2011, will not be able to take advantage of the popular $5,000 DC Homebuyer Tax Credit when they file taxes this year.

The tax credit that has made homebuying affordable for thousands of DC residents since it was first introduced nearly 15 years ago was axed from legislation during negotiations over the fiscal cliff and was not included in the American Taxpayer Relief Act signed by President Barack Obama last week, according to a spokesman for Del. Eleanor Holmes Norton (D-DC).

An attempt to make the credit retroactive for 2012 purchases and extend it into 2013 was unsuccessful, but the congresswoman is working on a plan to get the credit reinstated, he said. There's no specific plan of action or timeline in place yet.

Click beyond the jump for reaction from Federal Title's president.

Most popular posts of 2012

As another year comes to a close, let's take a look back at some of the more popular articles that were posted to our blog in 2012.

What does 'no consideration' mean?
by Catherine Schmitt

When someone says “no consideration” deed, what does it mean? Does it mean no transfer and recordation taxes?  No. It actually means that the property is being transferred via deed without money exchanging hands. Not all no consideration deeds are exempt from transfer and recordation taxes. There are a number of situations where a “no consideration” deed is appropriate and some of them are as follows... [Read More]

Maryland Homestead Tax Credit eligibility application deadline is Dec. 31
by Joe Gentile

For Maryland homeowners who wish to submit their one-time application to confirm eligibility for the homestead tax credit, the deadline is finally approaching. Every principal residence homeowner in Maryland should follow these steps to make sure that their property is registered and eligible for the homestead tax credit... [Read More]

Real estate taxes factor in homebuying decision
by Nikki Smith

A lot of folks think real estate taxes across the board are always higher in DC compared to Maryland or Virginia. While it's true transfer (recordation) taxes paid at settlement are higher for DC purchases, those homebuyers pay a far lower annual property tax rate compared to Maryland and Virginia thanks to the Homestead Deduction... [Read More]

Say good-bye to the HUD-1 Settlement Statement
by Todd Ewing

Just barely two years since the title and mortgage industry was turned upside-down with regulatory changes to the Truth-in-Lending Act (TILA) and the Real Estate Settlement Procedure Act (RESPA), the CFPB will be releasing its proposed forms and regulations next month to replace the HUD-1 Settlement Statement, Good Faith Estimate, and Truth-in-Lending Disclosure... [Read More]

Deed transfers in Montgomery County... Explained
by Joe Gentile

Today we will switch gears by taking a look at deed transfers as they relate to spouses and domestic partners in Montgomery County, MD.  Keep in mind that this is solely for Montgomery County – each county in Maryland has different rules.  All of the scenarios below are solely for changing the title of the property – these transactions are not part of a refinance or a modification... [Read More]

Owner's title insurance: Is it worth the price?
by Todd Ewing

While a homebuyer is required to pay for the lender’s title insurance premium, the owner’s title insurance is optional to the homebuyer, and sometimes homebuyers who are looking to shave dollars off their closing costs consider opting out of the owner's title insurance policy... [Read More]

Owner's title insurance: Seller fraud and HELOCs
by Todd Ewing

During our 16 years of business Federal Title has, on three separate transactions, paid out claims on owner’s title insurance policies due to a seller committing fraud by securing a home equity line of credit (HELOC) immediately prior to closing. These claims amounted to a total of $280,000... [Read More]

What is an Earnest Money Deposit?
by Joe Gentile

An EMD is essentially a good faith deposit to demonstrate to the seller that the purchaser is serious about the transaction and is willing to part with some money in advance of closing to prove his or her willingness to buy... [Read More]

3 reasons HELOCs create title headaches
by Joe Gentile

Home Equity Lines of Credit (HELOCs) may be difficult to obtain in today’s market, but not too long ago, everybody had one.  Recently, a series of closings were delayed in our office due to issues with HELOCs, and I expect that dealing with HELOCs will only get worse... [Read More]

Owner's title insurance: Encroachment from a neighboring property
by Todd Ewing

Just recently, during our underwriting review of an upcoming closing, our office discovered that the subject property — we will call it LOT 1 — was severely encroached upon by the improvements of the neighboring lot, which we will call LOT 2. I have included an actual copy of the location drawing below for your reference.

See how Federal Title stacks up against national, local closing cost averages

The cost of buying a home dropped 12 percent from last year, according to a survey conducted by, which reports homebuyers nationally pay $2,159 on average for title and closing costs.

The numbers vary a bit by state, but in every case Federal Title charges less than average for title and closing costs. In the District of Columbia, for example, homebuyers pay an average of $2,319 compared to $2,176 when they settle at Federal Title.

Closing costs in the District of Columbia rose to 10th place on the list of most expensive closing costs in the country from its 11th place position in 2011.

Average closing costs in Maryland and Virginia are quite a bit less than the national average, coming in at $1,997 and $2,046 respectively. Maryland homebuyers who settle at Federal Title pay $1,691 while their Virginia counterparts pay $1,696.

This year closing costs in Virginia are on average the 29th most expensive in the country, a big jump from the No. 38 position the state held last year. Maryland also jumped up on the list to 35th most expensive closing costs on average from 42nd in 2011.

Did you know Federal Title has a sister office in Coral Gables, Florida? Homebuyers in the state pay an average of $2,772 for title and closing costs compared to the $2,486 paid by homebuyers who settle with us.

Closing costs on average in Florida were 12th most expensive in 2011. This year Florida has the 4th highest closing costs on average.

These numbers come as no surprise to Federal Title. A similar closing costs study conducted last year using slightly bigger numbers also demonstrated that our title charges are among the most competitive in the region, and in most cases (DC & Maryland) top the competition.

Bankrate used the following parameters to gather Good Faith Estimates from 10 lenders in each of the 50 states and the District of Columbia for their June 2012 survey:

  • Loan amount: $200,000
  • Down payment: 20 percent
  • Purchase price: $250,000

View average closing costs by state

To calculate Federal Title's charges, homebuyers should use our Quick Quote tool. It is the easiest and fastest way to calculate closing costs. It's free to use and completely anonymous – we don't ask for your e-mail address.

How to compare title insurance service providers

Pending home sales in the Washington, DC metro area are nearly as high as they were two years ago when the $8,000 federal first-time homebuyer tax credit was still in effect, another sign that the market is poised for a turn-around.

That's good news for sellers. More buyers hopefully means homes are spending less time on the market and fetching offers closing to the initial asking price.

What exactly does a title company do?

While we talk all the time about the importance of shopping for title services, it's about time we address what it is exactly that a title company does. Let's take a closer look at what goes on between the time when you agree to purchase your property and when you legally take ownership.

An order is placed. Once you have a ratified sales contract, you are ready to order settlement and schedule your closing appointment. To complete your order, either you or your agent will provide contact information of all parties involved in the transaction along with the purchase price, loan amount, property jurisdiction and type of loan. A pre-closing manager oversees this phase in the process.

Title work begins. A title abstractor goes to work to ensure clear title. A title abstractor is someone who searches records and files pertaining to a specific property to find its history. This can include transactions between current and previous owners in buying and selling the property, as well as any liens or judgments against the land or house.

Meanwhile, your lender's loan processor works to fund your loan and communicates with members of the settlement team to produce a final HUD-1 and other legal documents you will sign at closing. A settlement coordinator acts as a liaison between the title company and buyers, sellers, agents and lenders. 

Time to sign. Once clear title is established and your closing documents are assembled, it's time to go to settlement. Signing all the paperwork will take about an hour. Buyers sign more documents than sellers. Once all the documents are signed, it's time to celebrate: You are now a homeowner.

End of the line. Work on your closing doesn't end with your signature, though. Your case moves on to post-closing, where the post-closing manager disburses escrowed funds, such as a final water & sewer bill. Post-closing is also your point of contact should an unexpected property tax bill, utility bill or lien come to light after settlement.

How to assemble a winning homebuying team

Let's face it: When it comes to buying a house, title insurance is likely the farthest thing from your mind. After all, there are so many steps along the path to homeownership that you'll take before you find your way to the settlement table.Securing a loan, finding the right real estate agent and finding a dream home to buy – these aspects of the homebuying process are far more glamorous, and self-explanatory, than the wonky legal aspect involved in issuing your title insurance policy.

Moneyball Poster
To assemble a winning homebuying team, look at the stats. Weigh services offered by agents, lenders and title companies against cost, and stretch your dollar further.

If you're serious about buying a house or condo, you've hopefully heard of a thing called "closing costs." These expenses are tacked onto the sales price of the home. Time was when you could lump your closing costs into your home loan, but nowadays a stricter mortgage industry holds borrowers on the hook for those costs. 

Break your closing costs down into three categories: policy premium, government transfer taxes and service provider fees (paid to the real estate agent, lender and title company, who packages the deal). Expect charges in the first two categories to be the same across the board.You can (and should) shop real estate service providers as you assemble your homebuying team.

Most homebuyers do some bit of research when selecting their agent and lender. They talk to friends and family, they jump online to read reviews and compare rates. But that's only two-thirds of the puzzle.A huge savings many homebuyers overlook is in selecting a title company. Take the time to get a quote from a handful of local settlement agents, and compare the bottom line closing costs. Ask if their company is affiliated with any other company, such as a real estate agency or bank.

It is widely known that independent settlement companies tend to charge lower settlement fees than title companies that participate in what our industry calls an affiliated business arrangement.

The right homebuying team includes the right title company, something to keep in mind while your hunting agents, lenders and houses.

Real estate taxes factor in homebuying decision

The spring real estate season is upon us, which means a stream of homebuyers will once again be wondering where is the best market to buy. As you help your homebuyer make that decision, you may want to consider the tax factor.

A lot of folks think real estate taxes across the board are always higher in DC compared to Maryland or Virginia. While it's true transfer (recordation) taxes paid at settlement are higher for DC purchases, those homebuyers pay a far lower annual property tax rate compared to Maryland and Virginia thanks to the Homestead Deduction.

If your homebuyer intends to stay put and use the property as a primary residence for 10 years or more, it's cheaper from a real estate tax standpoint to buy in DC based on today's calculations. The breakdown is summed up in the chart.

Of course, there are many other factors your homebuyer will take into consideration when choosing where to buy. When it comes to real estate taxes, your homebuyer should determine how long he or she intends to stay in the property, if the property will be used as a primary residence and if he or she is comfortable paying more taxes up front at settlement.

Another way your homebuyer can lessen the blow to their pocket book at closing is to take advantage of our REAL Credit™, which has saved our clients more than $8 million over the last 10 years.Breakdown of DC, MD and VA property, transfer taxes

Shop title insurance providers, save on closing costs

The Internet makes it so easy for consumers to find the best prices on all kinds of goods. Why would anyone willingly pay retail price when it's so easy to point-and-click your way to a bargain?

If we were talking about furniture or household electronics, it would seem like a no-brainer. But because it's title insurance – and title insurance is a pretty wonky subject – so many consumers seem complacent to let someone else do the shopping (or steering) even if it does wind up costing them hundreds or even thousands more at the closing table.

At Federal Title, we're trying to get the word out to consumers (shopping is easy, saving is awesome), so we partnered with our friends at the Better Business Bureau to produce a television commercial that will air on CBS for the rest of this month.

Why is selecting an independent title company so important?

Two reasons basically. By selecting a title company that is not bound by what’s known as an Affiliated Business Arrangement, you eliminate potential conflict of interest and generally save money.

