Monday, March 30, 2009

Are Your Escrow Deposits Insured?

With the recent drama regarding banks failing or being in trouble. Escrow companies have been answering the question for clients, how safe is the bank where their escrow deposits are being held?

There are some new insurance limits regarding deposits being held in an escrow trust account. These new limits are scheduled to be in place until December 31st of 2009.

Here are some of the details as posted by the FDIC

Basic FDIC Deposit Insurance Coverage Limits*
  • Single Accounts (owned by one person) $250,000 per owner
  • Joint Accounts (two or more persons) $250,000 per co-owner
  • IRAs and certain other retirement accounts $250,000 per owner
  • Trust Accounts $250,000 per owner per beneficiary subject to specific limitations and requirements
  • Corporation, Partnership and Unincorporated Association Accounts $250,000 per corporation, partnership or unincorporated association
  • Employee Benefit Plan Accounts $250,000 for the non-contingent, ascertainable interest of each participant
  • Government Accounts $250,000 per official custodian
  • Non-interest Bearing Transaction Accounts Unlimited coverage – only at participating FDIC-insured banks and savings associations **

You may have known that the insurance limit per account had gone up to $250,000, but what you may not have known is that the limit for funds in a non interest bearing transaction account (i.e. an escrow trust account) has unlimited coverage.

This is important for a real estate professional to know in case you have a client that is wanting to put their funds in to an interest bearing account for the purpose of closing an escrow. Having the funds in an interst bearing account certainly complicates things and you would want to advise your client about making sure they have the coverage they need if they do so. Many of the questions can be answered by reviewing the FDIC's FAQ's.

It may be worthwhile to at least let someone know that the escrow trust account is the safest place for their funds. After I say that I have to let you know there is one exception, banks can opt out of this additional coverage. So you will want to check to make sure that the bank where the deposits are held is participating in these new limits.

Having this new limit in place for escrow trust accounts is very helpful and gives the title companies and escrow companies an easy way to answer the question about how safe someone's funds are, if they are held in the trust account.

Friday, March 27, 2009

Refinancing Is ON!

I do the best I can to keep up on all the real estate news and many of the headlines these days are about refinancing. Check out these recent articles.

Market Watch  Applications filed to refinance an existing mortgage rose an unadjusted 41.5% last week, compared with the week before.

U S News & World Report The Mortgage Bankers Association on Tuesday jacked up its 2009 forecast for mortgage originations to reflect the Fed's recent moves to engineer lower mortgage rates. The group now expects mortgage originations to total $2.78 trillion this year

Market Watch 30 Year Mortgage Rate at 4.85%

Having the mortgage industry get busy again will help our economy in many ways.

My biggest concern is, are they ready for it?

In the last few years this industry has seen it's workforce shrink significantly. This happened in the form of layoffs and of course the closing of many mortgage lenders. So handling the increase in business will be tough for the present staff to accomplish.  I know this to be true in Santa Barbara.

The other piece of the puzzle is even though applications are up, will this reflect in actual closings being up as significantly? Borrowers are having a harder time qualifying and of course properties may not be worth what borrowers are expecting them to be worth.

The bottom line to me though is if you can borrow now and need to borrow now GO FOR IT!

Tuesday, March 24, 2009

Have You Checked Out

Joe Holland in my humble opinion is one of those elected officials that is available and doing his best to make sure his organization stays up to date. One of his latest endevours to keep information that is of public record available to the public is

I highly recommend looking at the real estate related resources that are made available. Two of the better ones are the recent homes sales and grantor grantee index.

With the recent home sales you can choose any city in the county and request home sales back 6 months. This is particularly helpful if you are used to trying to value your home from the likes of Zillow or Cyberhomes. The information from the County site is something I have found accurate, when I'm not certain how complete or accurate other sites are.

The Grantor Grantee Index option will allow you to look up names of individuals or entitities who you may need to find with respects to the documents they are recording or have recorded. Very helpful!

One other feature they have are charts. One of the charts available is the one showing the number of defaults being recorded.

All in all, check it out. You will probably find something of interest to you. Great Job Joe!