On homes and real estate: Whats the abstract?
Q. I recently inquired at my bank concerning refinancing my home mortgage, and they told me they require an abstract of title. Can you tell me what that is and why the bank requires it?
I have tried to obtain this document and have not been successful. I called the town clerk, the county clerk and my lawyer, and none of them could help me. I found out what company produced the abstract when my husband and I bought our house. The company could not give me a copy. What do I need to do to obtain the abstract of title on my house?
A. The abstract is a legal history of your real estate, telling who bought it, what mortgage was placed on it and when it was paid off, who resold the property or placed another mortgage on it, who inherited the property or had a judgment placed against it and so on. The lender wants proof that it's safe to take your property as security for the loan, with no loose ends that might give someone else a claim against it.
An abstracter searches for these documents in the county's public records (much easier in these digital times) and compiles them into the abstract. Your lender probably doesn't need information going all the way back to the 1800s. Old lengthy abstracts, some in fine Victorian penmanship, do make for fascinating reading. Often, though, the past 40 years' history is considered enough assurance.
Ask the person who handled your original purchase whether anyone has kept the abstract. Even if you find it, it must be brought up-to-date, showing what, if anything, has happened since you bought the place. Locating the old one might not save you that much money. You'll have to order up and pay for a current abstract anyhow. Your lawyer can arrange it.
Q. If I buy a house that is being rented, does the renter have to move before the closing date?
A. If the tenants have a lease, it "survives the sale." Their lease is just as binding on you as it was on the seller, and they'd have the right to stay for the rest of the term.
If the tenants don't have a lease and are simply on what is known as month-to-month, they must leave after receiving proper notice from their current landlord. In most areas, that's a full month's notice, from a date before the rent is due, usually the first of the month. Example: If they must leave by the end of June, they're entitled to notice, preferably in writing, before the end of May.
If you buy a rental property, your sales contract should state just what you and the seller have agreed to about occupancy.
Q. I started negotiating to refinance my home, which had a conventional mortgage, with a new VA mortgage. I made clear that I did not want the bank to collect extra money in escrow every month and then pay my insurance and property taxes for me, as I wanted to reduce my monthly outlay. I received a package back from the bank, with a good-faith estimate and a Truth in Lending disclosure statement, showing no escrow for taxes and insurance. Two months later, after I had complied with numerous requests for documents, the loan package was ready for me to pick up for a closing the next day. In reviewing the loan package, I noticed that I would have to contribute to an escrow for taxes and insurance. I contacted the bank and objected. The bank's only comment was that it was required and that the package I initially received should not have gone out.
I advised the bank verbally and in writing that I would close under protest and that I reserved the right to pursue this matter further. The bank's response was, "That's fair." We closed the next day. What are my legal rights to force the bank to reconstruct this loan and exclude the requirement for an escrow of taxes and insurance, for fraud and deceit or damages?
A. It's their bat and their ball (and their money you want), so you have to play by their rules. They want assurance that your tax and insurance bills are paid on time so their loan is not in danger.
I doubt a judge would rule that the employee's mistake along the way constituted fraud, especially after you accepted the arrangement at closing. And it's hard to see what your damages are. After all, you'll have to pay those bills, whether the bank collects the money and holds it for you or you pay the bank directly on your own. My advice is to relax and forget about it.
• Edith Lank will respond to questions sent to her at 240 Hemingway Drive, Rochester, N.Y. 14620 (include a stamped return envelope), or readers may email her through askedith.com.
© 2012, Creators Syndicate Inc.
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