When buying a home, you will be working with three groups of people: a real estate agent, mortgage lender and your "settlement team."

Click beyond the jump to keep reading.


New section on our website: Media Hits

At the end of last year, I compiled a list of all the news stories that mentioned Federal Title or featured a quote from one of our attorneys. The original list includes a lengthy piece from Washington Post columnist Harvey S. Jacobs that mentioned a study we commissioned about a year ago. The study, along with the article, highlight the importance of selecting your own settlement team. The extra effort could net you a savings of up to $1,180. 

That piece is probably my favorite, but it turns out there were quite a few articles published in 2011 in which Federal Title got a say. So I decided to go one step further and compile all the articles we've been mentioned in since I took over as marketing director in August 2009. All of these articles can be found in a new section of our website, the Media Hits section.

For now you'll find the media hits section under the Buyers & Sellers menu item, nestled under Articles. Happy Reading!

Greatest media hits of 2011

If there's one point we really like to drive home around here, it's that consumers should shop title companies in the same way they shop for a lender or real estate agent. The savings could be in the range of thousands of dollars.

When our attorneys aren't busy providing expert settlement services to our clients, they are spreading the Federal Title gospel to all who will listen. Here's a sample of some news stories we got to weigh in on this year:

New refinancing options for lower title fees
Washington Post
In the Washington area, Federal Title & Escrow provides as much as to $1,000 off total closing costs for home buyers who use its online “Real Credit” software platform for their transactions.

Shop for title insurance and closing services
Fox Business
If you have already been shopping for a real estate agent, a lender, a home and a moving company, you may be feeling shopped out. Before you put your feet up and relax, you should take the time to shop for title and closing services.

Shopping for title insurance can save you bundles
Whether you're buying a home or trying to refinance your mortgage, you should expect your title insurance to be among the more expensive items you'll have to pay for to get your new mortgage. However, you can save a bundle by shopping around for the most cost-effective policies that will protect you and your investment.

Buying a home? Shop around for title insurance
Washington Examiner
It may not seem like that much when you put that number next to the $400,000 you're going to owe the bank. But when you're paying those up-front closing costs, it can help ease that immediate burden.

New DC title insurance shortcomings
Washington Post
[T]he new law does not require settlement services providers to disclose their fees in writing or publish them on their Web site. The new law creates a huge disincentive to continue to publish settlement fees and costs since those disclosures could later be used by the District as evidence that those fees were not applied in all similarly situated settlements.

Get the refi that the lender promised
Section 1300 on the HUD-1 lists "additional settlement charges." It's a good idea to ask what these fees are for, and whether they are necessary. Ewing suggests that consumers go online to check for average closing cost fees at other local title companies to make a comparison.

Closing on your home: Are you walking in blind?
Homebuyers should stay in close touch with their real estate agent and lender in the days leading up to the closing to be certain all the necessary documents and financial arrangements for the mortgage are in place.

Who owns the foreclosure you bought?
Fox Business
Although most buyers have little to fear, the recent chaos surrounding sales of distressed properties highlights the importance of protecting yourself when purchasing a foreclosure.

Sponsored: 10 things you should know about closing costs
DC Urban Turf
Closing costs will inevitably take a large bite out of your wallet at the settlement table — anywhere from a few to several thousand dollars. The information in this article will help you better understand closing costs and teach you the right questions to ask your title or real estate agent.

Most popular articles of 2011

Our blog is one of our best tools for communicating with our clients. We use this space to answer commonly asked questions and address industry changes that may impact you, the homebuyer (or the homeowner who wants to refinance). It's where we write about what we know best: the closing process.

The following is a list of the Top 10 most popular articles on our blog in 2011. Please feel free to leave suggestions for future blog posts in the comments below. 

Shopping for title insurance services in the District of Columbia could save homebuyers up to $1,180, according to a recent study, while shopping in Maryland or Virginia could mean a savings of over $900.
"In this world nothing can be said to be certain, except death and taxes," Ben Franklin once famously said. Yet when it comes to taxes on real property – especially for first-time homebuyers – we find much uncertainty and confusion exists.
You just signed a contract to buy your dream home, the one with the white picket fence, the game room and the custom kitchen.  The only issue is that the sale of your property is taking place on June 20, while this house will not be ready until June 25.  Immediately you call the buyers of your property, and while they have no problem waiting to move into the property, the lock on their loan expires on June 20.  Now what?
In the world of real estate closings and title insurance lurks an oft misunderstood concept we call the “Reissue Rate.”  Simply put, a reissue rate is a homebuyer discount on the cost of an owner's title insurance policy.
As a result of a $10 million settlement in a class action lawsuit filed in the U.S. District Court of Atlanta, Georgia, Wells Fargo will issue refunds of $175 to approximately 60,000 military members and veterans who refinanced VA loans through Wells Fargo, Wachovia and SouthTrust between January 20, 2004 and October 7, 2010.
In the vein of “Affiliated Business Arrangements = Bad Business,” I bring to you yet more evidence of the same.  In an effort to maintain their government-sanctioned kickbacks, proponents (i.e., RESPRO, et. al.) of Affiliated Business Arrangements (ABAs) made a specious claim in a recent meeting with the Federal Reserve Board. 
An insured closing letter, also called a closing protection letter, is issued for an agent by the title insurance underwriter to your lender prior to your closing. This letter is for lender purposes only and is not issued to individuals for owner’s title insurance.
Effective January 1, 2011, the rate of withholding taxes to be withheld and paid to the Clerk of the Court on the sale of real estate by non-residents in the state of Maryland has been lowered from 7.5% to 6.75%. The rate of withholding for non-Maryland entities has remained unchanged at 8.25%.  
Editor's note: State legislators voted to raise the withholding for nonresident individual sellers from 6.75% to 7% effective June 1, 2012. The rate of 8.25% for nonresident entity sellers remains unchanged.
You will still need to meet the guidelines and supply proper documentation. You must have met the property purchase price threshold, used the property as your principal residence and be domiciled in the District of Columbia.  
Cash buyers are often reluctant to buy title insurance since it is not required when paying cash for real estate.  Title insurance is viewed as an esoteric commodity that’s imposed by lenders but doesn’t actually serve a purpose.  

Planning to refinance? Don't forget about title insurance

The government took action last week to help more homeowners with their mortgage payments. A revamped Home Affordable Refinance Program aims to remove some of the restrictions that have made it difficult for many to qualify assistance.

Historic lows on interest rates, changes coming to government programs such as HARP, it's no wonder so many Q&A and advice columns are dedicating space to homeowners' questions about refinancing, from knowing when to refinance to tips on how to avoid a mortgage refinance misstep.

One common question about refinancing relates to the settlement process, particularly title insurance.

Some homeowners are surprised when they hear they have to purchase a new title insurance policy when they refinance their mortgage. They bought a lender's and owner's policy when they purchased the home, and they want to know why they have to purchase a new title insurance policy.

To the lender, a refinance loan is no different than any other home loan. Your lender wants to insure that the new loan is protected by title insurance, just like the original lender required on your previous loan.  Lenders are protecting their investment against title related defects.

When you refinance, you are only buying a new title for the lender (a lender's policy), so your closing costs should still be less than when you purchased your home. And, while you're shopping around for the best refinance rates, be sure to shop around among title companies.

This will ensure you get the best pricing for your refinance.

Tips for securing a home loan

This week the 30-year mortgage rate sunk below 4% for the first time ever, yet mortgage applications continue to drop, according to a recent article in the Wall Street Journal.

Despite the attractive rate, lending standards remain tight, making  it difficult for many would-be homebuyers and refinancing borrowers to secure funding. While it is harder now to land a loan than it was five years ago, it's not impossible.

Here are a few tips to help prospective homebuyers and borrowers secure a home loan.

Get your finances in order

Before you can ask for a loan, you should know how much money you have and how much you can afford to borrow. Knowing this up front will also save you the potential heartache of getting attached to a home you can't afford. It'll save you, your lender and your agent a lot of time, too.

You are entitled to a free copy of your credit report from each of the three major credit rating agencies once a year.  Make a habit of getting it. Each report shows if you were more than 30 days late in making a payment on any of your existing loans or bills and lists inquiries made into your credit. If you come across any discrepancies, you'll want to inquire about them before you start shopping for a loan.

You'll also want to gather your most recent pay stubs, bank statements and tax forms. Any reputable lender you work with will need this information to determine if you qualify for a loan.

Limit credit inquiries while you shop for a loan

It may sound crazy, but shopping for a loan actually does ding your credit score by a couple points. So does applying for a new credit card or taking on new debt. Since your credit score helps to determine your interest rate, try to limit your number credit inquiries. Don't open any new lines of credit or make any large purchases until after the deal is closed.

Most experts will tell you to do all your mortgage loan shopping within a two-week span, as that will show up as one inquiry.

Save for a large down payment

The more money you can put into the transaction, the better your chances of securing a home loan. For FHA loans, you'll need at least 3.5%, though FHA loans come with more restrictions.

A 30-year conventional loan typically requires 20% down, but some lenders will make an exception depending on the property type and your financial situation. Note, though, that anytime you put down less than 20%, you'll have to pay for insurance on the loan, which means added monthly expense.

As the housing crisis continues, watch out for special offers from lenders. A recent article in Smart Money describes how many financial institutions, from national banks to local credit unions, are looking for ways to entice consumers to sign up for mortgages.  

If low home prices aren't enough, some banks are waiving lender fees, lowering rates and offering to pay closing costs. You may be able to leverage a large down payment and a lender discount in your favor.

With basic understanding of today's housing market, securing a home loan is not impossible. Be prepared by getting your financial house in order, and you'll be able to take advantage of record-low mortgage rates and home prices.

Independent agencies reject affiliated business arrangements: Washington Post

Over the weekend, the Washington Post Real Estate Section published an article by nationally syndicated columnist Ken Harney describing a sea change in the title insurance industry where transparency and honest rates are becoming more commonplace.

Toward the bottom of the story was a nice mention of Federal Title and our REAL Credit program as shining, local example of a title company rejecting the old practices of the title insurance industry in favor of a business model that benefits consumers.

Needless to say our office was pretty thrilled.

We believe consumers should know they have the right to choose their title company based on factors such as price, customer service, years in business, responsiveness and reliability.

We encourage homebuyers to shop for title services and offer them a breadth of information on our Web site to help them make the decision that is best for their situation. For years we've published our rates on our Web site and offered homebuyers and their agents a free online closing costs calculator to help them gauge how much money will be needed for settlement.

If Harney's article is any indication of the future of the title insurance industry, then it seems Federal Title's business model is finally becoming the norm instead of the brow-raising exception to the rule.

And the rest of the pack is following suit, as Harney writes: "A handful of agents in states where regulations permit discounts off closing-packages are now offering them. Plus growing numbers of title agencies are gearing up software platforms to provide services to consumers: online rate quotes, transaction updates ­notifying customers about the status of their title order. Some are even e-mailing documents in advance of closings for customers’ inspection, rather than hitting buyers with last-minute settlement surprises."

Why condo owners need an HO-6 policy

Last week we posted a pretty lengthy article about insurance for condo owners entitled, "Condo insurance considerations."

The piece delved into the differences between a Master Policy, which is what your condo association carries to protect the building and its common elements, and the Unit-Owner Policy otherwise known as an HO-6 policy. An HO-6 policy picks up where a Master Policy leaves off, protecting the inside of the unit as well as the owner's personal belongings. Items like replacing cabinets, appliances and flooring are also covered by the Unit-Owner Policy.

Earlier this month, our friend Michele Lerner who has written about Federal Title on many occasions, published a piece with the Washington Times entitled, "Insurance a must-have for condo owners." Her piece does an excellent job of expanding on the types of scenarios a condo owner might encounter where the HO-6 policy would come into play.  

"Condo owners need to understand that the master policy for the condo association often covers the buildings to reconstruct them as they were built originally and will not cover improvements, such as updated kitchens or hardwood flooring, that have been added to a home."

Understand mortgage fraud to avoid it

Mortgage fraud investigations have skyrocketed since the financial crisis began in 2008, and a recent report released by the FBI's white collar crimes division indicates the number of investigations has steadily increased in the years since.

If that's not bad enough, apparently now the mafia is getting involved in the scheming, drawn by the chance to rake in "high profits through illicit activities that pose a (relatively) low risk for discovery.

As a homebuyer, you should familiarize yourself with the concept of mortgage fraud in its many forms.

As defined in the FBI's report, mortgage fraud is "a material misstatement, misrepresentation, or omission relied on by an underwriter or lender to fund, purchase, or insure a loan. This type of fraud is usually defined as loan origination fraud. Mortgage fraud also includes schemes targeting consumers, such as foreclosure rescue, short sale, and loan modification."

Buying a house is likely the biggest financial decision you will ever make. Select real estate professionals who understand your needs and look out for your best interests. The Internet is a great place to get started on your search, but you should supplement that information with input from your friends, family & neighbors who've recently bought or refinanced a home.

To get a sense of the types of questions you should ask at the beginning of your homebuying adventure, check out these pamphlets created by the Federal Trade Commission that cover deceptive mortgage ads, buying a home and tips for homeowners.

Live Near Your Work: pilot program in the District

The DC Office of Planning is now searching for three District employers to partner in a pilot program that will offer homebuyers up to $12,000 toward their down payment and closing costs on a home near their place of employment or transit.

“OP will match employer contributions (up to $6,000 per participating employee) to attract and retain DC residents, with the primary purpose of encouraging employees to live close to their place of employment and/or transit,” according to a statement.

A Request for Applications (RFA) for up to $200,000 in matching homeownership grants, to be administered by qualified DC-based employer was released for the pilot program known as Live Near Your Work on April 29, 2011.

Applications for consideration in the first round of selection are due June 17, 2011. Applications received after this deadline will be considered in the second round of selection, with an October 7, 2011 deadline, if three partners are not selected in the first round.

We will keep you posted as this story develops.

Why homebuyers should shop to save on title services

Homebuyers who close with Federal Title are often surprised to learn how much money they've saved on their closing costs. This is because we offer every homebuyer (and refinancing homeowner) an instant rebate known as a REAL Credit™.

So why don't all title companies offer a similar savings?

As our fearless leader Todd Ewing likes to say, long ago Federal Title kicked the "affiliated business arrangement" habit. Some title companies out there are affiliated with real estate firms, mortgage companies – and sometimes both. When they send business to the title company, the title company pays those guys a referral fee, an expense that's often passed on to the homebuyer.

This is why we tell every homebuyer to shop for title services, just as Todd told Michele Lerner of the Washington Times in the recent article "Shop to save on title services," which ran last Friday on the cover of the Homes Section.

Our REAL Credit™ represents what a title company would typically pay to the referral source and ranges anywhere from $100 to $1,100 depending on the purchase price.

Proponents of these so-called ABAs like to say it's actually beneficial for consumers, a sort of "one-stop shop" system that's more convenient. They don't like to talk about how the cost for said convenience often comes at an increased price.

I don't know about you, but I find saving money to be pretty freakin' sweet, and if it's a question of saving as much as $1,100 or more, you can bet I'm going to do some research. It is so easy to shop for title services. The Internet is a magical invention that pulls information – such as closing fees and title insurance rates – at the click of a button.

We've even gone a step further and done the homework for you. Check out the DC Metro Closing Cost Report to review closing fees from title companies who've published their rates online.

10 things you should know about closing costs

Closing costs will inevitably take a large bite out of your wallet at the settlement table — anywhere from a few to several thousand dollars. But why pay more than you have to?

With a solid understanding of title insurance & closing costs, you will know the right questions to ask your real estate agent or title agent here at Federal Title.

A steal of a deal in the DC real estate market is increasingly rare, but by understanding your closing costs, you can make sure you’re not overpaying on the back end of your real estate transaction.

Check out our article, which appeared today on DC Urban Turf: 10 things you should know about closing costs.  Give it a read and feel free to leave your comment below.

10 things you should know about closing costs

Study: Homebuyers who shop for title services save big

Shopping for title services in the District of Columbia could save homebuyers up to $1,180, according to a recent study, while shopping in Maryland or Virginia could mean a savings of over $900.

"This serves as a reminder to homebuyers and their agents the importance of shopping for a title company," said Todd Ewing, president of Federal Title & Escrow Company.

The study, commissioned by Federal Title and conducted by Veris Consulting compared title charges among Washington Metro Area-based title companies, revealing stark differences in charges for identical real estate purchase transactions.

It included only those title companies that published their settlement fees/charges and title insurance premiums for both owner’s and lender’s coverage – also known as title charges – on their respective website.

Further, the study used identical criteria for real estate purchases in the District of Columbia, Maryland and Virginia. In the District of Columbia, the difference between the most expensive and the least expensive title services was $1,180; in Maryland, the difference was $935; and in Virginia, the difference was $934.

"About 70% of variable closing costs paid by the average D.C. Metro Area homebuyer are title-related," Ewing said. "Yet, very few homebuyers, or their agents, take the time to shop settlement companies to compare title charges."

Title expenses such as settlement fees, title insurance and lender origination charges may vary among service providers, and these kinds of expenses are known as variable closing costs, Ewing said.

He added that comparing title charges among D.C. Metro Area settlement companies can be a daunting task for the untrained eye, which may explain why so few consumers take the time to research title companies.

The study also examined each title company's Better Business Bureau rating to determine if there was any connection between higher title fees and ranking but found none.

Out of 25 companies, six had rankings and the only two that were accredited – Federal Title & Escrow Company and Express Title – were among the lowest and highest cost title service providers, respectively.

"The study suggests that higher fees do not equate to a higher BBB rating," Ewing said. "To the contrary, Federal Title is one of the lowest cost title service providers and also has one of the highest Better Business [Bureau] ratings, proof that a title company can offer top-notch customer service at competitive prices," he said.

Study Criteria

  • Only Washington Metro Area Title Companies that published a settlement fee and enhanced title insurance premiums for Owner’s and Lender’s Coverage.
  • Purchase Price: $500,000.00
  • Loan Amount: $400,000.00 (1st Mortgage Only – not including costs for simultaneous 2nd Mortgages)
  • Type of Title Insurance: Enhanced Coverage (aka, Extended, Standard, Homeowners) Full Premium/Non-Reissue Rate
  • Owner’s & Lender’s (Simultaneous Issue) Policies
  • The “Total Title Charges” figure excludes Government Recording Costs & Recordation Taxes and Location Survey

While the study mostly focused on how shopping for title insurance services can amount to significant savings for homebuyers, fees charged to the home seller were also examined. Seller fees ranged from $393 to $736 and averaged around $500.

Here are the results of a study of rates published online by D.C. Metro Area title companies. Study criteria was the same across the board. The study was conducted from Feb. 1, 2011 to Feb. 11, 2011 and was released Feb. 11, 2011. For the most up-to-date rates from each company, please visit the respective company's website. 

District of Columbia

Company Name / Website Total Title Charges
(As of 2-11-11)
Seller Fees
(As of 2-11-11)
BBB Rating
Federal Title & Escrow Co. $3,190.00 [PDF] $495.00 [PDF] (A) A+
Counselor’s Title, LLC $3,265.00 [PDF] $443.00 [PDF] See Rating
Settlement Pros $3,580.00 [PDF] $438.50 [PDF] See Rating
Stewart Title $3,925.00 [PDF] not published See Rating
Pinnacle Title $4,084.99 [PDF] not published See Rating
National Settlement Services $4,089.99 [PDF] not published See Rating
District Title $4,090.00 [PDF] not published See Rating
Paragon Title $4,125.00 [PDF] $454.50 [PDF] See Rating
Mid-Atlantic $4,130.00 [PDF] not published See Rating
Capitol Title $4,135.00 [PDF] not published See Rating
KVS Law Group $4,139.99 [PDF] $520.00 [PDF] See Rating
RGS Title $4,185.00 [PDF] $641.00 [PDF] See Rating
Express Title $4,339.99 [PDF] not published See Rating
Avenue Settlements $4,370.00 [PDF] $468.75 [PDF] See Rating
Accurate as of Feb. 11, 2011. Visit title company websites for current rates.


Company Name / Website Total Title Charges
(As of 2-11-11)
Seller Fees
(As of 2-11-11)
BBB Rating
Federal Title & Escrow Co. $2,300.00 [PDF] $495.00 [PDF] (A) A+
Counselor’s Title, LLC $2,375.00 [PDF] $443.00 [PDF] See Rating
Settlement Pros $2,755.00 [PDF] $410.00 [PDF] See Rating
Stewart Title $2,787.50 [PDF] not published See Rating
Paragon Title $2,870.00 [PDF] $454.50 [PDF] See Rating
Olde Key Title $2,943.00 [PDF] $433.00 [PDF] See Rating
Mid-Atlantic $2,948.00 [PDF] not published See Rating
Capitol Title $3,045.00 [PDF] not published See Rating
Pinnacle Title $3,045.00 [PDF] not published See Rating
RGS Title $3,045.00 [PDF] $530.00 [PDF] See Rating
National Settlement Services $3,050.00 [PDF] not published See Rating
KVS Law Group $3,100.00 [PDF] $520.00 [PDF] See Rating
Village Settlements $3,149.00 [PDF] not published See Rating
Express Title $3,175.00 [PDF] not published See Rating
Avenue Settlements $3,235.00 [PDF] $538.75 [PDF] See Rating
Accurate as of Feb. 11, 2011. Visit title company websites for current rates.


Company Name / Website Total Title Charges
(As of 2-11-11)
Seller Fees
(As of 2-11-11)
BBB Rating
Lighthouse Title $2,321.00 [PDF] $570.00 [PDF] See Rating
Federal Title & Escrow Co. $2,380.00 [PDF] $495.00 [PDF] (A) A+
Counselor’s Title, LLC $2,455.00 [PDF] $443.00 [PDF] See Rating
New World Title $2,550.00 [PDF] $535.00 [PDF] See Rating
Dominion Title $2,595.00 [PDF] $470.00 [PDF] See Rating
All American Title $2,645.00 [PDF] $393.00 [PDF] See Rating
Settlement Pros $2,960.00 [PDF] $411.00 [PDF] See Rating
National Settlement Services $2,980.00 [PDF] not published See Rating
Republic Title $3,025.00 [PDF] $460.00 [PDF] See Rating
Key Title $3,029.00 [PDF] $624.00 [PDF] See Rating
Mid-Atlantic $3,060.00 [PDF] not published See Rating
Stewart Title $3,087.50 [PDF] not published See Rating
Capitol Title $3,125.00 [PDF] not published See Rating
Pinnacle Title $3,125.00 [PDF] not published See Rating
Global Title $3,175.00 [PDF] not published See Rating
RGS Title $3,175.00 [PDF] $736.00 [PDF] See Rating
District Title $3,180.00 [PDF] not published See Rating
KVS Law Group $3,180.00 [PDF] $520.00 [PDF] See Rating
Avenue Settlements $3,235.00 [PDF] $418.75 [PDF] See Rating
Express Title $3,255.00 [PDF] not published See Rating
Accurate as of Feb. 11, 2011. Visit title company websites for current rates.

Now offering continuing education courses

We are pleased to announce Federal Title is now offering continuing education courses through a partnership with Real Estate Empower, Inc. Our first round of classes will commence Wednesday, February 23. Visit our continuing education section to learn more and to registerfor one or both offerings.

Satisfy course-hour requirements in the following areas:

D.C. Legislative Update    
February 23, 2011
Instructor: Catherine Schmitt, Esq.
Check-in: 9:00 a.m.
Class: 9:30 a.m. to 12:30 p.m. 
D.C. Financing Issues
February 23, 2011
Instructor: Jaclyn Kurz, Esq.
Check-in: 1 p.m.
Class: 1:30 p.m. to 4:30 p.m.  

The cost is just $15. Register now to reserve your seat in an upcoming class, but hurry as space is limited!

Classes will take place at 5335 Wisconsin Avenue, NW, Suite 440. Note: This is the same building where Federal Title's office is located but in a different suite.

Real Estate Empower, Inc. is a member of the Real Estate Educators Association and, like Federal Title, the company is accredited by the Better Business Bureau.

Keep an eye out for more classes in the near future, including classes that satisfy Maryland licensing requirements. For more information, please contact our office.

New: Homebuyer videos section

Sometimes it's easier to understand a subject with visuals. Title insurance and the real estate closing process in general are just two examples. 

With that in mind, take a moment to tour our new Homebuyer Videos section. Real estate agents: Use this section as a resource for your homebuyers. And homebuyers: Use this section to learn more about what goes on behind the scenes leading up to closing.

Here at Federal Title, we believe it's important to inform homebuyers, many of whom are purchasing a home for the first time. The more our homebuyers know in advance, the better prepared and the more comfortable they are when it comes time to sit down at the closing table.

Federal Title on XM169, AM1450 - Tune in!

Federal Title's very own Joe Gentile will discuss what's new with real estate fees this morning on SiriusXM's Joe Madison Show this morning beginning at 9:15.

The interview is part of a segment known as Wealth Building Wednesdays, hosted by our friend and Georgetown real estate agent, Jennifer Hammond.

Hammond approached us about the opportunity after reading a recent article posted on our blog entitled, "Added oversight means added expense for homebuyers."

Joe and the rest of us here at Federal Title are pretty excited about the opportunity. Keep an eye -- and an ear -- out for an audio from the interview.

Added oversight means added expense for homebuyers

Increased regulation on the title insurance industry will take a bite out of the wallets of homebuyers and refinancing homeowners in the District of Columbia in 2011.

Added oversight will likely amount to added fees and less room for negotiation, Todd Ewing, founder & president of Federal Title & Escrow Company, said just days after title insurance producers and companies operating in DC were placed under the regulation of the city's Department of Insurance, Securities and Banking.

"Title insurance premiums will no longer be negotiable since DISB now requires all DC title insurers to file their respective rates by March 31, 2011," Ewing said. "The requirement will likely result in overall higher title insurance premiums charged to homebuyers and refinancing homeowners."

Click beyond the jump to continue reading.

Closing attorney readies for a new chapter with a familiar beginning

Closing attorney Jackie Kurz finds her greatest satisfaction at the settlement table as the ink dries and she sees the smiling faces of homebuyers and sellers, all eager to begin a new chapter of their lives, knowing she played a part in making it all happen.

"Having a hand in creating that happiness is very rewarding," the Pennsylvania native said.

Kurz starts a new chapter of her own this week as she returns to Federal Title & Escrow Company. After more than two years, and two states, she is ready to pick up right where she left off, creating a settlement experience for each client that is seamless and painless.

Click beyond the jump to read more about Federal Title's newest attorney.

Federal Title's closing costs below national average

A recent survey from showed homebuyers in Maryland and the District of Columbia pay closings costs that are below the national average. That was good news on its own.

When I began digging through the details of the survey, I discovered this chart that breaks down closing costs for each state and separates origination fees from title & closing fees. That's when I learned (or confirmed, rather) homebuyers who select Federal Title for their closings pay well below average across the board.

For starters, closing costs across the nation averaged $3,741, according to The research was based on a $200,000 loan and a 20 percent down payment. 

The survey shows that the average homebuyer in Maryland pays $1,921 in title & closing fees. A homebuyer who settles the same real estate transaction through Federal Title pays $1,465.

And in D.C. the survey shows the average homebuyer pays $2,322 in title & closing fees. If the homebuyer had settled that property address with us, he would have paid $1,905 for the same title services.

Homebuyers in Virginia should be most excited of all: Closing costs average $2,355 across the state — exceeding the national average — but when Federal Title is on the case, closing costs come in at $1,509.

While these numbers are great, it's not the only factor to consider when choosing a title company. Beyond our competitive prices, at Federal Title we've built a reputation of exemplary customer service. We've bought and sold houses of our own, so we know how it feels to be a homebuyer or seller, to expect quality service for your dollar.

With this in mind we are working to improve our technology to make the closing process even more seamless and painless. This will free up time for our humans to tend to each client, which can only improve the title services we provide.

Maryland, D.C. closing costs below national average

Average closing costs in Maryland and the District of Columbia are less than the national average, according to the results of an annual survey by

Closing costs averaged $3,741 nationally, according to the survey, which was based on a loan amount of $200,000 and included loan origination and title fees.

Here's a breakdown of states in the Washington Metro Area, where Federal Title primarily works:

Maryland $3,402 No. 38
District of Columbia $3,685 No. 22
Virginia $3,883 No. 19

Calculate pro-rated property taxes quickly, accurately

We invite you to test our revamped Seller's Calculator, an easy-to-use tool designed to help real estate agents and home sellers calculate net proceeds from a sale. It's one of many improvements we're making to our website in the coming months as we continue to update our technology and make the Federal Title closing experience more efficient than ever before.

The new and improved Seller's Calculator takes the guess work out of determining your Seller’s net sales proceeds. Among many other features:

•    It pro-rates real estate taxes,
•    Allows you to apportion transfer & recordation taxes between the buyer and seller
•    Accounts for seller credits to buyers

Seller's Calculator »

To say the last few weeks around our office have been busy would be an understatement. But despite the hectic pace, our very own Todd Ewing was able to take some time out to speak with NPR business reporter Tamara Keith.

The story appeared June 30 during NPR's Morning Edition and aired here in Washington, D.C. and across the country. Here's a link to the story "Mad Dash as Homebuyer Tax Deadline Arrives" in case you missed it.

Federal Title featured on NPR homebuyer report

To say the last few weeks around the office of Federal Title & Escrow Company have been busy would be an understatement. As the clock counts down to the deadline for the federal homebuyer's tax credit, our staff is working diligently to facilitate as many smooth closings as possible.

Despite the bustle, our very own Todd Ewing was able to take some time out of his busy schedule yesterday to sit down with NPR business reporter Tamara Keith to speak about the mad dash of homebuyers hoping to close before the June 30 deadline.

The story appeared today during Morning Edition and aired here in Washington, D.C. and across the country. Here's a link to the story "Mad Dash as Homebuyer Tax Deadline Arrives" in case you missed it.

We're pretty excited about the story here around the office. Please share your thoughts, especially on Todd's part near the end, in the comments section below.

The other value of real estate

I've been stalking the DC real estate market for months, first hoping to cash in on the $8,000 federal tax credit, then waiting for the credit to expire so housing prices could drop. If I'm going to buy, I want to make a "good investment," right?

Not necessarily true, says Winifred Gallagher, whose column "Living Rooms" debuted in The New York Times this week. Real estate holds an often overlooked value for people that is far less tangible than a hefty down payment, she says.

She calls a home a "womb with a view," a secure place to which we can return to recharge our batteries or hide out from the storm.

Perhaps if more people changed their attitude about what it means to buy a piece of property, then more people would be getting excited about the prospect of a drop in home prices. (Real estate is going on sale!)

Yet since the government's exit from the housing market, amid reports of a drop in consumer confidence and predictions that housing prices will fall an additional 10-20%, mortgage applications have fallen to record lows and home sales have plummeted, also to record lows.

Properties may lose value through the end of the year, but eventually values will rebound, and as Gallagher says, all the while you could be building your life and putting a stamp on a property all your own, regardless of what's going on in the world outside its walls.

Whether you agree or not, the column is actually quite good.

Study: Math deficiencies increase foreclosure risk

I'm thinking back to the countless hours spent scratching my head in math class asking myself, "When am I ever going to use this stuff in real life?" A new study out of Columbia University is attempting to provide at least one answer.

Study says math deficiencies increase foreclosure risk, the headline in The New York Times reads. The assistant business professor who led the study found that borrowers with poor math skills were three times more likely than others to go into foreclosure.

"Overall, 21 percent of the respondents whose math abilities placed them in the bottom quarter of the survey experienced foreclosure, versus 7 percent of those in the top quarter," business and technology reporter Bob Tedeschi writes.

But do poor math skills cause borrowers to go into foreclosure? Our pal and real estate agent Ken Montville of MD Suburban Homes thinks it's a bit of a stretch, yet he agrees a homeowner who can't balance his checkbook or budget for future expenses is at a disadvantage.

In Tedeschi's article, Richard L. Tracy, Jr. of Campbell Mortgage asserts that borrowers with math deficiencies would most likely have a weak credit score, too.

The credit score may be a good indicator into how a borrower has handled previous debts, but it's not a crystal ball that can predict how a borrower will rebalance his budget if he loses his job or if the interest rate on his adjustable rate mortgage resets and ups his monthly payment beyond his comfort level.

Whether financial illiteracy causes borrowers to go into foreclosure down the road or not, it's tough to say. But what is certain is that it's the homebuyer's responsibility to understand the terms of his loan – including such mathematical concepts as amortization, principal and interest, interest-only versus fix-rate loans, percents and fractions – and make an educated decision.

What a coincidence the Merriam-Webster definition for literate is "having or displaying advanced knowledge or education." Cause or correlation aside, let's just say it would behoove you to know a little math before you plunk down several thousand dollars at the closing table. 

To rent or to own, that is the question

The $8,000 federal tax credit for first-time homebuyers expired for most of us a little over a month ago, but  mortgage rates continue to hold at historic lows prompting the question: Is it better to rent or own?

The big picture story tells us conditions are prime for buyers, but the truth is on a regional level the story has many versions. To determine if now is the best time for your unique circumstances, take a look at this Rent. vs. Buy Index produced by Trulia, a real estate website.

The index rates the Top 50 markets in the United States based on population and compares the average cost to rent a 2-bedroom apartment with the average listing price for comparable condos and townhouses.  

Miami, still reeling from the condo crash, is among the Top 3 cities where it's better to purchase than rent with a price-to-rent ratio of 8. Baltimore, the District of Columbia and Virginia Beach just barely fell within the realm of purchase, with price-to-rent ratios of 12, 14 and 14, respectively.

The tipping-point, according to Trulia, is a price-to-rent ratio of 15, which may be on the low side, according to some. The Wall Street Journal offers more analysis of the Rent vs. Buy index:

First, homeowners need to look first and hardest at present cashflow. The cult of homeownership made no sense. If renting is much cheaper than buying, think seriously about it.

Second: The markets that have fallen the furthest now look like good places to buy, while those that seem to be "safest" aren't. As the saying goes: There is no such thing as a "safe" investment, merely one whose risks are not yet apparent. It's a principle that a lot of people forget time and again.

Still not sure is it's better to rent or buy? The New York Times recently launched its Rent. vs. Buy calculator, which accounts for down payment, taxes and closing costs as well as rent deposit, renter's insurance and (of course) rent.

Not all title companies hate technology

I came across an article in Forbes today entitled "Why Title Companies Hate Technology."

At Federal Title, we love technology! We worked pretty hard around here to develop our consumer-friendly automatic quote software and then dove head-first into the world of Web 2.0 when we re-launched the Federal Title website earlier this year, so seeing a headline like that was certainly alarming.

Author Lee Gomes asks if a homebuyer can immediately access his credit score online, then why isn't there an online database where he can access land records and research his own title? Well, Mr. Gomes, if I can access my credit score online, why isn't there a database where I can access and interpret my own X-rays?

It's a conspiracy, according to him, where title companies are deliberately blocking the progress of technology because they stand to profit more from the current, "antiquated" system. His theory is that title companies have "enormous political clout in state capitals," and consequently the consumer is trapped into paying upward of $1,100 in closing costs. (It should be noted the bulk of the costs go toward the policy premium, not title services.)

Personally, I don't see how a credit score and a title search is an apples-to-apples comparison, as Todd likes to say. A credit score involves no legal interpretation whatsoever. Meanwhile, there's a whole glossary of terms that relate to the title search and settlement process.

Sure the title claims rate may be 1 out of 100 annually, but how does that support the opinion that we no longer need title companies? What Gomes fails to recognize is that issues arise during the title search far more frequently than that – more like 1 out of every 3 title searches, according to ALTA.

If potential title clouds appear during 33% of title searches but title claims are only made 1% of the time, that's evidence to me the system is doing its job.

Furthermore, many title companies are embracing technology because they recognize its potential to cut operating costs, a savings that's passed along to the consumer. That was the whole reason Federal Title developed its custom quote software.

The Internet is a great resource for house hunters, but it's not a substitute for professional or legal advice. Foregoing legal assistance to save a couple thousand in the homebuying process could actually wind up costing a whole lot more should a claim arise.

It may not be rocket science, but there is more to a title search than the eHow article suggests.

First-time homebuyer tax credit still on for military personnel

While the Federal Tax credit is a thing of the past for most of us, those serving overseas in the U.S. military, the foreign service and the intelligence community may still be able to claim the $8,000 credit.

"Members of the military and certain other federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and qualify for the credit," according to the Internal Revenue Service. That means qualifying homebuyers have until April 30, 2011 to enter into a sales contract. If the homebuyer meets that first criterion, he or she then has until June 30, 2011 to close the deal.

For more information on the credit, check out the IRS article, First-Time Homebuyer Credit: Members of the Military and Certain Other Federal Employees.

Second credit screening could delay closing or kill the deal

Want further proof that it's a bad idea to open a new line of credit while trying to buy a house?

Beginning June 1 your lender will likely be pulling a last-minute second credit report immediately before closing. If you've taken out a new loan that's large enough to affect your debt-to-income ratio calculations used in the original mortgage approval, your deal could fall through.

Opening a new line of credit – whether for new furnishings, landscaping, appliances, a new credit card, etc. – is one of the top homebuyer mistakes to avoid.

From the Washington Post:

The June 1 changes are part of a new effort by mortgage giant Fannie Mae to cut down on slipshod underwriting by lenders and fraud by borrowers. Fannie's "loan quality initiative" will require lenders not only to pull two credit reports for each mortgage transaction but to perform additional verifications of borrower occupancy plans for the property, Social Security numbers and Individual Taxpayer Identification Numbers.

The story appeared in last Saturday's edition. 

E-signatures for real estate contracts OK'd by FHA

The Federal Housing Administration recently announced it will now accept E-signed third-party documents – including real estate contracts.

The news come from the chief legal officer of the company that spear-headed an industry wide effort to move the FHA to formally recognize E-signed third-party documents. The FHA decision will help streamline the sale and financing of homes across the country, Ken Moyle of DocuSign said.

"FHA’s lack of guidance was not at the forefront of anyone’s mind a couple of years ago when the agency was only involved in two percent of home loans," Moyle writes on the DocuSign blog. "But the collapse of financial markets in late 2008 catapulted FHA into the mortgage spotlight almost overnight."

The last time FHA released formal guidance on e-signatures was in 1996.

"As the new #1 source of funding for nearly half of first time home buyers in 2009, FHA’s inability to articulate a clear process for accepting electronically processed documents became a very real problem for those who depended on the agency as a downstream partner," Moyle writes. " In fact, in early 2009 we saw some major FHA lenders retreat from their progressive policies toward e-commerce, as they waited for a signal from FHA."

An April 8, 2010-dated FHA mortgagee letter is the first in what is expected to be a series of responses to this initiative. It essentially says (and DocuSign confirms) it’s now official: E-signed third-party documents, including real estate contracts, are now being accepted by the FHA.

Could new rules make tax-credit closing deadlines tough to meet?

An article in this weekend's Washington Post discusses how new regulations could make it tougher for homebuyers to meet the June 30 closing deadline in order to cash in on the federal governments $8,000 tax incentive.

From the Post:

"As a result of toughened underwriting standards, confusing new federal disclosure rules, appraisal regulations and a long list of other potential obstacles, meeting that deadline could be harder than expected. In fact, mortgage industry leaders say some buyers who are seeking the tax credits won't get a cent because the clock will run out on them."

The same article also advises:

"Anticipate massive traffic jams and regulation-driven snares at title, escrow and settlement firms in the weeks and days preceding the deadline."

Changes to Truth in Lending Act that took effect August 1 of last year require a minimum seven-day waiting period between issuing a disclosure of mortgage loan costs on a Good Faith Estimate and the settlement or closing date.

Tack on an additional three business days of wait-time before consummating a loan transaction should the APR reflected in the initial disclosure vary by more than an eighth of one percent (.125%).

Homebuyers to ensure they receive the federal tax credit, not only should they be planning ahead as the Post recommends, they should make sure to receive a guaranteed quote for title services and avoid any last-minute surprises that could push them beyond the deadline.

And speaking of last-minute: Don't wait until the last minute to schedule closing. Even the most diligent of title searches can overlook something. Read this story from the trenches about a $6,000 lien on a $1,200 property. In short, the seller's attorney and real estate agent swore there were no issues with the property's title, and guess what - they were wrong!

To cash in on the federal credit, a little pre-planning and a lot of CYA is in order.

Am I ready to buy a home?

Though the federal government closed the door on the $8,000 homebuyer tax credit, real estate professionals remain optimistic that homebuyers looking to take advantage of low mortgage rates and home prices will not be deterred.

But what are the odds that the influx of buyers lured by the tax incentive could find themselves underwater or in a foreclosure situation in the coming years? Hopefully, with stricter lending standards and industry reform, the odds aren't great.

First-time homebuyers in today's market are more cautious than before, said local real estate journalist Michele Lerner, who spoke to an intimate audience of aspiring homebuyers and real estate agents at the Gallery Neptune in Bethesda.

"Buying a home is both a financial and emotional decision," Lerner said, noting that first-time homebuyers don't always think about buying a home as an important long-term decision. "It's not just about buying, it's a lifestyle change."

Lerner spent several months interviewing real estate agents, mortgage lenders and attorneys from all over the country to write her book "Homebuying: Tough Times, First Time, Any Time," a collection of 20 years of experience writing about housing and real estate condensed into 11 chapters. calls it a "MUST for anyone thinking of buying a home."

In doing the research for her book, Lerner said she was surprised by the contrasts she observed after talking to experts in local markets around the U.S. While national reports have painted a dismal picture of the housing market on the whole, pockets do exist where the outlook is not nearly as bleak.

Lerner, a long-time resident of the Washington Metro Area, pointed to the nation's capitol as a case in point. Lower levels of unemployment and incomes that rank above the national average have sheltered the District from the worst of it, while other areas such as South Florida and California have not been so lucky.

Sounds like all the more reason for homebuyers to do their due diligence, which is where a book like Homebuying can come in handy. To avoid the mistakes of homebuyers in recent years, Lerner says homebuyers should not only develop a realistic budget, but develop relationships with professionals they can trust: "The relationships you build with your real estate agent and lender will make or break your decision to buy a home," she said.

Lerner's work is regularly featured in the Washington Times "Friday Homebuyer Guide. " You can also check out this sample chapter and purchase your own shiny copy of the book at Lerner's website.

DC $5,000 first-time homebuyer tax credit regaining popularity

For the latest credit program, please view information here on DC's Newly Enacted First-Time Homebuyers Recordation Tax Reduction program that went into effect October 1, 2017.   

For District of Columbia residents who missed the April 30 deadline for the $8,000 Federal First-time homebuyer Tax Credit, there's another tax credit to cash in on.

Many have forgotten that DC offers a $5,000 tax credit to anyone who hasn't owned a main home in the District during the one-year period ending on the date of purchase. Since the DC Tax Credit is smaller and couldn't be taken simultaneously with the Federal Tax Credit, it has largely been ignored.

But the Federal Tax Credit required a ratified sales contract dated prior to April 30, 2010 and for settlement to take place by June 30, 2010. Now that it's expired, the DC Tax Credit will regain some of its appeal during the second half of this year. Additionally, the DC Tax Credit has not expired since it began in 1997.

Here is information taken from the 2009 IRS Form 8859, and so it applies to the 2009 taxes but can be used as a general guideline since it should be similar for the 2010 tax year (information for the 2010 tax year has not yet been released).

Frequently asked questions about the DC Tax Credit

Who is eligible for the DC Tax Credit?

Generally, the DC Tax Credit can be claimed in the year that the principal residence has been purchased as long as the purchaser(s) did not own another principal residence in the District of Columbia during the one year period ending on the date of purchase.  NOTE: Unlike the Federal Tax Credit, the DC Tax Credit only requires that you be a DC First-time Homebuyer.  Even if you are ineligible for the Federal Tax Credit since you own a property in another jurisdiction, you may be eligible for the DC Tax Credit.

How much is the credit for?

The maximum credit is for $5,000, or $2,500 if married filing separately.  The credit begins to phase out when the modified adjusted gross income exceeds $70,000 ($110,000 if married filing jointly) and ends at $90,000 ($130,000 if married filing jointly).  

Are there any exclusions?

Yes. You cannot claim the credit if you are eligible to claim the Federal Tax Credit on IRS Form 5405 or if you purchased your home from related persons or by gift or inheritance.  Related persons include, among others, grandparents, parents, spouses, children and grandchildren.  Also, the DC Tax Credit can only be claimed once, so it is not available if already claimed on another property.

Where can I get more information?

In depth information can be obtained from the District's Office of Tax and Revenue or by reviewing the IRS Form 8859.

History of the DC Tax Credit

The Taxpayer Relief Act of 1997 was signed by the president on August 5, 1997. The tax credit has been renewed every year ever since, granting taxpayers in the District of Columbia who have not recently owned a home eligibility for a one-time tax credit of up to $5,000 to be claimed against federal income taxes.

The tax credit is reported on Form 8859, and the taxpayer must file Form 1040 to claim this credit.  Download the DC First-Time Homebuyer Credit Tax Form 8859.

5 keys to buying your first home, tax credit or no

Time is running out for first-time homebuyers looking to take advantage of the $8,000 federal tax credit, set to expire Friday, April 30. Even if you're not in a position to cash in on the credit in the next five days, you can still land a great deal on a piece of property if you follow these five steps, which come from a USA Today article.

1. Get your finances in order.

2. Find a real estate agent and start looking.

3. Investigate the reputations of builders, condos.

4. Make an offer and apply for a mortgage.

5. Prepare for closing.

In honor of Earth Day: EPA proposes rainwater-trapping rules for D.C.

Coinciding with the 40th anniversary of Earth Day, the EPA has announced a proposal that would require developers in the District of Columbia to implement measures for trapping runoff to prevent pollution from making its way into rivers.

The proposal would effect new and redeveloped properties in the District and require 90 percent of rainwater that falls onto a plot to be captured via green roofs and rain barrels.

If approved, Washington, D.C. would become a test-case for an ambitious plan to curb runoff nationwide.

Real estate closing process in 6 steps

So you've submitted an order for settlement – what happens next? This is a common question we receive from homebuyers wanting to know the next step in the real estate closing process.

In this article I will outline the steps that occur in between placing an order for settlement services and signing the documents at the closing table. Terms and procedures may vary slightly by jurisdiction, and this is a generic outline of the real estate closing procedure.

Here at Federal Title we have a dedicated team of closing experts that includes settlement coordinators, processors and attorneys, who will guide you through the final steps of your journey to home ownership.

Could a short-sale boom end the foreclosure crisis?

The federal Home Affordable Foreclosure Alternatives program goes into effect next week, and some mortgage industry professionals anticipate it will spur a short-sale "boom" that could help ease the pains of a distressed property market.

For underwater homeowners, a short sale is better than foreclosure because it's less detrimental to the consumer's credit score. Whereas a foreclosure could knock as much as 200 points off a FICO score, the damage from short sale is about half as bad.

In the past short sales took an average of more than six months to complete, CNN Money reports, and banks were often reticent to approve short sales because it meant taking a loss.

But with a surge of foreclosure activity expected over the coming months, many lenders are choosing the lesser of the two evils. The CNN article also reports lenders lose 50 percent on a foreclosure and 30 percent on a short sale.

For lenders and mortgage brokers interested in learning more about HAFA, check out "Lender incentives in new HAFA program could expedite short sales."

Update: Lenders with HAFA questions can also check out this Q&A post on the Wall Street Journal's blog.

REO property inventory on the rise?

The inventory of real estate owned property is rising. An increase of REO inventories could cause home prices to fall, and the Wall Street Journal reportsinventories could rise as high as 733,000 units by April before dropping off again.

Inventories fell toward the end of 2009 because many properties were held up in the foreclosure pipeline while banks determined which distressed homeowners qualified for loan modification programs.

There are still deals to be had out there for investors and first-time homebuyers. If you're planning to put an offer in on an REO property, consult this list of Dos and Don'ts by settlement attorney Todd Ewing to avoid common mistakes and increase your chances of success.

Appeal property tax in 4 steps

If home prices have dropped in your area, there's a chance you could be paying too much in property taxes. Thankfully, there is something you can do about it: Challenge your property tax assessment before the local Property Tax Assessment Appeal Board (or some variation thereof).

The New York Times features an article, "High Property Taxes? 4 Steps to Lowering Them" to get you started down the road to appeal. For homeowners and homebuyers with questions about the tax appeal process in the DC Metro Area, learn how to "Take Advantage of Tax Appeal" from this article by our very own attorney Joe Gentile.

As he says, there's no need to be intimidated by the tax appeal process. Most appeals are resolved the first time, especially if you have done your research.

A small investment of time could potentially net thousands in annual savings. So check out online resources like Zillow's recent home sales tool. If you're about to purchase real property, talk with your real estate agent or closing attorney to make sure you understand the process. And if you're still unsure, This email address is being protected from spambots. You need JavaScript enabled to view it. us for more information.

Do open houses work for real estate agents?

Before the age of the Internet, the only way potential homebuyers could tour a home was to either contact their real estate agent to schedule a showing or to attend an open house.

Now-a-days virtual tours, photo galleries and online listings make it easier for the consumer to shop for houses without setting foot in one. Yet on any given Sunday you can bet somewhere in the DC Metro Area there's an open house taking place.

Do open houses work?

"The bottom line is that there is really only one good reason Realtors have Open Houses," writes Ken Montville of "It’s so they can possibly run into someone who is unrepresented by another Realtor and who might be interested in using their services. In other words, it’s a great way to prospect for new business."

Tradition dies hard, he adds. For agent insight, check out the rest of his post, "Do people still do open houses?" that weighs in on the investments versus the returns for an agent who hosts an open house in today's real estate market.

12 ways to come up with a down payment

It's hard not to get excited at the prospect of owning a home, especially when there's so much buzz about historically low borrowing rates, an influx of foreclosures on the market and a new program that might actually expedite the short sale process.

But with tighter lending standards these days, you may find the homeownership train is leaving the station without you if you don't have enough of your own money to throw into the pot.

With a federally backed FHA loan, you still need to come up with 3.5% of the sales price PLUS closing costs. On a purchase price of $300,000 in the District of Columbia, that's more than $16,000. (Calculate closing costs for yourself with a Quick Quote.)

Unless your favorite rich uncle remembered you in his will, or you've been saving for years in anticipation of a massive real estate market meltdown, you may be a few dollars short of making a down payment in today's market.

Here are 12 ways to come up with a down payment, according to Philly Real Estate Information:

  1. Set up an automatic saving plan.
  2. Get a gift from your parents, grandparents, other relatives or friends.
  3. Sell a car, boat, motorcycle, collectibles or other assets.
  4. Liquidate stocks, mutual funds, savings bonds or other investments.
  5. Allocate your income tax refund.
  6. Take a loan from your 401(k) retirement plan and repay yourself with interest.
  7. Withdraw funds from your 401(k) plan, subject to taxes and penalties.
  8. Collect on a loan that you made to someone else.
  9. Get a bonus from your employer.
  10. Explore homebuyer programs for teachers, police officers, firefighters and other public servants, if you qualify.
  11. Apply for a state or local government homebuyer down payment program.
  12. Use a private down payment assistance program.

Any other bright ideas? Leave your tips for saving toward a down payment as a comment below.

Consumer lending on the rise at smaller banks

Interest rates for home loans remain at all-time lows. The federal first-time homebuyer program has still got some steam left in it, and real estate agents are touting, "Now's a great time to buy!"

There's just one small problem: Tighter lending standards make it tougher to get a loan.

Most consumers can't buy a house without a loan, but last year at the largest 10% of U.S. banks (by asset size), consumer lending shrank by 4.7%, according to the Wall Street Journal.

Happily, there is a silver lining.

The same article reports consumer loans rose 3% at financial institutions that make up the lower 50% of industry assets. A spokeswoman for one Pennsylvania bank reported a 30% jump in consumer lending.

For consumers in the market for a mortgage, remember to shop around the same way you should when choosing a title company. Compare costs, talk to a few experts, read some blogs . If after shopping, you come to find lending standards are too strict to accommodate your needs, look for ways to beef up your down payment.

More on that a little later. ...

Lender incentives in new HAFA program may expedite short sales

Lenders are coming to grips with the fact that short sales will remain a part of the housing market for the next 24 to 36 months, the Wall Street Journal reports.

For lenders and mortgage brokers interested in the Home Affordable Foreclosure Alternatives program, an extension of the federal government's Home Affordable Modification Program that goes into effect April 5, here are some highlights, according to the U.S. Treasury Department.:

  • Borrowers receive pre-approved short-sale terms before listing the property, so sellers know what lenders will accept before listing the property.
  • There's a set time line, with deadlines for lenders and sellers to keep the short-sale process moving.
  • At the completion of a sale, borrowers may receive up to $1,500 for relocation expenses, while servicers may receive compensation of up to $1,000. Up to $3,000 of proceeds up for grabs among subordinate lien holders, making it possible to compensate second-mortgage lenders.

Guest bloggers wanted

How would you like a chance to be front and center before thousands of curious consumers with a genuine interest to purchase or refinance a home in the near future?

Better yet, what if you could broadcast your real estate industry expert knowledge and exponentially increase your exposure to these potential clients without spending a dime?

That's what Federal Title & Escrow Company is offering to mortgage lenders, real estate agents and other industry experts in the DC Metro Area – the opportunity to submit an article for a special guest column featured weekly on the company blog.

Submit an article to Federal Title's blog

In an age when Google accounts for 43% of global Internet traffic, businesses are relying more and more on web marketing strategies to improve their search engine rankings and stay in front of customers.

Establishing online visibility is a lot like competing in a high school popularity contest in that you need the most votes to win. Votes come in the form of inbound links from other websites. The more of them you have, the higher your page will land in search results.

Federal Title guest bloggers are encouraged to contribute a thoughtful article on a topic that somehow relates to the real estate industry – be it homebuyer programs, hot neighborhoods, new loan regulations, closing costs, just about anything goes – and provide a link back to their website. You can also submit a previously published article from your own blog or website and still provide a link.

The rules are simple:
1) No blatant self promotion; and
2) Federal Title reserves the right to edit all content as necessary.

Submit an article to Federal Title's blog

With no advertising dollars on the line, you've got nothing to lose! The marketing team is standing by the answer your questions and help you get started, so why not give this blogging thing a shot?

Order settlement services from your smart phone

An increasing number of real estate firms are providing homebuyers with free smart phone applications, commonly referred to as "apps," to make house hunting easier than ever.

While websites have offered similar technology for years now, mobile apps literally put this power in the palm of the homebuyer's hand, providing a snapshot of the local real estate market in real-time. Apps use smart phones' global-positioning technology to provide all kinds of information, from a homes features and amenities to property values to information about local schools and crime statistics to photos of the surrounding neighborhood.

There's no question that real estate apps are more than a passing trend. Zillow reports nearly 1 million downloads of its app and an average of 2 million home look-ups each month. Redfin has reported a high level of customer satisfaction from its app even if it's not a money-maker per se.

While Federal Title does not have a mobile app, it is possible to access our online tools, including the automatic quote generator and seller's calculator, directly from your smart phone. Add the link to your list of favorites to generate a quote at any time: — no download required.

'Strategic default' on the rise

At a time when one in four homeowners is underwater, and 2 million more Americans have gone through foreclosure, the thought of defaulting on a loan is becoming less taboo. In fact, many homeowners are taking a cue from high-profile investors, who have walked away from multi-billion dollar real estate investment projects, and choosing to cut their losses, the San Francisco Chronicle reports.

Foreclosure and delinquency rates remain high, a Treasury official said in a prepared statement Monday. And though there are signs of recovery in the housing market, the federal government still has a lot of work ahead of them, he said.

Part of that work is putting pressure on U.S. banks to ease terms for distressed homeowners, as well as incentive programs to encourage homeowners to sell their properties at a loss. A "Hardest Hit Fund" is aimed at supporting state and local housing agencies in California, Florida, Nevada, Arizona and Michigan help unemployed workers keep their homes and to help underwater homeowners into loan modification programs.

Refinancing borrowers struggle to capitalize on low mortgage rates

Borrowers are missing out on billions of dollars in savings because high rates of negative equity, tighter lending standards and falling incomes have made it difficult for many to refinance.

Federal officials are investigating ways to help refinancing borrowers, and last week the White House announced it will extend its Home Affordable Refinance Program.

Current refinance volume is nowhere near as much as expected, experts say, considering interest rates continue to hover at historic lows. Last week the Mortgage Bankers Association reported the average rate on a 30-year fixed mortgage was 4.95%.

The last time mortgage rates were at current levels was 2003, when refinancing activity hit $2.9 trillion, according to trade publication Inside Mortgage Finance. Last year refinance volume reached $1.2 trillion, the highest amount since 2003.

The Wall Street Journal examines why last January's refinance applications were at their lowest levels in a year.

Exactly how good is the new Good Faith Estimate?

Two months since the new RESPA rule took effect, some mortgage lenders report consumers are asking more questions throughout the homebuying process, while others say consumer confusion has simply taken a new shape.

The new rules will hopefully ensure fewer surprise fees, but does the new Good Faith Estimate make it easier for consumers to understand the terms of their loan program?

"One of the major flaws on the GFE is that it doesn't include a line for the total monthly payment, including principle, interest, taxes and insurance," our very own Todd Ewing told the Washington Times in an interview. "The monthly payment is expressed only as principle, interest and mortgage insurance premiums, which doesn't really clarify for borrowers how much they will need to pay each month."

The new Good Faith estimate has increased the amount of time it takes for a transaction to close, a New York Times article reported, because lenders must obtain a guaranteed quote for settlement services before sending the form to the borrower. The same article also reported consumers are asking more questions about closing costs than before because closing costs are represented as a lump sum on the new Good Faith Estimate instead of an itemized list like before.

The new Good Faith Estimate that went into effect January 1 was a response to consumer's primary complaint at the closing table: hidden or surprise fees.

Whereas in the past the GFE was an estimate of likely fees with no requirement of accountability, the new GFE holds mortgage lenders to a stricter standard. In some cases there's zero tolerance for going over the estimate, and lenders can incur heavy penalties.

How has the new RESPA rule affected you?

Google for real estate agents

Before a customer ever picks up the phone to ask for your business, chances are she spent a sizeable chunk of time investigating her needs and your services online.

Today more than ever, potential homebuyers are using search engines, particularly Google, to find anything from a reputable real estate agent to their next (or first) dream home.

To help you connect with homebuyers, check out Google for Real Estate Professionals, a wonderful toolkit where you'll find just about everything you need to make sure potential clients find you on the World Wide Web.

For example, with Google Maps homebuyers can view a property from a bird's eye or street view, explore traffic and public transit information and, perhaps most importantly, learn how to get in touch with you. All you have to do is upload your listings.

Once you finish uploading, take a couple extra minutes to explore the Local Business Center, where you can claim and manage your business listing.

YouTube is a great way to showcase not only your listings but your business as well. Post a testimonial video from a happy homebuyer or an informative piece that explains a tricky aspect of the homebuying process. Let your potential clients get to know you by guiding them on a walk-through of your newest property listing.

All services in the Google for Real Estate Professionals toolkit are fairly easy to figure out, and just about all are completely free to use.

GFE-based quote tool is now RESPA compliant

Washington, D.C. – Lenders navigating new RESPA rules can bank on the accuracy of Federal Title & Escrow Company's online quote system to prepare their Good Faith Estimates.

"Our online quote is accurate to the penny, or we'll pay the difference," company president Todd Ewing said. The final RESPA rule puts lenders on the hook to provide accurate Good Faith Estimates. Federal Title takes some of the pressure off with an accurate, online GFE-based quote system.

If a lender uses the system to prepare a Good Faith Estimate and winds up in violation of the tolerance limitations, Federal Title will pay the difference between the quote and the final HUD-1 executed on the day of settlement, Ewing said.

It's called the Zero Tolerance Guarantee, and it specifically covers HUD-1 series line items 1100 and 1200, also known as "title charges" and "government recording and transfer charges," which include transfer and recordation taxes, recording fees and title insurance premiums.

As the final RESPA rule that took effect at the beginning of this year aims at transparency, the title insurance industry is beginning to shift toward the same business model Federal Title adopted some time ago, Ewing said.

"Lenders are not only seeking instant, electronic quotes for title work that don't throw off any specified tolerances, they've come to expect them," he said. "With so much information available through a few taps of the keyboard, who wants to call up and ask for numbers?"

With this spirit in mind, Ewing also announced the launch of the company's revamped website that includes an informative blog, convenient search functionality and improved navigation.

Seasoned settlement attorney returns to Federal Title

Pens around Catherine E. Schmitt's office have a way of disappearing. That's the running joke around the office anyway, because this retired Marine and newest member of Federal Title & Escrow Company's team of closing attorneys can do a lot more with a pen than push paper.

Catherine Schmitt, formerly the managing attorney for Monarch Title – Georgetown and Bethesda – rejoins the ranks of Federal Title's talented staff after a five-year hiatus. She brings with her 20 years of title experience and a steadfast work ethic sharpened by her service with the U.S. Marine Corps.

She says the most rewarding aspect of her work is the time she spends developing relationships with her clients.

“I am a loyal customer of Catherine”, says Tom Buerger of Re/Max Allegiance. “She is always there for me – whether it is as an expediter for a quick settlement, as a counselor to allay the fears of my first-time homebuyers or as a resource to solve potential issues before they become a problem that will delay settlement. She is my attorney-on-call.”

Schmitt’s clients vary from new homebuyers to seasoned investors, but one thing her clients have in common is they understand the settlement process.

"Buying and refinancing a home are big decisions,” says Schmitt. “The settlement process is an opportunity to educate clients. It's a time for them to ask questions, so they can feel comfortable and informed."

Schmitt earned two Bachelor’s degrees from the University of Maryland and has her Juris Doctorate from Drake University Law School in Des Moines, Iowa, the same institution that produced Federal Title's founder and president, Todd Ewing.

"Catherine works hard and is dedicated to her clients.” Ewing says. “She is a model of customer service, and I am very excited to welcome her back to our team.”

Homebuyers seeking advice from Schmitt about title insurance or the settlement process need only venture up Wisconsin Avenue to Federal Title’s Friendship Heights office. Reach Catherine E. Schmitt at 202-362-1500 or e-mail her at This email address is being protected from spambots. You need JavaScript enabled to view it..

About Federal Title & Escrow Company

In an industry contaminated by affiliated business arrangements, kickbacks and other referral incentives, the Internet returns the power to the people. Federal Title recognizes consumer-driven market pressures, as exemplified by the new RESPA rule, and seeks to offer home buyers substantial closing cost savings and a streamlined settlement process. Federal Title has a reputation of being technically innovative and always at the forefront of the latest real estate trends.

Years ago the company made a bold move by eschewing all Affiliated Business Arrangements and established its REAL Credit Program, which saves home buyers up to $1,100 on closing costs.

Now Playing: Closing Costs Explained Visually

Nikki Smith
Main line: 202-362-1500
Direct line: 202-274-1517
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Title Report highlights our 'unique' business model

A few weeks back Federal Title president Todd Ewing spoke with The Title Report editor Jennifer Kovacs about Federal Title's approach to the changes."There's a hard push with the RESPA reforms toward what we've been doing all along, which is full disclosure. Mortgage lenders are not just going to expect it, they're going to demand all title companies provide a guaranteed quote for their services," Ewing said.

With new legislation around the Real Estate Settlement Procedures Act slated to take effect Jan. 1, 2010, many in the industry have concerns about how these changes will impact their daily work routine. More accountability, full disclosures -- the new RESPA rule has placed a lot of lenders in particular on the hook.

Click beyond the jump to read "Title company's unique anti-AfBA business model pays off.

How well do you understand RESPA?

At its core, the Real Estate Settlement Procedures Act, better known as RESPA, is a consumer disclosure and anti-kickback statute intended to alert consumers about their settlement costs and to prohibit kickbacks that could increase the cost of getting a mortgage.

New RESPA regulations were published in November 2008 and are scheduled to take effect Jan. 1, 2010.

To prepare for the changes, Federal Title & Escrow Company is hosting a free event for 100 guests, which will feature a presentation by mortgage banking and consumer finance expert Holly Spencer Bunting. To attend this free event and learn more about RESPA, This email address is being protected from spambots. You need JavaScript enabled to view it. the marketing department at Federal Title.

Wondering just how savvy you are when it comes to RESPA? Take this RESPA Quiz created by and test your knowledge of the law.

Federal Title joins Expert Click community

Todd Ewing
 Todd Ewing, president of Federal Title & Escrow Company is among the newest members of the Expert Click community. Expert Click connects journalists and experts in a variety of fields. For information about the title insurance business, how to calculate closing costs and laws and regulations like the Real Estate Settlement Procedure Act, or RESPA, visit Todd's profile.


RESPA reform luncheon coming up

Are you still chewing over the details of the new RESPA rule, wondering how the changes will affect your daily work routine? Federal Title & Escrow Company invites you to hear the real story on RESPA and This email address is being protected from spambots. You need JavaScript enabled to view it. in the Dogwood Room at the Kenwood Golf & Country Club in Bethesda on Wednesday, September 16 at 10 a.m.

Mortgage banking and consumer finance expert Holly Spencer Bunting will discuss the new RESPA rule, which goes into effect on the first of the year. Bring your questions for a Q&A session immediately following the presentation. Here's what Holly had to say about her upcoming presentation:

Despite the U.S. Department of Housing and Urban Development's ("HUD" or "Department") publication of its final rule to amend the Real Estate Settlement Procedures Act ("RESPA") in November 2008, the rule continues to stir controversy as the effective date for the new HUD-1 Settlement Statement and Good Faith Estimate draws closer. While there is still hope that HUD will delay implementation of the new forms until the Department coordinates its efforts with the Federal Reserve, settlement service providers are gearing up for the January 1, 2010 effective date. This session will provide an in-depth overview of the components of HUD's final RESPA rule and the new HUD-1 and GFE disclosure forms.

Space for this free event is limited to the first 100 guests, so This email address is being protected from spambots. You need JavaScript enabled to view it.! Last day to RSVP is Tuesday, September 8.

Decipher the FAQs of new RESPA rule

A Frequently Asked Questions report released by the Department of Housing and Urban Development regarding implementation of the new RESPA rule has raised more questions from an industry in need of interpretation and guidance.

"Lenders and title companies were looking to HUD to address the more difficult practical circumstances they will face in completing the new GFE and HUD-1," said Phil Schulman, an attorney with Washington, D.C.-based K&L Gates in an interview with the Title Report. "For the most part, they merely restate the instructions already contained in the regulations."

Decipher the FAQs with mortgage banking and consumer finance expert Holly Spencer Bunting, an associate with K&L Gates, who will present an in-depth overview of the components of HUD's final RESPA rule and the new HUD-1 and GFE disclosure forms.

Her presentation is followed by a complimentary lunch and will take place Wednesday, September 16 in the Dogwood Room at the Kenwood Golf & Country Club in Bethesda.

Only 15 spots remain! If you have not reserved your spot or believe a colleague could benefit from this free event, please respond as soon as possible. We are limited to the first 100 guests, and time is running out.

The last day to RSVP is Tuesday, September 8. Don't miss this wonderful opportunity to gain a full understanding of the new RESPA rule and enjoy a free lunch compliments of Federal Title.

Closing costs video 'good intro' to settlement steps

If you're shopping for a home and haven't had a chance to watch this quick introduction to title insurance, you may want to check it out. While "Closing Costs Explained Visually" is targeted toward consumers, real estate experts are also finding it useful.

"Rather than a detailed step-by-step dissertation on title and escrow -- which many consumers really need before the home buying begins -- the two-minute Federal Title & Escrow Co. video is useful as a primer to get you into the basics of the process," writes Broderick Perkins, editor of Deadline News and the Real Estate News Examiner blog.

After a proper intro to the settlement process from Federal Title, home shoppers may then want to read Perkins' thorough three-part title insurance series for a better understanding of today's title insurance industry.

My favorite installment: Part 3 - Shop Around for Title, Escrow Services.

Title insurance companies sometimes get a bad rep, but we're not all bad. Some companies are committed to giving their customers the lowest rate possible on insurance premiums. Federal Title for one is saving home buyers as much as $1,100 through our REAL Credit Program.

As a home buyer, the more you know about the settlement process, the more you'll be able to save on closing costs.

RESPA expert to shed light on new legislation

Mortgage banking and consumer finance expert Holly Spencer Bunting will educate real estate agents, mortgage lenders and members of the media about upcoming changes in RESPA regulations during a complimentary luncheon next month.

Federal Title & Escrow Company is hosting the event in the Dogwood Room at the Kenwood Golf & Country Club in Bethesda, Md. on Wednesday, September 16 beginning at 10 a.m. Bunting is an associate with the Washington, D.C. office of K&L Gates, concentrating on issues of federal and state regulatory enforcement, according to the firm's website.

She represents companies in the mortgage lending, title insurance and real estate industries in connection with regulatory compliance matters and defends clients subject to government audits, investigations and enforcement proceedings.

Additionally, Bunting advises clients about federal and state consumer credit and protection laws and regulations, including the Real Estate Settlement Procedures Act (RESPA).

Consequently, Bunting has delivered several presentations on RESPA and compliance and written several articles about the consumer protection statute, including "Finally, a Final RESPA Rule," and "RESPA's New Average Charge Provisions – Available for Some."

10 things homebuyers should know about title insurance

You have the right to choose your title company. In an industry contaminated by affiliated business arrangements, kickbacks and other referral incentives, the Internet returns the power to the people. Don't let your mortgage lender or real estate agent steer you toward their preferred title company without doing your homework first. You could save thousands of dollars – yes, thousands – by selecting a title company on your own.

It's easy to save money on title services. Ask for quotes from several title companies and compare them with your real estate agent's or mortgage lender's recommendation. By shopping around and asking about discounts, a lot of times the home buyer can save thousands on closing costs.

Your mortgage lender will require title insurance. This isn't one of those cases where you can skirt the extra expense and hope for the best. If you are borrowing money for a real estate investment, your mortgage lender will want to make sure it's protected. Title insurance protects your money if it turns out the seller didn't legally have the right to sell the property in the first place. At minimum, you will be required to purchase a lender's policy. An owner's policy, while recommended, is not required. To save money on your owner's policy look into Standard v. Extended coverage.

Title insurance is a one-time fee. Unlike other types of insurance, there is no ongoing premium to pay for title insurance. Your mortgage lender is required to provide you with a Good Faith Estiamte for closing costs, including title insurance, and factor those costs into the initial disclosure. This three-minute video explains closing costs in laymen's terms: Closing Costs Explained Visually.

Ask about "standard" title insurance vs. "enhanced" title insurance. Some title companies push enhanced title insurance without providing the consumer with a proper disclosure that a less expensive standard policy is available. For many home buyers a standard policy will suffice. It costs less, too. Compare standard vs. enhanced title insurance, and make sure to ask your title company what types of insurance products they offer. Talk with your lender and settlement attorney to determine what policy is appropriate for your home investment.

Who pays for title insurance depends on where you live. Sometimes it's the buyer who pays, sometimes it's the seller. And sometimes the cost is split between the two. In the Washington Metro Area, for example, title insurance premiums are generally paid by the home buyer. It's important to note that title insuranceis regulated largely on the state level. If you're conducting a little Internet research, be sure to use regional qualifiers in your search (e.g. state, county, etc.).

Some closing costs are fixed while others are variable. The cost of your title insurance policy and government recordation fees are dependent on the purchase price of your home, and the bulk of settlement costs are typically paid by the home buyer. However, the seller doesn't get off scot-free.

Seller fees include a fee for mortgage release procurement and deed preparations. The settlement fee is often split between buyer and seller. Home buyer fees include a title examination/abstractor fee, location survey fee and a fee to process paperwork. A title company may charge additional fees unique to each transaction, but the extent of the fees should be disclosed up front.

Settlement costs factor into your loan's Annual Percentage Yield (APR). Home buyers should know the settlement process can be delayed due to recent changes to the Truth in Lending Act (effective Aug. 1, 2009). If the actual APR differs from the estimated APR by more than 0.125 percent, your mortgage lender must issue a new initial disclosure that reflects the accurate rate and wait a minimum of 3 business days to close the deal. To avoid surprises at the closing table, invest five minutes of your time at the beginning of the transaction to obtain a guaranteed quote online for settlement services.

If you're planning to refinance, your lender will require a title insurance policy. There are plenty of reasons to refinance such as reducing your interest rate and mortgage payment or consolidating debt.While a new owner's policy may not be necessary if you plan to refinance, your mortgage lender will still want to ensure the investment is protected, so you will likely need to purchase a new lender's title insurance policy. Here is an example of a title insurance rate card for a refinance.

Referral fees increase the cost of title insurance. The Government Accountability Office recently reported that 5 percent of title insurance premiums went toward insurance claims. A far greater percentage (some reports claim 50 percent or more), went to real estate agents and mortgage lenders for referral fees. This practice is illegal and punishable by imprisonment and/or a fine, yet it's very difficult to regulate. Home buyers' best protection against exorbitant title costs is education, simply knowing they have the right to choose their title company, asking about discounts and learning about what options are available. Not all title companies shell out referral fees, or kickbacks. In fact, some title companies cut out the middle man and credit the home buyer instead when he/she orders settlement services online directly from them.

Lenders, title agents most affected by new RESPA rule

Washington, D.C. – Mortgage banking and consumer finance expert Holly Spencer Bunting will address controversy surrounding the reformed Real Estate Settlement Procedures Act during a presentation and Q&A session next month.

The new RESPA rule, which aims to connect the dots between estimated closing costs set forth in the good faith estimate and actual closing costs disclosed in the HUD-1 form, will mostly impact mortgage lenders and closing agents.

"The rule continues to stir controversy," Bunting said.

While there's hope the U.S. Department of Housing and Urban Development will delay implementation, settlement service providers are gearing up for Jan. 1, 2010 effective date, she added.

Mortgage lenders and real estate agents are encouraged to attend the free luncheon event, beginning at 10 a.m. Wednesday, September 16 at the Kenwood Golf & Country Club in Bethesda, Md., presented by Federal Title & Escrow Company.

"At its core, the Real Estate Settlement Procedures Act, is a consumer disclosure and anti-kickback statute intended to alert consumers about their settlement costs and to prohibit kickbacks that could increase mortgage costs," said Todd Ewing, president of Federal Title.

Claims that fraud, deception and general consumer ignorance led to the disastrous outcome of the real estate lending bubble fueled the overhaul of the home buyer protection statute. Bunting will provide an in-depth overview of the components of HUD's final RESPA rule and the new HUD-1 and GFE disclosure forms.

About the Holly Spencer Bunting

Bunting is an associate with the Washington, D.C. office of K&L Gates. She represents companies in mortgage lending, title insurance and real estate industries in connection with regulatory compliance matters, according to her biography on the company's website.

Her articles have appeared in a variety of publications including "The Review of Banking and Financial Services," "Mortgage Banking and Consumer Credit Alert," and "The Banking Law Journal."

About Federal Title & Escrow Company

In an industry contaminated by affiliated business arrangements, kickbacks and other referral incentives, the Internet returns the power to the people. Federal Title recognizes consumer-driven market pressures, as exemplified by the new RESPA rule, and seeks to offer home buyers substantial closing cost savings and a streamlined settlement process.

Federal Title has a reputation of being technically innovative and always at the forefront of the latest real estate trends. Years ago the company made a bold move by eschewing all Affiliated Business Arrangements and established its REAL Credit Program, which saves home buyers up to $1,100 on closing costs.

Talking title insurance: Investigate closing costs early

Your title insurance expenses are largely dependent on the cost of the home you plan to purchase. Sometimes homebuyers, especially first-timers, don't anticipate the added expense to the end of their real estate transaction. They may feel sucker punched by the settlement process.

Mortgage lenders require title insurance. ... If you were loaning somebody hundreds of thousands of dollars, you would probably want to protect your investment, too. And that's what title insurance does.

Still, some people believe title insurance is a racket.

"Title insurance is the biggest rip off of all the parasitic rip offs built in to the housing industry," reads one comment on a recent Kiplinger's article (which, by the way, misses the mark on title insurance premiums).

Title insurance itself is not a rip off at all. In the grand scheme of things, it's a small fraction of the money you're putting up to buy the property. As in 1 percent, according to the American Land Title Association. Furthermore, title insurance claims arise more often than you might think.

If there's a claim against your property and you don't have title insurance, you will have to pay to represent yourself in court. Once you finish paying the attorney's fees, you could still end up losing your property. Do you want to risk losing your home AND the money you paid for it?

More likely "the viking" probably allowed himself to get ripped off.

Conduct a little Internet research, and you'll find local title companies that offer competitive rates and generous discounts for escrow services. Homebuyers should note, however, title insurance premiums are set by the provider – not the title insurance agent.

For example, if 10 companies all use First American Title Insurance products, all 10 companies will charge the same insurance premium. Costs for settlement fees, title abstractor and examination fees, recording fees (which vary by location) and other fees that may apply may vary by company and may be negotiable.

Start investigating closing costs early in the home buying process. Get a free quote for title & escrow services from a local title insurance company like Federal Title. Understand the difference between an lender's policy and an owner's policy as well as the standard versus expanded policy.

If you know what questions to ask your real estate agent and mortgage lender about the closing process, you're chances of negotiating a great deal increase.

What do TILA changes mean for lenders, title agents?

Changes to the Truth in Lending Act (TILA) now require lenders to provide consumers "early disclosure" of good faith estimates of mortgage loan costs and a minimum seven-day waiting period between disclosure and closing.

This means it's all the more important for lenders to obtain an accurate settlement fee quote from their title agent as early as possible. The Federal Reserve has highlighted the major changes in the truth in lending early disclosure requirements this chart:

To avoid delays in the closing process, lenders must be precise. The new requirements also call for an additional three business days of wait-time before consummating a loan transaction should the APR reflected in the initial disclosure vary by more than an eighth of one percent (.125%).

A guaranteed quote, such as the one offered by Federal Title & Escrow Company, will ensure there are no surprises – or closing delays – at the end of a real estate transaction.

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